Uniswap Foundation Proposes $45 Million Incentive Program to Boost V4 and Unichain

The Uniswap Foundation has proposed a $165 million initiative to supercharge the growth of Uniswap V4 and Unichain.

If UNI holders approve the proposal, the funding will be split across three categories: grants for developer programs, core contributors and validators ($95.4 million), operations for team expansion and governance tooling ($25.1 million), and liquidity incentives ($45 million) aimed at improving adoption of Uniswap V4 and Unichain.

The proposal passed a temperature check on March 2 and will now proceed to an onchain vote.

Since its launch on Jan. 29, Uniswap V4, the latest iteration of the decentralized exchange, has not lived up to expectations, attracting a total value locked (TVL) of just $88 million, according to DeFiLlama. Unichain’s performance is even poorer. Since launching on Feb. 2, the Ethereum Layer 2 (L2) network has managed only $8 million in TVL.

One reason behind the low adoption is increased competition from other decentralized exchanges (DEXs) and alternative Layer 2 solutions.

The proposal’s stated goals include increasing Uniswap’s volume market share on Ethereum Virtual Machines (EVMs) to 60% and growing Unichain’s decentralized exchange (DEX) volume and DeFi TVL market share.

According to Uniswap delegate Ignas, the Foundation’s proposal passed its temperature check, but faced criticism.

“$UNI holders are a milking cow with no value accrual to the token. UNI has no fee switch while Uniswap Labs generated $171M USD in front-end fees in 2 years,” they said.

This frustration stems from the fact that Uniswap’s trading fees currently go to liquidity providers and frontend fees to Uniswap Labs, while UNI token holders have no direct revenue stream.

The fee switch — a mechanism that could allow UNI stakers to earn a share of trading fees — has been a major point of contention in governance.

UNI is down 22% in the past 30 days, according to Coingecko.