SECTION 1: APPLICANT INFORMATION
Applicant Name:
Risk Labs Foundation
Project Name:
Across Protocol
Project Description:
Across is a cross-chain bridge for L2s and rollups secured by UMA’s optimistic oracle. It is optimized for capital efficiency with a single liquidity pool, a competitive relayer landscape, and a no-slippage fee model.
Team Members and Qualifications:
Hart - Founder and CEO
Kevin - Treasurer
Matt - CTO
Melissa - COO
Korpi - Biz dev, financial operations
Ryan - Product Manager
Nick - Tech lead
James, Alex - Full stack
Dong Ha - Front end
Paul - Smart contract
Chase - Data
Dylan - Data
Tim - product design
Amanda - Marketing
Britt - Community
Project Links:
Website - https://across.to/
Docs site - https://docs.across.to/
Github - Across Protocol · GitHub
Dune - https://dune.com/risk_labs/across-protocol-stats
Twitter - https://twitter.com/AcrossProtocol
Discord - Across Protocol
Medium - across.to - Medium
Forum - http://forum.across.to/
Snapshot - Snapshot
Across V2 Audit - UMA Across V2 Audit - OpenZeppelin blog
Audit containing MerkleDistributor contract - UMA Continuous Audit - OpenZeppelin blog
(can be found by searching for “MerkleDistributor”)
Contact Information
TG:
Kevin - @kevinchan7
Ryan - @racarman245
Britt - @britt_m42
Twitter:
Kevin - @kevinchan2020
Ryan - @racarac
Britt - @BrittanyMadruga
Email:
kevin@umaproject.org
ryan@umaproject.org
britt@umaproject.org
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes
SECTION 2: GRANT INFORMATION
Requested Grant Size:
1,550,000 ARB
Grant Breakdown:
This grant will be used to subsidize up to 95% of bridge fees for users heading TO Arbitrum in the next 3 months. The cost of bridging includes both a gas cost as well as a bridge fee (which is used to compensate LPs). We plan to use the entirety of this grant to offset the cost of bridging for users entering the Arbitrum ecosystem, while also ensuring that these rewards are not farmable. In other words, there will not be a net profit for bridge users in this program, but we will make it nearly costless for users to enter Arbitrum during this period.
Funding Address:
0xd16D904b68429b93F1DFCD837F61AeDCd224e8F4
Funding Address Characteristics:
3/5 multisig with private keys securely stored
Contract Address:
We will be using our MerkleDistributor contract to hold and distribute these incentives. This is the Arbitrum deployment of this contract that is dedicated to this program:
SECTION 3: GRANT OBJECTIVES AND EXECUTION
Objectives:
The primary objective of this grant is to onboard users into the Arbitrum ecosystem as seamlessly as possible. A thriving L2 ecosystem is only possible if we also have a competitive and robust network of bridges to support connections between chains, and we believe that we can provide the most competitive bridging solution for users in terms of both speed and cost.
Key Performance Indicators (KPIs):
- Total volume transferred
- Total Users
- Nnumber of new users
- Amount of ARB rewarded per volume to Arbitrum
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
By providing a 95% rebate of the cost to bridging, we hope to maximize the amount of funds available to end users within the Arbitrum ecosystem. Additionally, a rebate of this nature provides folks with ARB that they can then use to participate in the other protocols that are using this grant as an opportunity to grow the ecosystem.
For example, a user may choose to bridge with Across into Arbitrum and then use their ARB rebate to provide liquidity in GMX.
Across has a history of fostering this kind of growth and innovation within Arbitrum, which can be seen in our “Ape Into Arbitrum” campaign. This was a month-long campaign designed to celebrate the diversity of opportunities in the Arbitrum ecosystem. Each of our featured protocol guests participated in an AMA, received an article spotlight (like this one Across: Ape Into Arbitrum Campaign Recap Part One | by Amanda | across.to | Medium ), a YouTube video spotlight, and was included in a our Galxe campaign, which can be seen here (Campaign Page | Galxe ).
Justification for the size of the grant:
To determine the size of grant we should request, we chose to benchmark against the volume increases that have been seen historically by bridges when awarding other L2 incentives in a similar way. A competitor of ours saw increases of ~600% during the reward distribution period of an OP grant.
Applying that percent increase to Across’ Q3 Volume of $221.2M to Arbitrum, yields an estimated volume during a 3-month ARB reward period of $1.33B. You can see more on Across’ performance in the protocol performance section below.
Assuming an average total sender fee (bridge fee + origin gas) of 0.1%, and applying an ARB rebate for 95% of total sender fee, yields total rewards of $1,263,500, or 1,540,854 ARB at a current price of $0.82/ARB.
Execution Strategy:
We will be using our MerkleDistributor contract to hold and distribute these incentives. This contract has been audited (link above) and has been in use within Across on mainnet for nearly a year to distribute ACX rewards through our referral program. A new MerkleDistributor contract is deployed on Arbitrum for the purpose of this program. You can see more on the MerkleDistributor on Github here (GitHub - across-protocol/merkle-distributor). The mainnet deployment can be seen here (AcrossMerkleDistributor | Address 0xE50b2cEAC4f60E840Ae513924033E753e2366487 | Etherscan).
Execution will also include updates to the Across UI to support a new rewards stream, which is handled by Risk Labs. We will collect data on bridge transactions TO Arbitrum and distribute rewards on a FCFS basis, not to exceed our awarded grant. Each user will be able to see their specific reward distribution within the Across UI when their wallet is connected.
Grant Timeline:
This incentive is intended to run for the full duration that is indicated in the scope of this grant program. We anticipate starting early November and ending January 31, 2024.
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
SECTION 4: PROTOCOL DETAILS
Is the Protocol Native to Arbitrum?:
We consider Across to be native to all of the chains we support. However, it is worth noting that we have supported Arbitrum since we launched in November of 2021.
On what other networks is the protocol deployed?:
Across supports bridging to/from Arbitrum, Optimism, Polygon, zkSync, Base and Ethereum.
What date did you deploy on Arbitrum?:
Across has supported bridging to Arbitrum since we launched in November of 2021.
Protocol Performance:
History
Across regularly supports around $5 Million in daily transfers to Arbitrum, with a cumulative volume exceeding $1B. In the past 30 days, we have seen $125 Million to Arbitrum.
Current Trend
Users have a variety of fast, 3rd party bridging options to choose from, and they are increasingly choosing Across over competitors, as shown in the image below. Even in the midst of heavy Layer Zero airdrop farming, you can see that Across is aggressively eating up market share for tokens and routes we support going TO Arbitrum. This organic growth has been seen in the absence of any incentive programs on our part.
We expect to see this trend continue, especially as the bridging ecosystem starts to see more and more users turning to aggregators (as we’ve seen with DEXs). When regular users need to bridge their assets based on price, speed, and security (and not farming a potential bridge token airdrop) the data shows that they opt for Across. This is demonstrated by Across’ dominance in head-to-head competition in aggregators like Lifi and Socket, where Across currently has about 70% volume share.
Across wins head-to-head in aggregators because it is 1) secure 2) the fastest and 3) the cheapest. We are able to accomplish this because of our unique design.
Security First
Across is the largest bridge in the ecosystem to use a battle-tested optimistic settlement mechanism. Across uses UMA’s optimistic oracle to confirm that transactions on all the chains are correct. If there is a transaction that is incorrect, it will be disputed and resolved by UMA tokenholders. It only requires a single honest actor to detect fraud. This mechanism has stood up to multiple attempted exploits with no problems at all. Our relayer model (described more below) also provides an extra layer of security for users because the relayers are the ones who take on any finality risk during the optimistic settlement window. It’s also worth noting here that Across only deals with canonical tokens (no wrapped/synthetics that would extend user risk unnecessarily).
Speed
Across is able to offer lightning-fast transfers because instead of using mint and burn or native swap mechanisms, Across uses relayers to fill orders and LPs to reimburse relayers. This model looks more like a lending model where relayers compete on speed for the opportunity to lend out their funds. This creates a competitive ecosystem of relayers that are always pushing the limits on innovation to continuously outpace their competition. The image below shows how Across compares to other bridges on median fill times to Arbitrum for the tokens and routes we support.
Fees
Bridge fees should be considered in two categories - liquidity/protocol fees and gas fees.
Gas
We put out a full analysis on gas fees here for those who want to read deeper into this specific category. A good takeaway from the article is that Across is particularly well suited to save users on transfers originating on mainnet, where we are up to 80% cheaper than competitors. Because of this, we think that we are particularly well positioned to help facilitate the migration of users away from L1 and towards L2s.
Bridge Fees
Across was designed with capital efficiency in mind in order to make sure we could provide our users with the lowest fees. Unlike our competitors who use an AMM model, Across fees don’t suffer from slippage or arbitrage. Our fees use a lending model that responds to bridge pool utilization. Additionally, we’ve optimized capital rebalancing and recycling to make sure that funds are not tied up longer than necessary or stuck in a 7-day transit cycle. And finally, we are able to keep our utilization within normal ranges by having a single liquidity pool rather than fragmented liquidity across each supported chain. This combination allows us to provide the lowest fees to Arbitrum across our supported tokens and routes, which is shown in the image below.
Projected Savings for this Grant
An added benefit to having the lowest fees is that Across will be able to facilitate the transfer of MORE funds into Arbitrum using LESS $ARB than our competitors, while also covering more of our users’ cost to migrate into the space. The chart below shows the median bridge fees for transfers TO Arbitrum across various bridges and routes, including the cost of gas. Below each column, you can also see the expected amount of ARB that would be distributed by each protocol using this type of rebate system. It should be clear here that saved funds for users result in saved funds for Arbitrum.
Protocol Roadmap:
Across is dedicated to providing users with a safe, fast, and cheap bridging option to an increasing number of chains. As we find ourselves in an increasingly multi-chain world, we are also starting to plan for ways to enhance the user experience in navigating that future. We believe the key to success in this space is to focus on these 5 main areas of growth:
- New chains
- Composable bridging (bridge + message on destination)
- Capital efficiency improvements
- Relayer network and filler auction improvements
- Cross-chain intent settlement system
Audit History:
Across’ most recent audit (done when we launched V2) can be found here:
SECTION 5: Data and Reporting
Is your team prepared to create Dune Dashboards for your incentive program?:
Yes. We do an extensive amount of data harvesting as a team already, and we are prepared to extend that to include an addition to our existing Dune Dashboard infrastructure to accommodate the reporting requirements of this program. You can find our dune dashboard in the links section of this proposal above.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
Yes. We are more than happy to provide bi-weekly updates on the Arbitrum Forum thread to share the details of this program.
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
