Summary
Following the passage of the Unichain-USDS Growth Management Plan on Snapshot that echoed Unichain as the pillar of Uniswap’s growth strategy, recent months have been dedicated to refining and updating the proposal for Uniswap DAO, based on feedback from various stakeholders.
When the proposal passed, Unichain held less than 20 million USDS; since then, we’ve seen strong growth to nearly 45 million USDS on Unichain. Our aim is to accelerate this growth through strategic deployment and secured incentives from the Spark ecosystem. We have opened up sUSDC as an additional avenue for growth as it utilizes the Sky ecosystem’s mechanism and contributes to the Sky ecosystem.
Additionally, we have raised the minimum KPIs to be more ambitious and implemented a self-imposed “No result, no reward” approach to promote fairness, collaboration, and success for Uniswap DAO.
Motivation
After a period of sharp growth, Unichain’s TVL has steadily declined from over $900 million USD TVL in July 2025 to nearly half that amount in early September. The introduction of USDS, sUSDS, and sUSDC creates opportunities for enhanced collaboration among DeFi protocols. Both sUSDS and sUSDC provide yield, funded by the Sky ecosystem. For example, if Unichain sUSDS TVL grows to $100 million, at the current 4.75% yield, this would cost Sky $4.75 million USD per year. sUSDS can be a crucial driver for Unichain’s DeFi ecosystem growth, offering a stable and scalable yield source.
Furthermore, we strongly believe Uniswap DAO should guide and decide on incentive distribution. The basis is once per three months (with reduced frequency following feedback to avoid overwhelming the governance process, but potentially more frequent in the future), the strategy will be suggested to Uniswap DAO, where they can vote via Snapshot to support the incentive distribution or not.
Goal / Growth Strategy
The strategy centers on coordinating with key protocols to expand the Unichain ecosystem, notably by utilizing Sky’s competitive base savings rate. With incentives from Uniswap DAO and relevant DeFi partners, this rate can be amplified further. While additional incentives are secured, partners have emphasized that Uniswap DAO’s support is essential.
All co-incentive programs will be data-driven to ensure effective growth. Co-incentives will be spent with strategic reasoning and analytical support. Program updates will be shared once per month to communicate with the community.
Beyond monthly program updates, we’ll refine the strategy in real time, allowing for continuous improvement and optimization. KPI-driven growth will enable ongoing adjustment of both partnership targets and co-incentives distribution to ensure maximum ROI on spending. We will provide the report regarding strategy and rebalancing weekly.
Currently, the planned methodology for pools and lending markets is an incentive redistribution framework that reallocates a portion of rewards from the bottom 25% performing pools to the top 25% performing pools. This systematic rebalancing attracts more users, increases TVL, and improves overall bottomline metrics by concentrating incentives where they generate maximum impact.
Instead of sending all reallocated rewards directly to the top-performing pools, up to 5% of the total value will be strategically reserved to seed emerging opportunities and strengthen smaller pools. No single test pool can receive more than 2% of the total value, ensuring diversification and controlled risk.
StableLab leverages its deep ecosystem knowledge and ongoing market analysis to identify where these allocations can have the highest long-term impact. By backing promising new pools or overlooked markets at the right moment, these rewards can spark meaningful growth and unlock outsized upside for the protocol. Over time, these allocations fold back into the regular rebalancing cycle, ensuring the system continuously adapts while compounding value across the broader ecosystem.
As with the offchain proposal, Unichain DAO retains the ability to reject any proposed distribution if deemed necessary.
Budget and Duration
As mentioned above, sUSDS and sUSDC provide yield funded by the Sky Ecosystem. For example, if sUSDS grows to $100 million, at the current yield rate of 4.75%, that would cost Sky $4.75 million USD per year. Contributions from various DeFi protocols would further grow Unichain, with Spark having committed to providing additional co-incentives.
We strongly believe the majority of the budget that Uniswap DAO provides should be tied to objective KPIs like USDS and sUSDS supply on Unichain, which is inherently tied to TVL.
The program will start with a budget of $1 million USD when the first Snapshot strategy vote passes after this onchain vote passes to kickstart the program. Therefore, only one-fourth of the budget will be fixed, and the remaining portion will be performance-based. The performance-based part will be paid when the agreed-upon KPIs are reached, and we request unlock by submitting on-chain proof.
In addition, 80% of the budget will be directly spent on co-incentives that focus on USDS and sUSDS growth to boost Unichain TVL and usage. For instance, additional yield for sUSDS to make sUSDS yield on Unichain more attractive, or an incentivized USDS and/or sUSDS pool such as UNI-USDS on Unichain.
The remaining 20% of the budget, would be used for operations and logistics–such as coordinating with partners and optimizing and reporting on the incentive program
KPIs
KPIs are intentionally set high to align with the DAO’s interests. Following growth in USDS, and to keep interests aligned and show our commitment, we have raised KPIs by three times (from $20 million to $60 million).
Out of the potential $3,000,000 USD incentive-based payment:
- $1,000,000 USD unlock. 80% allocated to co-incentives.
- Additional $1,000,000 USD unlock. 80% allocated to co-incentives.
- Additional $1,000,000 USD unlock. 80% allocated to co-incentives.
Additional Accountability and Alignment regarding KPIs
- 30 / 60 / 90-day TVL retention, with the goal of 60 % / 50 % / 40 % each of peak
-Net new liquidity provider addresses, with the goal of more than 1200 addresses by the end of the program
-Δ TVL / $ incentive (ROI), ≥ $12 TVL gain per $1 variable spend, measured 30 d after each unlock
Optimism provided 2,000,000 OP to Spark to deploy on Optimism + Unichain. Those funds are already financing 1/3 of the yield on sUSDS on Unichain. We would prefer to see what USDS supply looks like after those user incentives are exhausted, and it doesn’t make sense to further subsidize users holding sUSDS on Unichain with the existing 7% yield. This is especially important given that neither sUSDS nor USDS appear to be integrated into the DeFi ecosystem on Unichain. There appears to not even be a Uniswap pool with USDS or sUSDS on Unichain, nor is USDS or sUSDS integrated in lending markets like Morpho or Euler on Unichain.
The Event Horizon Community voted FOR on this Proposal (ehUNI-70): EventHorizon.vote/vote/uniswap/ehUNI-70
We are voting in favor of this proposal, consistent with the rationale provided in our Snapshot vote. We view it as a capital-efficient strategy to accelerate Unichain’s growth, making smart use of the Sky ecosystem’s existing sUSDS yield. Importantly, linking most of the budget to performance-based TVL targets ensures DAO spending is aligned with measurable outcomes. At this stage, the strategic opportunity to grow Unichain is clear and compelling, and we support moving this initiative forward.
The "no result, no reward" structure makes this a compelling and low-risk proposal. Tying the vast majority of funding directly to ambitious, measurable growth milestones is a highly accountable and capital-efficient way to drive real, sustainable growth for the Unichain ecosystem
You can find our full rationale here: https://gov.uniswap.org/t/proxy-prev-boardroom-delegate-platform/25385/22
We vote FOR this proposal. Incentive programs are not usually effective in the long term, since when the money runs out, capital migrates to new opportunities. In the case of this proposal, we like the idea of bringing in other protocols that partially fund the incentives, because it does not depend solely on Uniswap DAO to keep the rewards flowing.