Uniswap community expands 'Delegate Reward Initiative' to incentivize active governance with UNI tokens

The Uniswap DAO has voted to continue Uniswap’s “Delegate Reward Initiative,” according to an approved proposal on blockchain voting platform Tally. An additional $540,000 worth of the protocol’s native UNI token has been set aside to fund “Cycle 3” of the program.

As the name suggests, the initiative is a compensation program to enhance the quality and dedication of Uniswap governance via paid incentives. The program will distribute up to $6,000 worth of UNI tokens per month to top-performing “delegates,” an individual or entity granted the power to vote on behalf of other token holders.

The governance vote ran from Feb. 26 to March 4, 2025, and passed with 47.51 million votes (99.45%) in favor. Cycle 3’s proposal is now being “queued” with an actual date for execution to be determined later, assuming it is not canceled during the timelock period. 

Uniswap’s voting incentive program is aimed at increasing engagement and governance quality. While onchain voting and DAOs are theoretically more democratic, they generally do not always lead to wholly transparent or fair results. Providing additional financial incentives could theoretically boost a delegate’s voting participation rates, leading to a more dynamic and responsive protocol.

Uniswap's community in particular has been split on a long-debated governance proposal to flip the "fee switch" to redirect a portion of trading fees — currently paid entirely to the DEX's liquidity providers — to UNI token holders. In a previous interview with The Block, Uniswap creator Hayden Adams said "the fee switch exists within a governance system" and it's "up to that ecosystem" to vote on the decision. 

Incentives initiative

StableLab initially proposed the rewards initiative in February 2024 and implemented it in June, after being researched by an eight-member working group. 

“Cycle 1 was successful in that the 12 delegates selected maintained 100% voting participation rate for votes during this period,” the latest proposal reads. "In addition, several new delegates joined the protocol due to the presence of incentives."

Cycle 3, proposed by @Doo_StableLab, @PGov, @AranaDigital and @seedgov, expands this program to 15 delegates, which will be selected following updated criteria and a newly introduced “points system” determined by “objective metrics.” This includes a delegate’s voting participation history, proposal authorship and community engagement. 

Delegates can earn up to $3,000 worth of $UNI per month by maintaining a minimum of 80% participation in proportion to the number of proposals submitted. In other words, if there were 10 votes cast in the last three months and a delegate voted on eight of them, they would receive 80% of the $3,000 — or $2,400. An additional $3,000 is being offered to delegates to write “vote rationales.”

According to Tally, several active delegates including FranklinDAO, Michigan Blockchain and Wintermute Governance were among the largest voters. That said, inactive former delegates like Gauntlet and Stanford Blockchain were also major supporters of the proposal. It had a participation rate of 24%.