Original Title: "Uniswap: Crypto Unicorn Under Regulatory Shackles, Blockchain's Largest Dex Protocol"

Original Source: Trend Research

Since this round of ETH price increase, ETH has surged by 48% in the past month, driving up the prices of various ETH ecosystem projects. Based on historical data, blue-chip projects in the ETH ecosystem usually have a multiplier effect during a bull run. UNI is one of the key blue-chip assets that Trend Research focuses on in its ETH ecosystem portfolio, currently up 28% in the past month. If the bull run continues, UNI has the potential for further price appreciation. Additionally, with UNI's beta under the ETH price trend, it has certain track record alpha potential, including the potential expectation of macro regulatory easing, leading project business data, and structural price increases driving the token's value.

1. Macro Regulatory Environment

Regulatory Uncertainty Period (2021–2023): On September 3, 2021, the SEC initiated an investigation into Uniswap Labs, focusing on its marketing practices and investor services. SEC Chairman Gary Gensler has repeatedly stated that DeFi platforms may fall under securities regulations, emphasizing the need for more regulatory oversight. This investigation sparked widespread industry discussion, making the classification of UNI and similar governance tokens as securities a key topic in crypto regulation. On August 30, 2023, Uniswap won a collective lawsuit against it, with the court dismissing the charges and ruling that the Uniswap protocol is mainly used for legal purposes (such as ETH and BTC trading) and lacks clear regulatory definition to support the plaintiffs' securities claims.

Regulatory Pressure Period (2023–2024): On April 10, 2024, the SEC issued a Wells Notice to Uniswap Labs, alleging that the Uniswap protocol may operate as an unregistered securities exchange, its interface and wallet may act as unregistered securities brokers, and UNI tokens and liquidity provider (LP) tokens may be considered investment contracts. On May 22, Uniswap Labs submitted a 40-page Wells Response document, rebutting the SEC's allegations. Uniswap Labs stated that its protocol is a general-purpose technology platform not specifically designed for securities trading, with 65% of the trading volume involving non-securities assets (such as ETH, BTC, stablecoins). Chief Legal Officer Marvin Ammori stated that the SEC needs to redefine "exchange" and "broker" to regulate them and believes that the SEC's accusations are based on misclassification of the tokens.

Regulatory Unshackling Period (2025 to Present): On February 25, 2025, the SEC announced the termination of its investigation into Uniswap Labs, opting not to pursue enforcement action. Uniswap Labs communicated this outcome on X, labeling it as a "major win for DeFi" and emphasizing the legitimacy of its technology. This event reflects a shift in the SEC's attitude towards crypto regulation following the Trump administration taking office. On April 8, 2025, the SEC invited companies like Uniswap Labs and Coinbase to participate in a crypto roundtable discussion on exchange regulation. On May 5, 2025, multiple Republican members of the U.S. House Financial Services Committee and Agriculture Committee jointly released a new discussion draft on crypto industry regulation, building upon and expanding the core aspects of the previously introduced Financial Innovation and Technology in the 21st Century Act (FIT21 Act), further detailing and extending the regulatory framework for digital assets. The new draft's 49th page aims to clarify that as long as transactions involving the sale of digital goods do not grant the buyer ownership rights to the issuer's business, profits, or assets, such transactions do not constitute securities. The House plans to release an updated version of the Lower House Digital Asset Market Structure Act on May 29. The revised text follows the discussion draft released on May 5, and the advancement of this market structure legislation is widely seen as the foundational blueprint for the future of U.S. regulation and trading of digital assets. The House is set to deliberate on the crypto market structure bill on June 10.

Currently, from the substantial termination of the SEC's investigation into Uniswap Labs at the beginning of 2025, to the current definition of non-security in the crypto market structure bill, Uniswap's current tokenomics have shielded UNI from prosecution risks. With the Trump administration and its team's tenure, the trend in crypto regulation has been designed to adapt to the crypto asset classification methodology, Howey testing, regulatory agency delineation, etc., from the perspective of accommodating the development of the crypto industry. Discussions have been held with leading U.S. crypto teams, with Uniswap Labs playing a crucial advisory role in this process. Following the comprehensive unshackling, there is an expectation for potential further regulatory tailwinds in the future.

1. Project Business Overview

1. Top-tier Business Data

Uniswap is the earliest and largest Dex protocol in the crypto market, with a current TVL of $51.2 billion and a 30-day trading volume of $845 billion. It ranks second after Pancake and was the market leader in trading volume before the launch of Binance Alpha functionality. It generated $929 million in revenue over a year, ranking seventh. If we use a simple P/E valuation, Uniswap's P/E is approximately 4.5–6.4, compared to Coinbase's P/E of about 33–42, Apple's P/E of around 28–35, and Tesla's P/E of about 50–70. If in the future, UNI's "fee switch" can be activated or regulatory constraints loosened to expand its financial application scenarios (current UNI holders do not participate in profit distribution), relative to its business profitability, the current market cap is significantly undervalued.

According to the Uniswap Foundation's Q1 2025 Financial Summary, as of March 31, 2025, the foundation holds assets worth $53.4 million in USD and stablecoins, 15.8 million UNI tokens (valued in UNI), and 257 ETH. Based on the closing exchange rates as of May 28, 2025, this is equivalent to $150 million in tokens. The fund turnover period is expected to continue until January 2027, and the foundation currently maintains a healthy financial position.

2. Tokenomics Empowerment Attempt

In Uniswap's previous tokenomics, methods for generating yield using UNI mainly involved adding UNI to specific pair pools as LP, staking UNI to participate in DAO governance proposing buybacks or liquidity incentives, but these yields were indirect and mostly low in most cases. Holding UNI directly does not generate direct income, which is also the main reason why the UNI token price cannot rise to a very high price. However, Uniswap Labs has been constantly attempting to empower the tokenomics, repeatedly proposing a Fee Switch. Due to regulatory risks, it has not substantively passed and been implemented. The latest Fee Switch proposal was reintroduced in February 2024, passed a technical vote in May, and is expected to further advance on-chain voting in the second half of 2025. With the gradual advancement of the regulatory framework, the Fee Switch may be activated in the future.

In addition to the Fee Switch, the newly launched Unichain by Uniswap provides a new application scenario for UNI. Unichain is a Layer 2 (L2) blockchain announced by Uniswap Labs on October 10, 2024, based on Optimism's OP Stack Superchain framework, and officially launched on the mainnet on February 13, 2025. Uniswap Labs CEO Hayden Adams believes that "after many years of building and expanding DeFi products, we have seen where blockchain needs to improve and what conditions are needed to continue advancing the Ethereum roadmap. Unichain will provide the realized speed and cost savings of L2, better cross-chain liquidity access, and greater decentralization."

Like other L2 solutions, Unichain also has a validator network where UNI is staked as a bonding token. Node operators wishing to become validators in the UVN (Unichain Validator Network) must stake UNI on the Ethereum mainnet. The stake determines their chances of being selected in the active validator set. Earnings come from 65% of the net chain revenue (including base fees, priority fees, and MEV), allocated according to the staking weight. Currently, the specific staking scale has not been directly disclosed by the official entity, but Uniswap Labs continues to support Unichain, and if the yield and ecosystem size gradually expand, more UNI staking will be introduced to become validators and earn rewards.

II. Token Situation

The circulating market cap of UNI is currently 4.2 billion, with a FDV of 6.7 billion. The token is fully circulated, and approximately 37% is locked in staking.

The contract holdings amount to 448 million, with an OI/MC of approximately 10.6%. The aggregated long/short ratio is 1.02, the Binance account long/short ratio is 2.16, and the large account long/short ratio is 3.87. More long positions are held by large accounts. Since the ETH bull market, UNI's OI has been gradually increasing, and there is active trading in the derivatives market.

In the spot market's price action, during the November 2025 ETH bull run pattern, UNI showed a similar trend to ETH in terms of structure but with approximately 2-3 times higher volatility. However, in the current April ETH rally, both assets showed similar structural trends, but ETH's price increase outperformed UNI. If the trend continues, UNI may have further upside potential.

III. Summary

Since Donald Trump's official election as President of the United States in 2025, how the cryptocurrency industry will be regulated and integrated has become the most important topic. As the largest Dex protocol in the cryptocurrency market, how the U.S. regulates UNI will set a benchmark for the entire industry. Uniswap Labs is actively involved in shaping regulatory rules. Combined with the multiplier effect of ETH, it may see a structural bullish opportunity. The project's business data is at the forefront of the market, with significant profits and strong finances. Through Unichain's project advancement and the proposal of fee switching, the token may receive new empowerment. For those optimistic about the future market, UNI is one of the blue-chip assets in the ETH ecosystem worth paying attention to.

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