SECTION 1: APPLICANT INFORMATION
Applicant Name: BKT, Head of Growth
Project Name: ACryptoS
Project Description:
ACryptoS, established in 2020, pioneered yield optimizing and liquidity managing strategies. The team first brought automated strategies to Arbitrum in Nov 2022, achieving a milestone of $1.4M in TVL.
Our strategies are built on top of lending protocols, ve(3,3) DEXs, and V3 CL DEXs, producing highly efficient swaps and generating better yields for DeFi users.
Team Members and Roles:
- Axe of ACryptoS, Founder & Lead Dev
- HM, Core DAO, Senior Dev
- Blight Night, Core DAO, Strategy
- Mitch, Core DAO, Dev
- Mik Ro, Core DAO, UI/UX
- Wei, Core DAO, Research
- Abdul, Core DAO, Marketing
- BKT, Head of Growth/BD
- Realdo, Research & Community
- Stryfe, Research & Community
- Social team, Documentation, Community Managers
Project Links:
Contact Information
TG: Telegram: Contact @beekaytea
Twitter: https://twitter.com/cryptoBKT
Email: hello@acryptos.com
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?:
Yes
SECTION 2a: TEAM AND PRODUCT INFORMATION
Team experience:
Our founder Axe started mining Bitcoin in 2012 and later ventured into developing arbitrage bots. His deep dive into DeFi started with BSC at the end of 2020, initially focusing on yield farming bots for PancakeSwap. This further evolved into the development of Yield Optimizer Vaults and the innovative UniswapV3 strategies.
Since ACryptoS’s launch in 2020, we have achieved significant milestones over the past few years:
- First Venus.io leveraged strategies (higher yields and lower gas fees compared to other similar platforms)
- First Balancer V2 fork on BSC
- Top StableSwap on BSC, with stablecoin daily volume > $25 Million
- First Fantom validator liquid vault
- First native on-chain BNB staking vault
- Zero security exploits on our contracts
What novelty or innovation does your product bring to Arbitrum?
Our latest innovation is the Automated Concentrated Liquidity Manager (ACLM), using different strategies to streamline the liquidity provision process, and improve liquidity efficiency on Conc. Liquidity DEXs.
Key features of our ACLM include:
- Dynamic setting of positions and ranges.
- Automated rebalancing for optimal yields.
- Simplified single-token deposit system.
Our ACLM distinguishes itself from other liquidity managers by maintaining a dynamic range on V3 positions, adjusting to be narrower or wider depending on price fluctuation and volatility trends. This approach ensures that we consistently manage to host active liquidity, leading to more efficient swap volumes across essential token pairs like USDC, ARB, WETH, and WBTC.
Our strategies have resulted in a rapid organic growth to over $1M TVL for our ACLM on Arbitrum over the past few months. It is currently the top performing chain in TVL across our deployed strategies in various chains. We aim to further grow and develop these strategies with the support of Arbitrum.
For an in-depth understanding of how our ACLM operates, here are some of our detailed resources:
- ACLM (Advanced Concentrated Liquidity Manager) | ACryptoS
- Sustainable APYs via Uniswap V3. If you’ve tried using Uniswap V3 (or… | by BKT | ACryptoS | Medium
Arbitrum Dapp Link: ACryptoS
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes, our core offering of liquidity management is that we collaborate with other V3 DEXs on Arbitrum by providing automated strategies.
- helps protocols concentrate their liquidity/POL, resulting in significantly more efficient swaps
- helps onboard more users to V3 LPs from V2
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
Our ACLM shares some functionalities with protocols like Arrakis Finance, Gamma Strategies or Range Protocol, but our approach and performance set us apart.
Particularly for stable pairs, we have unique strategies that consistently delivered great results, offering users a compelling alternative for maximizing their liquidity provision. This competitive advantage allows us to attract and retain users to Arbitrum.
How do you measure and think about retention internally?
We have always been focused on attracting long term sustainable TVL. Starting from our launch in 2020, our approach has been to carefully test and deploy products, without overselling hype to users, and instead focusing on generating long term value and yields.
We generally collaborate with established projects with strong teams, instead of offering our users degen yields by risky projects. This has attracted and retained users who are interested in earning yields for the long term, on a safe and sustainable platform.
Here are some metrics where we use to analyze and make decisions from:
- Users
- New users
- DAU, WAU, MAU
- Liquidity
- TVL
- number of deposits / withdrawals
- Performance
- % of Active Liquidity hosted for each LP
- Swap Volume facilitated
- Fees generated for protocol
Relevant usage metrics:
- Daily Active Users
- Daily User Growth
- Daily Transaction Count
- Daily Protocol Fee: Vault performance fees, withdrawal fees
- Daily Transaction Fee
- Daily ARB Expenditure and User Claims
- Incentivized User List & Gini
- TVL
- Trading Volume
Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan:
Yes
Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal?
No
SECTION 2b: PROTOCOL DETAILS
Is the protocol native to Arbitrum?:
No. We launched on BNB Chain in 2020 before expanding to other blockchains in 2022. We brought our single-token vault strategies to Arbitrum in Nov 2022, initially collaborating with Radiant Finance and dForce Network.
Similarly, our successful ACLM strategies, first developed on our native chain, was ported to Arbitrum once it achieved stability, bringing over TVL and users with our ease of usage and attractive yields.
On what other networks is the protocol deployed?:
Our ACLM strategies are on 5 chains: Arbitrum, BSC, Optimism, Polygon, and Base.
Arbitrum ACLM vaults currently have the highest TVL at $1.05 Million, demonstrating strong user trust and adoption within the ecosystem.
What date did you deploy on Arbitrum mainnet?:
Sep-30-2022 (Arbitscan txn)
Do you have a native token?:
Yes, the $ACS token. Following the Multichain bridge incident, we migrated to a new token and eliminated further ACS emissions.
At the same time, we improved our tokenomics to ensure long-term sustainability. Revenue from our vaults is directed towards buybacks and burns, making the token deflationary.
Additionally, ACS holders retain voting rights and ownership within our DAO, enabling them to directly participate in shaping the future direction of the project.
(Link to tokenomics in docs.)
Past Incentivization:
For our earlier collaborations with various DEXs (Mdex, DSG Metaverse, Chronos, Equilibre, SolidLizard, Velocimeter, etc.), in exchange for building automated vaults for their platforms, they in turn offered mining incentives for our ACS pairs.
Also, our previous tokenomics included ACS emissions to our ACS Vault holders, but we’ve since removed emissions (as mentioned above).
Current Incentivization:
Our protocol currently incentivizes participation solely through sustainable mechanisms. Swap fees generated through ACLM vaults usage provide a natural incentive for users to stake their assets for the long term.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
No
Protocol Performance:
Performance highlights of our ACLM strategies on Arbitrum include:
- Stable vaults delivering consistently strong yields over a number of months, eg.
- USDC/DAI at 20-30+% APY
- wstETH/ETH at 10+% APY
- WBTC/BTC.b at 10+% APY
- High-yield returns on volatile pairs, successfully countering impermanent losses, eg.
- ARB/ETH at 101+% APY
- BTC/ETH at 36+% APY
*the above APY are all achieved purely via swap fees
Screenshot of managed USDT-USDC (Arbitrum) active liquidity %
*much under-utilized TVL that can be managed by our stable vault - 28 Feb '24
- blue bar indicates managed liquidity on ACryptoS
- grey bars indicate other providers
- large amount of under-utilized liquidity can be seen from the grey bars
Comparative Performance on Other Chains:
Our strategies have also demonstrated significant success on other chains, such as OP Chain and Base Chain, indicating potential similar performance in Arbitrum:
-
Dominating over 90% of active liquidity in OP Chain’s USDT/DAI and USDC/USDT pools (link)
-
Hosted 20%+ of active liquidity in OP Chain’s wstETH/ETH pools
-
Hosted 50%+ of active liquidity in Base Chain’s USDC/USDbC pool
Screenshot of managed USDT-DAI (Optimism) active liquidity %
*managing 88.3% of active trading liquidity for USDT/DAI Uniswap V3 (Optimism) - 28 Feb '24
In comparison with other concentrated liquidity managers, our strategies have outperformed in yield generation for the exact same pools managed. Attached below is a historical chart for the yields generated by our managed USDC-DAI pool on UniswapV3 (Arbitrum) for the period of 18 Dec '23 to 18 Jan '24
-
3.13% yield in 30 days
-
potentially extrapolated to 38.08% APR
Here are some stats collected from our dapp to indicate some of the performances of our ACLM vaults so far.
- the Fees column show the the collected yields after factoring in the IL incurred from rebalancing.
- the APR column shows the annualized APR based on the number of days these data are collected from
| Pair | Period (Days) | TVL | Fees (after IL) | APR |
|---|---|---|---|---|
| WBTC-tBTC | 63 | $182K | 2.78% | 16.1% |
| WETH-ARB | 22 | $161K | 4.77% | 79.13% |
| BTC.b-WETH | 59 | $45K | 5.05% | 31.24% |
| USDC-USDC.e | 64 | $37K | 2.73% | 15.56% |
| USDC-DAI | 62 | $32K | 3.56% | 20.95% |
We are confident that with increased exposure to Arbitrum’s user base and continued refinement of our strategies, there is much more room to grow in managed liquidity for our Arbitrum vaults.
Protocol Roadmap:
UI and Chart Statistics Improvement: Enhance user experience by advancing our UI. We have currently developed graphs to visualize distribution of liquidity across UniswapV3 pairs. We plan to further develop more detailed graphs to better visualize liquidity distribution, provide detailed yield history and establish accurate APY forecasts.
Our visualization chart serves as a useful tool to monitor the distribution of liquidity in various pools, identifying pools that have under-utilized liquidity being at out-of-range positions.
An example of USDT/USDC.e pool can be seen here.
Awareness and Engagement Campaigns: We intend to collaborate with platforms like Galxe to attract new users to ACLM vaults. We also plan to launch Learn&Earn campaigns for deeper user engagement and helping users in understanding of V3 CL liquidity provision.
Collaboration with Experts: We will be conducting in-depth analyses using advanced 3rd-party analytics to optimize our strategies, with the goal of improving vault yields and swap efficiency, while improving overall risk management. We are currently closely integrated with Chainlink for automated vault upkeep rebalancing and we are actively exploring further collaboration to develop more refined vault strategies.
Audit History & Security Vendors:
Our protocol has gone through a number of audits (Security & Risks | ACryptoS)
We also have an active bug bounty program (Bug Bounty | ACryptoS)
Security Incidents:
Our top priority is user safety. ACryptoS contracts have never been exploited.
SECTION 3: GRANT INFORMATION
Requested Grant Size:
80,000 ARB
Justification for the size of the grant:
ACryptoS has invested significant resources to integrate on Arbitrum. For deploying on Uniswap V3 Arbitrum, we tailored vault strategies based on individual pair volatility, volume, and TVL, maximizing user returns. Additionally, we integrated with Angle Merkl rewarder for seamless incentive distribution.
We actively engaged with Arbitrum protocols for vault integrations and co-marketing initiatives, and have achieved consistently good results in most of our vaults, especially the vaults utilizing our stable pair strategies.
Our focus lies on launching more vaults (currently at 23) for high-cap and high-volume pairs on Uniswap V3, with plans to implement on other CL DEXs. These strategic launches contribute to growing Arbitrum’s TVL.
At the current price of $2 per ARB, the grant request of 80,000 ARB will be $160,000 in $ value. Right now we are managing $1.05M TVL in our Arbitrum ACLM vaults.
- During the first week, it would bring an additional average ~60+% APR to the incentivized vaults, attracting users to deposit in.
- as TVL flows in and target TVL is achieved in 12 weeks, the average additional APR to each of the incentivized vaults would be ~15%.
Grant Matching: N/A. There is no long any $ACS emissions. Any additional incentives would be paid from our treasury, and we do not find it sustainable.
Grant Breakdown:
100% of the grant will be used to incentivize our ACLM products on Arbitrum. ACryptoS proposes a 12-week liquidity incentive program, offering a total of 80,000 ARB (distributed at approx 6666 ARB/week) to liquidity providers participating in qualified ACryptoS vaults built on V3 CL DEXs.
Targeted incentivization: We plan to incentivize 10-15 vaults (average of 400-700 ARB/week/vault) to bring in liquidity for under-capitalized pairs with high potential, and improve the overall liquidity distribution on the platform.
We plan to explore potential expansion to Sushiswap V3 and Pancakeswap V3 based on identified opportunities, and will distribute the incentives accordingly based on the metrics of these new vaults.
We will apply the following methodology when assessing pairs and their allocation of incentivization:
(examples shown are to illustrate the LP types, and do not indicate that these will be the ones incentivized)
- 60% to bluechips and stablecoin pairs
- these are crucial to Arbitrum ecosystem, and used by most users
- our stable LP vaults performance is one of our strengths, improving swap rates for key tokens)
- eg. WBTC/BTC.b, WBTC/WETH, USDC/DAI, USDC.e/USDC
- 20% to essential ARB pairs
- improve liquidity efficiency for ARB pairs
- at the same time generate higher swap yield for ARB LP providers
- eg. ARB/WETH, ARB/USDC.e
- 20% to high swap volume, Arbitrum native pairs
- enhance liquidity for native pairs, as they are the backbone of Arbitrum ecosystem
- eg. GMX/WETH, LODE/WETH, VELA/WETH
Considerations:
- lower priority to pairs that are already incentivized by other recipients of LTIPP or other grants
- lower priority to pairs with high TVL but low utilization
- allocating incentives to a wider variety of pairs, rather than too similar pairs
- ensuring incentivized pools do not conflict with each other when it comes to liquidity utilization
Funding Address: Treasury 0x5BD97307A40DfBFDBAEf4B3d997ADB816F2dadCC
Funding Address Characteristics:
The Treasury Multi-sig is a 2/3 Safe contract, managing our treasury and grant funds. Each signer is a unique Core DAO member, of which they have been voted in via Governance since 2020. The current 3 members of the Treasury Multi-sig are:
- Axe
- toortheroot
- BlightNight
Treasury Address:
0x5BD97307A40DfBFDBAEf4B3d997ADB816F2dadCC
Contract Address: We will deploy contracts to disperse rewards, which we will publish in our docs before Week 1.
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives:
- Expand our vault offerings: Deploy new vaults with customized strategies, catering to Arbitrum and user needs and maximizing their returns.
- Incentivize key pairs: Implement targeted incentives for major and high-volume swap pairs, accelerating TVL growth to a sustainable level. This enhanced liquidity will attract aggregators and bridges, ultimately prioritizing our vaults for optimal swap routing.
- Drive user adoption: Foster user base growth through strategic marketing and initiatives, doubling down on the added grant incentives
- Deepen protocol integrations: Collaborate with key Arbitrum protocols, incentivizing their token pairs for better concentrated liquidity efficiency
- Refine our CL Vault strategies: Continuously refine and optimize CL Vault strategies, enhancing their performance and overall risk management effectiveness.
Execution Strategy:
The entire grant amount (80,000 ARB) will be distributed as incentives across 10-15 selected vaults over a 12-week period. These incentives will directly reward liquidity providers, motivating them to contribute to the targeted pairs. This influx of liquidity will not only increase the TVL in these pairs but also facilitate much smoother swaps with lower slippage, ultimately benefiting users by reducing their transaction costs.
The incentives will be allocated to each qualified vault based on the following factors:
- TVL in our managed vault
- TVL in the underlying DEX
- average trading volume in the underlying DEX
- active liquidity % currently hosted by our vault
- vault historical APR (based on past performance since vault launch)
- prioritizing stable pairs, as our strategies have been performing well
- prioritizing bluechips, major stablecoins, and ARB pairs
Adjustments to the incentives can be done every 2 weeks based on analytics of the past incentives effect on the above factors. We will provide bi-weekly updates on vaults, TVL, performance, and incentive distribution. Our team will be open to feedback throughout the process and will work towards better utilization of the grant incentives.
Incentive mechanisms to ensure “stickiness”:
Our ACLM strategy prioritizes sustainable yields through swap fees, encouraging long-term user participation beyond initial incentives. As TVL grows, swap fees alone become sufficient to retain users. We make sure to continuously maintain user trust and engagement by keeping them updated on the vault performance.
In line with our ethos since our launch in 2020, we have always encouraged long term staking in our products, via various methods such as launching products with sustainable yields, educating users on staking long term benefits, ensuring fund safety amidst various exploits and hacks etc. We have established ourselves as a trusted protocol, and our strategy of keeping users safe + providing sustainable yields, have retained many of our users, along with keeping TVL consistent throughout the bear market.
Key Performance Indicators (KPIs):
We’ll measure success through three key metrics:
- Daily Active Users: Track the growth in unique users participating in incentivized vaults. This shows the program’s ability to attract and retain new users.
- TVL: Monitor the combined value of assets deposited across these vaults. This indicates program success in attracting liquidity to targeted pairs, enhancing their depth and improving market efficiency.
- Swap Volume Facilitated: Analyze the total amount of token swaps facilitated by the incentivized vaults. This demonstrates the program’s contribution to increased liquidity utilization and smoother swapping experiences for users.
These metrics directly align with the grant objectives of attracting users, enhancing liquidity, and improving swap efficiency. They are transparent and verifiable through readily available data sources, compiled on a verifiable dashboard, allowing the DAO to assess the program’s effectiveness.
Grant Timeline and Milestones:
This 12-week program will be measured against key milestones:
Preparation (Prior to Week 1) : Identify LPs based on abovementioned factors + allocation of % to each pair
Week 1 - 4 : Launch and incentivize 10-15 vaults (monitoring analytics weekly to optimize incentives).
Week 5 - 8 : Achieve a 2x TVL increase and 4x user growth, and 5x swap volume increase (moderate but achievable targets).
Week 9 - 12 : Achieve a 4x TVL increase, 8x user growth, and 10x swap volume increase (reflects cumulative impact and long-term potential).
*these milestones are decided based on our research on earlier similar grant incentives and the corresponding results
| Time | ARB | Cumulative | TVL | DAU | Volume |
|---|---|---|---|---|---|
| Preparation | 0 | 0 | 1x | 1x | 1x |
| End of Week 4 | 26,666 | 26,666 | 2x | 3x | 4x |
| End of Week 8 | 26,666 | 53,333 | 3x | 6x | 8x |
| End of Week 12 | 26,666 | 80,000 | 4x | 8x | 10x |
| Post-Incentives | 0 | 80,000 | 3x | 6x | 8x |
We’ll use data from DeFi tracking platforms, block explorers, and DEX aggregators to verify progress. These milestones factor in our existing user base, targeted incentives, and market optimism. They demonstrate program effectiveness and build a foundation for long-term success.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
Increased exposure through the grant, combined with our existing competitive APY and additional incentives, will attract new users and their assets (TVL) from other chains. Once TVL reaches a critical point, increased swap volume will generate higher swap fees for users, creating a sustainable APY even after the incentives end.
- Proof of traction: We’ve already achieved over $1 million TVL in under a year through organic growth.
Along with the additional incentives to the vaults from the grant, we will scale marketing efforts and double down on attracting new users and TVL to Arbitrum.
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 5: DATA AND REPORTING
Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO?
Yes.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Yes.
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program?
Yes.
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.
