Early Insights from the Revitalization & Growth Program
Yesterday, we shared our initial analysis of Uniswap’s incentive program on Base, diving into how it impacted liquidity, volume, and long-term LP retention. The discussion brought valuable feedback from the community, and we’re already exploring ways to integrate it into our ongoing analysis.
Key Findings So Far
Incentives Drove TVL, But Retention Remains a Challenge
During the campaign period, incentivized pools on Base saw an average daily TVL increase of $6M+, demonstrating a strong initial response.
| Pool name | Change in avg daily volume 90 days after the campaign |
|---|---|
| WETH/USDC 0.05% | -31% |
| USDC/USDT 0.01% | -39% |
| WETH/USDT 0.05% | -83% |
| cbETH/WETH 0.05% | -83% |
However, once incentives ended, most pools experienced a sharp LP exodus. The data suggests that post-incentive volume sustainability is critical for LP retention, with pools that maintained strong volume (e.g., WETH/USDC) keeping more LPs engaged.
The Cost of Growth – ROI Metrics
We analyzed how much TVL growth was generated per UNI spent:
| Total UNI spent per day | 692 |
|---|---|
| Average UNI price over the incentives period | $9.20 |
| Average daily TVL increase per UNI spent | $8,718 |
| Average daily TVL increase per USD spent | $948 |
| Average daily TVL increase attributed to incentives | $ 6,032,729 |
Incentives & Impact on Volume
One key takeaway from our extended analysis is how incentives influenced Uniswap’s overall volume share within the Base ecosystem.
- During the incentivization program, the total average daily volume for Uniswap was ~$295M/day, with incentivized pools accounting for 24% of this volume.
- Post-incentives, incentivized pools retained a higher share of Uniswap’s total volume than before, despite an overall decline in ecosystem-wide trading activity.
This suggests that while incentives temporarily boost trading activity, they also contribute to some residual stickiness in Uniswap’s volume share.
Where Did LPs Go After the Incentives?
One of the main concerns was whether LPs simply moved to Uniswap’s biggest competitor on Base, Aerodrome. The data suggests a more nuanced picture:
- 27.8% of Uniswap’s incentivized LPs provided liquidity on Aerodrome post-incentives
- Of those, 84.5% fully left Uniswap
- However, most users who left Uniswap (~64.8%) didn’t move to Aerodrome either, indicating broader retention challenges beyond direct competition
This suggests that user attrition is not just about LPs chasing better incentives elsewhere—there are underlying factors affecting retention that need deeper exploration.
Community Feedback & Next Steps
We received great feedback during the presentation, including:
- Comparing Uniswap’s incentivized pools to similar pools on other DEXs: This will help contextualize Uniswap’s performance and assess whether incentives were competitive relative to other platforms.
- Analyzing user order flow vs. algorithmic flow in incentivized pools: Understanding whether activity was driven by organic LPs or automated strategies will provide valuable insights into how sustainable the liquidity provision was.
What’s Coming Next
- Expanding Analysis to Other Chains: Now that we are wrapping up our Base analysis, we’re extending our methodology to other chains where Uniswap deployed incentives, as part of our grant scope.
- Deeper Retention & Competitor Comparisons:
- We’ll integrate cross-DEX comparisons to benchmark Uniswap’s effectiveness against similar incentives.
- We’ll explore how order flow dynamics influenced the longevity of incentive-driven liquidity.
- Terminal Development Progress: Wireframes for the Uniswap Impact Terminal are in place, ensuring seamless access to insights. Mobile and desktop versions are being finalized.
We’d Love Your Input
We’re refining our analysis and want to ensure it delivers the most relevant insights for the Uniswap community.
- Are there additional metrics or trends you’d like us to investigate?
- Any specific patterns or user behaviors you’d like us to explore?