Behind Unichain TVL's soaring popularity: a carefully planned liquidity feast, or the prelude to a new DeFi pattern?

Author: Frank, PANews

Since its official launch in February 2025, Layer2 network Unichain seems to have not aroused huge splash in the market at the first time. It coincides with the overall adjustment period of the crypto market, and its voice was once drowned.

However, the silence did not last long. Unichain's cross-chain activity has heated significantly on April 15 after Unichain and Gauntlet jointly launched a $5 million liquidity incentive campaign. In just 24 hours, 11 addresses have accumulated tokens worth about $22.23 million into Unichain. The sudden "money-spreading" activity was effective immediately. Unichain’s TVL saw a staggering jump after April 15, soaring from about $9 million to $267 million in two days, according to DefiLlama data. This number has quickly climbed to 4th place among many Layer2s. Unichain's inspiration-driven TVL explosion is just a brief "hair-pushing" carnival, or is it an effective verification of the gorgeous turn of Uniswap, the DeFi giant, from the protocol layer to the underlying public chain? Can Unichain take this opportunity to truly become a new home for DeFi?

L2 born for DeFi

Before understanding Unichain's recent outbreak, let's review its fundamentals. Unichain is the product of UniswapLabs's many years of deep cultivation in the DeFi field. It is positioned as a high-speed, decentralized Layer2 solution designed for DeFi and cross-chain liquidity.

From a performance perspective, Unichain's performance is similar to other L2s. According to official reports, the main network has achieved a block production time of 1 second after it is launched, and it is planned to achieve a "sub-second" effective block time below 200 milliseconds through the TEE (Trustable Execution Environment) technology developed in cooperation with Flashbots in the future, so that the transaction is completed almost instantaneously. In terms of cost, Unichain's transaction fees have been significantly reduced by about 95% compared to the Ethereum main network.

As of April 16, 2025, Unichain's official website data showed that it had processed more than 20 million transactions and had more than 371,000 wallet addresses. In addition, the processing of 95 million transactions and deploying 14.7 million smart contracts during the test network stage also reflects the advantages under the brand effect to a certain extent.

In terms of ecological cooperation, Unichain received support from many industry giants at the beginning of its release, with nearly 100 crypto projects and infrastructure providers announcing support or building on Unichain, including heavyweight players such as Circle, Coinbase, Lido, and Morpho.

Overall, Unichain seems to have gathered the basic conditions for building DeFi L2: high performance, low cost, and early support from industry leaders.

How UNI leverages 270 million TVL

Unichain has a good foundation, but TVL's explosive growth is undoubtedly directly ignited by the liquidity incentive campaign launched by Gauntlet. The event plans to distribute a total of $5 million in UNI tokens to 12 specific liquidity pools on Unichain as a reward in the first two weeks. These 12 pools are mainly concentrated in mainstream asset pairs, such as USDC/ETH, ETH/WBTC, USDC/WBTC, as well as UNI/ETH and multiple LST/LRT and ETH pairs.

There may be two contexts regarding the inherent reasons why this activity can attract liquidity so effectively.

On the one hand, there is the "hair feeding effect", the $5 million UNI token reward is concentrated in 12 pools and distributed in a short period of time (initially two weeks), which may bring potential high returns for liquidity providers.

We can use historical data on Gauntlet running similar incentive plans on other chains to estimate its attractiveness. A Gauntlet analysis mentioned that based on historical data, it is conservatively estimated that a $1 incentive can bring $35-50 TVL. Based on this calculation, the event may eventually bring about about $175 million to $250 million in TVL growth for Unichain. Judging from the current data, Unichain's performance has exceeded conventional expectations.

How much rate of return does this activity bring? Based on the growth of $267 million in TVL, users can earn about $181 in every $10,000 invested by users, with a yield of about 1.81%. Of course, this is the result calculated based on the current level of TVL. In the end, TVL may be higher and the actual benefits will be relatively less for users.

On the other hand, behind the pursuit of this hair-fighting effect of large funds, the deeper reason is the market's "stable returns" demand during the downward period. In the first quarter of 2025, the crypto market experienced a pullback as a whole, with the prices of mainstream assets such as Bitcoin and Ethereum falling, and the market volatility intensifying. In this environment, large amounts of funds, especially large amounts, tend to look for safe havens with relatively low risks and stable returns.

As more and more funds inflows have increased, the inversion of more and less wolf. Blogger @0x_Todd complained that this mechanism forces LPs to concentrate liquidity in extremely narrow price ranges. For example, USDC/USDT remained between 0.9998-1.0000, which led to an ultra-high liquidity depth of tens of millions of dollars in this narrow range. However, since the fee rate is only 0.01%, the daily transaction fee income is only 1K-2K US dollars, this kind of inversion also causes a huge waste of funds.

Overall, the soaring of UnichainTVL is the result of the combined effect of high short-term incentives and stable returns demand under market risk aversion, but whether this short-term soaring has practical significance remains to be seen.

Uniswap's "open conspiracy" relies on Unichain and V4 to return to the

leader of DeFi?

As Unichain's main network online and incentive activities begin to activate the market, the entire layout of Uniswap Labs has also begun to be implemented simultaneously in the near future. From the launch of Uniswap V4 to the severance of regulatory turmoil, to the proposal to promote cost switches for community governance. Uniswap seems to be working hard to return to the DeFi leader.

In January this year, Uniswap V4 was deployed on more than 10 mainstream networks including Ethereum, Polygon, Arbitrum, etc. V4 introduced the "Hooks" mechanism, allowing developers to insert custom code at key nodes in the liquidity pool life cycle, greatly enhancing the customization of the protocol and transforming it from a DEX to a DeFi developer platform. As of April 17, the TVL of Uniswap V4 has reached $369 million, surpassing the V2 version.

In addition, the protracted SEC investigation ended in February 2025 and no enforcement action was taken against UniswapLabs, and a $175,000 settlement was reached with the CFTC on specific leveraged token transactions. Overall, the systemic regulatory risks faced by Uniswap's core business have been greatly reduced.

The promotion of Unichain and V4 is inseparable from financial support. In March, the “Uniswap Unleashed” proposal approved a total of approximately $165.5 million in funding to support the growth of Unichain and V4, including $95.4 million in grants, $25.1 million in operating expenses and $45 million in liquidity incentives. This fund comes directly from the UniswapDAO vault.

Protocol fee switch, this is undoubtedly one of the core issues that UNI holders are most concerned about. Although the proposal has passed the preliminary vote and the final "UniswapUnleashed" funding vote, its implementation still needs to wait for the Uniswap Foundation to resolve relevant legal entity issues. Once successfully activated, it will directly bring agreement revenue to UNI holders who are staked and participated in governance, becoming a key step in UNI token value capture.

Overall, Unichain is more like a core and highly optimized "home court" created by Uniswap, and V4 is the strongest weapon displayed on this battlefield. Ultimately, migrating most of the TVL to Unichain is a possible long-term goal, but it still seems difficult in the short term. Currently, Unichain TVL (about US$178 million) still has a big gap compared to Ethereum mainnet (about US$2.5 billion) and Base (about US$600 million).

However, Uniswap will most likely stimulate the achievement of this ultimate goal through continuous community incentives. Currently, Uniswap DAO has approved the initial liquidity incentive of $21 million (3 months) for Unichain and expects a total of approximately $60 million in incentive funds to be needed in the first year. In addition, there is a $95.4 million grant budget, part of which will be used for the Unichain ecosystem.

The recent surge in TVL triggered by Unichain's liquidity incentive program is not just a carnival of funds chasing short-term high returns, but more like a "firepower reconnaissance" under Uniswap's careful layout. It successfully refocused the market's attention on this L2 network tailored for DeFi, and initially verified the feasibility of leveraging ecological cold start through strong financial resources.

Behind this incident is UniswapLabs' more profound strategic plan: by launching Unichain and V4 protocols, it can achieve vertical integration from applications to infrastructure, and create a DeFi exclusive chain with superior performance, low cost, and highly customizable to consolidate its leading position in fierce competition. However, whether Unichain can truly transform from a "protocol application chain" to a "new home of DeFi" still faces many challenges. Can short-term incentives be transformed into long-term user stickiness and real ecological prosperity? Can the innovative potential of V4Hooks be fully stimulated? When will the highly anticipated protocol fee switch finally be implemented, truly empowering UNI tokens.

For Uniswap and UNI holders, the future is full of opportunities and challenges. The success of Unichain will profoundly affect Uniswap's position in the next generation of DeFi landscape. The market is waiting to see whether this gorgeous turn from application to chain will succeed.