Uniswap Token Launch: Ethereum Gas Fees Skyrocket

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On September 17, 2020, Uniswap announced the launch of its governance token, UNI, on the Ethereum mainnet. The initial liquidity mining program was set to begin at 12:00 UTC on September 18, sending shockwaves across the decentralized finance (DeFi) ecosystem. With a total supply of 1 billion tokens, 60% was allocated to the Uniswap community, while the remainder was reserved for the team, investors, and advisors.

Of the community allocation, 15% (150 million UNI) was airdropped to early users based on a snapshot taken on September 1. This included liquidity providers (LPs), traders, and even those who had attempted to interact with Uniswap v1 or v2 contracts—regardless of success. Every eligible address received 400 UNI, sparking a wave of excitement and activity across the network.

👉 Discover how decentralized token distributions are reshaping user incentives.

Community Reaction and Network Congestion

The airdrop triggered an immediate surge in on-chain activity. Users rushed to claim their tokens, transfer them to exchanges, and trade for immediate profits. This spike in transactions caused Ethereum’s gas fees to skyrocket—from typical levels of 100–200 Gwei to an astonishing peak of 770 Gwei. At times, average fees hovered between 500–700 Gwei, making simple transfers significantly more expensive than usual.

Within just three hours, UNI-related transactions contributed 276.01 ETH (approximately $104,800) in transaction fees, accounting for 6.3% of all Ethereum network fees during that period. The congestion wasn’t limited to claims—new liquidity pools launched as part of the initial mining program also attracted massive participation.

Four pools were introduced:

Each pool distributed rewards at a rate of 8.3 million UNI per day, with 54 UNI per block allocated across all four. These rewards came with no lock-up period, encouraging rapid participation.

Market Response and Exchange Listings

As demand surged, major centralized exchanges moved quickly to list UNI. By 10:30 AM UTC, OKEx, Huobi, and Binance had all launched trading pairs. Futures and contract trading followed shortly after on platforms like FTX, further amplifying price volatility.

UNI’s price exploded from an initial trade around $0.30** to over **$3.00—a tenfold increase—within hours. On Binance, it briefly touched $15.00**, while Huobi and OKEx saw highs of **$5.50 and $4.88**, respectively. Even using the lowest peak ($4.88), this represented a 1,526% gain in under two hours**.

However, as is common in DeFi markets, the rally didn’t last. Profit-taking set in quickly, and prices soon corrected—dropping nearly 50% from their highs. Still, early adopters and active participants reaped substantial rewards.

Who Benefited Most?

The biggest winners were those deeply embedded in the Uniswap ecosystem long before the token launch. Some users created hundreds of wallets to maximize their airdrop claims—each eligible address receiving 400 UNI regardless of wallet balance or transaction volume.

One self-described “scientist” admitted to deploying numerous addresses, potentially multiplying their claim by hundreds. For such actors, the windfall could easily exceed tens of thousands of dollars—even at conservative price estimates.

Meanwhile, others missed out due to inaction or lack of awareness. Some users hadn’t interacted with Uniswap before the snapshot date; others forgot to claim their tokens in time. For them, the opportunity cost was significant.

Yet not everyone sold immediately. Many holders chose to keep their UNI, betting on Uniswap’s long-term potential. At the time of launch, Uniswap had already achieved over $900 million in total value locked (TVL) and surpassed Coinbase in trading volume over a 30-day period—despite being only two months old.

With a circulating market cap of just **$375 million** (based on a $2.50 price), many believed the token was undervalued relative to its impact and usage.

Governance and Future Distribution

Starting at 12:00 UTC on October 18, the remaining 45% of community-held UNI began unlocking over four years through the governance treasury. This fund supports future initiatives such as:

The team, investors, and advisors also receive their allocations on a four-year vesting schedule, aligning long-term incentives with protocol growth.

After the first month-long mining phase ended on November 17, 2020, governance rights expanded. UNI holders gained control over how the treasury’s funds are used—marking a true shift toward decentralized decision-making.

👉 Explore how token-based governance empowers decentralized communities.

Frequently Asked Questions

Q: What is UNI used for?
A: UNI is Uniswap’s governance token. It allows holders to vote on protocol upgrades, fee structures, treasury allocations, and other key decisions affecting the platform’s future.

Q: How did users qualify for the airdrop?
A: Any wallet that interacted with Uniswap v1 or v2 before September 1, 2020, qualified for 400 UNI. This included failed transactions, ensuring broad inclusivity among early adopters.

Q: Why did Ethereum gas fees rise so much?
A: Thousands of users simultaneously claiming tokens, transferring assets, and providing liquidity caused network congestion. High demand for block space drove up gas prices across the board.

Q: Is UNI still valuable after the initial hype?
A: Yes. Beyond speculation, UNI represents ownership and influence in one of the largest DEXs globally. Its utility grows as Uniswap expands into new markets and layers like Layer 2 scaling solutions.

Q: Can I still earn UNI through liquidity mining?
A: The initial mining program ended in November 2020, but Uniswap continues to introduce new incentives and farming opportunities based on governance decisions.

Q: Was the UNI airdrop fair?
A: While some exploited it via multi-wallet strategies, the distribution prioritized actual users over whales or speculative investors—a rare approach in crypto that strengthened community trust.

At its core, the UNI launch exemplified how decentralized protocols can reward early contributors while transitioning toward community-led governance. Despite short-term price swings and network strain, it underscored Uniswap’s pivotal role in shaping the future of open finance.

With over $932 million in TVL at launch—second only to Curve—the protocol proved its resilience and scalability. As Ethereum evolves and gas optimization improves, Uniswap remains at the forefront of innovation in decentralized trading.

👉 Learn how next-generation trading platforms are redefining digital asset access.