Uniswap Unleashed
[Feb 16: additions to ‘Uniswap Foundation 2025 Priorities’ and ‘Top 10 Largest Projected Grants Allocations’ charts, described here]
The Uniswap community is entering 2025 with the momentum of three positive catalysts: a more collaborative regulatory environment, the launch of Uniswap v4, and the debut of Unichain. As we look to the months and years ahead, we see the potential for Uniswap Protocol and Unichain to cement themselves as foundational infrastructure for digital value transfer.
The Uniswap community has always pioneered—but pioneers don’t stay ahead by standing still. Achieving this vision will require more than just technological innovation; it demands strengthening network effects and evolving our governance system to fund, sustain, and grow the Protocol independently over time. We call for action, and for the broader community to work alongside us as we evolve Uniswap to its next era.
In the following proposal, we define four strategic priorities for the years ahead:
- Scaling network supply: Provide most capital efficiency across active EVM chains
- Scaling network demand: Create premier DeFi development platforms
- Equipping Governance and the community: Activate revenue
- Equipping Governance and the community: Onboard Protocol Core Contributors
In the following proposal, we discuss not only these priorities but also how we expect to achieve them alongside the community and how we, the UF, will measure our success. We also discuss our budget request to achieve these goals. Today we are also posting a request for incentives to support the growth of Uniswap v4 and Unichain. If approved, these funds would be managed, within pre-set parameters and onchain, by Gauntlet, while having control maintained by Uniswap Governance.
In this proposal, we are requesting an investment of $95.4M into the UF grants budget, and $25.1M to fund operations, for the next 2 years to fund these priorities. In a separate incentives proposal posted today, we request a $45M budget to support liquidity incentives.
We recognize and appreciate the size of this request. It reflects an investment into the success of the Uniswap Protocol and Unichain, and into value for the Uniswap community. Founded in 2022 with a singular focus on Uniswap v3, the UF now leads the growth of the developer ecosystem for a true developer platform in Uniswap v4, and an L2, Unichain. In addition, we are levelling up Governance to support long term sustainability with the creation of a Core Contributor program, new tooling like Conditional Funding markets, and more.
This proposal is an investment into the future of the Uniswap community. It is designed to match the scale of our mission while being backstopped by best-in-industry transparency reporting and an unrelenting drive to create value.
2024 laid the foundation for ecosystem alignment and value capture
Over the last year, we have worked hand in hand with our grantees, developers, delegates, and other supporters to lay a strong foundation to support us on the road ahead. As a result of that work, today we have achieved:
- +800 hook developers from more than 60 countries, with dozens actively building production projects
- +150 hook prototypes spanning a variety of use cases, in addition to an OpenZeppelin code library for developers to use as a guide
- Nearly 100 infrastructure and DeFi partners for Unichain
- Unistaker contracts, which allow Uniswap Protocol revenue to be earned through delegation, designed, engineered, and audited
- A Unichain Validator Network (UVN) that advances decentralization and compensates its validators and stakers with 65% of chain revenue
Along the way, the Foundation has evolved to a team of 16 individuals, working across Growth, Protocol & Engineering, Governance, Legal, and Operations.
You can read more about our community’s accomplishments in 2024 in our Community Impact Report.
In 2025, the UF will chart new pathways for governance sovereignty and Protocol-aligned growth
The long term successes of the Uniswap Protocol and Unichain are tied not only to their network effects, but also the governance system which can sustain and evolve them.
For the Protocol to become the world’s infrastructure for digital value transfer, we must strengthen these network effects while equipping Uniswap Governance with more tools to interact with offchain entities and make effective funding decisions. If we are successful, we not only grow the Protocol and Unichain in the short term, but we create a mechanism by which Governance can continue to develop them over time and independently.
To grow network effects, we’re focused on cultivating both supply – liquidity infrastructure for both the Protocol and Unichain – and demand – developers, integrators, and interfaces. As with all network effects, the cultivation of one side drives the growth of the other, building a self-reinforcing loop.
Over a medium to long term timeframe, however, network effects can be disrupted by competitors. Uniswap Governance, with its control over the Treasury, must evolve to ensure the Protocol remains competitive. We are focused on equipping Governance with the tooling to make adaptive, high-ROI funding decisions without reliance upon any one entity over a long time horizon.
This year we have defined four strategic priorities to strengthen network effects and empower Governance to execute on high impact, long term decisions to keep the Uniswap community at the forefront of DeFi.
First we address supply, or how we will support the development of liquid markets across Uniswap Protocol and Unichain, respectively.
Priority 1: Provide most capital efficiency across active EVM chains
Uniswap v4 and Unichain, both recently launched, stand to significantly expand their respective market share through offering innovative AMM functionality and novel infrastructure. However, this won’t happen on its own. Today the UF has posted a proposal with longtime collaborators at Gauntlet to fund $45M in incentive programs. In that post, we also lay out the strategic rationale and tactical execution of those programs in detail.
Unichain and v4 have launched into a market in which there is intense competition for liquidity. For instance, some competing AMMs and chains spend upwards of $50M per month in native tokens to support liquidity. We take these factors into account in the design of our program.
Our long-term goal is not to put in place or encourage perpetual incentivization. Rather, lasting impact will come from strengthened organic demand to sustain liquidity. This brings us to our next focus, the demand side of the equation, our plans to support and grow our developer community.
Priority 2: Create premier DeFi developer platforms
Uniswap v4 has reduced the friction for anyone to innovate upon digital asset market structures. Thus far, our programs have directly taught 1,000+ developers to learn how to build hundreds of hooks. Unichain is similarly optimized for DeFi development, and allows for experimentation at all levels of the stack.
Our planned initiatives include funding programs, infrastructure, and education to support developers through the hook development lifecycle, as illustrated below. These programs benefit developers across all Uniswap v4 deployments.
We are excited to lead ecosystem development efforts for Unichain – a chain designed with DeFi in mind. Some of the Unichain specific programs we have designed include Developer Growth Programs (Infinite Hackathon, Retro Grants Program, and the Unichain Builder Open Call), a Unichain Infrastructure Allocation, a Unichain DeFi Partner Allocation, and an upcoming Unigames competition. We also support a global program of Developer Ambassadors and a full-time Developer Support team.
Success in this priority means increasing the percentage of volume flowing to hooks on v4, growing the number of revenue-generating hook developers and integrators, and expanding Unichain’s builder ecosystem. Developer success would in turn not only sustain but grow demand for underlying liquidity, reinforcing our network effects.
However, sustainable growth also requires unlocking revenue and enabling Governance with the tools to ensure continued innovation and development. To solidify the Uniswap community’s place at the forefront of DeFi, we must also explore ways to empower and evolve our Governance system to align incentives, adapt to change, and sustain growth.
Priority 3: Activate revenue
We recently announced that 65% of Unichain net chain revenue would be earned by UVN validators and stakers, upon the launch of the UVN. The UF plans to develop and support the UVN validator and staker network, and explore supporting the development of UVN extensions later this year as well.
In addition to this step, the UF is also validating whether the creation of a legal entity (e.g., a DUNA), would be appropriate for Uniswap Governance. A legal entity may offer benefits to Governance including clarity on legal status, the ability to contract with other entities (like development teams), and more. If our vetting is successful and we believe the creation of a legal entity for Uniswap Governance is in its best interest, we would propose to Governance to implement a legal entity structure. If adopted, this step would pave the way for the potential introduction (or re-introduction) of a governance proposal for delegators to earn Protocol revenue. We could then create similar governance proposals for either select or all deployments of Uniswap.
Success here sets up the community up well for working alongside the UF in our last strategic priority.
Priority 4: Onboard new Protocol Core Contributors
To sustain itself over the long term, we must equip Uniswap Governance with the tools to fund and incentivize development teams and other initiatives to drive innovation and growth for the long term. To enable this, we are exploring the creation of a new community driven initiative – Core Contributors. While final details will be refined with delegates, our goal is to establish long-term, incentive aligned development teams responsible for advancing the Uniswap infrastructure.
- A Core Contributor would be a development team tasked with developing core infrastructure for the Uniswap Protocol, UVN extensions, and more. This may include but is not limited to non-EVM versions of Uniswap, new hook protocols, and more.
- A Core Contributor team would have a direct relationship with Uniswap Governance. Note that a successful governance proposal to create a legal entity (mentioned in Priority 3) would be required here as a prerequisite.
- These Core Contributors should be incentive-aligned with the success and growth of the Uniswap Protocol and Unichain. They would likely be compensated in UNI vested over time.
- To support the early development of this program, the UF might bootstrap an initial grant to potential Core Contributors. Through this grant, the team would prove their potential, and develop a relationship with delegates. Upon the completion of their work, the contributor might seek a larger, longer-term grant directly from Governance.
- A potential risk to our success here is the ability for Governance to effectively select and size grants for Core Contributor teams over time. Conditional Funding Markets offer a potential pathway for Governance to use as a tool to fund these teams in the future. Our work in developing CFMs is early, but we are excited to learn from our experiments and develop this tool.
Grants and Operational Budget Projections
In this proposal, we are requesting an investment of $95.4M into the UF grants budget, and $25.1M to fund operations, for the next 2 years to fund these priorities. These figures are net of cash on hand. As mentioned above, we recognize and appreciate the size of this request. It reflects an investment into the success of the Uniswap Protocol and Unichain, and into value for the Uniswap community, and will be backstopped by best-in-industry transparency reporting and an unrelenting drive to create value.
Our program also demonstrates strong capital allocation efficiency. In 2024, our operational and grants expenditure ratio aligned closely with industry standards for leading foundations, at approximately 39% for operations and 61% for grants. Looking ahead, we project this ratio will improve even further, reaching an all-time ratio of 29% for operations and 71% for grants by 2026. These figures demonstrate a focus on maximizing resources for impactful initiatives while maintaining operational sustainability. Additional details can be found in the appendix.
Our projected grants budgets for 2025 and 2026 are $57.9M and $41.5M respectively, totalling $99.4M.
Our projected operational budget in cash for 2025 and 2026 is $24.8M. Projected UNI compensation over that time period is 1.5M UNI (or $13.8M USD at Feb 11 opening rate of $9.45).
Grants Budget
Our grant program, including each of the grants programs listed above, are focused on driving the success of and value for the Uniswap community.
Each grant includes clear performance targets that grantees must hit to unlock funding at key milestones. These targets include: notional TVL, notional volume, % market share of volume, number of developers onboarded, number of integrations unlocked, and more. If a grant fails to deliver its intended impact, we have the ability to terminate it early, and reallocate funds to other initiatives.
By holding grantees accountable to measurable outcomes, we ensure that every dollar spent strengthens protocol network effects or supports our goals of empowering Governance.
Operations Budget
Hires
Our team is currently made up of 16 individuals, focused on Growth, Operations, Legal, Governance, and our Developer Platform. You can take a look at our current team makeup here.
Over the next year, we plan to make at least 12 hires in order to support our achievement of the goals we have laid out. As mentioned above, our increase in team size reflects the increase in the investment we are making to grow and strengthen the Protocol and community.
To provide one example, our Governance team (currently 1 person) initially focused on Uniswap v3 governance. Looking into 2025, its scope will expand (or in some cases has already expanded) to include Optimism governance, Conditional Funding Markets, the Core Contributor Program, as governance activities related to Uniswap v4 and Unichain. Our hiring to build our Governance team reflects that.
Transparency & Accountability
As part of the Foundation’s commitment to transparency and accountability, we provide regular reporting on funding, impact, and financials, with recurring community and delegate IRL and virtual events.
In 2025, alongside a successful funding proposal, we will initiate a set of regular sessions with a small group of representative delegates to review and discuss the UF’s strategic direction and execution.
2024 Bi-Annual Impact Reports:
2024 Quarterly Financial Reports:
2024 Allocation Memos & Grant Announcements
- Blockful: Uniswap Foundation Governance Security Review
- Atrium Academy: Uniswap Hook Incubator (2024-2025 Cohort Expansion)
- Areta: Uniswap Foundation Security Fund
- Butter: Conditional Funding Markets
- OpenZeppelin: Uniswap v4 Hooks Contract Library
- Unichain Developer Grants
- Panoptic: gRHO Program
- Atrium Academy: Uniswap Hook Incubator (2024 Cohorts)
- Auditless: Protocol Grants Program
- New Funding Categories: Protocol & Security
- Allium: DEX Analytics Portal
- Gauntlet: Routing Algorithm Optimization
Community Resources:
Delegate Events:
- Govswap (3x / year)
FAQ
Who is on the current team?
Our current team makeup is below.
What is your liquidation and treasury management strategy?
Our liquidation and treasury management strategy is designed to balance operational needs, market impact minimization, and a demonstration of long-term commitment to the community. We plan to gradually liquidate a portion of our holdings for operations and grant expenses with the goal of protecting against downside risk while maintaining upside potential. This approach will be implemented through vetted experienced organizations to ensure optimal execution.
To minimize our impact on the market and demonstrate our long-term commitment, we plan to hold ~50% of requested funds requested in UNI in the near term. This of course may change over time, however we do aim to maintain a portion of our treasury in UNI long term. We are also exploring the ability to stake a portion of our UNI holdings once staking becomes available.
How does the Unichain Growth Reserve, mentioned in your recent UVN blog post, intersect with these plans?
When the UVN launches, 65% of Unichain net chain revenue will be earned by UVN validators and stakers for their work. Until the UVN launches, the UF will direct this chain revenue to support Unichain growth efforts through a Unichain Growth Reserve. Specifically, the UF will allocate these funds, net of applicable taxes, towards our Unichain growth programs. This may include our liquidity incentive program and our developer growth initiatives. Reporting on Unichain Growth Reserve inflow and expenditure will be provided in the Uniswap Foundation’s regular Quarterly Reports, and posted to the Uniswap Governance Forum.
What happened with the Unistaker governance vote last year?
While we were initially optimistic we would be able to pass the Unistaker upgrade proposal, various concerns emerged relating to liability, tax, and securities concerns as we continued our diligence and discussions. It might be possible to mitigate those concerns using different mechanisms than were initially contemplated such as the creation of, upon a successful governance vote, one or more legal entities for Governance. We are currently exploring and plan to publicly report on the potential benefits and risks of legal entity formation by Uniswap Governance.
What is the Router Incentives subsidy?
Our Routing Subsidy program is designed to incentivize swap routers, including solvers and fillers, to send order flow to hooked pools over a period of 9 months. If a router sends trades via hooked pool(s), it will be eligible to rebate up to 80% of transaction fees incurred on that trade.
Can you tell me more about the Foundation’s capital efficiency?
More financial data related to our capital efficiency is below.
Our capital efficiency today is comparable to that of other leading Foundations.
Sources: Linux Foundation, Arbitrum Foundation, Mozilla Foundation
How has the Uniswap Foundation engaged in the changing regulatory landscape?
In 2024, the UF engaged informally with staffers of Congress members, the administration, and regulatory agencies, and crypto lobbying groups to advocate for DeFi to push for regulatory clarity, governance certainty, and builder protections. Recognizing the pivot from enforcement to dialogue, UF has engaged with the SEC Crypto Task Force, CFTC, and key Congressional committees to help shape DeFi policy. The UF is well-positioned to expand these efforts and excited to explore opportunities here in the next year.
