Uniswap Delegate Reward Initiative - Cycle 3

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Uniswap Delegate Reward Initiative - Cycle 3

Authors: @Doo_StableLab @PGov @AranaDigital @seedgov

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Summary

This proposal outlines the Uniswap Delegate Reward Initiative—Cycle 3, a compensation program designed to improve and sustain the participation quality and dedication among Uniswap delegates following the conclusion of Cycle 1 and 2.

Background

In late February 2024, StableLab proposed the Uniswap Delegate Reward Initiative. After the GovSwap event in Denver, further research to plan and implement the Delegate Reward Initiative was highlighted, leading to the formation of the Uniswap Delegate Reward Working Group, composed of 8 members from different organizations. After extensive research for more than a month, the Working Group produced several findings, which can be found here: https://gov.uniswap.org/t/findings-from-uniswap-delegate-reward-working-group/23702

Incorporating these findings, the Uniswap Delegate Reward Initiative Cycle 1 was proposed and launched in June 2024. Cycle 1 was successful in that the 12 delegates selected maintained 100% voting participation rate for votes during this period. In addition, several new delegates joined the protocol due to the presence of incentives.

With learnings from Cycle 1, including how to make a points system to determine the top delegate applicants in a more fair and objective manner, along with a tier system to incorporate different participation levels of delegates, Cycle 2 was launched.

Success of Cycle 2

As of January 2025, all 16 delegates in the program have maintained a voting and rationale qualification rate above 85% over the past three months, with 10 delegates achieving a perfect 100% in both categories. Their collective participation is essential; without them, quorums would not have been met.

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The program also attracted several participants to become delegates.

Additionally, community calls for Cycle 2 played a key role in keeping governance members informed, averaging 38 participants per call, with paid delegates demonstrating a mean attendance rate of 81.25%.

Learnings/Challenges from Cycle 2

In the most recent cycle, the DAO encountered an unexpected tie for the 15th position, highlighting and opening a discussion about implementing a more robust and transparent delegate incentive system. This situation not only tested the limits of Uniswap DAO’s current framework but also underscored the dedication and quality of the delegate candidates. Below, you will find a revised version of the tie-breaker criteria to prevent the issues encountered with the cycle 2 application.

As was the case with Cycle 1, Cycle 2 provided valuable insights into the program’s effectiveness and areas for improvement. A key success was its enhanced accessibility, which enabled new delegates such as Areta Governance, PEPO, and Ignas to participate. This highlights the program’s ability to bring fresh perspectives into Uniswap’s governance. Cycle 2 also admitted multiple delegates from alternative DeFi ecosystems, introducing a more robust host of decision makers in the DAO.

Additionally, the initiative has maintained a high participation rate among delegates, contributing to more active and engaged onchain governance processes. We have also seen a significant increase in community call participation over the past cycle, showing that an attached incentive associated with monthly calls results in larger audience sizes.

Voting participation remains the most direct and measurable form of governance contribution, leading us to adjust the weighting of different criteria for Cycle 3.

The primary change for Cycle 3 is an increased emphasis on voting participation, particularly onchain voting, which carries greater governance impact. While community participation, such as attending community calls, remains a factor, its relative weight has been reduced to focus more on direct governance actions. Plus, measurement of voting participation is objectively the most straightforward metrics for determining who is contributing to governance. This weight will therefore influence who will be admitted to the program.

For those who are selected into the program, the requirement for rationale submissions remains intact, as it has demonstrably increased forum participation and fostered more discussion among delegates. However, we have not included rationale “quality” or length as a variable for determining compensation. It is possible that the DAO would like to in the future rely on more subjective metrics since they may illustrate a higher degree of substance on forums, but the evaluation for quality on forum posts may lead to an unneeded degree of conflict when determining scores. The current goal with rationales is to simply see the directional thought process behind a delegate’s voting decision.

Cycle 3 Proposal Details

Application Eligibility

  • There will be a week-long period for candidates to submit their applications. The top 15 delegates will be determined based on a point system outlined below.
  • Delegates from Cycle 2 must apply again for Cycle 3–they will not be automatically included.
  • Only delegates who have participated in onchain voting for at least three months prior to the application post are eligible for Cycle 3.

Uniswap Delegate Reward Cycle 3 Metrics

In case there are more than 15 eligible applicants, the top 15 will be chosen by the following objective metrics. The highest number of available points will be 11.

1. Voting Participation

Since a delegate’s primary role is to utilize voting power from delegators and vote in Uniswap’s best interest, active participation is essential to ensuring quorums are met and malicious proposals are thwarted. This category carries a total of 7 points, with onchain voting weighted more heavily due to its ability to directly impact governance contracts and direct treasury funds. The voting rate is evaluated based on the past six months.

Offchain Voting (Snapshot)

90% and above: 3
80% to 90% : 2
70% till 80% : 1.5
60% till 70%: 1
50% till 60%: 0.5
50% or below: 0

Onchain Voting

90% and above : 4
80% till 90% : 2.5
70% till 80%: 1.5
60% till 70%: 1
50% till 60%: 0.5
Below 50%: 0

2. Proposal Authorship

Contributing to proposal drafting for Uniswap DAO is valuable, but maintaining quality and preventing malicious proposals is equally important. As a result, only successfully passed votes are counted. This category is worth a total of 3 points, with onchain proposals receiving greater weight once again.

For non-binary proposals, if a “No” equivalent option was available and the final voting outcome was a choice other than “No,” the proposal qualifies for points in this category. For example, the Uniswap Treasury Working Group (UTWG) Election would not be eligible, as there was no “No” vote option. However, the [Temp] Uni Onboarding Package - BSC would qualify, since an “Against” option was present, and the final outcome was “$1M.”

Authored or Co-authored a proposal that passed offchain (Snapshot) vote before.

Yes, 2 or more: 1
Yes, 1: 0.5
No: 0

Authored or Co authored a proposal that passed onchain vote before

Yes, 2 or more: 2
Yes, 1: 1
No: 0

3. Community Participation

The full point for this category is 1.

Community Calls (attendance for September, October, December 2024 & January - Feb 2025)

Attended at least 80% of calls: 1
Attended at least 50% of calls: 0.5

Tie Breaker

  1. Ties will be decided by the date of the first onchain vote that these applicants cast in order to reward delegates who have been contributing to Uniswap governance for an extended period. The tie-breaking value will be determined based on the end date of the vote in which the delegates participated, not the onchain date when the vote was cast.
  2. In the event of a tie with the first tie-breaker criterion, priority will be given to the delegate who has cast the most votes in the last 6 months.
  3. In the event that the tie persists further, the final decision will favor the delegate who was first to present their delegation platform—hence, priority will be given to the individual/entity who first publicly declared their intention to become a delegate.

Delegate Reward Eligibility

Once delegates have passed the application process, they must fulfill the following requirements to be eligible for up to $6,000 USD worth of $UNI reward per month.

Requirements

  1. Maintain a minimum of 80% participation in onchain and off-chain voting during the last 3 months to be eligible to receive up to $3,000 worth of $UNI per month, with the proportional payment based on each delegate’s participation in the total votes cast during the last 3 months (number of votes cast x 100 / total votes cast during the last 3 months). For example, if there were 10 votes cast in the last 3 months and a delegate voted on 8 of them, that delegate will receive 80% of the $3,000 USD, i.e. the delegate will be eligible to receive $2,400. If another delegate voted on 7 of those votes, that delegate will not be eligible to receive any rewards as their participation was 70% of the votes, below the 80% minimum.

Additional Rewards (the below are only available if the above Requirement of Voting Participation is fulfilled)

2a. Write rationale for the voting on their delegate profile.
-Deadline for writing rationale would be 7 days from the end of each vote.
2b. Attend Uniswap Community Calls.

Achieving these above will provide an additional up to $3,000 USD worth of $UNI. For 2a and 2b, there will also be proportional payment. For example, if there were 4 votings and 1 community call, and a delegate missed writing a rationale of 2 of the votes, the delegate would be eligible to receive $1800 [3/5 * $3000].

Budget

We are requesting 540,000 [6000 USD *6 Months *15 Delegates ] USD worth of UNI for cycle 3 of the Uniswap Delegate Reward Initiative.

The total amount, once approved, will be sent to the Accountability Committee, which will be responsible for the monthly distribution of rewards to eligible delegates. Since the total budget of the Delegate Reward WG has not been fully used, administration of this reward program–including the creation of this proposal and the admin work behind verifying monthly delegate participation–will be allotted from that account, with no additional costs to the DAO. Therefore, the total budget request will be solely for the delegate pay.

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Hey Doo, I wanted to chime in on this matter before applications arrive. I believe the process for the ‘additional rewards’ section should be reviewed and explicitly stated in the proposal.

I have some concerns regarding point 2a, some delegates in Cycle 2 (I haven’t verified Cycle 1 yet) consistently took more than 15 days to provide the rationale for their votes, yet they were still rewarded.

Regarding point 2b, I don’t have specific details, but as I understand it, the process is self-reported. A UAC member submits the form for anyone to fill out during the community call, and later, they check whether it has been completed. However, this system seems easy to bypass—someone else could fill it out on your behalf, or it could be shared with others during the call. Is there any safeguard against this? Are cross-checks conducted by the oversight entity?

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To point 1, I think it makes sense to add in a section saying all rationale needs to be added in by say the 5th of the month after to be counted for in communication

And for this point, the meeting itself is recorded and the form is double checked with the actual meeting attendance to prevent exactly this.

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Hey Juanbug, thanks for the answer!

Regarding this, I believe we should expect more from the delegates, especially since they are compensated for their work. Can’t we set a submission deadline within 10 days of the vote? If we allow delegates to submit their rationale up to a month later, we are essentially rewarding them for providing explanations long after the decision has been made.

Ideally, rationales should be submitted along with the on-chain vote to ensure clarity on what the delegate was thinking and feeling at the time of voting. Delaying this process increases the risk that delegates may forget their original reasoning and instead create a rationale that retroactively fits their vote, offering less genuine insight.

Thanks for this insight!

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Thank you for working on the updated version of this initiative. Before providing feedback on the proposal, we want to express our gratitude for the opportunity granted to us through this program.

We believe this proposal is an improvement over the previous one in several ways:

  • Offchain and Onchain Voting Brackets: These are much more effective than in the previous program, where many delegates received all the points despite relatively low voting participation. The weight assigned to these factors in the overall score is well-balanced, as they are the most critical aspects of a delegate’s role.

  • Community Call Participation: The new brackets make much more sense compared to the previous program, where delegates could easily earn a point by attending just one community call.

  • Tie-breaker: This is now clearly defined and is unlikely to create any conflicts.

  • Removal of Seniority Points: We support the decision to remove the additional point for delegates with six months of seniority, as we felt it provided an unfair advantage.

What we think could be a good addition

We think the inclusion of an extra point for delegates who attended all community calls, voted, and provided their rationale for every on-chain and off-chain vote over the past six months would be a very good addition. A bonus point for perfect participation in the second cycle could help recognize those who remained consistent during the 6 months.

Regarding pepo’s comment:

We agree that this restriction makes sense. While we have been late once or twice, we will ensure this doesn’t happen again. In our case, our team made the voting decision during a meeting, but the team member responsible for preparing the rationale was a new hire and needed more time. Moving forward, we will make sure to share our rationale promptly after the vote.

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We support this inclusion, even the deadline for justifying the vote could be set at 7 days from the end of each vote.

This is a very interesting suggestion for inclusion.

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Agree here; in favor of adding this in and it makes sense.

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The rationale requirement has been updated to 7 days.

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I personally agree with this.

I was brainstorming with other delegates regarding this, and I came to the conclusion that providing additional points for actually engaging in a timely manner should be recognized for the program.

As community calls attendance isn’t tracked for non-already participants of the delegate program (and backtracking it can potentially be a hassle), I was thinking of a system in which you value the voting participation based on the contribution to the discussions/thought process, something like this:

  • vote with no rationale: 1x
  • vote with rationale: 1.5x
  • vote with rationale in a timely manner: 2x (we could take the 7/10 day window for the cut)
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Thank you for the feedback. We assumed attendance was tracked for all delegates since it’s a requirement of the new program:

So if they can determine that a delegate attended 80% of the calls, they should also be able to determine if they attended 100%.

We also like your suggestion:

Providing a rationale for all votes should earn an additional half point, in our opinion. This is tricky because if we include it now, delegates could still submit their rationale retroactively. So for the second bullet point, we would also apply a 30-day cutoff window.

The third point might be a bit controversial, as some delegates could argue that submitting a rationale at the end of the month (before the payment calculation) was allowed. However, we agree it would be a good addition. I’d suggest including it as a replacement for the third tie-breaker:

It could be something like this:

  1. In the event that the tie persists further, priority will be given to the delegate who has provided the most voting rationales in a timely manner, within 10 days after the vote ends.
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Glad to see fruitful discussions about cycle 3 in progress. thank you @Doo_StableLab for incorporating learnings from the previous cycles as well as delegate feedback.

In every application cycle, there have been more applicants than slots, infact that DAO had to participate in an extra vote in the last cycle. Many delegate platforms have initiated participation in the DAO since the last cycle. Given these facts, maybe it’s worth considering increasing the number of slots to 20.

Several delegates participate in commenting on proposals which helps the author receive valuable feedback on their proposals. This can be a valuable criteria for selecting suitable candidates.

Finally, I do recommend giving additional points to delegates who have held on the the UNI which was received as rewards in the previous cycles, this shows a clear commitment to the DAO

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We support the inclusion of timely rationale submission, within 7 days of the vote, as a key criterion for the delegate selection in Cycle 3. As @pepo and @Argonaut and others have highlighted, providing rationales is essential for transparency and understanding delegate decision-making.

The value of these rationales diminishes significantly if they are submitted long after the vote, potentially becoming justifications crafted in hindsight rather than reflections of the delegate’s thinking at the time of voting.

Thus, we support that timely rationale submission be incorporated into the scoring system, ensuring that delegates who prioritize timely communication and accountability are appropriately recognized and prioritized for participation in the Cycle 3.

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Thanks everyone for their comments. And we will continue to reflect the feedback as needed and aim to have the snapshot vote live later this upcoming week.

Actually, as we have notetaker AI, we are able to also track for non-already participants of delegate program. There can be of course some edge cases (like an applicant lies and pretends to be someone else who attended the call) but it would not be hard to solve such cases as the attending members are still below 40 members at the moment.

Feedback from various stakeholders is that it’s important to exercise caution in such and focus on contributions from delegates rather than expanding the number of eligible delegates.

There were definitely some discussions around streaming, vesting, and etc. However, criticism is that if it was to be implemented, it would heavily favor institutional or professional delegates that are able to source revenue elsewhere to maintain their contributions while holding the token.

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I think its a good idea in total but how can we ensure someone is voting with the best interest for the community and not only voting to get elected? The initiative is solid but rewarding delegates purely based on voting participation without considering the quality of engagement is a flaw. Delegates might vote just to stay eligible rather than making thoughtful contributions. Ading a qualitative review could ensure more meaningful governance decisions

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We think that the main improvement in this cycle is the emphasis on timely rationale writing. In future cycles we think that delegates should be posting rationale even before the voting period is over to completely eliminate writing rationale in hindsight. Or, at least have the deadline move closer towards the end of the voting period as reward initiative cycles continue.

There would need to be a way to measure the quality of delegate contribution in a non-arbitrary way, which is hard to do since some delegates may feel that their contributions/feedback was more important or influential than others’. For example, how do you quantify @SEEDGov recommending the 7 day rational submission, when @pepo previously suggested the 10 day timeline?

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In principle, we agree with that, but who defines what is a thoughtful contribution and how? This qualification is subjective. In other DAOs, such as Arbitrum, for example, there is the role of a Program Manager who, on a monthly basis, reviews the contribution of each delegate, evaluates it according to pre-established parameters and assigns a score. It is still subjective, but it implies that there is a program of other characteristics that contemplates an entity that evaluates the delegates according to pre-established parameters and logically assigns a budget to the entity that fulfils this role. Otherwise, I return to my original question: who and how defines what is a thoughtful contribution and what is not?

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Require :clap: PAID delegates :clap: to own :clap: a personal stake :clap: of UNI token :clap:

If the DAO is paying delegates for decisions: the delegates should have financial interest in the success or failures of those decisions.

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As a concept I agree, but it can lead to undesirable effects, as large delegate teams can afford to stake part of their income, but not small teams or individual delegates. This could lead to a plutocracy where delegates are only large teams with financial backing, pushing out individuals who want to contribute.

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The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas. It’s based on their combined research, fact-checking, and ideation.

Something that’s perhaps worth reflecting on and maybe even adapting the program to account for is engagement with proposals in the form of feedback. Right now, a delegate can only ‘earn points’ either for voting and communicating their rationale, co-authoring a proposal and attending calls. But, as this very thread shows, delegates engaging with a proposal by providing feedback is very valuable and probably something we should encouraging and incentivising more.

We do not have any strong view of how this can best be achieved without creating unwanted behaviors (e.g. low effort/quality or AI comments) but perhaps it’s worth discussing more.

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Regarding this point, I agree with Userisky that holding UNI tokens should be more relevant for PAID delegates.

For reference, here is a full list of the active delegates on the DAO and their holdings (either on wallet or self-disclosed): https://uniswapdashboard.notion.site/181c7082cf4d8014853cf8b753a3f548?v=182c7082cf4d808b9176000c4f9a33c8

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