The Uniswap Foundation voted to approve a massive $165.5 million investment plan, but why?

Because the performance of Uniswap v4 and Unichain has not yet met market expectations.

In just over a month:

· The total value locked (TVL) of Uni v4 is only $85 million

· The TVL of Unichain is only $8.2 million

To drive growth, the Uniswap Foundation proposed allocating $165.5 million in funding to the following areas:

· $95.4 million for grants (developer programs, core contributors, validators)

· $25.1 million for operations (team expansion, governance tool development)

· $45 million for liquidity incentives

As you can see, Uni v4 is not just a DEX, but a liquidity platform, and Hooks are applications built on top of it.

Hooks are expected to drive the growth of the Uni v4 ecosystem, so the grant program is needed to accelerate this process.

Detailed allocation of the grant budget:

The $45 million in liquidity provider (LP) incentives will be used for the following:

· $24 million (distributed over 6 months): to incentivize liquidity migration from other platforms to Uni v4

· $21 million (distributed over 3 months): to drive the Unichain total value locked (TVL) from the current $8.2 million to $750 million.

In comparison, Aerodrome mints around $40-50 million worth of AERO tokens per month for liquidity provider (LP) incentives.

The proposal has passed the temperature check stage, but still faces some criticism:

· Amid industry landscape changes, Aave proposed to buy back $1 million worth of AAVE tokens weekly, and Maker plans to buy back $30 million monthly, yet UNI holders are like "milking cows" whose token value has never been captured.

· UNI tokens have not implemented a fee-sharing mechanism, while Uniswap Labs has earned $171 million through frontend fees over the past two years.

The key to the entire system lies in the organizational structure of Uniswap:

· Uniswap Labs: Focused on protocol technology development

· Uniswap Foundation: Driving ecosystem growth, governance, and funding programs (such as grants and liquidity incentives)

A very savvy legal team indeed.

Aave and Maker have established a closer alignment of interests with token holders, and I don't understand why Uniswap's frontend fees can't be shared with UNI holders.

In general, other criticisms mainly focus on the high salaries of the core team, Gauntlet's responsibility for executing liquidity incentives, and the establishment of a new centralized DAO legal structure (DUNA).

As a small governance representative of Uniswap, I voted in favor of this proposal, but I still have major concerns about the future of UNI holders: the incentive mechanism has not been aligned with the interests of holders.

However, I am a loyal fan of Uniswap and highly recognize its role in driving DeFi. The current growth momentum of Uni v4 and Unichain is very bleak, and they need to introduce incentive measures to promote development.

The next Uni DAO vote should focus on the value capture mechanism of the UNI token.