The phased approach starting with sticky liquidity and transitioning to diversified collateral options is a good strategic move. Also, the focus Arbitrum native products demonstrates a deep understanding of the overall ecosystem’s needs.
A comprehensive proposal overall to enhance Abracadarba’s infrastructure and contribute to the broader ecosystem. We’re in support.
MIM has shown resilience, and an ability to support other projects via integrations and co-incentivization.
Although i dont quite agree with the plan to incentivize only the MIM-2CRV pool and perhaps consideration of native AMMs might be more suited, it cant be understated that curve has the ability to bring adoption.
Perhaps a Cauldron for ARB tokens might work well here to mitigate the desire to simply sell the ARB rewards.
regardless, i can support a grant of ARB for Abracadabra.
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Firstly, thank you for your thoughtfully laid-out proposal and your ongoing support for the Arbitrum ecosystem.
Introduction and Rationale
Your proposal seeks a grant of 1.5M ARB tokens for various incentives, including MiM market making, borrowing, and savings. This represents 3% of the 50M ARB allocated for this type of program. As early supporters of Arbitrum, Abracadabra’s Collateralized Debt Position (CDP) system has proven effective, allowing users to earn yield without selling tokens. With a Total Value Locked (TVL) of 15.69M USD on Arbitrum and substantial fee generation, we’re encouraged by your contributions. We think your proposal can positively impact the Arbitrum ecosystem, especially with the planned addition of new vaults and collateral options.
Vaults are near their maximum capacity, limiting the impact of further incentives
The timing for the launch of new vaults is unclear
Our recommendation for change: We suggest allowing new products to go live before initiating the incentive program to better gauge its impact.
Concern Regarding Grant Size
The grant request is on the high side given the current budget constraints
Our recommendation for change: Consider lowering the grant request to better align with available funding and other initiatives within the Arbitrum ecosystem.
Allocation of ARB tokens over new vaults is unspecified
The grant size may be more than needed for the specified objectives
Our recommendation for change: Please provide a detailed framework showing how the ARB tokens will be allocated across upcoming vaults and consider a reduced grant size that aligns with a more focused set of goals.
Castle Capital appreciates the innovation and functionality that Abracadabra brings to the Arbitrum ecosystem. In its current form, however, we suggest some adjustments to the proposal for it to gain our full support. Specifically, we’d like to see a detailed plan for new vaults and their total allocation, along with a more focused and lower grant request.
Your commitment to the Arbitrum ecosystem is evident, and we hope that our comments are taken as constructive feedback aimed at refining this proposal for the benefit of all involved. Thank you for your consideration.
Thanks a lot @CastleCapital for taking the time to read our proposal in depth and provide feedbacks! It is much apprecciated!
A couple of points that might help mitigating your concerns:
Vaults are near their maximum capacity, limiting the impact of further incentives: Abracadabra’s markets on Arbitrum are not near maximum capacity, ther are plenty of MIMs ready to be borrowed if liquidiity allows so.
Abracadabra currently offers 21 million MIM left to borrow on their MagicGLP cauldron and it capacities can scale quickly and efficiently, in small periods of time as proven by magicGLP TVL increase in less than 2 weeks.
We strongly believe that, if met by proper liquidity incentives, this situation can happen again, and we are happy to contribute SPELL rewards to this goal. Part of the grant will focus to deepen liquidity and therefore remove slippage on entering the cauldron, while native MIM savings on Arbitrum will test new and innovating ways of improving the system efficiency.
The timing for the launch of new vaults is unclear: Given the strong Research and Development effort that is happening around GMX V2 vaults, we prefer remaining not bounded around fixed ETAs. This allows us to be flexible when it comes to how to follow new trends and products that might arise thanks to the STIP.
Additionally, at Abracadabra we believe that having a strong long term plan, set up in advance, is a much better approach than not planning in advance and risking of loosing momentum for valuable products requesting a grant later on.
A grant to Abracadabra isn’t just a grant to our project; it’s a grant to the Arbitrum ecosystem and its delegates, by boosting up each protocol that is accepted as collateral to mint MIM.
We’ve established a dedicated group for delegates to participate and actively shape the future roadmap of Abracadabra following the STIP. You can find it here.
We are very much looking forward for your expertise there, as it will be pivotal in deciding upon other collaterals not necessarily linked to the STIP and propelling the ecosystem forward.
We are looking forward to any additional feedbacks, and we very much appreciate the effort required to give comments on the STIP. Please feel free to DM us on telegram directly if you need a faster communication line, considering the tight timelines! Thanks again for your consideration!
You have definitely alleviated some immediate concerns. However, due to the budget constraints, our own governing values, and our preferences of sectors we would like to see a slight reduction in request.
We value your dedication to the ecosystem and working with partners to create the greatest possible benefit.
There is no doubt you deserve a grant, whether or not that is closer to 1M (in light of what I referenced above is up for debate). We actually very much enjoyed analysing your proposal!
I’m inclined to support your grant request because I do think that Abra has invested heavily into it’s Arbitrum-based suite of products but I, as CastleCapital, believe that your proposal would likely find more support if the amount requested was lowered to 1m $ARB.
Although our proposal is locked and cannot be adjusted at this point, we want to emphasize that your support means a lot.
keep in mind that our grant distribution model inherently benefits other protocols within the ecosystem. The nature of Abracadabra’s products creates new opportunities for collaterals, which, in turn, attract more TVL and users to various projects.
In essence, a grant to Abracadabra serves as a grant to a broader spectrum of ecosystem players.
Looking forward to continuing our journey in collaboration with delegates and highlighting potential collateral opportunities to be onboarded on the platform.
We fully endorse this proposal for several compelling reasons. The primary objectives are well-defined and strategically aligned with both Abracadabra’s growth and the Arbitrum ecosystem’s development. From strengthening and expanding the Abracadabra infrastructure to driving user onboarding and engagement, this grant aims to make notable advancements that are critical for long-term success.
We would like to extend our gratitude to Abracadabra Money for the steps they have taken towards enhancing the decentralized finance ecosystem of Arbitrum and for their detailed STIP explanations. We hope that, at the end of your plan, you will create new collateral opportunities and use cases for many users on Arbitrum.