Acryptos considers the Council’s main concern to be the protocol’s lack of traction—a discrepancy between its deployment on Arbitrum in 2022 and the incentivization of the product they aim to promote in August 2023.
According to DeFiLlama, its current TVL is $1.04 million, identical to when the Council assessed the application one month ago and identical to when the applicant drafted the initial proposal two months ago. This demonstrates that traction has stalled.
Additionally, incentivizing pools with APRs above 60% initially and an additional 15%—to what they are actually paying—subsequently seems excessive and is not in line with market offerings. Such high APRs attract mercenary liquidity, which leaves the protocol once these elevated rates disappear.
On the other hand:
The applicant themselves states that their strategy does not aim to increase the TVL, volume, or number of users on Arbitrum, an aspect that the Council emphasized they would have liked to see addressed in this proposal.
For these reasons, we believe the proposal should not be accepted.