RFC - Programmable incentives with Metrom

[0xVenky]

Hey everyone, I’m Venky, co-founder of Metrom! We’re excited to introduce ourselves to the community and share how we can help make UNI incentives on each chain more efficient and targeted.

With Metrom, protocols can achieve the same or greater liquidity depth while saving 20–50% of emissions. Imagine sustainable incentives that align rewards with your goals, benefiting both Uniswap and its users.

Metrom - Programmable Incentives for sustainable liquidity

Metrom is a programmable incentive platform designed to help protocols create smarter, more sustainable reward mechanics for liquidity providers. By leveraging strategies like KPI-based and range-based incentives, Metrom reduces inefficiencies, aligns rewards with protocol goals, and fosters long-term liquidity sustainability.

Vision and Motivation

Our vision is to create an ecosystem where liquidity mining evolves into a performance-driven, value-focused practice. Metrom empowers protocols to optimize their incentive structures, benefiting both projects and their communities.

Why Now?

AMMs face persistent challenges like mercenary capital, APR leakage, and indiscriminate reward distribution, leading to inefficient emissions and unsustainable liquidity.

1. Mercenary Capital: Liquidity that enters solely for high APR rewards and exits as soon as emissions end, leading to unstable liquidity pools due to short-term capital movement

2. APR Leakage: Unsustainably high APRs, depleting emissions without achieving long-term goals.

3. Lack of Targeted Incentives: Rewards are distributed indiscriminately across LPs, regardless of their contribution to protocol objectives.

Who Are We and Why Are We Building This?

Metrom is built by a team deeply rooted in the DeFi ecosystem, with expertise in designing and managing incentive structures for AMMs. Our journey started within DXdao and Swapr, where we also introduced DIY campaigns. We found that the token incentives were not sustainable and it led to the evolution of Carrot, a platform that introduced early forms of KPI-based incentives.

Through these experiences, we identified challenges running on-chain calculations and inefficiencies in liquidity mining. Metrom was born as the solution—an advanced, scalable platform that combines these learnings to empower protocols with tools for smarter incentivization. By shifting computations off-chain, we’ve unlocked new possibilities for designing and structuring incentives.

For a detailed look at our journey and the origins of Metrom, you can read our story here

Innovative KPI-Based Distribution

KPI-based/goal based incentives are at the heart of Metrom’s value proposition. Traditional liquidity mining rewards all LPs equally, regardless of impact. Metrom flips this by aligning rewards with measurable TVL KPIs ensuring emissions directly support protocol growth.

For instance, if a pool’s target is 10 million USD TVL with 250K UNI as reward, and the pool only reaches $5M TVL, only 125k in UNI would be distributed. More use cases could be found here: https://docs.metrom.xyz/kpi/usecases

Currently, we only use TVL as KPI metric, we will be adding newer KPIs like time, volume and combination of these as KPIs in the future.

Advantages of KPI-Based Incentives:

1. Efficiency: Protocols can allocate rewards based on performance metrics like TVL, volume or liquidity, ensuring emissions directly support protocol growth. Currently, we support TVL based KPIs and will expand the KPIs based on adoption and feedback.

2. Alignment with Protocol Goals: KPI incentives align LP rewards with the protocol’s broader objectives, such as improving liquidity depth and reducing volatility.

3. Flexibility: Campaigns can be customized to target specific behaviors, allowing projects to experiment and iterate without overcommitting resources.

By rewarding outcomes over inputs, KPI-based incentives help reduce the ‘mercenary capital’ effect while signaling to the community and chains the target TVL for bluechip pools relative to the $250K incentives spent.

Creating a KPI campaign is super simple with Metrom and should take under a minute to set it up.

Range/Tick based incentives

Range-based incentives are a powerful tool for optimizing liquidity allocation, particularly in concentrated liquidity pools like Uniswap V3. Instead of distributing rewards evenly across all liquidity providers, these incentives focus emissions on LPs supplying liquidity within targeted tick ranges, aligning rewards with areas where liquidity is most needed.

The current approach to distributing incentives targets all in-range positions. Introducing range-based incentives will allow the creation of campaigns that focus on specific price ranges or bands.

For example, in a DAI/USDC pool, a narrow range (0.995 – 1.005) could be incentivized to concentrate liquidity where it’s most needed. It would also work great for yield bearing pools like WETH/wstETH.

Aligning rewards with targeted tick ranges will improve pricing for traders and enhance market depth. Additionally, this approach enables greater capital efficiency by optimizing the liquidity provided and the incentives distributed.

How This Benefits Uniswap Compared to Current Incentive Structures

AMMs has historically faced challenges with liquidity incentivization, including the impact of mercenary capital, which enters for high APR rewards and exits once emissions end. This results in a rapid decrease in TVL, weakening their position and leaving gaps in liquidity depth.

1. Reducing Mercenary Capital: KPI-based incentives ensure that rewards are tied to meaningful outcomes, such as maintaining liquidity over time or boosting trading volume. This discourages short-term participation and rewards LPs who contribute to Uniswap’s long-term success.

2. Preventing APR Leakage: Traditional rewards have often resulted in APRs spiking to unsustainable levels (e.g., 100–200%), depleting emissions faster than necessary. With conditional KPIs, Uniswap could maintain an ideal APR of 15–25%, stretching incentives over longer durations while achieving the same TVL and activity goals.

3. Communicating clear goals: Uniswap could communicate clear goals such as achieving $10M in TVL on each chain in exchange for $250K in incentives. This ensures a balanced benefit: the chain and the community secures significant liquidity depth, while Uniswap maximizes the impact of its emissions.

Savings through Metrom’s KPI - a simulation

To illustrate the potential impact of Metrom, we analyzed Uniswap’s emissions on TAIKO and modeled two different KPI-based incentive setups. We can see that the once the incentives stop, the WETH-USDC pool has lost almost all of the TVL.

By shifting to KPI-based incentives, Uniswap could have saved over 30,000 TAIKO (~50%) in emissions on a single pool over just 30 days. Even with a 50/50 KPI split, savings still exceed 15,000 TAIKO—proving the efficiency of Metrom’s approach. All these saved rewards will be recovered by the campaign owner and could be sent to DAO or to extend campaigns for longer duration.

Simulation parameters:
Pool: WETH-USDC
TVL KPI: 5 million USD
Total reward: 60000 TAIKO over 30 days

Results:
Setup 1 (100% KPI based): 30,022 TAIKO saved
Setup 2 (50% KPI and 50% traditional): 14,988 TAIKO saved

The two different KPI setups in the provided spreadsheet are:

Setup 1 - 100% KPI based distribution

Here, the entire reward pool is distributed based on 100% KPI achievement.
Total savings - 30022 TAIKO

Setup 2 - 50% KPI and 50% minimum payout

In this setup, half of the rewards are distributed as a guaranteed minimum payout, while the other half is contingent upon meeting specific KPIs. This structure ensures that all participants receive a baseline reward, with additional incentives tied to performance metrics.

Total savings - 14988 TAIKO

Fee proposal

To demonstrate value and build trust, Metrom proposes a 0% fee for all campaigns during H1 2025. From H2 2025 onward, a 10% performance-based fee will only apply to emissions saved—ensuring alignment with Uniswap’s goals. Also, all the unclaimed fee after 400 days will be redeemable by the campaign owner.

Conclusion:

Metrom’s KPI-based and range-based incentive models are designed to complement Uniswap by making emissions efficient and aligning LP behavior with Uniswap’s KPI goals. By leveraging Metrom, Uniswap can unlock sustained liquidity across expanding chains—solidifying its status as the most capital-efficient DEX in DeFi.

We invite Uniswap DAO to explore and share feedback on this innovative approach to liquidity mining. Together, we can redefine incentive programs to be more effective, efficient, and sustainable for the ecosystem. We would love to hear your thoughts and discuss potential pilot campaigns to bring these ideas to life.

Links:
Dapp: https://metrom.xyz
Github: https://github.com/metrom-xyz/
X: https://x.com/metromxyz
Discord: https://discord.com/invite/S2kBEAGWbM

You can reach out to me on my X: https://x.com/0xVenky or my tg: https://t.me/venky0x

[jengajojo]

Thanks for this interesting proposal @0xVenky

The 10% fee on saved emissions which is proposed here could incentivize Metrom to prioritize its revenue over Uniswap’s goals. Hence I suggest, post-pilot, the 10% fee applies only to savings, meaning Uniswap keeps 90% of optimized emissions. This aligns Metrom’s profits with DAO success.

[0xVenky]

Hey @jengajojo Thanks for taking time to read through.

This is what was intended in the post as well. Metrom will be taking 10% fee only from the savings and the remaining 90% will be recovered by Uniswap.

Not just this, all the rewards that are unclaimed by the LPs could be recovered by Uniswap DAO after 400 days from the end date of campaign.

[SEEDGov]

Hi, thank you for the proposal!

We have a query. We understand that the service offered in this proposal is the same or very similar to the one already provided by Merkl at different Uniswap Service Providers, Working Groups and Committees. Is this correct? Do you think you could complement each other, or would it be a competitor?

As a differential and innovation point we noticed that you offer the possibility to configure KPIs, is there any other difference or differential that you offer with respect to Merkl?

For example, we note that Merkl provides services in different Uniswap proposals and initiatives:

• Governance Proposal - Scale Uniswap Liquidity on Celo
• [Temp Check] - Combined Liquidity Incentivization Proposal
• rbitrum LTIPP Incentive Matching
• [RFC] Discretionary Budget from UAC for Co-Incentive Campaigns
• [RFC] Deploy Uniswap v3 on X Layer
• Onboarding Package for Gnosis Chain
• Uniswap Deployments Accountability Committee [Update Thread]

We extend the consultation to @AbdullahUmar , @Juanbug , @alphagrowth , @PGov . @AranaDigital , @fin_areta @kpk if you can inform us whether you are indeed using Merkl’s services in the above mentioned initiatives and whether you understand that this would be compatible with the present proposal which offers in our view similar services.

[0xVenky]

Hey, thanks for your response and for going through the proposal!

To clarify, while Merkl and Metrom both offer liquidity incentive solutions, Metrom operates with a fundamentally different approach. We are direct competitors, and given the nature of both products, collaboration would be highly unlikely. However, here’s what sets Metrom apart:

1. KPI-Based Incentives – Unlike standard token distributions, Metrom allows protocols to tie incentives to TVL. This ensures that rewards drive meaningful outcomes rather than just temporary liquidity.

2. Range-Based Incentives – Our system enables liquidity mining campaigns that target specific price ranges, ensuring deeper liquidity exactly where it’s needed. This will help reduce the amount of incentive paid out for stable or pegged pools and could be used in other volatile pools.

3. Simplified Setup – Setting up a Metrom campaign takes less than a minute, making it significantly more accessible for teams that don’t have the technical bandwidth for complex configurations. We will also have a working SAFE dapp to create campaigns directly from within SAFE.

4. Zero Fees for Uniswap – Metrom does not charge fees for Uniswap campaigns.

5. Treasury Reimbursements & Recovery – Unused incentives (from unclaimed rewards or KPI-based reimbursements) return to the treasury. KPI based reimbursements could be claimed after every distribution and unclaimed rewards after 400 days.

We acknowledge that Merkl has its differentiators, such as their dual-token reward structure (Token A & Token B incentives). If the DAO sees value in that, we’re open to building a similar feature to match its functionality.

Additionally, Metrom can offer deep insights into incentive effectiveness, helping Uniswap growth teams analyze campaign performance and optimize future distributions. We see this as an opportunity to fine-tune incentives and ensure they deliver maximum impact.

[AbdullahUmar]

Thanks for providing this intro to Metrom. The idea of conditional incentive campaigns has come up in the past, and it’s something that’s definitely worth exploring. As of today, the only platform that the UAC has used is Merkl, and the primary customization that we’ve played around with are the three gauges between fees, token A, and token B. Alternative campaigns under the growth program have also used OKX for distribution on Optimism, and we will likely be using Beefy for an upcoming campaign on Boba. But, by and large, Merkl is the go-to.

Most of the recent campaigns, especially for nascent pools where initially bootstrapping enough depth is important, we’ve relied on giving token A/B some weight. Much of this is because there’s a degree of unpredictability with campaigns that may be live for months at a time without revision to pools or gauges. More active campaigns, like the one we ran with Gauntlet for the Arbitrum LTIPP, had biweekly pool selection based on various stats, and that was entirely fee focused. The goal there was heavily biased towards volume. But since the UAC focuses mostly on bootstrapping funds, we do rely to a degree on token A/B. Metrom’s tick-based rewards adds an interesting element to this, where we can potentially target certain ranges specific pools. The duration of a campaign though matters a lot for deciding ranges. It’ll likely require more active management. Curious how dynamic Metrom is for starting/stopping/customizing campaigns as they’re underway.

Perhaps the best use case for conditional campaigns is those that bring initial uncertainty. When a new chain launches, the DAO may be hesitant to provide incentives due to the untested nature of the target chain. This was recently the case with Metal and Lisk. It makes sense to pitch the DAO with reasonable minimum payout, then select a corresponding lower+upper bound limits. I am curious how this would affect the LPs’ perception. Adding constraints helps the DAO track KPIs and budget campaigns better, but more complex restrictions may be a turn-off for certain LPs. Time weight is also important for TVL constraints. Is there a restriction for how long TVL has to sit in a pool before rewards are paid out? What if rewards hit the minimum payout and then TVL falls back?

The other aspect is fixed costs and agility with new chains. We’ll need to discuss how much Metrom will charge to deploy close to day one on new chains—which is of course aside from the variable costs on each campaign. Features like cross-chain incentives, where users earn on one chain and get paid on another, is also very helpful, especially when it comes to bridging the DAO’s funds. Having options here is nice.

Just set up a gc with you @0xVenky and the UAC to chat more.

[kpk]

We agree with @SEEDGov and @AbdullahUmar that Metrom overlaps with existing initiatives and products. Specifically, Gauntlet and Forse Analytics have already been funded to analyze and provide insights on Uniswap DAO’s incentive campaigns, to identify patterns and optimizations specific to Uniswap v3. Additionally, Merkl is used extensively across various incentive campaigns as a key tool.

That said, it’s always valuable to explore alternative solutions if they offer meaningful improvements over the current status quo.

Could you clarify whether you see Metrom as a replacement (an improvement over the current tooling and methodologies) or as an additional tool that provides unique value alongside existing solutions?

[BaptistG]

Hi, very interesting proposal! We noticed some questions around the differences between the two systems and wanted to give our input on this:

• Range-Based Incentives - while this is close to our fees/token0/token1 approach, it is a very cool feature that we’ve also been working on for several months and are currently refining to enable it to scale to pools with thousands of swaps and LPs. It will come out for both UniswapV3 and V4 in the coming months. The small twist we’re adding is that we will follow the tick and enable you to simply incentivize +x% -y% of the active tick to make management easier.
• KPI-Based Incentives - This feature prevents overpaying for liquidity but eliminates high APRs at campaign launch that can bring in a lot of new LPs. Some protocols mitigate this by creating smaller initial campaigns and adding new ones on top to further boost APR without extra cost, as fees are proportional to distributed tokens. It’s also quite hard to implement on concentrated liquidity pools (as you could technically have a TVL of $10M with 0$ in range), we’ve been thinking about how to implement this as well!
• Treasury Reimbursements & Recovery - Merkl contracts were recently upgraded, allowing campaign creators to recover unclaimed funds as soon as 30 days post-campaign (though we recommend waiting a year). By the way, this upgrade also comes with the ability to override campaign configuration while a campaign is active.
• Simplified Setup - this is a core Merkl feature and has been available since we launched, it supports safe and transaction builder payload generation as well.
• Fees
  • While we can’t offer our system for free due to sustainability concerns, we understand Metrom’s approach as a market share strategy. Our model is straightforward:
    • We take a percentage of distributed tokens
    • Higher distribution volume leads to lower fees
    • Uniswap naturally has a significant discount, likely to decrease with UniswapV4’s release
  • The approach of charging 10% on saved tokens is interesting but we prefer not to base our fees on campaign performance, as both Merkl and Metrom are technical tools enabling teams to run incentives on complex systems. Campaign “success” isn’t fully under our control and shouldn’t correlate with our fees. However, we strive to maximize campaign distribution through our user base and distribution partnerships.

A few other differentiating factors that are useful to keep in mind when choosing the solution:

• Reward forwarding - Merkl automatically detects ALMs such as Beefy, Steer or Gamma and is able to forward the rewards earned by the vaults back to the original users. This makes concentrated liquidity incentives much more accessible to less advanced DeFi users and fosters competition between the ALMs to create the most efficient strategy to maximise their users returns.
• Distribution - Merkl is a popular venue for farmers as we display hundreds of farming opportunities on over 30 EVM chains. On top of this, all the data displayed in our frontend is available in our API for free, this led tens of protocols to directly integrate Merkl rewards and claims in the frontend, further increasing distribution. For example, as soon as Uniswap creates a campaign on one of their pools, the APR will natively show on Beefy, Gamma, Ichi etc. We’re even seeing companies develop AI agents to dynamically create Merkl campaigns.
• Battle tested - we’ve distributed over $90M to over a million users across 30 EVM chains on over 70 different protocols. Scaling to such a userbase has been a real challenge with many learnings/sacrificed weekends along the way.
• Fixed APR (coming soon) - Fixed APR campaigns will enable incentivizors to pay users a fixed APR (or points) on the range incentivized, up until a max TVL where the budget is not enough to last until the end of the campaign, forcing the APR to diminish. This would not make sense in our current setup as you would not want to distribute more incentives for inefficient liquidity (this would enable users to create very wide positions and get more rewards when they’re actually not improving liquidity depth around the tick). In practice this is very similar to the KPI based incentives, gg Metrom for beating us to it!

While we feel like Metrom has been quite heavily inspired by our system and our UI/UX we’re happy to see new players in the space as this will push us to build an even better system in the future!

[0xVenky]

Hey @AbdullahUmar @kpk , thanks a ton for the detailed response. Will try best to answer.

Token A & Token B Support We’re actively building multi-token incentive capabilities to align with how Merkl handles two-token rewards. Agree that this is a great way to bootstrap initial liquidity.

@AbdullahUmar

Metrom’s tick-based rewards adds an interesting element to this, where we can potentially target certain ranges specific pools. The duration of a campaign though matters a lot for deciding ranges. It’ll likely require more active management. Curious how dynamic Metrom is for starting/stopping/customizing campaigns as they’re underway.

Currently, once a Metrom campaign is set, it can’t be changed in real-time. However, we’re researching automated “recurring campaign” to streamline more frequent adjustments. For instance, you could set a range (e.g., -15% to +15% around current price) and let the system automatically renew those parameters weekly or biweekly.

@AbdullahUmar

Is there a restriction for how long TVL has to sit in a pool before rewards are paid out? What if rewards hit the minimum payout and then TVL falls back?

Metrom calculates TVL every block and distributes incentives accordingly, making it impossible for LPs to game it by depositing liquidity temporarily to unlock and claim rewards. Minimum payout is just an alternate name for traditional liquidity mining if campaign creators want to combine traditional farming with KPI farming.

Deployment Costs & Timelines for New Chains
The deployment cost for new chains is waived for Uniswap. We can onboard any chain that supports TheGraph within a week. For chains without TheGraph, we’re open to use alternative infrastructure providers and that has usually been supported within a week.

@AbdullahUmar

Features like cross-chain incentives, where users earn on one chain and get paid on another, is also very helpful, especially when it comes to bridging the DAO’s funds.

This is something we dont have right now, but we investigated and felt that this is not too complex to build as all the logic is in the backend and we can build this soon-ish. Do I get it right that a campaign would be created in Arbitrum to track the liquidity in Sonic and let the addresses claim in Arbitrum?

@kpk

Specifically, Gauntlet and Forse Analytics have already been funded to analyze and provide insights on Uniswap DAO’s incentive campaigns, to identify patterns and optimizations specific to Uniswap v3.

We’d be happy to collaborate with both teams to leverage their insights on optimizing incentives. Metrom’s KPI-based approach can complement existing analytics by making liquidity mining more precise and goal-driven.

@kpk

Could you clarify whether you see Metrom as a replacement (an improvement over the current tooling and methodologies) or as an additional tool that provides unique value alongside existing solutions?

We see Metrom as an alternative tool that can offer unique features that go beyond standard liquidity mining campaigns. Our goal is to bring greater capital efficiency, flexibility, and alignment with Uniswap’s growth objectives. We would be able to better answer this if we get to learn a bit more about the different tools that UAC is using for incentives. There could be cases where we are complimentary and areas we are a replacement.

We appreciate the opportunity to explore these ideas further and look forward to discussing details during our upcoming group call.

[0xVenky]

@AbdullahUmar

I am curious how this would affect the LPs’ perception. Adding constraints helps the DAO track KPIs and budget campaigns better, but more complex restrictions may be a turn-off for certain LPs.

I wanted to respond seperately as it is a bit of a long explanation.

Sample Campaign Setup

• Total UNI Rewards: 5500 UNI
• 3 KPI Tiers:
• Tier 1: < $500k TVL → 750 UNI
• Tier 2: $500k–$1M → 1800 UNI
• Tier 3: $1M–$1.5M → 2950 UNI
• Campaign Duration: 6 months

Lets assume the price of UNI is about 12 USD.

The KPI-Based APR starts modestly (3.60% at $100k TVL) and rises to 8.80% by $1.5M TVL – this encourages LP to evangelise a bit about the pool to unlock higher APR.

The Traditional APR at $100k is almost at 132% but plunges as TVL scales, often attracting short-term capital.

Note: A tiered KPI model is more complex than a flat-rate approach and may require a bit of study before it is setup monitoring and fine-tuning. We will be delighted to work with the UAC to ensure emissions are throttled appropriately and campaign tiers are optimally designed. Also, this is a huge change in the way LPs read APR, so we would want to recommend using a mix of traditional and KPI based by using the minimum payout in Metrom.

We are also aware that 4% APR wouldnt attract any LP under 500K, so we need to work on the numbers a bit as this is just an example to show how this could possibly work. Happy to jump on a call and explain this further.

[0xVenky]

Hey, really appreciate the supporting words.

We admit we’ve historically been very focused on running everything fully decentralized, permissionless and on-chain. In 2022 as part of dxDao, we experimented with DIY campaigns on a UniV2 fork and later built Carrot to handle conditional on-chain incentives. However, it turned out to be heavily reliant on custom on-chain oracles, making setup quite complex and gameable. We looked at Merkl’s off-chain compute model for inspiration, and it helped us refine our approach.

The zero-fee approach is a strategic choice for us to encourage adoption. The immediate goal for us is to be able to demonstrate the efficiency of programmable incentives.

You guys are definitely killin it for pioneering innovation in incentives distribution and we are excited to see how both platforms (and many more) continue to evolve this space.

[0xVenky]

Case Study: Demonstrating Metrom’s KPI Incentives vs. Traditional Models on Sonic

After introducing ourselves to the DAO, we had discussions with UAC and they advised us to do a case study on how UNI emissions will be efficient through Metrom. This is a detailed study and results of how Metrom can help in running efficient liquidity mining campaigns.

Summary

Metrom is a KPI-based rewards distribution platform designed to help Uniswap optimize incentive token usage by tying emissions to measurable performance outcomes.

To demonstrate its potential, we ran a shadow campaign in parallel to Merkl, funded at a 1:100 ratio. Based on earlier discussions where Uniswap mentioned an APR of 15%, we arrived at a target TVL goal of $2.5 million. Because the pool reached only 43.92% of that target, just 0.9054 UNI out of 2.0615 were distributed, leaving 1.156 UNI unspent.

Scaled to a full campaign, this translates to 115.6 UNI saved in a single week, underscoring how a KPI-driven model can preserve DAO funds for future incentive programs.

Background

Following discussions with UAC, we set up a campaign to shadow one of the already running campaigns to demonstrate how a KPI-based rewards model can dramatically improve liquidity incentive efficiency.

Traditional models distribute a fixed reward regardless of performance, often overspending UNI tokens even when liquidity targets are not met. In contrast, our KPI-driven approach ties reward emissions directly to the achievement of a pre-set TVL (Total Value Locked) target.

Check out the shadow campaign here in Metrom.

Key benefits of the KPI model:

• Aligns rewards with real liquidity impact: Only a proportional share of UNI is paid out as the community approaches the TVL goal.

• Proportional Reward Scaling: LPs earn UNI rewards that increase as the pool’s liquidity grows toward the target—ensuring that every deposit contributes directly to higher rewards as the community’s TVL advances.

• Efficient Use of UNI: If the liquidity target isn’t fully reached, the excess UNI remains available for future incentive campaigns, helping to maintain a sustainable long term reward system

• Sets clear community goals: By communicating the TVL targets (e.g., $2.5M in this case), the community has a tangible milestone to rally behind, fostering greater community collaboration.

Campaign Setup

For this demonstration, 1% of the total rewards distributed over 7 days by Sonic is allocated. This is a ratio-based setup to mimic actual rewards (multiplied by 100, it aligns with the real figures).

Campaign start date - 15-Feb 23:00 UTC
Campaign end date - 22-Feb 23:00 UTC

Rewards through Merkl	Metrom setup
29.45 UNI / day	0.2945 UNI / day
1288 wS / day	12.88 wS / day

KPI TVL Goal: A target (upper bound) of $2.5M is set as the 100% KPI achievement level to match the 15% APR requirement.

KPI Model mechanics

During the 7-day campaign, the pool only reached 43.92% (Time weighted average TVL) of the $2.5M TVL target and hence only 0.9054 UNI is distributed out of 2.0615 total rewards. The remaining 1.156 UNI is recoverable by campaign owner and can be used for extending incentives.

Refer this spreadsheet for campaign performance, TVL progress, and detailed reports for further reference. In the chart below, the green columns are the KPI measurements reached and the dark grey is the total recoverable incentives that didn’t meet the KPI. The pie chart denotes how much of the incentives are distributed vs recoverable.

How we run the calculation

Incentive Calculation Process

Every minute, we take a snapshot of the TVL for all the pools that run the KPI campaigns.

Every 5 minutes, we calculate the average of all the measurements in the past 5 minutes and with that we compute the KPI%. The rewards are then assigned to the wallets within our backend.

Every hour, the prorate rewards are pushed onchain and claimable by liquidity providers. The remaining unmet KPI rewards are then allocated to the campaign owner to recover them.

With this minute by minute snapshot, the system ensures that incentive payouts always reflect actual liquidity performance.

Campaign Analysis

As we see that Sonic is slowly picking up steam during the later part of the campaign, the TVL is also growing and the incentives could have been put to better use when the chain is growing rather than exhausting all the incentives before the chain has shown true traction. Historically, many Uniswap incentives have been deployed when chain activity was still ramping up, leading to suboptimal token spending.

Exploring Alternate Configurations

To further understand the flexibility of the Metrom, we evaluated several alternative scenarios with different KPI setup

a. 50% KPI + 50% Blanket Distribution

Half the rewards are guaranteed (blanket payout, no KPIs), and the other half remains KPI-based.

Calculations:

Description	Calculation	Amount (UNI)
Blanket no KPI Distribution (50%)	50% of 206.15	103.075
KPI-Based payout (50%)	50% of 206.15	103.075
KPI Met (42% of KPI payout)	43.92% of 103.075	45.2705
Total Distributed Rewards	103.075 + 45.2705	148.3455
Recoverable unmet KPI rewards (Savings)	206.15 - 148.3455	57.8045

While this ensures a minimum guaranteed reward for all LPs, it reduces overall savings if the KPI isn’t met because part of the rewards are disbursed regardless.

b. Floor of 1M TVL with 50% KPI + 50% Blanket

A floor is set at 1M TVL where 50% of the rewards are paid regardless. Beyond that, rewards scale with KPI progress.

Purpose: This provides a safety net to LPs when liquidity is very low while still encouraging efforts to exceed the floor and meet higher targets.This leads to unlocking higher APR as the TVL grows.

Calculations:

Description	Calculation	Amount (UNI)
Blanket Distribution (50%)	50% of 206.15	103.08
KPI-Based Distribution Pool (50%)	50% of 206.15	103.08
Average TVL	(Time-weighted average - this is an approximation)	1,098,108
KPI Distributed Reward	(Average TVL) / (Goal TVL - Lower Bound TVL) * KPI pool %	19.14
Total Distributed Rewards	Blanket + KPI Distributed = 103.08 + 19.14	≈ 122.23
Recoverable unmet KPI rewards (Savings)	Total Rewards – Total Distributed = 206.15 – 122.23	≈ 83.92

The base incentives is paid out to all the LPs until the TVL reaches 1M and then once the TVL in the pool goes above 1M, it unlocks a new set of APR. This is the only case where higher TVL brings higher APR.

Conclusion

The shadow campaign and case study successfully demonstrates that KPI-based incentive distribution can effectively align rewards with actual liquidity performance—saving UNI tokens by setting clear, actionable goals for the community.

By scaling rewards in proportion to the TVL achieved, the model avoids overpaying for underperforming pools. This also motivates LPs and community to evangelise toward reaching established clear TVL targets.

Moreover, the flexibility to combine KPI-based rewards with blanket minimum payouts or to tiered APR incentives by TVL thresholds offers additional levers for optimizing liquidity growth.

This case study validates the efficiency and strategic advantage of adopting a KPI-based approach over traditional flat-distribution models.

Community feedback is invaluable to us, and we look forward to deeper collaboration with the Uniswap community. We’ll also continue working with UAC and will be delighted to deploy Metrom to support Uniswap’s incentive distribution on new chains, ensuring the DAO approved rewards are used effectively when timing and outcomes on these chains are uncertain.

[0xVenky]

Hey @okdunc , thanks for the appreciation ser!

TVL naturally fluctuates with market conditions, so incentives shouldn’t stay static; Metrom computes emissions every minute, throttling payouts if TVL falls and scaling them up when it rises, eliminating the “spray-and-pray” overspending of flat models. KPI-based campaigns extend the lifespan of incentives by tying payouts to a TVL goal—LPs must stay longer to unlock the full reward—and they’re more cost-efficient because if the pool hits only 50 % of the target, only 50 % of tokens are distributed, leaving the rest for future campaigns.

While a TVL KPI alone doesn’t guarantee liquidity will stick once incentives stop, it does make the spending itself efficient and lets protocols design campaigns that naturally encourage stickiness—for example, keeping rewards live only while TVL is maintained or configuring an APR curve that rises as TVL grows, giving LPs a reason to add capital and stay.

We’re also keen to work on optional vesting—say, 50 % unlocked immediately and 50 % vesting over 6–12 months. We would love to work with protocols that wants this to understand the different vesting conditions.