Uniswap Price Prediction – $20 In Sight As Investors Marvel At Proposed Rewards System

Uniswap is among the biggest gainers today among the big-cap cryptos and the overall crypto market. In the last 24 hours, Uniswap has shot up by 73%. As of 11:13 GMT+3, Uniswap was trading at $12.40. Volumes are also rising, up 1804% in just 24 hours to hit a high of $2.54 billion. 

New Fee Mechanism Proposed

This comes after a proposal was made to overhaul how Uniswap rewards token holders. In a post on X, Erin Koen, lead governance at the Uniswap Foundation, proposed that Uniswap should change the system and have a fee mechanism where UNI holders who stake and delegate their tokens are rewarded with fees generated by the Uniswap protocol. If implemented, such a system would significantly depart from the current system, where the rewards usually come from accrued fees. 

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🧵 Biggest week in Uniswap Protocol Governance… ever?

I just proposed a large-scale upgrade to the system. Specifically, I believe we should upgrade the protocol so that its fee mechanism rewards UNI token holders that have staked and delegated their tokens. 🦄

— Erin Koen (@eek637) February 23, 2024

It would also mean that the Uniswap exchange would start to collect fees in a programmed and permissionless manner. The fees would then be programmatically distributed to the token holders who stake their tokens and help keep the system running. 

Perfect Timing For The Announcement

The Uniswap news has also received excitement in the market because positive things are happening in the broader Ethereum ecosystem. For instance, Ethereum has a hard fork coming up on March 13 that will cut fees for L2s and help the Ethereum network scale better. The result is that investors will find it attractive to trade in Ethereum-based tokens again, a market that has been significantly raided by other L1s such as Solana. 

This means usage of the Uniswap decentralized exchange could rise significantly. With the proposal of a better fee distribution system, Uniswap could easily be one of the most attractive tokens for anyone looking to stake cryptocurrencies going into the future. 

The proposal to overall the Uniswap reward system is the main reason behind the token’s price rally, which has seen the token gain by over 70% in less than a day. 

Uniswap Bullish Breakout: A Signal To A Potential Rally 

Uniswap’s price shows a breakout from a multi-month range between the $3.853 support and $8.267 resistance. 

Now that Uniswap has blown through the $8.267 resistance and with high volumes, the token has drawn the attention of more investors. With the big news around it, FOMO buying could see Uniswap continue to gain and put a $20 target within range. 

However, if profit-taking follows and the momentum slows in the short term, a consolidation could follow, with $10 now a solid psychological support level. Another leg-up could follow once bullish momentum spreads across the market.

On the other hand, if profit-taking triggers a selloff that pushes Uniswap through the $10 psychological support, the next key level to watch would be $8.267, which is now a significant support level in the day. If $8.267 support is broken, prices below $5 could be tested within the day. 

Uniswap Price Prediction – Why $20 Is Within Reach 

While Uniswap could consolidate or turn bearish, the odds are that the current upside momentum is likely to continue. That’s because the proposal could be a game-changer for Uniswap in allowing token holders to earn a passive income off their staked tokens. 

Also, the proposal comes when the Ethereum ecosystem, which Uniswap is a part of, is up for a significant boost. This is thanks to the upcoming Dencun hard fork, which is expected to boost activity on L2s and make the Ethereum ecosystem more efficient. The expected result is more trading in Ethereum tokens through Uniswap. 

It is also noteworthy that the Uniswap upgrade proposal comes when investors expect the broader crypto market to make a parabolic price run. This is thanks to the upcoming Bitcoin halving that is now only 59 days away. Now that investors have something to look forward to for Uniswap and the price has shown to be responsive, Uniswap could see FOMO kick in earlier than Bitcoin and the other large-cap cryptocurrencies. This makes a $20 target firmly within range in the short term. 

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