Uni Giveth, and UNI Taketh Away?

Key Insights

• UNI derives its value from the expectation that the protocol can extract value from the network.
• Uniswap is the best product on the market, but adding a fee might make it the highest cost provider.
• UNI holders should only turn on the fee switch if they believe the market is undervaluing either the network’s ability to extract rents or the value of those future earnings. However, there is also a risk the market is over-valuing the network’s ability to support a tax.
• The argument to wait is that growing the network increases the ability to support a tax. So both the network and the protocol’s ability to profit from it grows if you wait.
• There really isn’t much risk beyond token price. The protocol doesn’t need the token, there are no expenses, and Labs is well funded and incentivized to continue building the network for at least the remaining two years of UNI vesting.
  

Introduction