[RFC] Uniswap Unleashed: Unichain and Uniswap v4 Liquidity Incentives

Requests for Comment
22

As we move into the snapshot phase, the proposal’s combined structure has sparked significant debate. To address this, I propose that the Foundation divide the vote into four distinct options:

  1. Approve the full proposal (Uniswap V4 and Unichain incentives).

  2. Approve only the Uniswap V4 incentives.

  3. Approve only the Unichain incentives.

  4. Reject the proposal.

This would allow stakeholders to vote directly on each part, avoiding an all-or-nothing approach. It ensures a clearer, fairer reflection of preferences and reduces potential friction.

2 Likes
23

Hi @devinwalsh while these questions were answered in the Community Call on Friday 21 February, 12pm ET, and we thank you for that, we would like to reiterate them here so that the community can be informed.

Does the DAO have any control over Unichain and the fees distribution? Correct me but from what UF answered to other delegates in past calls, I understand it does not, so my main questions are why would the DAO fund incentives in Unichain for 21M? And what is the benefit for DAO of this required funding?

Thanks.

1 Like
24

Hey @devinwalsh , read the proposal and took part in the community call to understand more about the proposals. We appreciate the focus on setting KPIs on the campaigns as this will help in making sure that the emissions are meeting the TVL goals. We also like the fact that Uniswap is now preferring to move away from setting static long term campaigns (like the 6 month ones on Sonic) towards dynamic 2 week campaigns. This approach will help throttle emissions and quickly identify which pools perform best.

Metrom can already process these KPI based distributions and we are seeing this real-time on a shadow incentive campaign that we are running on Sonic based on the original distribution. More details below:

1600×1316 181 KB

Shadow campaign specs

• We’re self funding the study with a 1:100 reward ratio, where Metrom rewards 1% of the same rewards defined in Merkl for the USDC.e-WETH pool. The rewards per day are 29.45 UNI and 1288 S on Merkl, while its 0.2945 UNI and 12.88 S on Metrom.

• The motivation is to demonstrate to the Uniswap DAO the efficiency gains achievable through KPI campaigns. As you can see from the screenshot above or the link below, the distributions are automatically proportional to the TVL.

Link to campaign in Metrom: https://app.metrom.xyz/en/campaigns/146/0x1ef4f825e2c4af8f2bd12219dba8a61944d5b71b3e608553d21350eb5cd6f1d9

We commit to publishing a comprehensive case study post-campaign that will showcase not only the efficiency gains (including UNI savings) but also a comparison of multiple KPI setups. This data-driven study will offer insights for further refinement and help align our approach with Uniswap’s strategic objectives.

The KPI based emissions are not confirmed to have retention or sticky liquidity, but it is a first step towards bringing efficiency to emissions, so that new such experiments could tried for combining TVL KPIs with volume and utilization.

25

While I know the UF is acting in good faith, this proposal draws too heavily from a 2021-style playbook with questionable effectiveness.

I think this whole conversation around incentivization needs to be reframed, with proper consideration around how people are using DEXes in 2025.

Additionally, this proposal seems to differ very little from one we might have seen in the previous regulatory environment. That might align with the Foundation’s more conservative approach, but it’s plainly out of sync with the broader space.

Okay, so what’s the proposal?
UniLaunch.

Unichain’s canonical token and liquidity launcher. That’s pretty much it.

Full token supply deployed as liquidity and permanently locked, with LPs fee claimable by deployer. Interface fees built in for deployment and trading interfaces.

This is the kind of onchain activity that sustainably draws the ETH<>USDC liquidity we’re about to spend tens of millions of dollar to rent on a short term basis.

Willfully ignoring Pump, Clanker, et. al because they attract a lot of unsavory BS, is not going to change the fact that these are the protocols driving trading volume on DEXes these days.

Use a fraction of the budgeted incentives to bootstrap a few interfaces.

We all agree that immutable, un-configurable code is legally defensible, so why wouldn’t this be?

Canonizing this protocol on Unichain will not only provide a sustainable income stream for future incentives and grants, it will also crowd out the potentially nefarious or extractive actors who will try to occupy this position in the future. I recognize there are legal and structural hesitations around being revenue-generating in any capacity, but the current proposal is wasteful and lacking in creativity. There’s gotta be a way to do this.

The token launchpad is a staple of any chain and a key driver of volume. Incentivizing underutilized liquidity on short term rentals is the exact opposite method for how we should be approaching something like this in 2025. Not to say liquidity incentives shouldn’t be part of the toolkit, but leading with them, at this kind of scale, is misguided.

26

@0xkeyrock.eth analysis right above your response undermines much of your defense of picking Gauntlet, which still has not posted in this forum. There’s too much handwaving and not enough solid evidence to back up the selection criteria, which raises a red flag.

Again, my number one suggestion is to allow an incentive package integration option for V4 builders. Once the V4 builders complete the cohort process and are ready to launch after audits, simply ask:

“Would you like Merkle and Gauntlet to handle your incentives, or would you prefer to build them in-house?”

Perhaps structuring it around this option would offer more flexibility and reduce dependency on these two third-party firms, while still giving the builders a chance to work with them.

Additionally, it’s pretty obvious that Uniswap Labs and now the Foundation have close relationships with the Gauntlet team. Personally, I don’t see much value added by Gauntlet to the overall space (lack of transparency with the Morpho Vault criteria, AAVE departure, failed and outdated liquidity distribution initiatives, and inactivity in responding to public discourse until the pressure becomes too much).

To highlight @GFXlabs in the other forum post it is important to setup a board to insure conflict of interests are not happening and to have a layer of accountability and neutrality as we approach $200 million post funding.

EDIT: Other potential conflicts of interest may arise between @Gauntlet and the lending hooks being built on V4. How can Gauntlet remain impartial if they have an allegiance to certain lending platforms’ equity or advisory roles (e.g., Morpho), while potentially having grievances with others, such as AAVE? Will the new V4 lending hooks be fairly incentivized, or is competition being intentionally limited?

1 Like
27

Hey all, wanted to comment on this from my account, having some thoughts outside the scope of this specific proposal. While I’m currently the Governance Lead at Gauntlet, I’ve also lived through many angles of L2 incentive programs as an author, analyst, and grant recipient (at Boost); I want to see if I can help contextualize some of the comparisons I’ve seen in discussions surrounding the incentives aspect of this proposal.

I’ve noticed a conflation between some of the more general incentive programs we’ve seen at the L2 level, focused primarily on protocol support and ecosystem growth, and what I believe is a particular and targeted campaign outlined above. The most significant community concerns I see are 1) long-term retention and 2) the incentive methodology.

To start, I want to state that Gauntlet agrees with many of the above points (@UreNotInD, @alicecorsini, @0xkeyrock.eth, etc.). I’ve also personally questioned the efficacy of many Uniswap growth incentives for new deployments and broad L2 programs, asking for more analytics and KPIs to help highlight what’s working (re: @stablelab dashboards). I think Gauntlet and the UF’s approach should help address several of these concerns.

The strategy here is built to drive long-term sustainable growth in V4 and Unichain. This clarity of focus comes from 1) the Foundation’s strategic focus and 2) Gauntlet’s robust (and tested) methodology.

1. Strategic Focus

One takeaway from previous L2 growth programs is that they relied on DeFi protocols as a proxy
for TVL growth. It’s no secret that early programs (Optimism, Arbitrum) lacked strategic goals. To many’s observation, this resulted in some successes, and many failures. Many grants attracted mercenary capital and had significant principal-agent problems between grantees (protocols) and the grantor (networks).

Uniswap and Gauntlet have designed this program to actively combat those trends by focusing on two goals: migrating volume/liquidity from V3→V4 and growing strategic asset liquidity on Unichain.

V3→V4 Migration

There is a solid precedent for migration incentives resulting in long-term retention. Gauntlet has managed programs like this before (USDC migrations on Arbitrum). Even at our favorite punching bag, STIP, GMX demonstrated remarkable retention from its incentives program to move users from V1 perps to V2.

From a business perspective, the Foundation (and the DAO) should value accelerating the adoption of V4. Providing liquidity for novel hooks on V4 will both accelerate the deployment of new integrations and provide an opportunity to expand Uniswap’s moat. This offers valuable differentiation against DEX competitors during the period when Uniswap V4 benefits from its BUSL licensing.

Unichain Incentives

Unichain’s advantage is that it is a dedicated network for the entire Uniswap ecosystem. While Uniswap competes with native incumbents on most L2s (e.g., Camelot on Arbitrum, Aerodrome on Base, SyncSwap on zkSync), on Unichain, it can function as the exclusive AMM.

With an opportunity to leverage strategic incentives, the Uniswap DAO can foster a deeper liquidity environment by doubling down on Uniswap liquidity, focusing on AMM pairs that attract protocols, developers, and capital to build on top of that liquidity. This extends to lending markets, perpetual markets, and aggregators that can unlock new DeFi strategies and products. The goal is to make Uniswap V4 on Unichain the premier liquidity hub in crypto by drawing real users, volume, and sustainable use cases through targeted liquidity investments.

Once live, Superchain interoperability will extend this liquidity to other Superchain members like Ink, OP Mainnet, and Base.

2. The Incentive Methodology

The second observation many have pointed out is that most incentive programs have suffered from gameable liquidity mining incentives that result primarily in mercenary capital joining the ecosystem to “farm” rewards, only to leave when incentives end. This is a valid concern, and as many have pointed out, this activity has occurred on several DAO-led incentive programs to date.

Gauntlet has had the opportunity of working with Uniswap on a few select programs, and we believe that we have achieved a methodology that not only protects against sophisticated actors utilizing complex farming strategies (such as Just-in-time liquidity and wash-trading) but also introduces ruthless efficiency in dynamic optimization and constant monitoring of liquidity conditions onchain.

Lastly, Aera allows the DAO to autonomously retract the program if it does not meet the desired goals. Dashboards will include high-level KPIs and widgets to provide transparency on core pool growth and separate it from the noise of “rug pull” or other toxic activity. Gauntlet’s data and analytics are designed to provide full transparency for our program’s live monitoring and evaluation. If folks haven’t yet, I strongly recommend checking out our previous research and results from existing Uniswap campaigns on Arbitrum (1, 2).

Final Thoughts

I’d also like to challenge the assumption that deploying and incentivizing Uniswap on Unichain is misaligned with the DAO. I would hate to see the politics of Unichain’s launch, no matter one’s feelings, distract from this.

Currently, UNI holders do not receive sequencer or validator revenue from any network where V4 is deployed, so it’s inconsistent to oppose Unichain’s V4 instance simply because it lacks sequencer fees for the DAO. Further, it’s worth considering whether decisions should be made on behalf of UNI holders or the “DAO” treasury. Thanks to the Unichain Validation Network (UVN), Unichain is the only V4 instance that provides alignment with UNI holders at the chain level. I’m having trouble understanding how this deployment is not the most valuable instance of Uniswap V4 for UNI holders.

2 Likes
28

There is a solid precedent for migration incentives resulting in long-term retention

If the expressivity and programmability of v4 are not incentive enough for LPs to migrate from v3, there’s very little gained to the DAO or protocol by paying them to do it. Migration for the sake of it is not a valid objective. There’s also nothing in the proposal about any specific kind of hook that will be incentivized. (Are these just generic LP pools on the same pairs, but v4?) That opens the door to a lot of subjective decision-making and politicized value assignment later on.

At a higher level, this kind of legacy, manually-operated incentive program makes no effort to even engage with the protocol itself. V4’s core feature is the ability to do exactly this kind of stuff in more programmable ways. Instead, it’s being delegated to a black box committee. Might as well be 2021.

29

While there are several angles to this proposal, this comment will focus on Unichain Incentive program, which itself also involves several discussion points.

1. Service Provider
-There have been discussions about the Service Provider, in this case, primarily about Gauntlet.

Whether the Uniswap Foundation can unilaterally decide to utilize certain service providers

-The Uniswap Foundation indeed can as it falls in their scope and mandate. Uniswap DAO can of course challenge the Uniswap Foundation’s selection but at the same time, there’s no restriction for Uniswap Foundation to have Open Process for all of their services. In similar logic, Uniswap DAO members and various Service Providers can also propose alternative set ups and put to vote regardless of what Uniswap Foundation proposes or even passes the vote.

Whether Gauntlet is a qualified service provider

-The mandate and scope of this proposal is to design and manage incentive programs. Gauntlet has designed and managed incentive programs before from DeFI protocols such as Uniswap to Compound to L2s and mainnets. So far comments from the community that are skeptical are noting some of incentive programs that Gauntlet contributed were not “sustainable.” But this not only is a cherry picking fallacy (as several such as Gauntlet’s Compound incentive contribution saw its TVL grow by 6 times and even now is still higher than when they started) but also does not reflect possibility that without them, the consequences could been worse.

2. Unichain Incentive
-Another key discussion is about Unichain incentive itself.

Whether Unichain Incentive could be helpful

And while it’s true that TVLs of Uniswap on multichain fell after the incentives stopped, there are ways to optimize as shown by both Gauntlet and also Forse. In addition, there are several factors that does make this very different from others. Unlike other chain incentives, this is native and this can be a very strong factor in making incentives more effective. Granted, there can be always counter examples but incentives for Katana DEX on Ronin was able to quickly grow to over 1 billion USD in TVL, though it was heavily impacted by the hack on Ronin bridge. dYdX, even after the incentives ended, still maintains high volume though its marketshare is smaller than before.

In conclusion, while some aspects of the proposals could be edited or improved, we believe it’s a valid proposal

30

This is a good example of why incentives could be helpful as Fluid and Instadapp have been providing incentives for an extended period of time. In the beginning, traction took some time but grew rapidly later

https://gov.fluid.io/t/update-weeths-wsteth-vault-parameters-wsteth-borrowing-rates-and-extend-rewards-on-arbitrum/835

31

Thank you all for the thoughtful feedback and questions. We see three primary areas that require a deeper dive: (1) whether liquidity incentives truly yield sustained, ROI-positive growth; (2) the methodology used for setting KPIs, TVL, and volume targets; and (3) how pools are selected and managed. Below is a deeper look at the approach to each.

Sustainable Impact of Liquidity Incentives

We agree mercenary capital and LPs warrant legitimate concern. Our dynamic optimization approach is specifically designed to counter this. Here’s how:

  • Historical Benchmarks & Live Feedback Loops:
    Gauntlet’s strategy is backed by prior campaigns on other networks (ref’d in previous comments), where we closely tracked retention after incentives ended. We run constant performance checks (e.g., daily volume, net LP flows, pool market share) and recalibrate incentives every two weeks, aiming to capture not just raw order flow but sticky liquidity that remains even after emissions taper.
  • Integration With Broader Growth Programs:
    We view incentives as one “supply-side” lever in tandem with “demand-side” initiatives—like developer grants, new hook deployments on V4, and early DeFi protocols on Unichain. When incentives are complemented by active builder engagement, the resulting network effects outlast the incentive period.
  • Evidence of Retention:
    In previous Gauntlet-run campaigns, we have documented higher capital efficiency and longer-term TVL retention compared to many self-directed or “set and forget” programs. For instance, 70% of targeted pools in an Arbitrum incentive program showed net positive post-incentive liquidity and volume growth—even after direct rewards ended. As noted in previous comments, some of the programs referenced as coming up short in sustainable impact were not optimized by Gauntlet and did not follow the same high touch approach. We’re confident that the combination of dynamic allocations and concurrent demand generation fosters a higher-than-typical retention rate.

Methodology & KPIs (TVL and Volume Models)

Our modeling and optimization pipelines revolve around the explicit targets set by the Uniswap Foundation for both v4 and Unichain:

  1. V4: Migrate the equivalent of ~50% of V3’s volume within 3 months, ramping to 75% by 6 months.
  2. Unichain: Achieve a top-5 chain revenue ranking by year’s end, underpinned by robust TVL and volume.
  • ROI-Based Projections:
    To set a benchmark for success, we calculate how much incremental TVL and volume an additional $1 of incentives can attract, referencing historical multipliers from other chain-level incentive programs. Using inputs from prior Arbitrum and Uniswap campaigns with a highly conservative discount factor, the rationale includes a starting assumption of $1 in incentives that will lead to $35–$50 of TVL. Although not a guarantee for future performance, this historical range informs our starting baseline.
  • Continuous Recalibration:
    These multipliers are not static. We refit them in real-time based on actual traction, so if a pool or chain sees stronger organic inflow than projected, the system updates to allocate resources more effectively. This ensures that incentives are aligned with user demand, and keeps the DAO from wasting UNI on incentivizing low-traction pools. We also plan to publish dashboards (within ~1 month of launch) so the community can track accordingly and decide whether adjustments are warranted.
  • Example Data Point:
    In the Arbitrum LTIPP Program Retro (Nov 2024), we saw:
    • $689 of TVL added per $1 of incentives during the incentive period
    • A post-incentive retention of $214–$243 in TVL per $1 in incentives

While many programs can see short-lived spikes, ours focuses on measurable and verifiable longer-term TVL retention.

Pool Selection Criteria & Ongoing Management

We believe intelligent pool selection is pivotal to sustainable growth, which is why we emphasize high-volume, core pairs rather than spreading incentives too thinly:

  • Core Token Pairs First:
    We prioritize “blue-chip” assets (WETH, WBTC, USDC, USDT), stablecoins, and certain LST/LRT pairs that have shown durable volume in previous deployments. Concentrating early incentives on these core assets supports stable fee generation and fosters user stickiness. While our data collection and quantitative frameworks will remain objective, asset selection will also be dependent on Uniswap Foundation’s strategic guidance and application momentum.

  • Developers & Hooks (v4)
    For v4 specifically, we aim to enhance developer traction by incentivizing hook-enabled pools that attract new integrations and novel DeFi use cases. We will incorporate UF feedback and community signals to boost the “right” pools, not just those chasing the highest short-term APR.

  • Filtering & Monitoring:
    We actively filter out underweight pools with high wash-trading risks or minimal long-term potential. Our dynamic approach means that incentives can be scaled back or redirected if a pool starts losing liquidity or performing poorly.

  • Transparent Tracking & Reporting:
    Our system collects core metrics—like net new LPs, daily active liquidity, volume trends, etc.—on a public dashboard. This allows governance to review the ROI on specific pools and refine future distributions accordingly.

Conclusion & Next Steps

Seeing the passion for Uniswap’s long-term success around these liquidity incentives is great.

We welcome further questions or clarifications on any of the above points, either in the forum or via direct messages. Our team remains committed to transparent, data-driven analytics and stands ready to refine the incentive parameters as real-time market data rolls in.

1 Like
32

As it’s a proposal that got additional discussions, here’s StableLab’s voting and rationale on Uniswap Unleashed: Unichain and Uniswap v4 Liquidity Incentives

Voted: Yes

1. Service Provider Considerations

Role of the Service Provider, Specifically Gauntlet

After reviewing the discussions centered around the selection of Gauntlet as the Service Provider, we find that the Uniswap Foundation is within its rights to make such decisions independently. While the Uniswap DAO can challenge these choices and the Foundation’s alternative open process for service selection encourages transparency and alternative proposals from DAO members, Gauntlet’s track record in designing and managing incentive programs for DeFi protocols, such as Uniswap and Compound, supports their qualification. While there are concerns about the sustainability of some programs, Gauntlet’s contributions have often resulted in significant TVL growth in the reasonable timeframe, suggesting their involvement has been beneficial.

2. Unichain Incentive Evaluation

Effectiveness of the Unichain Incentive

The potential impact of the Unichain Incentive is another focal point. Despite the decline in TVLs post-incentive, optimization strategies from Gauntlet and Forse highlight opportunities for improvement. This incentive’s native nature could enhance its effectiveness, setting it apart from others. Examples like the rapid TVL growth of Katana DEX on Ronin, despite challenges, and dYdX’s sustained high volume post-incentive, illustrate the potential benefits of strategic incentives.

Suggestion

We strongly recommend the proposal to consider focusing on Unichain for v4 liquidity as we believe the focus should be having more TVL and growth for Unichain rather than potentially reducing the effectiveness by incentivizing V4 migration in all chains.

Conclusion

While there are aspects of the proposal that could be refined, we believe it presents a solid foundation for enhancing the Uniswap ecosystem. Therefore, we support the proposal at this time, recognizing the importance of ongoing evaluation and adaptation to maximize its effectiveness.

33

As was written earlier, it would be good to separate these two different goals into different proposals.

Because I support the first part on the transition to v4, but it is completely unclear how we are going to retain and attract liquidity to the new chain, given that I do not see a big advantage over other L2 solutions, of which there are already many.

I would not want to just spend several tens of millions.

2 Likes
34

We vote for this proposal as well as the Uniswap Unleashed proposal.

Regarding the selection of Service Providers

Overall, we believe there are no significant issues with the selection process. Given Gauntlet’s track record and the qualifications that Aera fulfills, we do not see a strong reason to oppose the selection itself.
We are aware of concerns regarding the sustainability of the impact of Gauntlet’s liquidity incentives, but we believe that focusing solely on the cases where incentives have failed does not lead us to a constructive conclusion.
That being said, we do believe there is room for improvement in the selection process. Given the large budget involved, it is only natural that the better transparency in the selection process is asked. We believe that a more transparent approach should be taken going forward.

Regarding the incentive program design

While we support the overall direction of the proposal, we acknowledge the need for continuous monitoring of progress and the actual impacts generated by the program.
The general approach to the program has been disclosed, and this seems pretty valid.

Therefore, we agree to proceed with this approach, while it seems appropriate to adapt if things do not go as planned or if better strategies or service providers emerge. A realistic approach would be to regularly monitor the progress and impact via the provided dashboard, and initiate discussions about potential changes in service providers or additions to the program if necessary.

If a service provider or individual can present a clearly superior approach, we should reconsider both the basic approach to incentives and the selection of service providers. However, there is no urgent need for that to be the case at this moment.

1 Like
35

Gauntlet, historically, did not bring sufficient value to uniswap following their suggestions and recommendations.
In addition, yield farming incentives have proven to be a short term booster with little real traction to follow. Vast majority of the projects that offered LP incentives showed a dramatic token price drop due to the immense sell pressure this created on the token.

1 Like
36

关于unichain，激励型TVL只有一点效果，得不偿失。重要的是应用。目前的大多数L1/L2都会自然消亡，有像polymarket这样应用的链才会活下来。关于V4，对钩子的激励效果会更好。

37

没有十倍创新的L2就是重复造轮子，没有意义。再激励也没有用。

1 Like
38

We voted FOR Unichain and Uniswap v4 liquidity incentives. Our understanding is that additional incentives will be allocated to Unichain beyond the initial three-month period. Under the current design, there would be an unintended incentive to bridge off Unichain after three months with backloaded v4 incentives still live on other chains. We would encourage the Foundation to start discussions on Unichain’s next round of incentives as soon as possible to avoid relying on a late governance vote to avoid an unintentional capital migration off of Unichain.

After in-depth discussions with Gauntlet at ETHDenver, we are confident in their dynamic approach to adjusting incentives based on performance metrics.

While we acknowledge concerns from delegates regarding how Unichain will return value to the DAO, we believe that close collaboration between the DAO and the Uniswap Foundation is essential to refining these mechanisms. That said, it’s important to recognize that successfully bootstrapping liquidity and driving sustainable activity on Unichain will inherently generate long-term value for both the DAO and UNI tokenholders.