DeFi is no longer chasing yield. It’s chasing sustainability.

In 2025, two of the industry’s biggest protocols — Uniswap and Hyperliquid — are proving that value capture isn’t about token emissions anymore. It’s about who can buy back and burn the fastest.

Uniswap, the blue-chip decentralized exchange, finally flipped its long-dormant “fee switch,” activating a deflationary burn model through its new UNIfication proposal. Meanwhile, Hyperliquid, the rising perpetual DEX, has quietly been buying back its own token nonstop — pouring 97% of all trading fees into automated HYPE repurchases.

Both are rewriting tokenomics in real time. But their philosophies couldn’t be further apart.

Uniswap’s Long-Awaited Fee Switch

For half a decade, Uniswap’s “fee switch” lived in GitHub limbo — designed but never activated for fear of SEC scrutiny. That changed on November 10, 2025, when founders Hayden Adams, Ken Ng, and Devin Walsh submitted a proposal that redefines how UNI captures value.

At the center is a fee-to-burn model:

• On v2, protocol fees rise from 0% to 0.05%, trimming LP rewards from 0.3% to 0.25%.
• On v3, fees vary per pool — one-quarter of LP fees for low-tier pools, one-sixth for higher tiers.

All collected fees flow into a “token jar” smart contract, where anyone can burn UNI to withdraw an equivalent amount of crypto.

Even Unichain, Uniswap’s layer-2 chain, joins the burn loop — its sequencer fees now add to the same deflationary circuit. It’s the first time Uniswap’s L2 and protocol income have merged under one system.

And in a surprise move, Uniswap Labs announced it will stop collecting all interface, wallet, and API fees, sending every cent of value capture to the protocol itself.

For context, the plan also includes a 100 million UNI treasury burn, a one-time “catch-up” representing fees that could’ve been burned since 2020. That’s a 16% supply cut — the largest in Uniswap’s history.

Hyperliquid’s Relentless Buyback Engine

While Uniswap argues governance, Hyperliquid just runs code. Its system is brutally straightforward: every trade feeds a buyback.

About 97% of all trading fees flow into the Assistance Fund, an on-chain vault that automatically repurchases HYPE. Maker rebates still reward traders, but nearly everything else goes into compression. No votes. No proposals. No DAO bottlenecks.

By October 2025, the fund had spent $644.64 million — equal to 46% of all buyback spending across crypto that year. In total, 21.36 million HYPE were repurchased at an average price of $30.18.

And that resilience isn’t hypothetical. It was battle-tested during the October 10, 2025 crash, when $19 billion in liquidations hit in 24 hours. Binance froze under load, but Hyperliquid stayed online, processing nearly half of all liquidations.

According to @aixbt_agent, Hyperliquid burns around $25M weekly, already removing nearly $900M from circulation at a pace of $3.6M per day. Its revenue now exceeds Ethereum, Tron, and Jupiter combined, with HYPE trading solely on its own DEX — sealing off external arbitrage while buying back faster than most projects even earn.

Even skeptics have come around. As @stevenyuntcap noted, calling Hyperliquid “just airdrop hype” misses the point — the protocol found real product-market fit. Its engine runs on usage, not speculation.

UNI vs HYPE: Two Paths to Deflation

As of November 2025, UNI trades around $8 with a $5.5B market cap.

While HYPE sits near $40 and $11B — more than double.

The imbalance isn’t arbitrary. Investors see Hyperliquid’s machine as tighter, faster, and mathematically reliable.

Uniswap, by contrast, trades like a blue-chip utility — credible, but governance-heavy.

When it comes to fee generation, Uniswap pulls in about $1.8–$1.9B annually, all currently going to liquidity providers. Under UNIfication, one-sixth to one-quarter of that flow redirects to burns — roughly $460M per year.

Hyperliquid’s system dwarfs it: $1.29B annualized revenue, with $1.15B (89%) going straight into buybacks. It’s the DeFi equivalent of an 89% reinvestment rate — absurd for a protocol barely two years old.

Analyst @bread_ compared the two directly: UNI’s proposed burn would equal $38M per 30 days, ahead of $PUMP ($35M) but far behind $HYPE ($95M).

Governance vs Automation

Uniswap’s model depends on coordination. Every adjustment requires DAO approval, and liquidity providers — a powerful bloc — could vote to reduce burns if returns thin out. The system is elegant but fragile.

Hyperliquid’s design is mechanical. If volume rises, buybacks rise. If it drops, the system scales down. No committees, no politics. But that precision hides risk — Hyperliquid’s closed-source HyperCore and centrally managed Assistance Fund leave it exposed to trust and transparency challenges.

Who’s Winning So Far?

In raw performance, Hyperliquid leads. It’s executed $645M in buybacks in ten months — nearly triple Uniswap’s projected annual burns. The market knows it: HYPE’s market cap is twice UNI’s.

But Uniswap’s edge is longevity. Its governance structure, transparency, and integration across Ethereum and Unichain make it a potential long-term survivor — one that can adapt as regulation tightens and new DAOs form.

The real bet? Automation vs alignment.

Hyperliquid dominates now through speed and consistency. Uniswap could win later if it proves that community-driven economics can scale without collapsing under politics.

Either way, 2025 marks a turning point: DeFi tokens are finally backed by real cash flow, not inflation.

This article is part of DropsTab Research.

Hyperliquid vs Uniswap: Who’s Winning DeFi’s Buyback War? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.