Written by: Lawrence
Introduction: A Delayed Liquidity Feast
On April 12, 2025, the liquidity staking protocol Lido tweeted on platform X “Incentives: Soon™”, announcing the launch of a 3-month Unichain liquidity incentive program involving 12 mainstream asset pools (including wstETH/ETH, WBTC, stablecoins, and UNI/COMP, etc.). This marks the first time since the initial liquidity mining of Uniswap V2 was launched in 2020 that UNI tokens have been included in the official incentive system after a 5-year hiatus. Previously, the price of UNI dropped from $19 to a low of $4.5 after a prolonged decline of 3 months, nearing the historical low of $3.3 after the LUNA crash in 2022.
Behind this action lies both the continuation of Lido’s dominance in the Ethereum staking market and Uniswap’s key breakthrough attempt in its Layer 2 strategy, becoming a window for observing the turning points in the DeFi market cycle.
Lido’s “Liquidity Fortress”: From Staking Monopoly to Cross-Chain Expansion
1.1 Lido’s Strategic Intent: Consolidate the DeFi Currency Status of stETH
As the absolute leader occupying 27.1% of the Ethereum staking market (data as of April 14, 2025, source: Dune Analytics), Lido’s core goal has shifted from merely expanding staking scale to enhancing the on-chain application scenarios of stETH.
Previously, the main use cases for stETH focused on lending collateral (AAVE and MakerDAO accounted for 40%) and passive holding (55%), with its function as a trading medium only making up 3%. This time, choosing Unichain as the main battleground for incentives aims to embed stETH into the core liquidity pools of Layer 2, promoting it to become a “universal Gas asset” for cross-chain transactions.
Technological Mechanism Innovation:
Merkl Reward Distribution: A zero gas fee model using off-chain computation and on-chain verification to lower the user participation threshold.
Multi-asset pool design: covering ETH, LST, WBTC, stablecoins, and UNI/COMP, forming a cross-chain asset exchange matrix;
Cooperate with Gauntlet: Prevent “short-term arbitrage traps” in liquidity mining by dynamically adjusting incentive weights.
1.2 Data Perspective: Lido’s “Decentralization Anxiety” and Attempts to Break Through
Although the number of Lido’s node operators has increased to 37 (targeting 58), its protocol-level market share (78%) still far exceeds the 15% security threshold proposed by Vitalik.
This time, the liquidity guided by Unichain is essentially about diversifying risks through “inter-protocol collaboration”: migrating the liquidity dependence of stETH from the Ethereum mainnet to the Rollup ecosystem, thereby reducing the impact of single points of failure on staking security.
From on-chain data, the scale of stETH cross-chain to Arbitrum and Optimism in Q1 2025 has grown by 320% year-on-year, validating the initial effectiveness of this strategy.
Uniswap’s “self-redemption”: Can Unichain turn around the Layer2 dilemma?
2.1 The mission of Unichain: From fragmented liquidity to aggregation
Uniswap’s Unichain, launched in 2024, is a universal Rollup based on the OP Stack, aimed at addressing the liquidity fragmentation issue in the multi-chain ecosystem. However, its initial performance has fallen short of expectations:
Cross-chain experience bottleneck: Users must first bridge assets to Unichain, leading to transaction delays and increased costs;
TVL growth is weak: As of April 2025, Unichain’s locked value is only $7.65 million, far below that of other chains.
The significance of Lido incentives:
By introducing core trading pairs such as stETH/ETH, Unichain can quickly establish deep liquidity by leveraging Lido’s staking volume.
For example, the initial APR of the wstETH/ETH pool is designed to be 180%-250%, which is much higher than the 45% of similar pools on the mainnet, potentially attracting arbitrage capital to migrate across chains.
2.2 The “Hidden Dangers and Dawn” of UNI Token Economics
The core contradiction of the current low UNI price lies in:
Unlocking of Selling Pressure: The total token unlocking amount for the team and investors in 2024 will reach over 65 million, accounting for 6.5% of the circulating supply.
Breaking the deadlock: The “fee switch” proposal was rejected again in March 2025, resulting in protocol revenue unable to benefit token holders.
Bottom Signal Analysis:
Exchange Balance Hits All-Time High: Glassnode data shows that the exchange holdings of Uni have reached an all-time high. If a reversal signal appears, it may indicate a price recovery.
On-chain chip distribution: Glassnode data shows that the proportion of whale addresses holding over 10,000 coins has decreased from 62% in 2024 to 47%. The diversification of chips may indicate retail investors are bottom-fishing.
Valuation Anchor: The current Price-to-Sales (PS) ratio of UNI is 8.2, lower than the industry average of 15.4, placing it in the historical 10th percentile.
Technical support: The weekly RSI (14) has dropped to 28.6, approaching the extreme oversold area of 2022.
Market Impact: The “Song of Ice and Fire” in the DeFi Ecosystem
3.1 The “Siphoning Effect” of Liquidity Migration
The incentives from Lido may trigger two major chain reactions:
Layer 2 liquidity redistribution: The stablecoin pool TVL of emerging chains like Solana and Sui may decrease by 15%-20%, with funds shifting towards Unichain;
Lending Protocol Interest Rate War: AAVE’s wstETH collateral borrowing rate has dropped from 5.2% to 3.8%, or is forced to launch a subsidy program.
3.2 The “Unexpected Rise” of COMP and Risks
The selection of COMP in this incentive pool has sparked controversy. The underlying logic may lie in:
Clearing Safety Cushion: Compound’s on-chain lending liquidation line is generally lower than Aave’s, making it suitable as collateral in high-volatility markets;
Governance token reuse: A recent proposal by MakerDAO allows COMP to be used as collateral for minting DAI, enhancing its utility scenarios.
Conclusion: Finding “asymmetry” in uncertainty.
Lido’s liquidity incentives are not only tactical collaborations of DeFi protocols but also a strategic experiment in the value capture logic of the Layer 2 era. For UNI, the price of $5.4 reflects both a pessimistic pricing based on historical path dependence and an implied option premium for Unichain’s successful breakout. Under the dual catalysts of macroeconomic shifts and the formation of regulatory frameworks, 2025 may become a key turning point for UNI’s transition from a “governance token” to a “cash flow asset.” Investors should be cautious of the short-term fluctuations brought by liquidity siphoning, but should pay more attention to the long-term value of leading protocols rebuilding their moats under the narrative of cross-chain interoperability.
