Uniswap Price Plummets 11.8% Amid Summer Gains

Uniswap's price plummeted by 11.8% on Wednesday morning, still sitting higher than any point during the summer. Anyone who bought UNI over the past month is facing a significant loss in their paper gains.

For those in Germany, selling now would almost certainly trigger a taxable private disposal transaction due to the one-year deadline for purchases made this summer.

The UNI price on September 24 was $9.31, down 11.75% against the previous day's level, with a daily high of $10.55 and low of $9.07. Over seven days, UNI is up 37.66%, while over 30 days it has risen by 113.85%. Its market capitalization stands at $5.78 billion on a circulating supply of 620.66 million UNI.

The recent price surge can be attributed to the fee switch implemented by Uniswap, which directed part of the protocol's trading fees from liquidity providers to itself. This change has resulted in around $23.15 million in protocol revenue since activation, with approximately $4.9 million accrued in the past 30 days.

For tax purposes, it is essential to understand how Uniswap's revenue distribution affects holders. Around 17% of swap fees flow into protocol revenue, which accumulates in a contract called TokenJar and can only be released through the Firepit mechanism by burning UNI. This means that no income is transferred to holders, but rather benefits them through a tightening of supply and the subsequent price increase.

A private disposal transaction under Section 23 EStG arises when selling a crypto asset within a year of acquiring it, making the gain taxable in full at your personal income tax rate. If more than a year has passed between purchase and sale, the gain remains tax-free.