Protocol Fee Expansion: Vote 1

Proposal Spec

If this proposal passes, it will execute ten transactions:

/// Transition to v3OpenFeeAdapter on Mainnet

/// Change the owner on UniswapV3Factory to v3OpenFeeAdapter
V3_FEE_ADAPTER.setFactoryOwner(address(v3OpenFeeAdapter));

/// Enable fees on Arbitrum, Base, and OP Mainnet. For each chain:

/// Set the owner of the V3 Factory to the V3OpenFeeAdapter
V3_FACTORY.setOwner(address(v3OpenFeeAdapter));

/// Set the recipient of V2 protocol fees to the TokenJar
V2_FACTORY.setFeeTo(address(tokenJar));

/// Transition to CrossChainAccount ownership on Celo

/// Transfer v2 setFeeToSetter role
V2_FACTORY.setFeeToSetter(CrossChainAccount)

/// Transfer UniswapV3Factory owner role 
V3_FACTORY.setOwner(CrossChainAccount)

// Transfer Uniswap v4 PoolManager owner role
POOL_MANAGER.transferOwnership(CrossChainAccount)

Because these transactions are crosschain, governance front ends may not decode them correctly. We recommend reviewing the Seatbelt simulation report to confirm their validity.

Relevant Addresses

Mainnet

Contract	Address
V3OpenFeeAdapter	0x3e40DB80450f025b01E45c58b0aF763C7A29a8bd
V3FeeAdapter	0x5E74C9f42EEd283bFf3744fBD1889d398d40867d

Arbitrum

Contract	Address
TokenJar	0x95E337C5B155385945D407f5396387D0c2a3A263
Releaser (ArbitrumBridgedResourceFirepit)	0xB8018422bcE25D82E70cB98FdA96a4f502D89427
V3OpenFeeAdapter	0xFF7aD5dA31fECdC678796c88B05926dB896b0699
UniswapV3Factory	0x1F98431c8aD98523631AE4a59f267346ea31F984
UniswapV2Factory	0xf1D7CC64Fb4452F05c498126312eBE29f30Fbcf9

OP Mainnet

Contract	Address
TokenJar	0xb13285DF724ea75f3f1E9912010B7e491dCd5EE3
Releaser (OptimismBridgedResourceFirepit)	0x94460443Ca27FFC1baeCa61165fde18346C91AbD
V3OpenFeeAdapter	0xec23Cf5A1db3dcC6595385D28B2a4D9B52503Be4
UniswapV3Factory	0x1F98431c8aD98523631AE4a59f267346ea31F984
UniswapV2Factory	0x0c3c1c532F1e39EdF36BE9Fe0bE1410313E074Bf

Base

Contract	Address
TokenJar	0x9bD25e67bF390437C8fAF480AC735a27BcF6168c
Releaser (OptimismBridgedResourceFirepit)	0xFf77c0ED0B6b13A20446969107E5867abc46f53a
V3OpenFeeAdapter	0xaBEA76658b205696d49B5F91b2a03536cB8A3bE1
UniswapV3Factory	0x33128a8fC17869897dcE68Ed026d694621f6FDfD
UniswapV2Factory	0x8909Dc15e40173Ff4699343b6eB8132c65e18eC6

Celo

Contract	Address
CrossChainAccount	0x044aAF330d7fD6AE683EEc5c1C1d1fFf5196B6b7
UniswapV3Factory	0xAfE208a311B21f13EF87E33A90049fC17A7acDEc
UniswapV2Factory	0x114A43DF6C5f54EBB8A9d70Cd1951D3dD68004c7

Proposal

This is the first proposal to use the new governance process approved in UNIfication. The new process only applies to fee parameter updates, where proposals can bypass the RFC stage and go directly to a five-day Snapshot followed by an onchain vote. This allows for faster updates to protocol fees, while retaining the security of onchain governance.

Snapshot vote here.

Since UNIfication went live in late December we have been monitoring protocol fees, which were rolled out gradually to ensure protocol health. This started with v2 and select v3 pools on Ethereum mainnet. This rollout has gone well, with market-adjusted TVL up on Ethereum mainnet since December. The burn system is working as expected, permissionlessly converting fees in many different tokens into UNI burns.

Now, we propose to:

• Expand protocol fees on v2 and v3 to Arbitrum, Base, Celo, OP Mainnet, Soneium, X Layer, Worldchain, and Zora
• Enable protocol fees on all v3 pools via a new tier-based v3OpenFeeAdapter on mainnet and the above L2s

Implementation Details

Expand protocol fees to L2s and burn UNI on mainnet

This proposal introduces v2 and v3 protocol fees on eight chains. Fees on each chain will be routed to the TokenJar on that respective chain.

UNI burned on L2s doesn't stay on L2s - it is bridged back to mainnet and sent to 0xdead. This uses the same infrastructure used for burning Unichain sequencer fees (OptimismBridgedResourceFirepit for OP Stack chains, and ArbitrumBridgedResourceFirepit for Arbitrum).

Enable fees on all v3 pools

The current v3FeeAdapter manages protocol fees pool by pool and governance maintains a list of individual pools and their fee levels. Today, those pools account for a significant majority of v3 volume on Ethereum mainnet.

v3OpenFeeAdapter replaces this with a tier-based system. Protocol fees are set uniformly across all pools sharing the same LP fee tier. For example, all 1bps LP fee pools could have protocol fees set to 25%. Any pool automatically gets the default protocol fee for its tier, no governance action is needed. This means if this proposal passes, protocol fees will be active on every v3 pool. Governance retains the ability to override fees on individual pools.

Governance Process

Please note that because of GovernorBravo’s limit of 10 actions per proposal, there will be two separate onchain votes posted in parallel. One proposal will include the change to mainnet’s fee controller and turn on fees on Base, OP Mainnet, and Arbitrum, the other will turn on fees on Celo, Soneium, Worldchain, X Layer, and Zora.

https://tally.xyz/gov/uniswap/proposal/94