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Nadeau announced that the protocol will no longer pay a $368 million settlement fee to Ethereum (ETH) validators after launching Unichain. Instead, these funds will go to Uniswap Labs and possibly Uniswap token holders.

Aside from settlement fees, Uniswap also has the potential to earn the maximum value miners or validators can obtain (staking maximal extractable value) by rearranging and sorting transactions waiting to be added to the blockchain.

Since Uniswap owns all validators on the Unichain network, Nadeau predicts that MEVs will no longer go into the pockets of Ethereum validators. Thus, according to data based on last year’s MEV percentage, approximately $100 million will be added to Uniswap’s annual revenue.

Nadeau said, “MEV is estimated at around 10% of total fees paid on Uniswap ($100 million last year). “They will have the option to share some of this with token holders,” he wrote.

Additionally, Nadeau noted that last year Uniswap earned $1.3 billion from trading and settlement fees across its five main chains on Ethereum, Optimism, BNB Chain, Base and Polygon. Unfortunately, none of these funds went to the protocol or token holders.

With the launch of Unichain, Ethereum validators may lose a large portion of the $368 million they would have earned from settlement fees paid by Uniswap. Additionally, ETH token holders may also be negatively impacted as the protocol burns less ETH and settlement fees go to UNI token holders.

“Ultimately, Uniswap is integrating across the spectrum of technologies to provide greater control of the value they create through their interfaces and smart contracts,” Nadeau said.

In September 2022, Ethereum co-founder Vitalik Buterin criticized Uniswap’s idea of ​​creating a layer 2 blockchain. He stated that the Uniswap chain or roll-up is contrary to Uniswap’s selling point.

“Uniswap’s core value proposition is that you can trade in 30 seconds,” Buterin said. “In this context, it does not make sense to create a Uniswap chain or roll-up,” he said.

On October 10, Uniswap Labs announced plans to announce a new open-source Ethereum-based layer 2 network called Unichain. In a press release shared with Crypto.news, Uniswap Labs explained that the Optimism-powered project will solve scalability issues that have been holding back wider adoption of Ethereum.