What’s next for the Uniswap token as the top six addresses keep UNI holdings out of circulation?

• Uniswap UNI governance token has only 25% real circulation even after full unlock.
• On-chain data provider EmberCN says the community treasury received 430 million UNI and only 7% went into circulation.
• The top six Uniswap holders have not yet surrendered their UNI tokens.
• UNI is shedding more than 3% on Wednesday, trading at $6.528.

Uniswap’s governance token for the protocol, UNI, was launched in 2020. In the past four years, even though the entire supply of UNI has been fully unlocked, only 25% has entered circulation as of Wednesday.

Most of the tokens are held by the six largest holders. Data from the EmberCN chain tracker shows that the first six addresses, including a16z and Union Square Ventures, did not sell their UNI.

Whale wallet activity has an impact on price depending on whether it is the accumulation or widespread distribution of the asset.

At the time of writing, UNI is trading at $6.528, down more than 3% on the day.

The Uniswap Token may rally or crash based on these factors

According to on-chain data, Uniswap’s largest wallet holders have not sold their UNI holdings even though the entire supply of the governance token has been unlocked. The last unlock event started on September 18, 2023, unlocking 227,040 UNI per day for 365 days.

Data from the Tokenunlocks app shows that Uniswap’s entire supply (maximum supply) of 1 billion tokens has been unlocked. The unlocked tokens were allocated as follows:

Uniswap token allocation

Of the 430 million UNI allocated to the community treasury, the address currently holds 399,789,850 UNI tokens, according to Etherscan data. This means that the difference, 30.21 million, flew into the market.

Top Uniswap supports

The rest of the tokens remain untracked, in the entities’ cold wallets or exchange wallets. Only 7% of the tokens distributed to the community treasury went into circulation, contributing to the low selling pressure on Uniswap on exchange platforms.

Uniswap wallets with large holdings of UNI, a16z, USV, ParaFi Capital tokens

Coingecko data shows that UNI’s circulating supply is 753,766,667, however, EmberCN’s analysis of newly unlocked tokens between 2023 and 2024 shows that only about 25.83% UNI tokens are currently in circulation.

While this seems optimistic for the asset, a deeper look reveals how the stronghold of the big six entities holding UNI tokens and their actions (bulk selling, profit taking or holding) could influence the asset’s price.

An interesting perspective is that New York State Attorney General Letitia James has issued subpoenas to venture capital firms that invested in Uniswap. The list includes Andreessen Horowitz (widely known as a16z) and Union Square Ventures, among others. An Axios report shows that earlier this year, the US Securities and Exchange Commission (SEC) had questions for venture capitalists.

As regulators scrutinize entities that hold a large share of the UNI token, their next steps could make or break the asset’s price trend. If entities sold their holdings widely, it could increase selling pressure on Uniswap, pushing the price down. If venture capitalists continue to hold and demand is sustained at current levels or increases, UNI’s price could either remain flat or rise in the near term.