Regulatory approval and v4 launch: It’s time to reevaluate Uniswap

Author: Nomos Labs Source: mirror

Introduction

For the past two years, Uniswap has been trapped in a valuation paradox: as the leading DeFi protocol, it boasts the highest trading volume and fees in the industry, yet fails to generate a single cent of returns for token holders.

But as we enter 2025, the Uniswap story appears to be entering its next phase. The protocol itself is evolving, as is its governance. The only thing that remains unchanged is that the market continues to price UNI using a "zero commission" logic.

As we attempt to answer the valuation question regarding UNI:

Given the current favorable conditions, what should be its fair valuation? Therefore, it's time to reevaluate Uniswap. 1. Current Status of the Protocol: From the Narrative of No Dividends to the Reality of Being Undervalued In February 2025, Uniswap finally reached a turning point that changed the narrative—the U.S. Securities and Exchange Commission (SEC) announced that it had officially closed its investigation into Uniswap Labs and "would not take any enforcement action." This not only cleared years of compliance woes for Uniswap itself, but also sent a clear signal to the entire DeFi market: open financial infrastructure at the protocol layer still has room to survive and expand within the regulatory framework. At the same time, Uniswap's product iteration was quietly completing a generational upgrade. In early 2025, v4 officially launched and completed multi-chain deployment. Leveraging the flexibility offered by the Hooks architecture, Uniswap's liquidity aggregation efficiency was further enhanced. The launch of the Unichain mainnet provided a more unified foundation and execution environment for its subsequent expansion. Actual performance quickly provided feedback: in May 2025 alone, Uniswap's monthly spot trading volume reached $8.88 billion, a new high for the year, and its total trading volume over the past 30 days reached $109 billion. In addition to the catalytic factors of the trading volume rebound and the launch of v4, Uniswap also ushered in a potentially critical change in governance. On August 12, the Uniswap Foundation (UF) proposed registering a Decentralized Unincorporated Nonprofit Association (DUNA) in Wyoming and establishing "DUNI" as the legal entity for Uniswap's governance. This means that in the future, the Uniswap DAO will have a legal identity, enabling it to sign contracts, hire partners, and fulfill tax compliance off-chain, while also recognizing the legal validity of on-chain governance. Crucially, DUNI will provide governance participants with limited liability protection, significantly reducing the personal legal or tax risks that may arise from protocol decisions. This structural improvement precisely fills the final link in the implementation of the dividend mechanism: the previously untouchable "legal gray area" is being filled by the system. Once DUNI is established and protocol revenue truly reaches the DAO or UNI holders, it will no longer be just a "vision" but a step toward practical implementation. However, compared to the protocol's expansion, UNI's valuation remains stuck on its old trajectory—the price hovers around $10, and DefiLlama shows zero revenue for its holders. The protocol generates nearly tens of billions of dollars in annualized fees, yet not a cent has flowed into the hands of UNI holders. There's certainly a reason for this. From the outset, Uniswap's governance mandated a zero share of protocol revenue, shifting all transaction fees to limited partners. But now, that story is changing. The DAO has initiated experimental discussions on charging a uniform 0.05% protocol fee for the entire v3 pool. Technically, the UniStaker module, which combines "staking + delegation → profit sharing," has already been deployed. The removal of regulatory risks has made this distribution logic more realistic. The problem is: while the protocol structure has changed, the market's pricing logic remains unchanged. Uniswap is evolving from "non-dividend-paying infrastructure" to a protocol with potential cash flow distribution capabilities. However, the current market pricing of this evolutionary path remains stuck in the old valuation system of "focusing on storytelling, not returns." This, in our view, is precisely the starting point for a reassessment of Uniswap's current state.

Second, Valuation: Using Dividend Expectations to Examine Future Valuation

Under existing pricing logic, UNI is more of a simple cryptocurrency. Without dividends and fee rebates, the market naturally won't price it based on the logic of "cash flow generation."

However, once the protocol profit sharing premise is established, UNI's valuation logic will no longer be "market sentiment × liquidity game" but "distributable protocol revenue × profit sharing ratio × PE multiple."

In this case, the most straightforward valuation method is:

Expected Valuation = Expected Dividends for the Year × PE Multiple

• Dividends: Calculated by annualized protocol revenue × profit sharing ratio. PE multiple: 40–60x is a common range for most DeFi protocols, but Uniswap's scale and revenue structure warrant a higher premium. First, consider scale. According to DefiLlama data, Uniswap's trading volume over the past 30 days reached $109 billion, significantly ahead of PancakeSwap's $65.5 billion and Raydium's $32.6 billion. In other words, its monthly trading volume approaches the combined total of the top five DEXs. This means that in the future, the Uniswap DAO will have a legal identity, enabling it to sign contracts, hire partners, and fulfill tax compliance off-chain, while also recognizing the legal validity of on-chain governance. Crucially, DUNI will provide governance participants with limited liability protection, significantly reducing the personal legal or tax risks that may arise from protocol decisions. This structural improvement precisely fills the final link in the implementation of the dividend mechanism: the previously untouchable "legal gray area" is being filled by the system. Once DUNI is established and protocol revenue truly reaches the DAO or UNI holders, it will no longer be just a "vision" but a step toward practical implementation. However, compared to the protocol's expansion, UNI's valuation remains stuck on its old trajectory—the price hovers around $10, and DefiLlama shows zero revenue for its holders. The protocol generates nearly tens of billions of dollars in annualized fees, yet not a cent has flowed into the hands of UNI holders. There's certainly a reason for this. From the outset, Uniswap's governance mandated a zero share of protocol revenue, shifting all transaction fees to limited partners. But now, that story is changing. The DAO has initiated experimental discussions on charging a uniform 0.05% protocol fee for the entire v3 pool. Technically, the UniStaker module, which combines "staking + delegation → profit sharing," has already been deployed. The removal of regulatory risks has made this distribution logic more realistic. The problem is: while the protocol structure has changed, the market's pricing logic remains unchanged. Uniswap is evolving from "non-dividend-paying infrastructure" to a protocol with potential cash flow distribution capabilities. However, the current market pricing of this evolutionary path remains stuck in the old valuation system of "focusing on storytelling, not returns." This, in our view, is precisely the starting point for a reassessment of Uniswap's current state.

  Second, Valuation: Using Dividend Expectations to Examine Future Valuation

  Under existing pricing logic, UNI is more of a simple cryptocurrency. Without dividends and fee rebates, the market naturally won't price it based on the logic of "cash flow generation."

  However, once the protocol profit sharing premise is established, UNI's valuation logic will no longer be "market sentiment × liquidity game" but "distributable protocol revenue × profit sharing ratio × PE multiple."

  In this case, the most straightforward valuation method is:

  Expected Valuation = Expected Dividends for the Year × PE Multiple

  • Dividends: Calculated by annualized protocol revenue × profit sharing ratio. PE multiple: 40–60x is a common range for most DeFi protocols, but Uniswap's scale and revenue structure warrant a higher premium. First, consider scale. According to DefiLlama data, Uniswap's trading volume over the past 30 days reached $109 billion, significantly ahead of PancakeSwap's $65.5 billion and Raydium's $32.6 billion. In other words, its monthly trading volume approaches the combined total of the top five DEXs. Compared with other DEX related data, it is obvious that Uniswap, a protocol that has proven its cross-cycle capabilities and has an absolute share of industry revenue, has long formed a "fault-like" leading pattern. This advantage is not only in its large scale, but also in the sustainability and breadth of its revenue distribution - it covers multiple chains such as Ethereum, Polygon, Arbitrum, Optimism, etc., and its liquidity and user base are extremely stable. Therefore, it can use a pricing method close to that of traditional financial markets for blue-chip cash flow assets. At this scale, UNI, as a leading competitive barrier and bargaining power, is enough to enjoy a premium higher than the 40-60 times PE of ordinary protocols.

    

    Secondly, compared with the current P/Fees/TVL ranges of other DEXs, the valuations of leading projects are generally 30%~100% higher than those of second- and third-tier projects. Against the backdrop of global compliance, the anticipated implementation of fee switches, and institutions' preference for investing in leading protocols, a reasonable and conservative PE estimate for UNI is: Taking the industry's relatively low average PE of 40x as the base * (1 + 30%-100%) = UNI PE = 52x-80x ⬇️ The median PE is 66x. Finally, PE isn't a fixed number; it fluctuates with market interest rates, industry sentiment, and the competitive landscape of protocols. To compare the revenue and valuation of other protocols, you can directly check the data on DeFiLlama and compare UNI against similar rankings. You'll quickly understand whether a PE of 66 is overvalued. 4. Valuation Analysis: Uniswap, Why Will It Be Worth $26 in the Future? So, if we look at Uniswap from a traditional finance perspective, the most straightforward valuation method is a simplified version of the discounted cash flow (DCF) method: taking the distributable cash flow over the next year as a benchmark, multiply it by the potential price-to-earnings (PE) ratio to arrive at a reasonable market capitalization range. Over the past 30 days, Uniswap's total trading volume was approximately $109 billion. Based on an average fee rate of 0.3%, the protocol generated approximately $327 million in total fees during this period. Since the fee switch has not yet been activated, this revenue currently flows entirely to limited partners. However, once the dividend mechanism is implemented, the protocol can distribute a certain proportion (assuming 10%-25%) to UNI holders.

    Annualize the 30-day transaction data to obtain the annual distributable cash flow range:

    • 10% share ratio: $109B × 0.003 × 0.10 × 12 ≈ $392.4M

    • 25% share ratio: $109B × 0.003 × 0.25 × 12 ≈ $981M

    (According to the Gauntlet report, Uniswap v3's fee switch mechanism supports splitting LP income in multiple tiers of 10%-25%. Currently, DAO governance has also started a trial pool to charge a unified 0.05% fee. Protocol fees represent that the protocol is trying to activate the possibility of dividends without harming LPs)

    

    In the current market environment, the PE level we reasonably inferred in the previous section is about 66 times. Substitute into the calculation formula:

    • Low share scenario (10%): $392.4M × 66 ≈ $25.9B

    • High share scenario (25%): $981M × 66 ≈ $64.8B

    Considering that the current total market value of UNI is only $10.5B and the coin price is about $10.6 (as of 22:00 on August 8, 2025), this means that under different dividend ratios, the revalued theoretical coin price range is:

    • Low share scenario: about $26.2

    • V. Between the Reality and Imagination of Dividends: Opportunities, Paths, and Risks

      Seeing this, you may ask: The protocol dividend sounds good, but can it really be fulfilled?

      In fact, this question has been an unresolved proposition hanging over the heads of leading DeFi projects in the past few years. In addition to the aforementioned regulatory, governance, and technical issues that are being properly resolved, Uniswap is not the first to take the plunge:

      • SushiSwap has used "transaction fees shared with coin holders" as a token incentive since its inception;

      • GMX, dYdX and other protocols have long formed the market mentality of "staking = income rights";

      • new-generation trading protocols such as Ambient, Maverick, and Pancake v4 have all built-in "profit-sharing logic" during their launch phase.

      

      But this does not mean that the risk has disappeared. The fee switch has not yet officially begun, and all valuation expectations are still based on "reasonable" assumptions. A 2% perpetual inflation mechanism was initiated this year, and before dividends are paid, each new UNI token effectively dilutes the value of existing holders. Furthermore, the activation of the fee switch doesn't guarantee everyone will reap the benefits. There may be a threshold for dividends, and the actual proportion of cash flow that can be shared remains unknown. And the core risk lies in the fact that everything still depends on the DAO's decision. But this time, at least we've seen Uniswap move forward with great ambition. Conclusion: Beyond Valuation, It's a Bet on Direction At this point, it's clear that Uniswap's valuation logic has indeed reached a turning point. The only thing lagging behind is market sentiment and pricing models. Current data shows that Uniswap's trading volume has returned to highs, its profit-sharing mechanism is beginning to have a viable implementation, and its cash flow model is reshaping the market's understanding of UNI. Compared to the vague narratives of the bubble period, Uniswap today actually has a stronger foundation for a "return of value." Of course, valuation models can only tell us, "If everything goes well, how much will UNI be worth?" Ultimately, UNI's value lies not just in its ability to distribute dividends, but in whether it can regain its voice at a time when the DeFi narrative is least optimistic. Because the market may not always price rationally, but it always makes up for lost time. This time, perhaps it's time to relearn. The data in this article is based on statistics from August 8 to August 10, 2025, and the situation may change.