Uniswap Delegate Reward Initiative - Cycle 3

Requests for Comment
21

We appreciate the discussion around the learnings and challenges from Cycle 2. We’re encouraged by the feedback already incorporated into Cycle 3, specifically, the introduction of a 7-day window for posting rationales, as it may lead to more deliberate commentary and deeper engagement in governance debates. Since this is the only (current) change in delegate scoring for the upcoming cycle, it provides a clear opportunity to measure its impact on delegate participation in forum discussions. It would be valuable for @StableLab to observe and report on these effects to the DAO. Additionally, as @Sinkas pointed out, considering how to further adapt the program based on delegate feedback would likely lead to stronger delegate engagement.

Furthermore, discussions have emerged around improving delegate alignment in governance, with ideas such as requiring delegates to hold UNI or implementing vesting/streaming mechanisms in the current distribution. Additionally, there have been suggestions on how to better reward delegates who demonstrate consistent engagement, such as attending all calls and maintaining perfect voting participation.

A potential solution is to introduce a monthly delegate bonus reward, designed to increase delegate alignment, incentivize optimal governance activity, and fairly compensate top contributors without placing undue financial pressure on smaller delegates who may need to sell tokens for expenses.

This bonus pool would allocate 1,000 UNI per month, distributed among delegates who meet all three of the following criteria:

- Perfect voting participation
- Attendance at all community calls
- Providing effective and timely voting rationale

The UNI would be evenly split among eligible delegates. For example, if 10 out of 15 delegates achieve a perfect score, each would receive 100 UNI. This amount would be in addition to the $6,000 USD base compensation but would be subject to a 3-month lockup followed by a 6-month linear vesting schedule (open to different lockup/vesting timeframes) to reinforce long-term alignment.

Adding a bonus pool ensures that governance remains active and well-incentivized while addressing concerns around long-term alignment and rewarding optimal delegate behaviors for a relatively low additional cost(6,000 UNI) to the DAO.

22

It’s already a plutocracy. Just take a look at the Notion link @pepo posted above. The majority of the delegates don’t even own UNI, yet they’re steering the ship on behalf of VCs or the UNI DAO allocation. Financial interests are misaligned, and the UNI DAO is bearing the cost of that misalignment.

Given the current regulatory climate, VCs might as well start voting directly instead of engaging in this delegation theater. At least that would be a more transparent way of showing how DAOs operate, and it could spark ideas on how to address the issue. For example, VCs could use their significant early-stage allocations to compensate decision-making delegates, rather than the UNI DAO funding it through this initiative.

If VCs want professional delegates to ease their workload, why is the UNI DAO paying for it?

1 Like
23

This could have the opposite effect of what you expect. Setting a high entry barrier would make it easier for incumbent delegates to stay in place while providing less value, as they can outcompete others simply by holding tokens. It’s healthier to allow delegates to compete without requiring them to invest large amounts in UNI. Instead, we could require them to vest a percentage of their compensation or even lock it for a year. This would ensure they have skin in the game without creating a barrier for those who don’t have significant funds.

24

Thank you @Doo_StableLab @PGov @AranaDigital @seedgov for this proposal and to all the delegates that have provided valuable feedback.

  • We agree with the inclusion of a submission deadline, and a week seems reasonable.
  • Great to see clearer tie-breaker!
  • Do not really agree with the perfect participation point, yes threshold should be set high but would rather see an emphasis on quality over quantity (though as others have noted, easier said than done; worth discussing further as per @Sinkas comment). Don’t see how, say, a 100% participation delegate vs a 95% participation delegate improves governance in a way that justifies additional payment.
  • Not against exploring the idea of better delegate alignment via locking/staking/vesting as per @Argonaut’s comment.
2 Likes
25

I do not agree whith that. Requiring UNI holding generates an entry barrier, only entities with economic capacity could be delegates, the same if a long vesting time is established, only teams with saving capacity could be delegates. The small unipersonal delegate is expelled.

On the other hand, the delegator is the one who is most committed to UNI, if the delegate to whom he delegates his tokens votes against his interests, he withdraws the delegation. Therein lies the incentive game that generates commitment for both the delegate and the delegator.

1 Like
26

On voting rationale: Requiring the rationale on the delegate profile doesn’t really help that much, just makes all the threads unwieldy to read as a lot of talking points are repeated.

We’ve been posting our rationale on X, and encourage other delegates to do the same. Requiring this would be more effective for education and discovery, as many people are incorrectly starting to think the UNI DAO doesn’t do anything as of late.

27

After conglomerating and reading through everyone’s comments, we have:

  • Added a 7 day requirement post vote ending to submit the voting rationale. This decision to some degree was accepted by pretty much everyone as a way to stay active and not have stagnant reasoning.

Some opinions that were brought up in the forums and through conversations not incorporated that are worth discussing in the future:

  • Delegates to have UNI holdings in their wallets to qualify. This was a minority opinion that is worth exploring in the future, but given the lack of strong support and possible discouragement of smaller single team delegates, we decided not to include it for now. In the future, it will be worth fledgling out the specifics on what is considered “owned” UNI and the various security and custody questions that come from it. (Example: Team member owns tokens and delegates to the delegate wallet, should that count?)
  • Expanding delegate set to 20. This didn’t receive much support and for now, we’re keeping at 15 as it seems there is still ample space for newer delegates to get involved and qualify.
  • Vesting UNI rewards: A few delegates voiced this, and it’s something we think should have high priority in discussions next season. For now, given the mixed overall opinions, the overhead and logistics of setting up the first vesting system the UNI community has seen didn’t seem to make sense currently.
  • Additional bonus points and funds for “perfect” performance: Some delegates thought it would be worthwhile to reward applicants who were able to attain 100% participation across all metrics: voting, rationales, and community call attendance. This time, we’ve adjusted the voting participation to include more brackets than last cycle that give more points but would be interested in exploring a bonus for perfect performance in the future. Keeping this in mind, delegates for cycle 3 should try their best to attain 100% participation in case the point system in the future incorporates this adjustment.

In the future, we should start the next cycle discussions sooner so that we can have more time to iterate on new ideas before the 6 month cycle ends (this cycle ends February).

For this cycle, we think the proposal captures a good amount of the lessons from prior seasons, and makes the selection criteria more strict compared to last seasons to ultimately find the top delegates at the DAO, with clear tie breaking criteria. We will post a snapshot shortly and look to follow this ideal timeline:

  • Wednesday 2/19: Post Snapshot
  • Monday 2/24: Open application for new delegates (template to be added shortly)
  • Monday 2/24: On Chain vote starts
  • Wednesday 3/5: Application for new delegates closed
5 Likes
28

Please take a look at @Doo_StableLab’s comment and the snapshot that is currently live here: Snapshot.

2 Likes
29

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

After careful consideration, we’ve decided to vote ABSTAIN in this proposal.

While we support the concept of delegate incentives, as we believe delegates should be compensated for their time and effort, we have not seen adequate alterations to the program that address the qualitative aspect of participation (see our previous comment).

At the same time, we understand the difficulty of incorporating qualitative criteria in a manner that’s both fair and practical. For that reason, and because we also stand to benefit as we’ve been receiving rewards in the two previous cycles, we decided to vote abstain.

30

We are voting in favor of this Delegate Reward Initiative Cycle 3, while maintaining our stance from previous cycles, particularly on quality vs. quantity, conflict of interest, and vesting mechanisms (see previous discussions: Curia Delegate Platform and Cycle 3 Discussion).

Although we support several proposed improvements—increased emphasis on voting participation points, clearer tie-breakers, and rationale deadlines—we believe the initiative could be more ambitious given the six-month cycle. Our primary concern is maintaining a balance between the quantity and quality of contributions.

Relying solely on quantitative metrics may not fully capture thoughtful proposal analysis or meaningful contributions. We therefore advocate for more robust mechanisms that reward quality governance participation, where the rationale behind decisions is given greater weight.

Attracting newcomers with meaningful contributions is essential for diversifying opinions and enriching governance. However, if the focus remains predominantly on numbers, it could hinder efforts to challenge delegates who receive monthly payments despite not meeting the higher standards of quality. Others should have the opportunity to challenge delegate decisions based on the quality of their rationale, and we should closely evaluate this cycle’s outcomes to understand its full impact.

In the next cycle, we would advocate for having a monthly rewards system that incentivizes full participation. Delegates who achieve 100% participation would receive rewards, while those falling short would incur proportional deductions. Additionally, a quality-based bonus pool would recognize meaningful contributions—we could even experiment further allowing those not eligible for monthly payments to get this bonus as well.

This approach would encourage delegates to consistently provide high-quality rationale and strive for continuous improvement, while still rewarding top performers. For evaluating the quality of contributions, we are keen to adopt a framework similar to Arbitrum’s—as @SEEDGov mentioned—where a Program Manager scores contributions based on predefined parameters. Although this method involves a degree of subjectivity, its structured approach helps ensure that valuable insights are properly recognized.

In summary, we believe striking a balance between quality and quantity is key to enhancing governance and maintaining an engaged, diverse pool of delegates. We also support the proposed vesting approach, but view it as a long-term strategy to align incentives with sustainable, quality contributions.

2 Likes
31

While we have voted in support of this proposal, we’d once again like to reiterate our position that there should be some form of accounting/scoring/eligibility associated with a Delegate’s voting power and/or the amount of UNI they hold.

As described above, this proposal places a large emphasis on the importance of onchain/offchain voting and talks about utilising Delegates’ voting power. Yet there is no quality control in place for this? A Delegate with 10 UNI VP is valued the same as a Delegate with 2.5M UNI, yet the latter provides significantly more economic security to the DAO.

One major pushback about enforcing eligibility requirements based on VP is that it makes it harder for smaller delegates. This is completely fair and we recognise that contributions to DAOs are more than just VP. But there is currently 0 recognition of VP.

A solution to this is to add another category that awards points to Delegates based on some scoring metric of either VP or the impact of their relative VP. Thus, as a Delegate you can still apply with minimal VP however, you will be less competitive than another Delegate with the same performance yet has a larger VP.

1 Like
32

Application has been posted https://gov.uniswap.org/t/uniswap-delegate-reward-initiative-cycle-3-application/25288

34

what about an ai? if wanted i could write a concept for it?

35

We are inclined to support this proposal but suggest re-evaluating participation vs. delegation size in future iterations.

Currently, delegate compensation prioritizes reaching a quorum, which in a token-weighted system (e.g., Uniswap DAO) is best achieved by engaging large stakeholders rather than smaller, vocal delegates. It might be worth exploring whether targeting inactive large delegates (or growing stakeholder delegation) is effective alongside paying a broad base of extremely small delegates.

Another goal is attracting and retaining high-quality, diverse delegates. While valuable, this is also gameable, and smaller delegates are not necessarily aligned with token holders’ interests as larger ones might be. The program should reward outstanding contributions without incentivizing noise.

A better approach could incentivize meaningful evaluation and participation while introducing new models that don’t conflate qualitative feedback with voting power. The program shouldn’t over-index on either but should strike a balance.

Ultimately, the program should aim to incentivize meaningful engagement on DAO proposals from as many of the largest and most powerful stakeholders as possible. Ideally, the DAO can also reward newcomers who demonstrate outstanding value with both compensation and a route to receive a delegation from existing investors and UNI whales (diversifying the delegate base).

This program seems a bit overly focused on attracting loud and active participants, regardless of alignment, versus engaging the most aligned stakeholders.

36

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

We’re voting ABSTAIN on the onchain vote.

Following our ‘abstain’ vote during the temp-check, we’re also abstaining on the onchain vote. As others have also expressed, some aspects of the program could be improved before the program is renewed. However, we understand the nuances involved and that someone would need to lead this process, which is why we’re abstaining and not voting against it at this time.

Also, we plan on applying to the program, so we’re abstaining due to a conflict of interest.