Is Uniswap’s 67% Fee Increase During SEC Charge Correct?

The value of the Uniswap decentralized exchange rose by about 67 percent. This move comes in the wake of possible legal action by the US Securities and Exchange Commission (SEC) against the DeFi protocol.

According to the information on the official website, users will have to pay a fee of 0.25% for most exchanges, which is an increase from the previous rate of 0.15%.

Uniswap paid fees to prepare for legal battle.

Uniswap explained that this fee adjustment aims to ensure sustainable funding for its operations. Although trades eligible for fees have been introduced, some transactions remain fee-free, such as exchanging stablecoin pairs with their equivalents or stacking and unwinding WETH.

Users can bypass the payment using an alternative interface to access Uniswap. However, any transactions on the core network and supported Layer 2 networks will incur additional charges.

Read more: 12 Best Decentralized Exchanges for 2024

Interestingly, Uniswap's announcement of the payment update coincides with the SEC's recognition of Wales, a condition precedent to enforcement action. Therefore, market observers pointed out that Uniswap's increase in transaction fees is a strategic move to strengthen its financial reserves in anticipation of possible legal proceedings from the financial regulator.

“The internet fee goes to Uniswap Labs to fund the team's efforts to build products around the protocol…or in this case fight the SEC on behalf of the entire industry. If you don't want to pay the fee, then just use an aggregator. Regular users are better served by an aggregator anyway (hint, those are often (They will also have fees),” said Dan Smith, a crypto platform researcher at Blockwork Research.

Read more: Uniswap (UNI) Price Forecast 2023/2025/2030

The SEC's litigation against crypto entities is protracted and financially burdensome. For example, Ripple spent more than $200 million on its ongoing lawsuit against the SEC.

Despite the huge financial costs involved, Uniswap has expressed its determination to fight the lawsuit. The organization considers the effort an important step in defending DeFi principles.