SECTION 1: APPLICANT INFORMATION
Applicant Name:
AirPuff
Project Name:
AirPuff
Project Description:
AirPuff is pioneering the integration of liquid restaking and leverage strategies within the Arbitrum ecosystem, offering users ways to optimize their earnings through under-collateralized leverage and advanced restaking protocols. Our platform enables users to leverage up to 15x on their positions, maximizing rewards and airdrop values while fostering growth and liquidity in restaking on Arbitrum.
Team Members and Roles:
- Milian (CEO & Co-founder)
- 0xJeff (CSO Chief Strategy Officer)
- Amos (CTO Chief Techology Officer)
- Patrick (CMO Chief Marketing Officer)
- Nero (Project Mannager)
Project Links:
- Website: [https://www.airpuff.io/]
- Twitter: [@airpuff_io]
- Telegram: [t.me/airpuff_io]
Contact Information
- Point of Contact: Nero
- Point of Contact’s TG handle: @neroairpuff
- Email: info@airpuff.io
Do you acknowledge that your team will be subject to a KYC requirement?:
Yes
SECTION 2a: Team and Product Information
Team experience:
Our core members have played pivotal roles in a variety of DeFi initiatives, such as perpetual decentralized exchanges, yield aggregators, and Web3 gaming platforms. Notably, the development team includes former core contributors to the CDP protocol NUON Finance, highlighting the depth of our team’s expertise in developing innovative DeFi solutions.
0xJeff also brings his insights from his time at Spartan Group and as co-founder of Steak Capital to his role as Chief Strategy Officer at AirPuff, where he steers product strategy and business development.
What novelty or innovation does your product bring to Arbitrum?
AirPuff introduces the concept of liquid restaking to Arbitrum, positioning it as a leading Layer 2 platform for restaking activities on Ethereum. Our model of leveraged liquid restaking allows users to enhance their rewards through a system designed to minimize and manage risks effectively. This includes clear risk management and liquidation protection.
- Earning Points with Non-ETH Tokens:
- Lenders, including those depositing stablecoins, can claim a 10% share of the total points from leveraging activities. This alternative offers an avenue for those wary of ETH’s price volatility to earn points while enjoying significant yields with minimal risk.
- Moreover, enabling leverage users to deposit stablecoins for farming points is under development, broadening the scope for earning without direct ETH exposure.
- $APUFF: Gathering Airdrop Values:
- Holders of the $APUFF token are entitled to a 5% share of total points from all leveraging strategies, positioning $APUFF as a collector of airdrop values across protocols. This makes $APUFF a key asset for users aiming to capture diverse airdrop benefits comprehensively.
- Intuitive Mechanism:
- AirPuff stands out for its user-friendly leverage and interest rate model. Unlike complex mechanisms involving yield estimations, our platform offers a straightforward experience. General users can easily navigate the system, with the downside covered only by the interest paid, eliminating the need for intricate calculations on yield changes.
- Implied Yield vs. Interest to be Paid:
- Offering an attractive proposition, AirPuff enables users to gain leveraged exposure to airdrops. With a market equilibrium suggesting implied yields of over 30% on the yield tokens and airdrops, AirPuff provides leveraged exposure with a <20% interest rate. This presents users with an appealing option for leverage airdrop farming without concerns about dilution by larger stakeholders.
- Low Liquidation Risk for Leveragers:
- Airpuff minimizes liquidation risks for leveragers through the robust price correlation between Liquid Restaking Tokens (LRTs) and ETH. Users can further reduce the risk by adjusting positions and adding collaterals. This ensures leveraged users maintain a relatively low-risk profile.
- Stable and Competitive Yields for Lenders:
- With an under-collateralized leverage model, AirPuff ensures lenders receive generous compensation with a competitive interest rate. This translates to a higher-than-market-offer lending yield, making it an attractive choice for depositors seeking a stable and robust ETH yield. Stability is at the core of AirPuff’s offerings, providing a reliable option for consistent earnings.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes, AirPuff is designed to be highly composable.
Currently, we have successfully integrated leverage strategies using Etherfi weETH, Renzo ezETH and KelpDAO rsETH on Arbitrum. Our roadmap includes the imminent launch of additional strategies on other LRTs. We are actively exploring partnerships to integrate LRTs that are active on Arbitrum into AirPuff.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
Gearbox and Stella are some of the comparable protocols.
However, AirPuff distinguishes itself by allowing deposits and borrowing across a wider variety of assets, not limited to just ETH. This flexibility caters to a broader user base with different asset preferences. Additionally, AirPuff offers more competitive borrowing rates, making it an appealing choice for users looking to maximize their DeFi engagements efficiently.
Furthermore, the forthcoming $APUFF token enhances AirPuff’s uniqueness by offering functionalities beyond governance. It aims to be the essential token for aggregating airdrop values, positioning itself as a singular asset for users interested in maximizing their returns from various protocols. This strategic emphasis on providing tangible value through airdrops sets AirPuff apart in the sector.
How do you measure and think about retention internally?
Our key metrics include user growth rate, total value locked (TVL), and transaction count. We aim to grow our user base to 1000 in 12 weeks, with TVL 10 million.
| Category | Relevant Metrics |
|---|---|
| General | All general metrics in the OBL relevant metrics chart are relevant. These metrics include: Daily Active Users, Daily User Growth, Daily Transaction Count, Daily Protocol Fee, Daily Transaction Fees, Daily ARB expenditure & User Claims and Incentivised User List. |
| Yield / Yield Aggregator | All metrics for Yield in OBL relevant metrics are relevant. The metrics include the TVL of the incentivized pool, and the list of depositors. The list of depositors will contain information like LP addresses, their current liquidity in USD, time-weighted liquidity in USD, and the duration of liquidity provision. |
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?:
Yes, AirPuff is developed on Arbitrum as its primary platform.
On what other networks is the protocol deployed?:
Currently, AirPuff is also deployed Ethereum Mainnet to complement our Arbitrum operations.
What date did you deploy on Arbitrum mainnet?:
28th February 2024
Do you have a native token?:
We do not have a native token yet, but is planning to launch it in Q2.
Tokenomics can be found here.
Past Incentivization:
This will be AirPuff’s first major incentivization program, aiming to bootstrap liquidity and user adoption on Arbitrum.
Current Incentivization:
We are preparing a liquidity mining program for early adopters, details to be announced.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
No
Protocol Performance:
There is not much Protocol performance related data yet, as we are in the early stages. Our focus has been on developing a secure and user-friendly platform. Performance metrics will be closely monitored and posted.
Protocol Roadmap:
2024 Q1:
- Liquidity Bootstrapping:
Initiating multiple campaigns aimed at drawing additional capital for deployment within AirPuff. These efforts are geared towards enhancing the user experience by facilitating seamless borrowing and lending.
- Expanding Scope to Include KelpDAO rsETH and Renzo ezETH:
AirPuff plans to incorporate KelpDAO rsETH and Renzo ezETH into its offerings. This expansion aims to increase restaking liquidity on Arbitrum, positioning it as a premier Layer 2 solution for restaking activities.
- Completing an Additional Audit with Zokyo:
An extra layer of security is anticipated through the completion of a comprehensive audit of our smart contracts by Zokyo. This step is critical in bolstering protocol security and safeguarding user assets.
Q2:
- Extending into Liquid Restaking Protocol Airdrops (Inception and Genesis):
AirPuff intends to extend its offerings to include LRT Airdrops from protocols such as Inception and Genesis. This move is designed to give users additional avenues to capitalize on the growing restaking sector, potentially enhancing their reward prospects.
- Diversifying Leveraging Strategies:
Beyond traditional leveraging, AirPuff is committed to exploring new strategies that offer users greater flexibility. This initiative aims to enable users to optimize their earnings while efficiently managing risks.
Q3:
- Exploring Further Liquid Restaking Opportunities:
The focus will shift towards investigating additional strategies related to LRT, including leveraging the liquidity pools (LPs) of LRT tokens. This exploration is part of AirPuff’s ongoing effort to expand the liquid restaking ecosystem on Arbitrum, fostering a more vibrant and inclusive environment for all participants.
Audit History & Security Vendors:
Smart Contract Audits
To identify and mitigate any vulnerabilities, coding errors, or potential loopholes, smart contract audits are vital. These comprehensive reviews of our codebase are conducted by seasoned auditors to ensure it’s fortified against potential threats. Such audits significantly reduce the likelihood of hacks, bugs, or any unforeseen issues, safeguarding against financial and reputational damage.
AirPuff’s smart contracts have been audited by Zokyo and CD Security, with reports available here:
- CD Security Audit Report
- Zokyo Audit Report (currently underway)
Bug Bounty Program
We’ve initiated a bug bounty program, covering both our front-end interface and smart contracts, to tap into the expertise of ethical hackers and security researchers. This initiative encourages the discovery and reporting of vulnerabilities, further bolstering our defense mechanisms.
- Launching on Hackenproof
Leveraging Hypernative
Utilizing Hypernative’s cutting-edge technology, AirPuff is equipped to receive instant alerts on suspicious deployments or forks, acting as an early warning system. This capability is crucial for pre-empting and thwarting potential hacking attempts.
Security Incidents:
No incidents to date.
SECTION 3: GRANT INFORMATION
Requested Grant Size:
90,000 ARB
Justification for the Grant Size:
Regarding the grant, our goal is to attract a total of $9 million in TVL of LRTs to Arbitrum via AirPuff. Having already launched three strategies tied to distinct liquid restaking protocols—Etherfi weETH, Renzo ezETH, and KelpDAO rsETH—we aim to draw approximately $3 million in TVL to each of these strategies.
We are also looking to expand our offerings to include LRTs from Swell, Inception, and Genesis. As new strategies are introduced, the ARB allocations will be adjusted and distributed among the strategies to meet market demands.
Our aim for each LRT strategy is a TVL of $3 million, targeting an additional 8% APR, based on an ARB price of $2. This approach underpins the rationale for allocating 30k ARB to each LRT strategy over a 12-week program, calculated as follows:
= 3000000*0.08/4/2
= 30,000 ARB
We set our TVL target at 3 million based on data from a comparable protocol, Gearbox, which has approximately $100 million TVL (Sourced from their Dune) for its LRT strategies on Ethereum. Given AirPuff’s primary focus on Arbitrum and the relative size of LRT capital on this chain, we aim for 10% of Gearbox’s TVL, equating to $10 million. Assuming equal distribution across three planned strategies, this results in a $3.3 million target for each.
The 8% APR target is based on Stella’s protocol, offering an 8%-12% ARB APR atop their farming pools (Sourced from their medium). Opting for a conservative approach, we apply the lower bound of 8% as our target. This level is deemed optimal for attracting the desired capital volume, positioning AirPuff to effectively grow and contribute to the Arbitrum ecosystem.
Grant Matching:
N/A
Grant Breakdown:
| Strategy | Initial ARB Allocation |
|---|---|
| Leverage Etherfi weETH | 30,000 |
| Leverage Renzo ezETH | 30,000 |
| Leverage KelpDAO rsETH | 30,000 |
- The ARB allocations mentioned are preliminary estimates for the three strategies currently implemented. The actual distribution of funds will be subject to changes and undergo bi-weekly reviews to adjust for market conditions and strategy demands.
- Should additional strategies be introduced within the incentive period, allocations may be adjusted to accommodate these new strategies, ensuring responsiveness to evolving market needs.
- The allocations will be distributed linearly to each LRT strategy across 12 weeks, aiming to boost the TVL for each strategy to $3 million
- the ARB funds will only be used to incentivize activities for LRT strategies, to encourage the migration of liquid restaking onto Aribtrum
Funding Address:
0xBb21A619e47Af352BD4f0d8A7D94DF5C1F95791D
Funding Address Characteristics:
The address is a 2/3 multisig that is able to receive ERC-721
Treasury Address:
Not Available for now. Treasury will be set up in the coming days.
Contract Address:
| USDCe Lending | 0xa2e4cab1F6f9f1163bCe937517f1935BEc4a0A7c |
|---|---|
| USDT Lending | 0xeb0b9B5FFb763dD69440565F63c67f9695B7C3dA |
| ARB Lending | 0x529f94bcd37896b6a38452497C62b2F0a8217517 |
| wstETH Lending | 0x521A8Ca3baF3d7677ddCC091eD91D969D4AfcfF8 |
| ETH Lending | 0x97801654D2048E639043c77b16Bc906541B3490a |
| USDC Lending | 0xd3E1BDe4b4163c86B9b7668dE8Ae7618720dCa93 |
| airpuff interest receiver | 0x0C8A4800Eb0e189F1540Fdf9cA3718764c26A9a8 |
| airpuff fee receiver | 0x666B1c1132A4062dF15868425196022f1612dC1d |
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives:
To accelerate the adoption of leveraged liquid restaking in the DeFi ecosystem, particularly within the Arbitrum network, enhancing liquidity, user engagement, and overall ecosystem growth.
Execution Strategy:
- The allocations will be distributed linearly to each LRT strategy across 12 weeks, aiming to boost the TVL for each strategy to $3 million
- Users will be able to claim their ARB tokens on Airpuff weekly, calculated with a time-weighted basis on their deposit collaterals in US dollar terms
- Funds will be allocated in linear basis, such that the total ARB released will be the same across the 12 weeks of program
- In the event new strategies are introduced during the incentive period, the allocation of funds may be revised to accommodate the added strategies and respond to market demands.
| Number of strategies deployed | Estimated intial ARB allocation per strategy |
|---|---|
| 3 strategies | 90,000 / 3 = 30,000 ARB |
| 4 strategies | 90,000 / 4 = 22,500 ARB |
| 5 strategies | 90,000 / 5 = 18,000 ARB |
*The ARB allocations provided are preliminary estimates and may be adjusted in response to market conditions and demands. The table serves as an initial guide for the distribution of funds among the strategies.
**To maintain the effectiveness and value of the incentives, we will cap the number of strategies eligible for ARB incentives at five.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?
-
$APUFF emissions and locking will be implemented later to provide extra incentives for users in depositing for long term and engaging with the community.
- Lock $APUFF and receive veAPUFF. Your veAPUFF value is proportional to the amount and duration staked (up to a maximum of 2 years). Each wallet is associated with a single vePUFF expiry date
- Hold veAPUFF to enjoy utilities, including unleash of borrowing capacity, extra $APUFF emission, Protocol fee share, and Voting Gauges
-
More strategies will be deployed on AirPuff such that leverage farming will only be the first step in bringing restaking onto Arbitrum
Specify the KPIs:
- User Growth: Reach 1,000 users within the first 12 weeks.
- TVL: Secure $3 million in TVL for each LRT strategy.
Grant Timeline and Milestones:
Timeline: Linear Distribution across 12 weeks
Milestones:
| Weeks | Details |
|---|---|
| 1-3 weeks | We anticipate a swift increase in the TVL for each strategy during the initial three weeks, driven by the attractive APR augmented by linearly distributed ARB incentives. This phase is expected to bring each strategy’s TVL to $1.5 million. |
| 3-6 weeks | As the program progresses into the third to sixth weeks, the pace of TVL growth is likely to moderate, with projections estimating the TVL reaching around $2.5 million during this period. |
| 6-12 weeks | In the subsequent phases, while the rate of TVL increase is expected to decelerate further, we aim to achieve our ultimate goal of $3 million in TVL per strategy. This represents a phase of stable growth, bolstered by an additional 8% APR contributed by ARB incentives. |
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
The grant will enable us to further bring in LRT onto Arbitrum, making it the default L2 for liquid restaking token activities.
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?
Yes, we are committed to transparency and will comply with all reporting requirements.
Does your team agree to provide bi-weekly program updates?
Yes, we will provide comprehensive updates to ensure community engagement and transparency.
Does your team agree to provide a final closeout report?
Yes, we understand the importance of sharing our learnings and results with the community.
Does your team acknowledge that failure to comply can result in the halting of the program’s funding stream?
Yes
