SECTION 1: APPLICANT INFORMATION
Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.
Applicant Name: Arbidex
Project Name: Arbidex
Project Description: Arbidex is an advanced, user-oriented DEX & Ecosystem. Our community-centric ethos positions us uniquely as to serve as a self-sustaining protocol/dex. The only Liquidity Marketplace with a suite of products (dex,perpetuals,launchpad,marketplace,bridge) having all of its fees generated reidrected to its token as real yield.
Team Members and Qualifications:
+5 other team members consisting of marketing, designing and community management.
Linktree - arbidexfi | Twitter | Linktree
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes
SECTION 2: GRANT INFORMATION
Detail the requested grant size, provide an overview of the budget breakdown, specify the funding and contract addresses, and describe any matching funds if relevant.
Requested Grant Size: 240,000 ARB (~$200,000)
Grant Breakdown: All of the granted funds will be used for Liquidity Incentives (Farms) on the DEX.
- $ARB from grant will be added as the third reward for liquidity incentives with $ARX + $xARX
Funding Address: 0xE8FFE751deA181025a9ACf3D6Bde8cdA5380F53F
Funding Address Characteristics: 2/4 Multisig
SECTION 3: GRANT OBJECTIVES AND EXECUTION
Clearly outline the primary objectives of the project and the Key Performance Indicators (KPIs) used to measure success. This helps reviewers understand what the project aims to achieve and how progress will be assessed.
Our proposed budget is carefully crafted to propel growth and enhance efficiency on our Arbitrum platform, concentrating on bolstering volume and liquidity. Here is a high-level breakdown of how we currently allocate our funds and the potential enhancements we can achieve with the grant:
- Monthly Incentives (Current): Our current budget reserves $35,000 per month for our own token incentives for liquidity. This has resulted in an impressive average monthly average volume of $55+ million, leading to the generation of about $60,000+ in real yield (fees and bribes), which we redistribute in real yield to our token. The outcome is a marginal net inflation only.
- Monthly Incentives (With Grant): The proposed grant of 240,000 ARB (~$200,000) allows us to substantially boost our monthly incentives to a total of $135,000 ($100,000 additional each month to the current $35,000 incentives). We expect this increase in incentives to spark exponential growth in both volume and Total Value Locked (TVL) on chain. This is straight incentives, but since we expect a major boost in liquidity the incentives from our side will increase as well and we aim to boost them to $50k that means $150k liquidity incentives each month ($100k from Grant + $50k from us in our token).
- Impact on Fee Generation and Real Yield Redistribution: The additional funding would enable us to double our fee generation and redistribution to our token holders because of volume growth. This not only enhances incentives but also fosters our token’s appreciation, subsequently elevating the APR which in turn into more incentives creating a loop. Hence, the current $35,000 in incentives will grow to over $50,000 due to the volume & liquidity influx, thereby increasing revenue and real yield, thus providing space for more incentives as explained in above point with projections.
- Liquidity and Volume Projections: Leveraging our existing efficiency ratio over the past months of 1.85 (Efficiency = Volume/Liquidity), we anticipate that a 3-4x increase in liquidity would lead to a 5x-6x surge in volume over our monthly average, approximately $100 million/month, facilitated by ~$135,000 ($100,000 from the grant and $35,000 from our Arbidex incentives) incentives to liquidity. This sets a solid ground for us to target our ambitious $1 billion mark in cumulative volume, indicating a potential volume increase of $700 million over the subsequent two months with the help of grant.
In essence, this grant is not just additional funding; it’s an essential catalyst that can supercharge the ecosystem, notably by enhancing incentives for liquidity providers and by allowing us to offer more to our holders through increased 100% fee redistributions resulting from the volume increase which allows us increase incentives which means that grant is not just a certain boost here but it starts a cycle which then can increase our incentives to 2.5x-3x or more. This grant is poised to significantly expedite the swift and efficient expansion of our platform on Arbitrum and bring significant tvl and volume on chain.
Key Performance Indicators (KPIs): Key Performance Indicators (KPIs) that we’re tracking for this milestone are Cumulative Trading Volume, Incentives, Real Yield Distributed, Total Value Locked. Each of these offers a unique perspective into our operations, guiding us to refine our strategies for the most efficient outcomes.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?: Our request for this grant is rooted in the genuine aim of bolstering the liquidity provision on Arbidex, our decentralized exchange (DEX) and Arbitrum as a blockchain. We believe that with the support from the Arbitrum Foundation, we can significantly strengthen the inherent “Liquidity Loop Flywheel” model, an approach that has proven instrumental in fostering a self-sustaining ecosystem within the DEX. The grant would act as a catalyst and eventually grow liquidity/tvl on Arbitrum. Arbidex is a closed community-to-community dex, where the incentives and fees all of it is redirected back to the users/investors hence no intermediaries.
To elaborate, the funds from the grant will solely be channeled towards incentivizing liquidity provision especially to BTC/ETH/ARB/USDC/USDT pools which have the most capital in all of DEFI. This infusion of liquidity is designed to drive a substantial increase in trading volume because. When there is deeper liquidity in our DEX attracted by incentives, traders are more likely to experience smooth, efficient, and favorable trades powered by our low tick spacing concentrated liquidity and 20% lower fees then other DEXES on chains like Optimism, Ethereum, BSC, Fantom and others, which might not be a big cut for small defi users but a good number and reason for Big Whale’s/Institution to move money to Arbitrum and trade on Arbidex saving the cut in fees and better rates. This enhanced trading experience invariably attracts more activity and, thus, raises the volume of transactions happening on Arbitrum and Arbidex. Meaning: Capital infusion from traders as well as yield farmers on Arbitrum for better yield and rates.
Higher transaction volume translates into more fees being generated for Arbidex. All of these fees, coupled with bribes from our partners, are redirected towards real yield staking for $ARX (our main utility token). The purpose of this redirection of all of fees + bribes is two-fold: on one hand, it appreciates the token value as the APRs for real yield staking increase; on the other hand, it incentivizes more users to contribute liquidity to our platform on Arbitrum, due to the higher returns from the farms as the token value appreciate.
This dynamic creates a powerful, virtuous cycle: as liquidity increases, trading volume and fees grow, fueling further yield for real yield stakers and incentivizing more liquidity provision, which in turn boosts liquidity yet again benefiting the chain as well as the dex as it is plays the key role.
We see this grant as an contribution not just in Arbidex, but in the future growth and robustness of the Arbitrum blockchain itself. By improving the liquidity, efficiency and lowering fees for swaps of our DEX, we are also enhancing the overall user experience and utility of the Arbitrum blockchain over every other blockchain. In essence, this grant serves to fortify the interconnected and mutually beneficial relationship between Arbidex and the broader Arbitrum ecosystem.
Arbidex serves as a beacon of sustainable value in the Arbitrum ecosystem, fostering an environment where value isn’t minted but organically generated through a self-sustaining, 100% community-owned model without any intermediaries. This unique construct helps us enrich Arbitrum in several ways, each adding a distinct and enduring value. Arbidex has built a complete “circle of life” model where value is organically generated, focusing on “The People” where the true value lies.
- Firstly, we offer 20% lower swap fees on swaps compared to DEXs on other chains such as Ethereum, BSC, Optimism, Fantom among others and even within Arbitrum as well. This competitive pricing drives significant volume to our platform and to Arbitrum, attracting a wider user base especially the bigger investors where this 20% cut matters.
- Secondly, we have launched the Developer Program by Arbidex, a unique initiative that gives up to 25% of swap fees generated by the protocol’s token back to its treasury in real liquid token. This supports the growth and evolution of both emerging and established protocols by providing them with an additional revenue source for expanding there operations.
- Lastly, Arbidex has partnered with various protocols to expand their offerings to the Arbitrum network for the time and also introduced them to the era of Concentrated Liquidity for the first time on Arbitrum only, which offers better swap rates than regular DEXs on other chains. For instance, our partnership with Frax Finance has introduced their $sfrxETH to the Arbitrum network, bringing the highest yield liquidity staking derivative (LSD) to Arbitrum from Mainnet and BSC. This successful introduction has seen millions of dollar worth of sfrxETH bridged to Arbitrum from the mainnet, and multiple partner protocols, including Frax Finance, have been introduced to Concentrated Liquidity on Arbitrum for the first time as well which drives a lot of volume from other chains because of better pricing with decent liquidity only.
In summary, Arbidex has facilitated a swap volume of about $300m on the Arbitrum network, reflecting our efficient model’s effectiveness. Furthermore, we have redistributed around $500k to our users as real yield, creating a self-perpetuating cycle that benefits our users and enhances the Arbitrum ecosystem’s vibrancy. As we continue to innovate, partner, and grow, we reaffirm our commitment to adding lasting value to the Arbitrum ecosystem, one swap at a time.
Justification for the size of the grant: Our existing efficiency ratio over the past 6 months has been 1.85 (Efficiency = Volume/Liquidity) with current incentives, we anticipate that boosting incentives 3x-4x will result in a 3-4x increase in liquidity which would lead to a 5x-6x surge in volume over our monthly average, approximately $100 million/month, facilitated by ~$135,000 incentives to liquidity.
With previous data, average volume of $100m/month nets $62k in sole fees which is re-distributed to token which will be a 2x-2.5x increase in Real Yield resulting in token value appreciation resulting in higher aprs on farms.
Execution Strategy: As mentioned all the incentives are used for liquidity farming, the pools to be incentivised-
arb-usdc - 15%
arb-weth - 15%
weth-usdc - 12.5%
Arx-weth - 12.5%
wbtc weth - 12.5%
Used.e-usdc - 12.5%
Usdt-usdc - 12.5%
Partner pools - 7.5%
Grant Timeline: 2 months
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
Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.
Is the Protocol Native to Arbitrum?: Yes, Arbidex is native to Arbitrum Network only.
On what other networks is the protocol deployed?: N/A
What date did you deploy on Arbitrum?: 03/15/2023
Protocol Performance: We’re proud to share that Arbidex has performed remarkably well. The metrics reflect not only our dedicated efforts but also the value our platform offers to its people. And with little boost (grant) we can assure to reach new heights and levels.
- Transaction Volume: We’ve recorded an impressive total ~$340 million in transaction volume so far, with daily averages consistently maintaining around the $2 million. On peak days, this figure has touched $8-10 million, evidencing the robust user engagement our platform has and the efficiency it offers at lowest fees.
- Real Yield: Thanks to our community-first model, we’ve distributed roughly $500k back to the users staking ARX as real yield. This encompasses all sources of revenue, including fees, partner bribes, and other income streams.
- Market Cap to Liquidity Ratio: Among native DEXs, we’ve maintained the thickest liquidity and the lowest Market Cap/Liquidity ratio, which usually stands between 1.2-1.7. This optimal ratio has not only ensured a dense liquidity pool but also fostered a stable token price with a relatively low market cap and deep liquidity.
- Total Value Locked: Arbidex reached one of the highest tvl on Arbitrum on inception driving a lot of volume and capital on chain, with peak tvl of over ~$180m.
- Real Yield APR: The average APR for real yield on our stakers has been an impressive 120-200% APR over the last five months at an average that would net to an 70% ROI so far in sole real yield i.e. BTC ETH ARB USDC. This figure is testament to the value we provide to our users, who benefit from 100% of the swap fees and partner bribes going to them.
- Emissions: Currently, our effective daily emissions are only around ~$1k, while the fees generated range between $1.5k-$2k each day (daily average based on last 6 months). This closes us to one of the lowest inflation rates in the Arbitrum ecosystem in terms of incentives.
- Efficiency: In terms of TVL to Volume efficiency, Arbidex stands out, regularly utilizing more than 60-70% of the DEX’s liquidity. On certain days, we’ve even reached 150% efficiency, an indicator of how well we optimize liquidity. Thanks to concentrated liquidity and the 20% lower fees.
In essence, these figures reflect the compelling performance of Arbidex, its ability to maintain stability while generating substantial real yield, and its success in fostering an efficient, low-inflation, and high-liquidity platform that benefits all users. Our vibrant growth and commitment to providing exceptional value make Arbidex a key central player in the Arbitrum ecosystem and with the grant many new heights can be reached.
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application.]
SECTION 5: Data and Reporting
Provide details on how your team is equipped to provide data and reporting on grant distribution.
Is your team prepared to create Dune Dashboards for your incentive program?: Yes, on receiving the grant we are prepared to create Dune Dashboards tailored towards KPI and milestones to track them efficiently.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread? Yes, we will provide bi-weekly updates covering dashboards, metrics and explanations.
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