Uniswap's UNI Token Sees Surge in Revenue as Memecoin Trading Takes Off

Uniswap's UNI token has found its cash machine in a rather unusual way. Since December, the protocol has been taking a slice of trading fees and using that money to buy back UNI on the open market, destroying it instead of holding onto it.

This 'burn' mechanism was first activated after holders passed a proposal called UNIfication in December, but it didn't really take off until July when Uniswap deployed its protocol on Robinhood Chain, an Ethereum L2 for 24/7 on-chain stock trading. The platform quickly became the go-to decentralized exchange (DEX) for the chain, handling 86% of daily volume.

As a result, revenue went from around $100,000 per day to $244,000 per day, with Robinhood Chain alone accounting for 60% of the burn. This translates to roughly $90 million worth of UNI destroyed per year against a market cap of around $3.5 billion.

But what's even more interesting is how memecoins are being used to trade tokenized stocks on Uniswap. Launchpads like Bankr and long(dot)xyz allow anyone to mint a memecoin with a trading pair that's actually a stock token instead of a stablecoin. This means that every purchase pulls stock tokens out of circulation, creating a pool of liquidity.

One such example is the BONER memecoin, which was created on August 20th and pointed its trading pair at tokenized HIMS stock. The result was a 1,000% increase in value over 24 hours to a market cap of around $40 million, with a few thousand dollars of buying pushing tokenized HIMS to $132.64.