SECTION 1: APPLICANT INFORMATION
Applicant Name:
Julian A - julian@apeswap.finance
Project Name:
ApeBond (formerly ApeSwap)
Project Description:
ApeSwap is a DEX aggregator and bond provider. In an industry plagued by unsustainable and inflationary tokenomics, ApeSwap’s novel approach to DeFi solves two problems that all protocols currently face: how to source sustainable decentralized liquidity, and how to sustainably diversify treasury assets.
Leveraging our comprehensive suite of products and unique DeFi expertise, ApeSwap works closely with partner protocols to ensure their treasury and liquidity are set up for long-term success.
Team Members and Roles:
- Scott: CEO / Head of Technology
- Ignacio: Head of Product
- Julian: Head of Business Development
- Santiago: Head of Communications
Project Links:
ApeBond | Twitter | Telegram | Discord | Reddit
Contact Information
Point of Contact:@JulianApeSwap
Point of Contact’s TG handle: @JulianApeSwap
Twitter: https://twitter.com/JulianApeSwap
Email: julian@apeswap.finance
Do you acknowledge that your team will be subject to a KYC requirement?:
Yes
SECTION 2A: TEAM AND PRODUCT INFORMATION
Team experience (Any relevant experience that may be useful in evaluating ability to ship, or execution with grant incentives. Please provide references knowledgeable about past work, where relevant. If you wish to do so privately, indicate that. [Optional, but recommended]):
ApeBond was formerly ApeSwap, a top DEX and DeFi ecosystem founded in February 2021 on BNB Chain. Historically, the ApeSwap DEX has facilitated over $18B in total trade volume, with a peak TVL close to $600M. The ApeBond team also maintained a lending network as part of the ApeSwap DeFi ecosystem, with a historical peak TVL of $20M.
The ApeBond team has a 3+ year exploit-free track record of constant product development and delivery, having maintained smart contracts containing hundreds of millions of dollars in assets.
What novelty or innovation does your product bring to Arbitrum?
Today, ApeSwap has rebranded to ApeBond, a bonding protocol with an emphasis on providing treasury building services to other on-chain protocols, both pre and post-TGE.
ApeBond’s unique approach to liquidity building and on-chain capital fundraising through bonds is supported by our recently co-authored ERC-5725, which we have proudly brought to Arbitrum as part of our deployment. This token standard provides an interface for transferable vesting NFTs which release underlying tokens over time, creating an industry-wide standard for token vesting.
Is your project composable with other projects on Arbitrum? If so, please explain:
ApeBond bonds are highly composable with other projects building on Arbitrum. Our business model relies on relationship building with other protocols and working with them to host bond sales for their token ecosystem and community.
Beyond this, our Liquidity Bonds focus specifically on fundraising DEX LP tokens in various formats (v2, v3 positions, ICHI liquidity, etc.) and are designed to encourage projects to build on-chain liquidity on other protocols.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
While there is one other protocol currently doing bonds on Arbitrum (Bond Protocol), ApeBond stands apart through:
-
Unique Technology: Our bonds leverage our co-authored ERC-5725 to standardize the linear distribution of tokens using NFTs. This token standard also allows for transferability, which could eventually encourage the creation of secondary markets.
-
Reach and Community: ApeBond has close to 100k monthly active users using our various DeFi products, which has allowed us to sell over 25,000 individual bonds with over $8.5M in total bonded value.
-
Dedication to Growth: ApeBond has already opened bonding markets with 96 partners, and we don’t plan on slowing down anytime soon. Our recent bond volume has been growing exponentially month over month, and we look forward to continuing this growth through our ongoing partnerships, various whitelabel implementations, and our recently introduced launchpad.
How do you measure and think about retention internally? (metrics, target KPIs)
ApeBond’s KPIs are mainly focused on the performance of the various bonds we are hosting for our partners, as well as how users respond to these bond sales.
Some of the metrics we look at include:
- Users: MAU, DAU, etc.
- Return on Emissions: The return generated from tokens emitted during bond sales.
- Total Unique Wallets: The number of unique wallets interacting with the ApeBond ecosystem.
- First Time Wallets: The number of first time wallets interacting with the ApeBond ecosystem.
Relevant usage metrics:
| General Metrics (Applies to all) | Daily Active Users: A time series metric representing the daily count of unique addresses interacting with the protocol’s contracts. |
| Daily User Growth: A time series metric representing the daily user growth (in addresses) interacting with the protocol’s contracts. | |
| Daily Transaction Count: A time series metric representing the daily number of transactions interacting with the protocol’s contracts. | |
| Daily Protocol Fee: A time series data representing the daily total protocol fee generated. For example, swap fees, borrowing fees, etc., comprising all economic value generated through the protocol, contracts, apps, etc., by users. | |
| Daily Transaction Fee: A time series, daily total transaction fees generated daily by interactions with the protocol’s contracts. | |
| Daily ARB Expenditure and User Claims: Data on individual ARB incentive claim transactions made by users, as incentivized by the protocol. It should include the timestamp, user address, and the claimed ARB amount. The spent ARB will allow for the normalization of growth metrics. |
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? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant):
No.
SECTION 2b: PROTOCOL DETAILS
ELI5 Example on Bonds
- Bond Contract Deployment:
- ApeBond creates and deploys a custom bond contract.
- Token Transfer to Bond Contract:
- Partner tokens (in this case, ARB) are transferred from our Treasury Address to the newly created bond contract.
- Bond Sale Launch and Continual Marketing:
- Bond sale goes live with announcements.
- Continuous promotion of the bond throughout the sale period by both ApeBond and our partners.
- Users Purchase Bonds:
- Users use LP Tokens, bluechips, or stablecoins to purchase partner tokens at discounted rates, vested over time through bonds. In this case, users would pay using ARB-WETH LP tokens to purchase discounted ARB.
- Discount is dictated by ApeBond’s tailored algorithms and market demand. The more users purchase, the lower the discount goes, the less users purchase, the higher the discount goes.
- Users effectively purchase an individual “bond” with specific discount, vesting terms, payout, etc., which represents the underlying partner tokens being vested.
- Users use LP Tokens, bluechips, or stablecoins to purchase partner tokens at discounted rates, vested over time through bonds. In this case, users would pay using ARB-WETH LP tokens to purchase discounted ARB.
- Funds Transfer:
Raised LP Tokens, bluechips, and stablecoins are automatically transferred to partner wallet upon each individual bond sold.
Is the protocol native to Arbitrum?:
No, ApeBond is a multi-chain protocol that started as ApeSwap on BNB Chain, though we have been on live on Arbitrum since March 2023. Today we mainly work with clients on BNB Chain and Polygon, but would love to provide more value to protocols in the Arbitrum ecosystem, starting with the Arbitrum DAO.
On what other networks is the protocol deployed?:
- BNB
- Polygon
- Ethereum
What date did you deploy on Arbitrum mainnet?:
ApeBond launched publicly on March 14th, 2023, while our smart contracts have been live since March 3rd, 2023.
Do you have a native token?:
Yes, our native token is $ABOND. More information on our tokenomics can be found here.
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
ApeBond worked with the Telos blockchain from June 2022 - April 2023 to host bond sales for the TLOS token. The goal was to build on-chain liquidity on Telos across several pairs using a high number of small bond sales. During this time, Telos saw a 94.33% average return across 16 bond sales.
Current Incentivization: How are you currently incentivizing your protocol?
- Users earn yield through discounted tokens purchased through our bonds.
- Users are incentivized to purchase ABOND and stake for veABOND in order to unlock further discounts on bonds and access to public sales hosted on our launchpad. More info on additional utilities available here
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
No
Protocol Performance:
- 95+ bonding partners, 8M+ total bonded value, 25k+ total bonds sold
- 100k+ monthly active users across the ApeBond DeFi ecosystem
- Formerly known as ApeSwap, operated as a DEX since early February 2021 with over $18B in total trading volume
- Over $200M in oversubscription across 12 launches on the original ApeSwap Launchpad
- Historical peak of $20M+ TVL on the ApeSwap lending network
We track bond sales and performance through our own internal dashboard. We try and keep Defilama as updated as possible, but open to creating a Dune to track this as well.
Protocol Roadmap:
Here are some upcoming updates and developments we’re excited to share:
- Developing and extending zap integrations for all types of bonds and LPs
- Launching veABOND and further expanding our token utilities
- Developing a secondary marketplace for our Bonds
- Mainnet ETH Bonds (live last week)
- The release of our new Launch Bonds launchpad (this week)
- Continue to Whitelabel Bonds with select partner protocols (next partner coming next week)
- Bonding for a top 50 ranked Blockchain (coming in a couple of weeks)
Audit History & Security Vendors:
- We pioneered the ERC-5725 Token Standard
- These ERC-5725 Bond Contracts have been audited multiple times
- General Protocol Audits
Security Incidents:
No, none of ApeBond and ApeSwap’s smart contracts or products have ever been exploited in our 3+ years on-chain.
SECTION 3: GRANT INFORMATION
Requested Grant Size:
216,507 ARB
Justification for the size of the grant:
We’ve coined the term ‘Liquidity Debt’ to depict the deficit in liquidity needed for a project to sustain larger trades, ensuring a reliable trading ecosystem. Through our Liquidity Health Dashboard, we shed light on decentralized liquidity health, a crucial yet often overlooked metric.
Our dashboard currently reveals a Liquidity Debt of ~$9.05M (as of March 17th at 17:00 UTC) for the ARB token, which we aim to address to foster an optimal decentralized trading environment for the Arbitrum DAO and token for years to come.
We propose a pilot program using the LTIPP funding to show and start to build sustainable liquidity for the Arbitrum DAO, addressing the current liquidity debt of the ARB token.
Targeting a 5% reduction in this debt through an initial pilot study presents a logical and attainable objective. This grant also seeks to showcase the advantages of building sustainable liquidity and address liquidity debt for other projects within the Arbitrum ecosystem, promoting a robust and sustainable liquidity framework which would work for any sized protocol in the ecosystem.
5% of roughly ~$9.05M would be a POL growth for the Arbitrum DAO of ~$452k worth of ARB-WETH LPs. At ARB’s last 30 day effective price of $2.09, we request 216,507 ARB to conduct an initial pilot case study and showcase the effectiveness of bonds in building on-chain liquidity.
We intend to take these results to the Arbitrum Treasury and Sustainability Working Group to present our case and show them how this could be implemented in the roadmap to diversifying the ARB Treasury sustainably and closing down on chain liquidity debt for good.
This Bonding program will take approximately 30 days. Our analysis and models, which historically engage long-term holders and mitigate direct token dumping, validate that the current ARB token emissions and sell pressure can quite comfortably sustain this grant size without negative price impact. Keep in mind the Arbitrum DAO will be receiving LPs in return thus clawing 50% of the emissions back in the form of LPs that they get to keep and own.
Grant Breakdown:
ApeBond plans to allocate the entire grant as Bonding incentives.
The incentive distribution is spread over 30 days:
- Bond Token: 216,507 ARB
- Bond Vesting Term: 60 day linear from time of user bond purchase
- Raise Asset: ARB-WETH LP
- Fee: 5% Initiation
Funding Address:
0xd9d5930297F08181da4E2883863C463bF1cdC3Cb
Funding Address Characteristics:
A 3/6 multisig SAFE created to hold the ARB allocation
Treasury Address:
ApeBond Treasury Wallets and Contracts
Contract Address:
The full ARB allocation will be distributed through ApeSwap’s Bond contracts, which can be viewed here.
The specific contract address can’t be shared until the ARB bond contracts have been deployed.
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives:
Objectives:
1. Bonding Permanent Liquidity for the Arbitrum DAO
2. Closing the Liquidity Debt for the $ARB token by 5%
3. Community Building and New User Ecosystem Engagement
4. Bring the results of this Pilot Study to the Arbitrum Treasury and Sustainability Working Group for further collaboration
Execution Strategy:
ApeBond proposes allocating 216,507 ARB tokens to bond permanent protocol-owned liquidity for the Arbitrum DAO. These tokens will be put in an ARB bond and bonded for ARB-WETH LPs to further grow the Arbitrum DAO’s POL.
Tech
We leverage the ERC-5725 token standard, which was developed by the ApeBond team and has received official endorsement from the Ethereum Foundation. This NFT-based standard is integral to our Bonds, granting users a Bond NFT containing their tokens, which vest over a defined period as specified at the time of purchase. In this case, the ARB bonds will vest linearly over 60 days.
ApeSwap’s approach aims to efficiently bond POL for the Arbitrum DAO, a feat unattainable through traditional farming incentives. The result is a lasting deepening of the liquidity pool for the $ARB token, as well as community engagement.
Fees
For the adept management of this initiative, ApeBond will take a 5% initiation fee on the initial token allocation. This fee is a requisite to cover ongoing marketing, development resources, and operational costs, ensuring the smooth execution and success of the Bond.
Marketing
Our marketing strategy is robust, encompassing outreach through our community forums, social channels, PR outlets, and media partners. Additionally, we’ll collaborate with other entities on Arbitrum to extend our marketing reach. Consistent marketing campaigns are planned to continually attract participants and keep the momentum going.
This is a pilot study, and our ultimate objective is to present compelling evidence to permanently alleviate the Liquidity debt on the ARB token, which presently stands at $9.05M.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?
Our proposed bond program is uniquely designed for maximum stickiness. As we will be exclusively bonding on-chain liquidity, we anticipate that 90%+ of the ARB value will remain on-chain permanently (at least until the Arbitrum DAO decides to remove it).
Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy.
The following KPIs are aimed at evaluating the progress and success of our initiative in enhancing the liquidity health of the ARB token, making strides towards achieving liquidity comparable to well-established assets on Arbitrum like ETH, USDC, and wBTC.
| KPI GOAL | KPI METRIC | PROOF |
|---|---|---|
| ARB Bond ROE* | 93-99% | Dashboard + status updates |
| Liquidity Debt Reduction | 10-12%+ | Dashboard + status updates |
| Unique Bonding Wallets | 500 | Dashboard + status updates |
*Return on Emissions (what return are we receiving for the token spent)
Grant Timeline and Milestones:
- Week 1: ARB Tokens distributed and Launch of Bond Sale
- Week 1: Bond metrics dashboard is operational tracking KPIs
- Week 2: First status report shared on Arbitrum DAO forums.
- Week 4: Second status report shared on Arbitrum DAO forums.
- Weeks 1 - 4: Ongoing marketing campaigns throughout the bond program
- Week 5: End of Bond Sale
- Weeks 5+: Submission of a proposal to continue Bonding and Building Permanent Liquidity through collaboration with the Arbitrum Treasury and Sustainability working group
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
Our proposal seeks to bolster the Arbitrum ecosystem through the integration of ApeSwap’s Bond technology, aiming for a significant increase in permanent DAO-controlled liquidity.
1. Enhancing Liquidity:
- Our goal is to elevate the liquidity depth of ARB, aspiring to reach parity with other blue-chip assets like WETH, USDC, and WBTC on the Arbitrum Network.
- Higher liquidity is pivotal for attracting new users and bolstering blockchain usage, with Total Value Locked (TVL) being a crucial metric in this aspect.
2. Benefits Across the Ecosystem:
- For the Arbitrum DAO:
- Diversify ARB holdings
- Strengthen ARB liquidity
- For Token Holders:
- Acquire ARB at a discount
- Enhance ARB liquidity
- For Protocols on Arbitrum:
- Increase awareness and access to bond programs
- Enhance liquidity in ARB pools, fostering creativity and ease in protocol development for ARB-funded protocols
Through these mechanisms, we aim to create a win-win scenario for all stakeholders within the Arbitrum ecosystem, stimulating growth, and innovation, while establishing a robust liquidity foundation.
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
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 16. Along with this list, please answer the following:
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? Are there any special requests/considerations that should be considered?
Yes
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Our team will gladly plan bi-weekly status updates and calls to report on relevant data points and KPIs.
We can also create a custom Dune dashboard specifically for the purposes of tracking the bond sales performance outlined in this proposal. We also have a bonds dashboard available here.
First Offense: In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.
Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.
Third Offense: Funding is halted permanently
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)
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
