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.