Overview & Opportunity
UNI incentives and organic growth has skewed Unichain’s TVL heavily toward Uniswap. $460m of liquidity has been deposited across spot and CL pools. Yet, Compound V3 only has around $5m in Supply:
- 600k in USDC
- $4.7m in ETH
There is a $100-200MM addressable market for USDC and ETH lending on Unichain, and Compound markets live, and ready to entrench a first-mover network effect on the chain.
TVL Growth Strategy
- Incentiveize Stablecoin Supply - [20-40% of Incentives.]
During Arbitrum’s LTIPP, we learned that rewarding supply produces growth. When Compound streamed ARB exclusively to USDC and USDT lenders, supply TVL climbed from ~$92 million to $266 million an increase of 180%, and every dollar of ARB pulled in roughly $139.
On Unichain we propose funnelling 20-40% of the COMP incentive budget to USDC and USDT0 denominated supply, paid out via Distribution partners.
- Incentivize ETH Supply for Loopable LSTs / LRTs - [15-30% of Incentives.]
Organic use of the ETH Market on Unichain is focused on the following loops:
- weETH / ETH @ $2.6m in collateral.
- wstETH / ETH @ $1.76m in collateral.
ETH Staking Yield provides organic demand for looped leverage, but this activity is constrained by supply. When the utilization rate of the ETH market reaches the kink, the spike in borrow APR makes these LST / LRT Loop trades unprofitable.
You can see evidence of this in the ezETH collateral listing:
- ezETH / ETH @ $0 in collateral.
weETH and wstETH Loopers are eating up all of the ETH supply, and the APR for ETH Supply has not met the required hurdle rate for more deposits. Even though ezETH is listed as collateral, the market needs more supply to grow.
We propose directing 15-30% of the COMP incentive budget to ETH denominated supply, paid out via Distribution Partners.
- Structured-product partner vaults - [10-30% of Incentives.]
Yield products and vaults during LTIP proved that white glove strategies can bring incremental dollars that self-manage health-factors and auto-loop capital. We will reserve 20% of incentives for whitelisted vaults that lock funds for ≥ 30 days, ensuring alignment. Partners receive streaming COMP only while vault TVL is maintained, creating a built-in claw-back if deposits leave early.
We will highlight the loop mechanic through partner dashboards so traders can form one-click, 2-3x recursive positions.
- Unichain Conditional Funding Markets.
The Uniswap Foundation has signalled a June/July CFM grant round. CFMs, Conditional Funding Markets, are a form of futarchy - which uses prediction markets as a governance mechanism, and are an experiment into how we make funding decisions in a decentralized way. In the Uniswap Foundation’s first implementation of CFMs, Forecasters will predict the specific amount of TVL a lending protocol will generate on Unichain over three months if the team receives the grant. The UF will allocate two grants of $450,000 each based on the results of the CFMs, and the teams will use that grant in an attempt to maximize their TVL growth.
While nothing is guaranteed, quick wins on Unichain will increase Compound’s chance to co-finance growth campaigns. We encourage Compound to apply to participate in the CFM when applications are announced in a few weeks.
AlphaGrowth will champion a matching proposal so that every COMP dollar is effectively doubled by Uni tokens, halving the effective incentive spend while keeping APYs attractive. Our target is $200-500k in matched funds, and we will coordinate timelines so that the Uni grant starts as COMP emissions ramp down, smoothing APRs and reducing “cliff” risk at campaign end.
- Gamified quests & referral funnels - [5-10% of Incentives.]
High engagement quests were a silent workhorse in LTIPP: Layer3 and similar platforms drove a material share of first-time wallet creation at minimal cost. We will dedicate 5% of the incentive pool to a Layer3 or similar quest series that requires a qualifying deposit (≥ $100) and a seven-day holding period. This approach blends education with light gamification to seed long-tail wallets that historically exhibit better retention than airdrop farmers.
Together, these five tactics recreate the proven Growth levers which led to our success on Arbitrum. We will tailor these strategies for distribution on Unichain.
KPIs & Milestones
Our success framework revolves around four measurable objectives that tie directly to Compound’s bottom line and Unichain’s network effects:
- $100m TVL in 90 days
Our primary KPI is TVL growth. Reaching this threshold not only validates product market fit but also unlocks economies of scale in risk parameters.
- Utilization at an average of 60%
TVL by itself is insufficient unless borrowers put it to work. We therefore target an average utilization rate of 60 percent, calculated over rolling two-week windows during the campaign. Maintaining that level confirms that borrow demand is healthy, reserve fees accrue to the treasury, and lenders see competitive yields without over-risking the markets.
- Retain 70% of peak TVL, 30 Days after emissions end
Short term mercenary capital undermines long term profitability, so retention is a core KPI.
- Secure at least $100-$500k in UNI tokens
To multiply the impact of DAO funds, AlphaGrowth will pursue Unichain’s forthcoming futarchy grants and other co-marketing pools. Our milestone is to secure a minimum of $100-500 k in Uni tokens by the end of the quarter. Matching capital of that magnitude effectively doubles depositor APR without draining additional COMP from the treasury.
Budget & Request to the DAO
To achieve the Unichain growth targets, we are asking the DAO to approve $700k in COMP budget.
- $400k in COMP incentives.
With $400k in COMP and similar budget in UNI AlphaGrowth will mirror the dollar denominated spend that proved so effective on Arbitrum and ensures the APR remains predictable for depositors from day one.
- $300k in COMP for operations, marketing, and integrations.
- $300k will be released up front to cover immediate integration work, strategy and marketing execution.
These funds pay for analytics dashboards, weekly KPI reporting, creative assets, Layer3 quest fees, and the BD hours required to secure matching grants from Unichain’s forthcoming futarchy program.
- Performance Bonus
To align AlphaGrowth’s upside with the DAO’s, we propose a performance bonus of $50 k in COMP for every additional $10 million of net TVL above the $100 million target, payable only after an independent audit confirms balances and retention 30 days post-campaign. This success fee is conditional: if we fall short, the DAO owes nothing beyond the base, and any unused incentives automatically revert to the treasury.
In sum, the DAO’s commitment is capped at $700k in COMP, and a results-based bonus that rewards over-performance while protecting downside.
Approving this budget equips Compound to seize Unichain’s liquidity window:
- Drive up to $100-200 million in sticky deposits.
- Add an estimated $0.5-1.5 million in annual reserves.
- Perform as a leading protocol in Unichain’s Futarchy incentives competition.
Closing
Compound’s growth team has already demonstrated that targeted, data-driven incentives can outperform competitors by 7.7x on a dollar on dollar basis. Unichain is the next high liquidity frontier, and the window to capture it is now before rival money markets arrive. Backing this proposal lets Compound lock in the network effect, generate an estimated $750k in new annual reserves for a 12 Month ROI at $100MM TVL and 7 Months at $200MM.
Due to the time sensitive nature of Unichain opportunity AlphaGrowth will run this campaign and handoff and align to the Compound Foundation assuming the DAO votes in a Foundation.
Looking forward to comments and feedback.