Uniswap Ecosystem Incentives Initiative

Governance-Meta
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Introduction:

As a member of the metagovernance team (UADP) with @AbdullahUmar, we are interested in working with @alphagrowth to increase our presence and engagement with the target chains that Uniswap is currently deployed on.

Over the past six months, Uniswap has incentivized over a dozen v3 deployments on compatible L1 and L2 EVM chains with over $5M of UNI tokens. In addition to bolstering liquidity and utilization of Uniswap across these chains, the allocated incentives have brought in thousands of unique addresses and users to the respective chains. Furthermore, participating in the governance of Arbitrum, and other target chains soon, through the UADP show the DAO’s willingness to engage and devote resources to the combined growth of both of our communities. Now, with the conclusion of our first ecosystem grant from Arbitrum, we are expressing our intention to expand our incentives initiative to other chains and deepen our relationships within those communities.

Background:

  • Uniswap has voted to incentivize over a dozen deployments across various chains. Deployed incentives and chains are listed here.
  • Uniswap was a recipient of the initial Arbitrum airdrop, and with ~25% of the funds, a metagovernance program was started on Arbitrum. The voting rationale of the program is here; the program has gained delegation since and maintained 100% voting rate.
  • The metagovernance team, UADP (@Juanbug, @AbdullahUmar), applied for the Arbitrum long term incentives pilot program. More info here.
  • Uniswap received a grant of 1,000,000 ARB tokens. To show alignment, a matching incentives discussion was also started for Uniswap and $750,000 of UNI was approved.
  • The UADP then worked with @Gauntlet to distribute these tokens over 12 weeks, concluding recently in September. An in-depth report on the efficacy of this program will soon be delivered by the Gauntlet team.

Going forward:

With the success of the initial trial grant application on Arbitrum, we believe now is the time to move forward with expanding these initiatives. Many of the chains that Uniswap is deployed on administer tens of millions of dollars in grants, often without enough worthy applicants. We also believe that an additional level of alignment can be achieved with target chains if the DAO is able to hold a stake in their governance tokens. A vehicle like the UADP has proven successful in participating in Arbitrum governance, and such a setup extrapolated to other EVMs will be beneficial as well as the likelihood of attaining grants and sustaining reciprocating relationships is only increased if the DAO becomes an active participant.

Grant Applications:

We are interested in replicating what we did at Arbitrum, across the other deployments of Uniswap. This will be a much more intense venture, and are asking the community for feedback on what and where to focus. We believe this is a great opportunity to work closely with the AlphaGrowth team. They have been exploring ways of marketing the DAO in the broader ecosystem and have shown success running this playbook on Compound.

@alphagrowth is a DeFi and DAO service provider primarily working in the realm of growth through securing grants, growth-marketing, and Defi Operations. Today, they run all growth, business development, and marketing efforts for the Compound.Finance protocol. AlphaGrowth’s achievements at Compound include securing nearly $4 million in incentives for Compound users, launching 7 new markets and over 30 collateral assets, and driving a TVL increase of more than $400 million (Quarterly Report).

Together with AlphaGrowth, some areas we want to focus on are:

  • Identifying existing opportunities
    • To boost our current efforts, AlphaGrowth has been involved in grants programs for several years. Since they already have their finger on the pulse of so many grants programs, identifying these opportunities for Uniswap will be a simple activation. We will submit applications for Uniswap early and often. Additionally, we will engage all of Uniswap’s existing blockchain ecosystem partners to explore their appetite for one-off incentive programs.
  • Creating new opportunities
    • In many cases, blockchain ecosystems have unspecified ecosystem funds set aside to incentivize user engagement, but these opportunities might not always be publicly announced through formal grants programs. To unlock these opportunities, we and AlphaGrowth will leverage our relationships with various ecosystems.
  • KYC/KYB
    • Many grants/incentives require KYC/KYB. We can utilize ReservoirDAO, AlphaGrowth’s sister company, a DAO LLC in the Marshall Islands. This DAO LLC is how they have claimed and distributed incentives for Compound. Everyone is doxed and happy to facilitate this process.
  • Incentive Distribution
    • Once we’ve secured the grants, we will distribute the incentives through various Uniswap partners. For our grant prior from Arbitrum, we used Gauntlet and Merkl. To distribute incentives at Compound, AlphaGrowth had great success using just Merkl and OKX. In addition to using these tried and true partners previously mentioned, we will identify the most effective distribution partners for Uniswap incentives.
  • Marketing
    • As we open up more of these lucrative opportunities for Uniswap users, it’s crucial that there is visibility. In the coming days, AlphaGrowth will be pushing forward a high impact marketing plan similar to the one they have been running at Compound.

Working together on these pieces, we are confident we will have sufficient coverage and bandwidth to manage the chains

Expanded Metagovernance:

Currently, Uniswap has only received self-delegation from Arbitrum as a part of the UADP team. In the future, this is an avenue that we are actively exploring to deepen our relationship with other teams. Being delegates builds trust from within and strengthens any grant application we submit. We will continue to look for good opportunities to become involved with other chains where Uniswap is deployed and even consider other complimentary communities if relevant.

Next Steps:

We want to start a discussion around the interest and scope of our plan. We can continue in our current state or scale up and appropriately cover these many bustling ecosystems. Namely, we would like to nail down the size and focus of this initiative. In the coming weeks, we will incorporate general feedback and ideas before moving forward with a full plan and budget.

We will receive suggestions across a multitude of scopes with an ultimate goal of reaching community consensus on an execution plan. Thank you everyone for your time and we look forward to everyone’s opinions!

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We’ve had some great chats with the AlphaGrowth team while they were refining Compound’s grant and growth initiatives. $400 million increase in TVL is no joke and they take their position very seriously, considering the unique positioning of the Compound protocol and experimenting with all the ways it can grow.

Definitely would love to see them more involved and happy to give more feedback on specific scopes of work. Think they could do similar to Uniswap as they did with Compound, mainly identifying what makes each blockchain ecosystem different and how Uniswap on that specific chain can be tailored for better success.

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100%. We’ve worked with their team on Compound for almost a year now and definitely think they’ve delivered more than they were promised. However the scopes end up, we are definitely interested in working together on this.

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The above proposed centralized decision-making process for partner identification leaves Uniswap at risk. It’d be best to be ran publicly. I believe Bryan, AG founder, agrees.

“Funding and grants to decentralized protocols cannot be reliant on centralized firms”-https://x.com/bryancolligan/status/1831548418944057612

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Hey @cmrn, a few points, I think Bryan’s tweet was directed at grant programs themselves. Oftentimes, a lot of them are run behind closed doors without any community input whatsoever. That is separate from this process of actually applying for them.

Additionally, I would argue that the partner identification step is a collective process and once we decide to deploy and oftentimes even incentivize the deployment, those chains can effectively be considered “partners” and chains of interest going into the future. The amount of focus spent on them and which ones specifically is a goal of this discussion.

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What I referenced was how they determine who’ll be supported in the ultimate distribution. I’m very familiar with how they ran this process at Compound.

Related to Bryan’s tweet, maybe he could clarify @bryancolligan

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@cmrn thank you for the ping.
With centralization you gain speed, with decentralization you gain the wisdom of crowds. Grants teams need someone to talk to help structure incentives correctly based on DAO needs. Identifying the initial set of partners and initiatives will take trial and error until clear criteria emerge. For the first couple initiatives we will bring back to the DAO to help create a process to evaluate while testing the effects and learning from campaigns. What we bring are initiatives and potential deals. We will help define deal shape & structure and bring back to the DAO for vote.

For more context on the tweet. There are at least 195 jurisdictions globally each with their own laws and regulations. Currently the way people vote in DAOs is processed through a filter by where the voter is physically located.
Sometimes not what is best for the DAO.
On at least 3 occasions we have had to squash campaigns(grants, funding, marketing) based on regulatory risk and not the merit of the campaign.
We have taken steps and will continue as an collective to limit this risk.

I believe the future of DeFi is to be funded by those that are not beholden to certain jurisdictions.

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Thank you Jun for helping push this forward.

We will be sharing a more comprehensive program overview in the coming days.

Grateful to have @PGov and @AbdullahUmar on the team to help execute.

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Can you summarize in simple terms what you actually plan to do?

From my understanding, the RFC has three main potential action points:

  1. Renew and continue Uniswap liquidity mining programs on multiple chains.
  2. Apply for grants from DAOs governing these chains.
  3. Get governance tokens on these chains (by requesting delegation or also through treasury swaps?) and participate in governance.

Is this an accurate summary? Do you intend to bundle all of this into a single vote?

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Hey @kfx We’ll be putting up a comprehensive plan shortly :grin:

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In short, mainly the second point.

  • Applying for grants across the chains Uniswap is currently deployed on.

The use of more incentives can be used in the future as a bargaining chip for Uniswap. Similar to delegation and increased metagovernance but all of that will be situational based on specific circumstances on a respective chain.

As for a vote, this specific point has the goal of setting something formal up in the future, which will likely require a vote.

The Alphagrowth team is looking to propose a larger RFC with this topic being part of it in the days to come :blush:

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Thanks for the proposal @PGov and glad to see the favourable results achieved at Compound. I have a few questions:

  • What was the change in TVL after the incentives ended at compound? What is the state of TVL now compared to before the program started?

  • Can you please present reference to research work which dives into a comparative analysis of service providers, and the ultimate rationale for choosing the service provider in question?

  • What is the rationale behind proposing a service provider/partner as opposed to going through an RFP process?

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Thanks for the response @jengajojo and it’s nice to see some serious discussion starting!

  • Will defer to @alphagrowth for this specific point. I know they just released a quarterly report on the Compound forums that is a good overview but will let them add more.

  • It seems point 2 and 3 are rather similar. After the DAO voted in the first metagovernance team, it was a rather small initiative at the start, but something that we quickly realized had a lot of potential. Over time, as this idea of “grant hunting” became more and more fleshed out, we again realized there was a lot of opportunity and much funding was being left on the table for the DAO. When it came to figuring out how to best tackle this issue with, we thought of Alphagrowth as anecdotally, from @AbdullahUmar and our’s combined experiences at over a dozen DAOs, this has been our best experience from an outside third party. I’ll let them explain more about their track record. Lastly, when it comes to actually sorting out a proposal and scope in the future, your comments regarding RFP could certainly make sense. For now, there’s pretty much nothing to vote on yet and we’re just trying to gather a sense of scope. .

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