Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.
Applicant Name: Tomcont - Abracadabra DAO
Project Name: Abracadabra DAO
Project Description: Abracadabra is a Lending and Leverage farming platform, built on top of the stablecoin MIM, live on Arbitrum since 16th of September 2021.
Team Members and Qualifications:
- Tomcont: Legal Entity Approved in aip 22
- 0xMerlin: DAO Contributor/ Solidity
- 0xRomy: DAO Contributor/ BD
- Wicked: DAO Contributor/ BD
- 0xCalibur: DAO Contributor Solidity
- 0xGeorgiy: DAO Contributor/ PM
- Multiple FE and BE engineers, designers and community moderators
Website - https://abracadabra.money/
Twitter - https://twitter.com/MIM_Spell
Discord - Abracadabra money
Github - Abracadabra · GitHub
Documentation - https://docs.abracadabra.money
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes
Detail the requested grant size, provide an overview of the budget breakdown, specify the funding and contract addresses, and describe any matching funds if relevant.
Requested Grant Size: 1,500,000 ARB tokens
Grant Matching: Abracadabra has been steadily incentivizing its MIM-2CRV pool on Curve Finance on Arbitrum with SPELL emissions for the last 2 years. Abracadabra is committed to match the ARB incentivisation with a minimum of 160,000,000 SPELL throughout the duration of the STIP, and scale it accordingly.
Funding Address: 0xfBDf75866904767dE1Caa8B64eb18a7562517F5A
Funding Address Characteristics: 3/6 Multisig
Contract Address: Addresses will be provided further on, considering the multiple distributions methods and the Research and Execution effort currently undergoing GMX V2.
At the present time Abracadabra gives out rewards through a Masterchef-like contract, used to incentives MIM-2Crv deposits. The address can be found here: 0x839De324a1ab773F76a53900D70Ac1B913d2B387. Similarly, once contracts are deployed, the addresses will be provided.
Clearly outline the primary objectives of the project and the Key Performance Indicators (KPIs) used to measure success. This helps reviewers understand what the project aims to achieve and how progress will be assessed.
- Strengthen and expand Abracadabra infrastructure on Arbitrum
- Solidify Abracadabra’s position as the preferred yield farming platform on Arbitrum
- Develop Arbitrum Native products around
- Explore and integrate more attractive collateral options within the Arbitrum ecosystem
- Drive more user onboarding and engagement within the Arbitrum Ecosystem
The primary aim of this grant is to enhance the already thriving Abracadabra Money infrastructure on Arbitrum, solidifying its position as the preferred platform for yield farming on Arbitrum.
Being among the earliest products launched on Arbitrum (initially introduced on 16/09/21), Abracadabra has consistently depended on the Arbitrum ecosystem to explore compelling and lucrative collateral options. This grant will further support these efforts by facilitating the inclusion of additional collaterals in our MIM lending markets, and onboarding more users to the Arbitrum Ecosystem.
Key Performance Indicators (KPIs):
The combined TVL (Total Value Locked) of Abracadabra, including its cauldrons and other products, along with the total and percentage supply of MIM within the Arbitrum Ecosystem, serve as valuable Key Performance Indicators (KPIs) for monitoring the effectiveness and outcomes of the proposed grant.
Lastly, the launch of MIM Savings Rate (currently under development) natively on Arbitrum.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?: Currently, for every issued MIM, Abracadabra DAO needs to charge at least 6/7% interest. Collaterals delivering APYs below this, are therefore not interesting listings for the DAO.
1) Accepting new collaterals
As dedicated partners with various Arbitrum projects, the borrowing Incentives met with deeper MIM liquidity, will empower Abracadabra to include a variety of collateral assets that would otherwise remain ineligible for listing due to the interest rate requirements currently dictated by MIM cost of capital.
LP tokens, and Perpdex LPs as well as ARB are only some of the possible examples that could potentially be listed in the short term.
2) Innovation, Research and Development
Our DAO has consistently led the way in Arbitrum’s growth and eagerly anticipates making meaningful contributions by creating user-friendly products built on the most innovative technologies. MIM Savings rate native launch on Arbitrum, is a proof of this commitment to improvements and updates in the current set up.
Additionally, we are specifically working on a follow up Cauldron to the very popular magicGLP cauldron, leveraging upon the improvements of GMX v2 while creating an easy to use index token like GMX v1, composed of BTC, ETH and ARB GM tokens. This will allow for people to provide liquidity and set and forget it, as well as borrow against it using Abracadabra cauldrons. This index is currently under development, together with isolated GM tokens cauldrons.
Justification for the size of the grant: Abracadabra has been a dedicated supporter of the Arbitrum ecosystem for over three years since its initial launch. In its early days in 2021, the Abracadabra ETH market attracted over $100 million in Total Value Locked (TVL), demonstrating remarkable growth especially considering bullish market conditions. Throughout this extended period, Abracadabra has established strong and enduring partnerships with key native protocols on Arbitrum, creating innovative products and contributing to the ecosystem’s ongoing development through consulting work and peer reviews. The DAO community has been steadily engaging with multiple Arbitrum Governance proposals, making their voice heard through on-chain and off-chain votes on multiple occasions.
The 1.5m ARB mentioned in this proposal will be used for multiple activities, all meant to further boost usage and activity on Arbitrum.
Deepening MIM-2Crv liquidity will result in higher trading volumes for DEXs, and slippage free environments for Arbitrum decentralized stablecoin users. Boosted APY will present valuable opportunities for cross chain yield farmers, looking for new chains in which they will be able to deploy their capital.
As a positive externality, these combined effects will result in higher on-chain fees being paid, thereby generating increased revenue for the Arbitrum DAO through sequencer fees.
Execution Strategy: The grant will strategically allocated to three primary sources:
Phase 1 of our strategy is primarily centered around the expansion of substantial MIM liquidity, particularly against stable assets, directly on the Arbitrum network. To ensure the effectiveness of the subsequent two phases, it is crucial that we kickstart this growth with a robust incentive program.
Historically, substantial incentive programs have proven to be catalysts for fostering ‘sticky’ liquidity. This term refers to a situation where users and assets remain engaged and active within the ecosystem even as incentive rewards decrease. It essentially establishes a strong foundation for the following phases of our plan.
As we progress into Phase 2 and Phase 3, the successful establishment of ‘sticky’ liquidity in Phase 1 will enable us to gradually reduce the incentives. This strategic reduction is possible because the ecosystem, having gained momentum and engagement in Phase 1, will be more self-sustaining and less reliant on high incentives. This phased approach ensures a smoother transition towards a stable and thriving ecosystem on Arbitrum.
After successfully enhancing liquidity levels, the next strategic step involves implementing direct borrow incentives to provide an additional boost to the development of Arbitrum native products, such as ARB-focused LP tokens and GM tokens. These incentives are designed to have a two-fold impact.
a) User Engagement and Adoption: Direct borrow incentives aim to increase the user count and overall activity on Arbitrum. By offering attractive borrowing incentives, we aim to attract and onboard the first wave of users and facilitate the adoption of new products. This not only strengthens the ecosystem but also encourages users to actively engage with Arbitrum native offerings.
b) Sustainable Ecosystem Growth: Concurrently, liquidity mining incentives will continue to operate, albeit at a decreasing rate. This strategy is intended to act as a sustaining force for the newly onboarded users and products. As the ecosystem matures, the decreasing rate of liquidity mining incentives helps maintain a healthy and balanced growth trajectory. It ensures that the ecosystem remains attractive for both new and existing participants, while gradually reducing reliance on high initial rewards.
In essence, this two-pronged approach leverages direct borrow incentives to kickstart initial adoption and user activity, while maintaining liquidity mining incentives to sustain long-term growth and stability within the Arbitrum ecosystem.
The culmination of our strategy, Phase 3, promises an exciting opportunity to witness the MIM Savings Rate mechanism in full action. During this phase, the incentives for the MIM Savings Rate will be optimized for efficiency and effectiveness, distinguishing it from the earlier liquidity mining incentives. The equal distribution of ARB tokens during this period will enable us to conduct impartial and precise assessments of the various liquidity enhancement mechanisms in play.
Note: Phase 3 distribution for the MIM Savings Rate could happen ahead of time, depending on Research and Development timelines of the MIM Savings Rate. Distribution schedule will be adjusted ahead of schedule, and reported properly into the bi-weekly report.
As Phase 3 unfolds, we are poised to broaden our horizons by onboarding a more diverse array of exotic collateral assets developed around the innovations worked up over Phase 1 and Phase 2. Additionally, we anticipate the development of innovative products that will be intricately linked to emerging infrastructures. These advancements are expected to flourish, thanks in no small part to the overarching influence of the STIP product on the ecosystem as a whole.
Grant Timeline: 4 Months (up until 31st January 2024)
- Phase 1: Starting once the grant is received and lasting ⅓ of the time until 31st January 2024
- Phase 2: Starts right after Phase 1 ends, and lasts a similar timeframe.
- Phase 3: Same as above, and ends on 31st of January 2024, marking the end of the STIP grant for Abracadabra.
Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream? yes
Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.
Is the Protocol Native to Arbitrum?: Yes, MIM minting is native to Arbitrum and Abracadabra has been one of the first protocols to ever launch on it.
On what other networks is the protocol deployed?: Ethereum, Avalanche, BNB Chain, KAVA, Optimism, FTM are networks where MIM meetings are available, while Linea, Moonbeam, Polygon and BASE are additional networks in which MIM beaming is possible.
What date did you deploy on Arbitrum?: 16th of September 2021
Protocol Performance: Notable Stats
- MIM Holders on Arbitrum: 55,204
- ETH produced for MagicGLP holders: 563.97 (885k USD)
- MIM Total Transfers on Abritrum: 1,009,752
- GLP Market Dominance and TVL since launch: https://dune.com/defimochi/definitive-glp-vaults-tracker
- Abracadabra Analytics: https://analytics.abracadabra.money/overview
Protocol Roadmap: On the collateral side, Abracadabra current focus is to expand its collateral choices around innovative and high-yielding assets, with a particular focus on GMX v2 GM tokens (index and isolated).
On the tokenomics side, the team is focusing on delivering a SPELL tokenomics revamp, with a novel MIM Saving Rate debuting on Arbitrum.
Audit History: Abracadabra contracts are licensed forks of Bentobox and Kashi lending markets which have been further refined and expanded upon by DAO contributors, audited by multiple firms and battle tested over more than 2 and a half years.
Provide details on how your team is equipped to provide data and reporting on grant distribution.
Is your team prepared to create Dune Dashboards for your incentive program?:
Our team has experience with Dune Analytics and in the past has provided multiple dune analytics dashboard to track the success of our products, specifically on Arbitrum.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
Reporting will be taken care of by team members, and will be always accessible on the tooling infrastructure we will provide.
Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?: Yes