We're excited to share a grant opportunity for lending protocols. It will be the first implementation of Butter’s Conditional Funding Markets (CFMs) for the Uniswap ecosystem.

Unichain lending protocols will be the first projects funded by Butter Conditional Funding Markets

With Unichain mainnet now live, we’re excited to announce a new grant initiative designed to strengthen and grow the network’s lending markets. Two Unichain lending protocols will each be eligible for up to $450,000 in grant funding, through Butter’s CFMs.

Lending protocols: Submit your grant application here.

Piloting new funding mechanisms for high impact grants

As announced in January 2025, the UF is pioneering futarchy as a grant funding tool through Butter. In the UF’s first implementation of CFMs, Forecasters will predict the specific amount of TVL a lending protocol will generate on Unichain over three months if the team receives the grant. The UF will allocate two grants of $450,000 each based on the results of the CFMs, and the teams will use that grant in an attempt to maximize their TVL growth.

Through participation in CFMs, potential lending protocol grantees can highlight their unique strengths to a broad audience and rely on economically incentivized actors to judge whether they will be successful in achieving the target outcome: more TVL.  Forecasters are empowered to put skin in the game for the grant allocation they believe will produce the best outcome.

Being a Forecaster is permissionless; subject to some jurisdictional restrictions, anyone can do it. If you want to learn more about CFMs and participate in predicting which lending protocol will produce the most TVL, sign up here for more information.

If you’re new to Futarchy and want to learn more, check out Vitalik’s Introduction to Futarchy and a Futarchy walkthrough from MetaDAO.

Conditional Funding Markets in Action

As this is a unique grant allocation process that welcomes the participation of all community members, it’s important to understand how to interact with CFMs. Please note that these dates are subject to shift.

For Lending Protocols:

By February 21st, lending protocols interested in competing for the grant should apply, detailing their unique qualifications for funding and how they plan on using the grant to grow their TVL. The UF will select finalists to move on to the CFM.

Before February 27th, the selected teams will publish a public roadmap on how they plan to grow their TVL on Unichain. This roadmap should include a plan for how they would utilize the $450,000 grant to achieve that goal.

On March 13th, the two protocols whose CFMs have the highest prices (meaning the market believes they are most likely to drive the highest amount of TVL) will each be awarded a $450,000 grant. All other protocols will have their markets closed.

Between March 13th and June 13th, the grantee teams will use the funds to grow their TVL.

For Forecasters:

On February 27th, the CFMs will go live. Forecasters should study each applicant’s plans to use the grant funding, deposit USDC into the CFMs, and use it to indicate their answer to this specific question: “Given a $450k grant budget, how much TVL will this protocol bring to Unichain in three months?”

Between March 13th - June 13th, the two lending protocols that received grant funding will have three months to generate as much TVL as possible. During these 3 months, the CFMs for these protocols will remain open, and the market can continue to predict how much TVL they will produce.

On June 13th, CFMs will close, and an oracle will inform the markets how much TVL each lending protocol produced. Forecasters will be able to redeem the USDC they deposited, and those who most accurately predicted the TVL will have the markets resolved in their favor, earning upside for their predictions.

Using CFMs to allocate these grants aggregates the information in the market and rewards those who can accurately predict which teams will bring the most value to Unichain.

CFMs are experimental mechanisms rooted in the concept of futarchy, a governance model where policy decisions are guided by having skin in the game. These markets aim to allocate funding based on projected outcomes but remain experimental.

Grant allocations may depend on volatile or illiquid market structures, leading to unexpected inefficiencies. There is no assurance that any market outcome will lead to effective decision-making or real-world improvements. Finally, these markets may be subject to legal and regulatory scrutiny, and participation could be restricted in certain jurisdictions.

Ready to Build on Unichain?

By combining Unichain's optimized infrastructure with Butter’s CFMs, we're creating a more objective, neutral, and collaborative way to grow the DeFi ecosystem.

If you're developing a lending protocol and want to participate in this futarchy experiment:

• Apply for the grant: https://share.hsforms.com/1WbkNdVqmQMuuzxfGbO9aQgsdca9

• Learn about becoming a Forecaster: https://share.hsforms.com/1FFHA-8ULR0y1JYtlbjyDSwsdca9