Cross Ecosystem Grant Programs

The Report in a Snap

Airdrops remain a prevalent incentive alignment practice in the crypto space, rewarding both users and builders of networks.  However, protocols often struggle to utilize these tokens effectively, typically opting to sell them or hold them for treasury diversification. Areta's Strategic Governance team’s latest report explores ways to optimize airdrop utility through strategic initiatives like the Uniswap Arbitrum Grant Program (UAGP).

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The Role of Airdrops in Crypto

Airdrops remain a prevalent incentive alignment practice in the crypto space, rewarding both users and builders of networks. For example, 10% of all 1.28 billion ARB tokens were airdropped to DAO wallets, significantly boosting their treasuries. However, protocols often struggle to utilize these tokens effectively, typically opting to sell them or hold them for treasury diversification.

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Cross Ecosystem Grant Program

In March 2023, Arbitrum airdropped ARB tokens to early supporters, including Uniswap. Areta and partners created the Uniswap Arbitrum Grant Program (UAGP) to fund projects benefiting both ecosystems, fostering strategic ties and leveraging synergies. The UAGP proposal also included the creation of the Delegate Program (UADP) to protect Uniswap’s interests through governance decisions on Arbitrum.

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Program Design & Success Metrics

The UAGP's success metrics focus on volume/liquidity increase, user growth, and protocol integrations. Through extensive stakeholder consultations, the program was designed to address critical intersections of the Uniswap and Arbitrum ecosystems. Five RFP categories were created to attract projects with high potential for long-term growth and improvement of both ecosystems.

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Operations & Learnings

Five months into operation, UAGP has funded 12 grantees from over 130 applications. Key learnings include the need for rigorous milestone-setting, substantial operational support for applicants, and adapted reporting processes. Reporting tasks were shifted from monthly to bimonthly to reduce burnout and focus on significant updates.

Just as we aimed to better utilize airdropped tokens to create strategic synergies between Uniswap and Arbitrum, we hope the success of the UAGP can inspire other ecosystems to explore similar initiatives. By working together, we can replicate this model across the web3 space, fostering a more interconnected and robust decentralized future for all protocols and their communities.

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Engage with Areta Today

At Areta, we are committed to consistently delivering new insights and quantitative analyses to provide everyone with an institutional view of the web3 landscape. Download our latest report to gain a deeper understanding of the trends and data shaping the crypto market. Your feedback is invaluable to us.

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