This progress report provides an overview of Stabila’s Season 1 initiative, which ran from July through December 2025, and reflects outcomes relative to the objectives and KPIs outlined in the original funding request.
Summary:
The Season 1 mandate was to support DeFi Infrastructure & Incentive programs aligned with Celo Governance Season 1 Intent to Grow TVL on Celo.
Stabila’s primary goals were to:
- Deepen DEX liquidity for stablecoins and blue-chip assets on Celo
- Strengthen lending markets and expand viable collateral options
- Launch and scale infrastructure critical to long-term, sustainable DeFi growth
Stabila pursued these objectives by allocating incentives across key DeFi protocols on Celo, complemented by targeted ecosystem and partner engagement efforts to attract new liquidity providers. In parallel, Stabila supported strategically important protocols, including those approaching a potential token launch, where incremental liquidity or usage could have an outsized impact on ecosystem TVL and onchain activity.
Despite a challenging macroeconomic environment, Season 1 incentives were effective in bootstrapping and maintaining relatively sticky liquidity and engagement across core areas of the Celo DeFi stack.
Budget and Spending Overview:
A total Season 1 budget of 500,000 cUSD and 2,885,246 CELO was approved for Stabila’s Season 1 program.
As of the end of the season and into mid-January (to account for incentive program continuity), Stabila has spent and allocated a combined total of 494,384 cUSD and 427,667 CELO of Season 1’s budget.
Incentive deployment was paced in response to execution timelines and market conditions. Incentives were directed toward initiatives that were ready to proceed, while other allocations were deferred as external dependencies and launch timelines evolved.
Accordingly:
- 5,616 cUSD and 2,457,579 CELO remain unspent and will roll into Season 2 to support initiatives extending beyond the Season 1 timeline, including for Morpho’s forthcoming deployment and an upcoming FX perpetuals exchange launch native to Celo
- 750,000 OP tokens associated with Season 1 are pending receipt and are intended to be earmarked for Season 2 protocol incentives.
Budget Breakdown
Note: Stabila commits that 0% of Celo Community Fund proceeds are used for payroll or salaries—all funds are directed exclusively to program delivery and ecosystem impact. Unspent Season 1 funds will roll forward into Season 2 and be applied to initiatives whose timelines extended beyond the Season 1 window. These rollover balances are expected to reduce the incremental funding required for Stabila’s Season 2 initiatives.
Liquidity Incentives & Protocol Support:
Uniswap Incentives:
Ahead of Season 1 funding, Stabila used earmarked prior funding to complete a co-incentive program with Uniswap DAO, which concluded in late October. At peak deployment, Stabila and the Uniswap DAO were jointly deploying approximately $200k per month in incentives across 10 core FX and blue-chip pools:
- USDT/USDC
- USDT/cUSD
- USDT/WETH
- USDT/cEUR
- USDT/CELO
- USDT/cKES
- USDT/PUSO
- USDT/cCOP
- USDT/cREAL
- USDT/cGHS
Incentives were weighted toward blue-chip pairs, given their role as foundational liquidity for lending markets. In parallel, Stabila deployed smaller, independent incentives across a broader set of local-currency stablecoin pools to support onchain FX trading. Historical incentive data is publicly available via Merkl.
Observed Outcomes:
- By the conclusion of the co-incentive campaign (October 22nd), the 10 core pools reached approximately $9.5M in TVL, representing the majority of Uniswap liquidity, or approximately 74.22%, on Celo at the time (~$12.8M total TVL, source: DeFiLlama)
- Following the end of the co-incentive program, total incentive spend was reduced to approximately $80k per month, distributed across the original core pools and a broader set of FX-related pools
- Despite materially lower incentive levels and declining asset prices, liquidity showed meaningful persistence. As of December 19th, total Uniswap TVL stood at approximately $9.3M, with ~$6.7M remaining in the original 10 core pools. This indicates that a meaningful portion, over 70%, of the liquidity attracted during the incentive period (primarily sourced from external LPs) persisted even after incentive levels were materially reduced.
- This retention is notable in the context of broader market conditions in Q4 2025, when aggregate DeFi TVL declined by over 30% amid sector-wide asset price drawdowns. Against this backdrop, Celo’s core incentivized Uniswap pools experienced comparatively more resilient liquidity, despite a ~60% reduction in incentive spend.
Aave Incentives:
Stabila supported Aave on Celo through targeted incentive programs focused on deepening stablecoin and blue-chip liquidity. Initial incentives were funded using earmarked prior allocations, with Season 1 funding deployed from October onwards in coordination with the Aave ACI team. Incentives were deployed at a steady cadence of approximately $80k per month.
In parallel, incentives supported the integration of Self Protocol verification into the Aave front-end, enabling increased rewards for ZK-verified users participating in lending markets. Separately, Stabila coordinated with infrastructure partners on integrations intended to expand access to Aave for Opera MiniPay users.
Observed Outcomes:
- Total Aave TVL (defined as supplied minus borrowed) increased from approximately $7.0M on June 30 to $18.4M on December 19 (source: DeFiLlama), with a peak of ~$23M in late October
- Growth was driven primarily by stablecoin supply expansion, with borrowing activity scaling alongside supply, indicating improved market depth and utilization.
Velodrome:
Stabila deployed incentives on Velodrome via time-bound allocation to bootstrap liquidity and support cross-chain exposure for blue-chip assets on Celo. Incentives were deployed natively between September and mid-November. In parallel, Stabila supported a pilot that rewarded Self-verified participation for veVELO voters following Velodrome’s Self Protocol integration.
Observed Outcomes:
- Velodrome TVL declined from approximately $2.0M on June 30 to ~$565k by December 19 (source: DeFiLlama). While incentives were deployed, liquidity growth and retention were limited relative to other venues
- The veVELO emissions and voting mechanics introduced additional complexity, reducing predictability around incentive outcomes for the liquidity providers.
- This period also coincided with broader structural shifts in the DEX landscape. The teams behind Aerodrome and Velodrome have announced plans to merge into a unified DEX called Aero (targeted Q2 2026) while confirming Celo support, reflecting broader trends toward liquidity consolidation and capital efficiency.
Given these dynamics, Stabila temporarily paused Velodrome incentives and will reassess deployment following platform changes and ecosystem consolidation.
Morpho:
The planned launch of Morpho on Celo was delayed during Season 1 following the deprecation of the Morpho Lite front-end. Proceeding with a public deployment requires alignment with a suitable third-party front-end provider, which Stabila is supporting and helping to finalize, with work underway toward an early Q1 2026 launch.
In parallel, Stabila is conducting additional diligence around risk curation and potential curator partnerships ahead of the Morpho deployment. Accordingly, no Season 1 incentives were allocated to Morpho.
Ad Hoc Initiatives & Ecosystem Support:
In addition to core protocol incentives, Stabila supported targeted ecosystem initiatives focused on experimentation, partner development, and preparation for upcoming launches.
Self Protocol Pilot
Stabila collaborated with Self Protocol to pilot pioneering, verified incentive mechanisms across Aave and Velodrome. These pilots validated technical integration and informed future incentive design. In Season 2, Stabila plans to explore more targeted Self-enabled incentives, including potential integrations on Uniswap via Merkl.
Celo DeFi Builders Initiative
Stabila supported a short-term builder initiative during Season 1 to engage DeFi teams evaluating deployment or scaling activity on Celo. The program concluded in late November and was delivered with support from Divvi during the Season 1 period.
Ecosystem Events & Partner Development
Stabila sponsored Stable Summit at Devconnect Buenos Aires, strengthening inbound interest across RWAs, yield-bearing stablecoins, and DeFi infrastructure. Stabila also participated in multiple sessions, including a Stable Summit presentation outlining how Stabila’s incentive programs support Celo’s broader DeFi ecosystem and opportunities for liquidity providers. In addition, Stabila presented at the Staking Summit, highlighting stCELO and its integration within the Celo DeFi ecosystem.
Several partnerships initiated through these engagements are in active discussion and expected to progress in upcoming periods.
FX Perpetuals Preparation
Budget reserved for a Celo-native FX perpetuals exchange will roll into Season 2. While the launch did not occur within Season 1, Stabila substantially progressed preparation and incentive design in parallel and is positioned to support early liquidity and usage upon an expected early Q1 2026 launch.
Operations & Management:
Marketing Support
Stabila engaged an external marketing agency on a limited basis to support community engagement and ecosystem awareness during Season 1. This included coordination with key opinion leaders (KOLs) and ecosystem participants to amplify visibility of DeFi initiatives and broader Celo ecosystem activity.
Legal/Administrative Fees
Legal and administrative spend covered routine operational overhead required to operate the Stabila entity and execute Season 1 programs, including corporate governance, legal review, compliance support, and general administrative expenses.
Metrics, KPIs & Season 1 Reflection:
This section reflects performance against the key metrics outlined in the original Season 1 funding request.
1) TVL Growth
The original Season 1 KPI targeted +45% growth in Celo’s USD-denominated DeFi TVL relative to the June 30, 2025 baseline. While material progress in Celo’s DeFi stack was achieved, headline USD TVL was not sustained due to a broader industry-wide market downturn.
From early October to late November 2025, aggregate DeFi TVL declined by approximately 30% (~$55B), on par with other ecosystems such as Optimism and Arbitrum, driven primarily by falling asset prices that compressed USD-denominated liquidity. This was further compounded by a pronounced risk-off environment and increasing liquidity fragmentation, including industry-wide deleveraging events such as Stream Finance’s xUSD collapse.
On Celo specifically, headline USD TVL fell due to ecosystem-level factors, including CELO price depreciation and partner-driven liquidity withdrawals as part of operational and TGE-related capital reallocation.
Despite these macro and ecosystem headwinds, protocol-level outcomes were strong within markets directly supported by Stabila’s incentives:
- Aave: TVL increased from approximately $7.0M to $18.4M+ by December 19th (~163% growth), driven primarily by USDT supply growth and increased utilization of wETH as blue-chip collateral, both of which were directly supported by Stabila’s incentive programs
- Uniswap: Within the core pools incentivized by Stabila, approximately $6.7M in TVL remained (December 19th), representing the majority of Uniswap liquidity on Celo at that time. This liquidity was predominantly externally sourced and demonstrated meaningful retention following incentive reductions
2) Morpho Deployment and Scaling
The planned Morpho deployment did not occur within the Season 1 timeline due to new external dependencies, as detailed in prior sections.
3) FX Perpetual Exchange Deployment and Scaling
The launch of a Celo-native FX perpetuals exchange did not occur within the Season 1 window, with timelines shifting into early Season 2. While the protocol launch did not complete during the reporting period, incentive design and preparation work substantially progressed in parallel, and the allocated budget has been rolled forward accordingly.
Stabila remains positioned to support early liquidity and usage incentives upon launch.
4) Self Protocol Integrations
Stabila supported the integration and pilot of Self Protocol enabled incentives across two DeFi protocols: Aave and Velodrome. These first-of-its-kind pilots validated technical integration, user flows, and operational feasibility for identity-gated participation within DeFi incentive programs. Learnings from these pilots are informing more targeted incentive designs planned for Season 2, including potential integrations on Uniswap in collaboration with ecosystem partners.
Forward Outlook:
As Stabila moves into Season 2, the focus will shift towards building on the work from Season 1 by onboarding real-world and yield-bearing assets, expanding lending and FX market depth, and supporting more organic, usage-driven yield beyond incentive programs.
With additional lending markets, FX perpetuals, and additional DeFi infrastructure expected to come online, Season 2 aims to translate incentive-led liquidity into more durable, sustainable TVL growth across Celo’s DeFi ecosystem.