Forecasters can now deposit USDC on the Butter interface and predict which of four lending protocols: Compound, Euler, Morpho, Venus will generate the most TVL on Unichain to earn rewards based on accuracy.
Today, Butter's Conditional Funding Markets go live for the first round of Unichain lending protocol grants. The four competing protocols are Compound, Euler, Morpho, and Venus, with forecasters earning rewards by accurately predicting which will achieve the highest Total Value Locked (TVL) on Unichain over the next month.
The lending protocol with the highest forecasted TVL by July 11 will receive a $100,000 grant from the Uniswap Foundation, with all protocols able to apply to compete in a second CFM where two teams will be awarded $400,000 each. This represents the first deployment of Butter's Conditional Funding Markets for the Uniswap ecosystem.
How forecasting works
Four lending protocols are participating in this first CFM round: Compound, Euler, Morpho, and Venus. These protocols were selected through an application process that opened in June based on their plans for growing TVL on Unichain.
Forecasters deposit USDC and buy positions based on the TVL they expect a protocol to achieve. The higher the forecasted TVL, the higher a protocol's "price" in the market. The protocol with the highest priced outcome positions and TVL prediction as of the market close on July 11 receives the $100,000 grant.
This mechanism uses market dynamics to aggregate information across the collective, via forecasters, about which protocol will drive the most growth, with forecasters earning rewards based on the accuracy of their predictions when the first market resolves on August 10.
Participating lending protocols publicly shared the details of their applications to help forecasters accurately predict outcomes. Read what Compound, Euler, Morpho, and Venus will accomplish if given this grant here.
Experimenting with new governance mechanisms
Conditional Funding Markets are an implementation of futarchy. By putting skin in the game, forecasters become 'joint owners' & are more likely to make better grant funding decisions.
Earlier this year, Optimism Governance partnered with Butter and the Uniswap Foundation to test CFMs for grant allocation, funding five projects and rewarding accurate forecasters. The full analysis of Optimism's futarchy experiment is available here.
Key dates
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July 8: Forecaster onboarding and Q&A with Butter and the UF
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July 11: First CFM closes, $100,000 grant determined
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August 10: First CFM resolves based on actual TVL results
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August 11-15: Second CFM live for two $400,000 grants
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November 13: Second CFM resolves
Get involved
Forecasters can now deposit USDC and begin making predictions at app.butter.markets. Participation is permissionless, except within certain jurisdictional constraints.
Learn more about futarchy
New to futarchy and Conditional Funding Markets? Explore the concepts behind this novel funding mechanism: