2025-12-25 17:20:16

UNI's recent performance is quite interesting—positive proposals are flooding in, yet the price is actually trending downward. Looking at the candlestick chart, it resembles a carefully staged counterpoint drama, but if you delve into on-chain data, you'll find the underlying logic is actually quite clear.

**UNI Transformation: From Governance Token to Revenue-Generating Asset**

The two core actions of this proposal are quite aggressive. One is the direct destruction of 100 million UNI tokens, accounting for 16% of the circulating supply, creating a supply gap. The other is activating the protocol fee switch, using a portion of transaction fees to continuously buy back and burn UNI, forming a spiral deflation.

What does this mean? UNI is transforming from a pure governance tool into an asset capable of generating real cash flow. Roughly estimating based on current trading volume, a major DEX could have an annual buyback fund reaching around $460 million to $500 million. In other words, token holders are essentially enjoying a long-term buy-side dividend.

**Positive news but prices fall—it's not just simple reverse operation behind this**

But in reality, after the proposal passed, UNI dropped to $5.60 (as of December 24 data). This seems strange, but it's actually a common market pattern.

Funds that were early investors tend to take profits once expectations are fulfilled, leading to a sudden surge in sell orders. Meanwhile, liquidity providers (LPs) notice that protocol fees will be deducted from their earnings by 16%-25%, prompting some to consider withdrawing liquidity. Concerns about liquidity then spread, creating a negative feedback loop.

**What do on-chain signals say?**

From the movements of whale addresses, this looks more like a premeditated shakeout. Large holders sell at high prices when positive news is realized, while scattered retail investors follow suit and cut losses. Truly patient players, on the other hand, gradually start to position themselves during this period. Such "positive news causing a dip" windows are often good opportunities to reallocate chips.

UNI2.62%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

15 Likes

Reward
15
5
Repost
Share

Comment

0/400

4am_degen

· 4h ago

It's the same old trick, I've seen too many bullish dumps. The big players who sold at high prices have already run, retail investors are still hesitating whether to cut losses. This is actually a good opportunity to get in; just look at the whale positions on the chain. UNI is now like a hot potato; by this time next year, you'll be laughing. Burning 100 million tokens is actually quite ruthless; long-term holders will make big profits. But you need patience; otherwise, watching the price fall can easily blow your mind. The washout this time has filtered out true believers; those who cut losses are just along for the ride.

View OriginalReply0

BridgeNomad

· 4h ago

watched the exact same playbook with stargate's liquidity migration last month—whales coordinate the dump right after governance passes, retail gets liquidated, then real capital quietly repositions. the 16% burn + fee switch sounds bullish on paper until you factor in LP withdrawal risk and slippage fragmentation across pools... that's where the rot sets in. been there too many times.

Reply0

BlockImposter

· 5h ago

It's the same old trick again. Good news on the fundamentals actually leads to a sell-off. Big players are playing this game. Wait, can UNI really drop this much after destroying 100 million? Liquidity has been drained by LPs, right? That's interesting. Honestly, at $5.6... the whales probably set an ambush long ago, just waiting for retail investors to cut losses. The deflationary spiral sounds good, but the current problem is that no one dares to buy in. Liquidity is really at risk. Now, UNI depends on whether the subsequent trading volume can support the buyback, otherwise it's all just on paper. There are indeed opportunities for accumulation at low levels, but it depends on whether your mental resilience is strong enough, haha. Destroying 16% of circulating supply... in the long run, it's a positive move, but this wave in the short term looks too ugly. It's another show of retail investors and big players playing cat and mouse. Get used to it.

View OriginalReply0

RugPullAlarm

· 5h ago

Here comes the old trick of "good news causes a sharp drop," with a 16% burn rate that simply can't stop large investors from selling off. --- The $460 million to $500 million buyback fund sounds appealing, but who can guarantee that this money will actually reach the holders? On-chain data will tell the story. Let’s wait and see the movements of these whale addresses. --- LP withdraws 16%-25% of fees and then starts pulling liquidity—this is basically telling retail investors to run. I've seen too many cases of liquidity collapse. --- "Good news causes a dump" is just reconfiguring the chips? Come on, it’s just an excuse for project teams and big players to team up and harvest retail investors. --- Falling to 5.6 on December 24? I need to check if there were any suspicious large transfers to exchanges at that time. An alert system is essential. --- Burning 100 million tokens sounds intense, but deflationary spirals need trading volume to support them. Without trading volume, it’s just empty talk. --- Early investors taking profits is the prelude to all rug pulls. The only difference this time is that the rug pull is a bit more "compliant."

View OriginalReply0

ColdWalletGuardian

· 5h ago

Hey, it's that same trick again. I've seen many cases where good news causes a dump... The real opportunity is probably hidden in this kind of panic. Wait, LP is being drained of 16% of income? Who would think of that? It's like cutting off the source at the root. Burning 100 million tokens is really a desperate move, but the price still drops... indicating that smart money has already exited. This round of whale washouts is quite aggressive. We have to wait until retail investors are squeezed out before a rebound. Turning UNI from a governance token into a yield-generating asset sounds good, but with the current liquidity crisis, it's all pointless. Why do I feel like this is just a disguise to harvest retail investors... The $460 million buyback sounds appealing, but what about the reality? On-chain data shows some people are accumulating at low levels, but dare they follow? The risk isn't small either. Burning plus buyback, the trick is new, but it all depends on whether it can truly support the token price later on.

View OriginalReply0