Firstly, Gauntlet’s report should be shared in the forum. As previous comments noted, a significant amount was spent on this report, yet the context provided in the forum for such large incentives being justified is extremely superficial. For example - Aerodrome has high incentives due to the fact that 100% of fees are redistributed to veHolders. Therefore, this is not an accurate comparison for everyone that understands DeFi. Secondly, zkSync’s $5m monthly emissions boosted TVL from $100M to $266M; given this, I would like to see Gauntlet’s methodology that assumes $7m/month for Unichain can lead to 750m TVL? And how much will remain sticky? This just comes across as presenting big numbers to create an urgency that large incentives are required for growth. This is not the case; projects like Fluid are growing extremely well without relying on incentives. To be honest, it’s ridiculous to expect delegates to make an informed decision to allocate such a large amount of funds with so little context.
Since the report was not shared here - let us share our own analysis and benchmark the success of 2024 Uniswap incentive programs for new chain deployments:
Scroll Campaign Results: 18th project by TVL, 7th DEX by TVL, 490k TVL
Linea Campaign Results: 35th project by TVL, 12th DEX by TVL, 130k TVL
Manta Campaign Results: 36th Project by TVL, 10th DEX by TVL, 3.6k TVL
Taiko Campaign Results: 10th Project by TVL, 7th DEX by TVL, 187k TVL
ZKsync Campaign Results: 13th Project by TVL, 6th DEX by TVL, 6.46m TVL
MoonBeam Campaign Results: 13th Project by TVL, 5th DEX by TVL, 22k TVL
Mantle Campaign Results: 31st Project by TVL, 13th DEX by TVL, 2.6k TVL
Sei Campaign Results: 14th Project by TVL, 6th DEX by TVL, 718k TVL
Gnosis Campaign Results: 7th Project by TVL, 2nd DEX by TVL, 8.64m TVL
Polygon zkEVM Campaign Results: 31st Project by TVL, 13th DEX by TVL, 2.6k TVL
Have these deployments been successful in creating a flywheel effect? None of these deployments have over $1m TVL, and barely any have cracked the top DEXes on their chain. Most of these deployments are completely dead and the only volume comes from arbitragers fixing the stale prices.
From a business perspective, Uniswap has spent $2.75M on these deployments (excluding matched amounts from protocols) while the annualized fees from these deployments are $310K. Even if a fee switch were applied to reclaim fees—assuming a 15% share—that would yield roughly $46,500 per year for the DAO, equating to a 1.7% return and taking 59 years to break even.
To @Gauntlet and everyone voting yes on this proposal (and also @Matt_StableLab @Doo_StableLab , whose team were paid $60K for an incentives dashboard in October that remains undelivered): Can these incentives be considered successful? If yes on what metric, if no what is the evidence that Unichain will differ from these deployments?
Mercinary capital is notoriously chain and protocol-agnostic, chasing the best rewards. While such capital can temporarily inflate TVL and metrics, it evaporates once incentives drop. Incentives only have value when paired with a superior product that drives lasting user engagement. Evaluating Unichain, at $10M TVL, we see little inherent market demand for this Layer 2. Subsidising activity with incentives might temporarily boost activity, but will demand persist? Historical examples like MODE (TVL dropping from 575M to 19M), Manta (667M to 46M), and Blast (2.27B to 233M) offer little optimism that Unichain will fare any differently.
We are not opposed to incentives—they are necessary for projects of this scale. However, they must be planned carefully and backed by solid evidence. Instead of replicating outdated growth tactics, why not allocate a budget to incentivize v4 hook pools with unique architectures on a case-by-case basis, rewarding both LPs and the hook creators? This approach would drive innovation and highlight the superior customizability of v4 pools.
We must move beyond inflating numbers with massive incentives and focus on funding sustainable solutions that drive real, long-term engagement – We need to make Uniswap great again.