A temperature-check vote before Uniswap governance could give trading on Circle's Arc blockchain a direct economic link to UNI — something the network's launch never provided. If approved and later implemented, the proposal would activate protocol fees for Uniswap v2, v3 and v4 on Arc, routing a governance-set share of existing swap fees into contracts designed to remove UNI from circulation.

Key points:

• Arc fees are not burning UNI yet; the link depends on approval and the deployment of remaining contracts.
• The vote covers Uniswap v2, v3 and v4.
• Uniswap handled roughly $56 million in daily Arc volume during launch week.
• Only the protocol share of fees could support burns.
• Several fee-contract addresses remain unpublished.

Arc gained Uniswap markets before gaining a UNI connection

Uniswap launched v2, v3, v4 and UniswapX on Circle's Arc blockchain when the network went live on September 16. Arc is Circle's own layer-1 blockchain, and the USDC stablecoin the company issues serves as the network's gas asset for paying transaction fees. Traders could immediately access Uniswap through its web app, wallet and API.

The deployment broadened Uniswap's distribution, but it did not make Arc trading economically relevant to UNI. Users do not need the token to swap assets — UNI's function is governance, letting holders vote on protocol decisions — and the fees those trades generate ordinarily belong to liquidity providers rather than the protocol.

Arc was one of the developments surrounding UNI's September 18 breakout, but the launch gave traders no reason to buy the token. The new governance proposal, published on the Uniswap governance forum, would add the supply-side connection the original deployment lacked. If approved and implemented, it would activate protocol fees for Uniswap v2, v3 and v4 on Arc, and a governance-set portion of existing swap fees would move into contracts built to take UNI out of circulation.

Uniswap dominated Arc's first days of trading

DefiLlama data showed approximately $80 million in tracked decentralized-exchange volume on Arc over 24 hours when checked on September 19. Uniswap accounted for roughly $56 million of that total: close to $40 million on v4, approximately $15 million on v3 and about $1 million on v2.

During DefiLlama's available launch-period window, the three versions recorded about $264 million of Arc's $276 million in tracked DEX volume.

The figures confirm that Uniswap dominated Arc's opening activity. They do not establish whether that turnover will continue after the network's first week. Arc had been live for only three days when the data were checked, leaving too little history to separate recurring demand from launch-related trading, and the numbers may still shift as launch-period activity develops.

How Arc fees could become a UNI burn

Only part of each swap fee would go to the protocol

The proposal would not introduce a second charge on top of Uniswap's normal trading fee. Instead, it would redirect a governance-set portion of the existing fee from liquidity providers to protocol-controlled collection contracts. The option — often called the fee switch — has existed in Uniswap's code since v2's 2020 launch, but it went unactivated for years, and turning it on has been one of the longest-running topics in Uniswap governance.

Under Uniswap's published fee structure, a v2 trade with a total fee of 0.30% can allocate 0.25% to liquidity providers and 0.05% to the protocol. V3 divides fees differently depending on each pool's fee tier.

V4 requires a separate policy because its pools can use hooks and dynamic fees. There, a policy contract sets the protocol share for each pool category, while an adapter applies the rule and transfers collected assets to TokenJar.

DefiLlama estimated that Uniswap's Arc pools generated approximately $387,000 in gross swap fees over 24 hours. That figure is not protocol revenue and should not be read as the amount available for UNI burns; the launch-period total of approximately $1.9 million carries the same limitation. A reliable burn estimate cannot yet be calculated: the protocol share is not active, rates differ between pools, and the eventual number of tokens removed would also depend on UNI's price when the accumulated assets are.

TokenJar would not conduct a conventional buyback

The planned system would not take Arc's collected fees to an exchange, purchase UNI and destroy the acquired tokens. Instead, the assets would accumulate inside TokenJar contracts. Independent traders or automated bots, known as searchers, could claim those assets by supplying the amount of UNI the contract requires. The incentive is straightforward: the operation pays when the collected assets are worth more than the required UNI plus transaction costs.

The synthetic token is Arc's representation of UNI, so this represents one economic burn, not two. Destroying it allows the matching canonical UNI on Ethereum to be released solely so it can be sent permanently to the burn address — an address no one controls, from which tokens cannot be recovered.

The mechanism already operates for protocol fees collected on other supported networks. An earlier v4 fee proposal cited a one-day record of approximately 186,000 UNI burned through the wider system.

The Arc expansion would not give UNI holders a dividend, a claim on protocol revenue or a direct payment. Its main direct effect would be removing UNI from tradable circulation when collected fees are successfully released.

How a burn could affect UNI's price

Burning tokens reduces the amount of UNI available to be held or sold. If demand remains unchanged while tradable supply declines, buyers end up competing for fewer tokens, which can support a higher price.

The effect depends on scale. A small burn may be outweighed by ordinary selling, weak demand or tokens returning to circulation from existing holders, so UNI's price could still fall even while some supply is being removed.

Searchers may also need to obtain UNI before claiming Arc's accumulated fees, potentially adding demand around each release. Some may already hold the required tokens, however, so every burn should not be treated as the equivalent of an open-market purchase.

More burns could mean less income for liquidity providers

Protocol fee capture is not free. Every portion redirected to TokenJar is a portion no longer earned by the liquidity providers who supply the assets traders need.

Capturing more could increase the burn generated by each trade, but it could also reduce the returns available to LPs. If competing exchanges offer better net returns, liquidity may move elsewhere, increasing slippage and making Arc's Uniswap markets less attractive to traders.

That leaves governance with a trade-off. A larger protocol share produces a stronger burn from the same volume, while a smaller share leaves more income with the liquidity providers responsible for keeping trades efficient. The most productive setting would therefore not necessarily be the highest available fee. Governance must decide how much revenue to redirect without weakening the liquidity on which future fee generation depends.

The temperature check does not activate the fees

The current Snapshot vote — the offchain signaling stage of Uniswap's governance process — runs from September 18 through September 23. A successful temperature check would still need to be followed by an onchain governance vote before any Arc fee changes could take effect.

The automated-market-maker contracts and the governance messaging route between Ethereum and Arc were already deployed when the proposal was published. Addresses for several parts of the fee system, however, were still marked “TBD.” These included TokenJar, the v3 and v4 fee adapters, the v4 policy contract and components of the Wormhole transfer setup (Wormhole is a cross-chain messaging protocol).

The proposal's authors said the remaining contracts would be deployed before the onchain vote. Their absence from the temperature check does not prevent governance from supporting the general plan, but voters will need the completed addresses before they can evaluate the final execution package.

What to check after the temperature vote

• The missing fee-contract addresses are published.
• Governance approves the final onchain proposal.
• Arc trading remains active after launch week.
• Liquidity stays in the affected Uniswap pools.
• Protocol fees begin accumulating inside TokenJar.
• Ethereum transactions confirm that UNI reaches the burn address.

Governance can build the pipe, not fill it

The proposal would make Arc economically relevant to UNI in a way the original deployment did not. The connection remains indirect: trades must generate fees, governance must capture part of them, searchers must release the collected assets, and the corresponding UNI must finally reach Ethereum's burn address.

Arc does not need to preserve all of its opening volume for the system to function. It does need recurring trading and enough LP income to keep its markets competitive. That — not the temperature-check result — will determine whether Arc becomes a meaningful UNI sink or merely another network with functioning fee contracts.

This article is provided for informational purposes only and does not constitute financial or investment advice. Governance proposals, network data and cryptocurrency market conditions can change rapidly.