Report N°2: Arbitrum New Protocols and Ideas Domain
This report describes the development of the Arbitrum New Protocols and Ideas domain, up until the current date, the 16th of February, and is a continuation of Report 1. I have been currently leading the domain alone, and in this report I will cover all the applications and what has been achieved up to this point.
Note: the program is not currently complete and there is a leftover in the safe, currently both being allocated in one or more project and if possible shared with other domains, due to the increase of price of the $ARB token.
Domain Overview
- Number of proposals: 51
- Number of proposals accepted: 16 (one is a typo that got resubmitted)
- Funding Allocated: 264.000$
- Number of milestones in total of all accepted projects: 43
- Milestones completed: 7
- Funding Disbursed: 65,000$
Proposal categorization
As of the 16th of February, this is a classification of all the submitted proposals.
Similar to Report 1, DeFi is the most prominent category. What is interesting, tho, is that the classification has even out with the category of Infrastructure and NFT. It shows how builders, especially smaller ones (which are the main TAM of the Questbook program), are targeting NFT projects that are seen as opportunities for both the community and for new ventures.
This is the sub-categorization breakdown of the DeFi, Infrastructure and NFT proposals.
There is no change compared to Report 1: Derivative is still the most important subcategory.
The same applies for the subcategory of Infrastructure. It has to be noted tho that the amount of applications, increased in the second part of the program, have for sure helped in diversifying this sector. The same consideration of Report 1 can apply here.
NFT is now a new, main category analyzed that was not available in Report 1 due to the lower presence. We can see the focus in Deployment and Gaming.
For for the former, it can indicate how teams are indeed looking to build tools for ohter builders and users, such that they will be able to deploy NFT collections with no coding experience. This can be read as the willingness from the public to also experiment with specific utility of the NFT beside the classic PFP usage.
The latter, Gaming, is one of the category that is the most established for NFT alongside PFP. A lot of protocols wants to build services and tools on top of gaming NFT, showing how the landscape for this category is evolving over time in term of the creation of pick & shovels.
Proposals Accepted
The following is a list of all the accepted projects, on top of the one already shown in Report 1, with a summary of the proposal and related details.
Giveth
- Giveth wants to enhance its donation platform by integrating the Arbitrum network and incentivizing its use through a sponsored Quadratic Funding (QF) round. This initiative aims to widen fundraising capabilities for verified public goods projects and attract more users to Arbitrum. With $5,000 allocated for the integration process and an additional $2,500 for running the QF round, Giveth plans to require all participating projects to have an Arbitrum address, thereby promoting Arbitrum adoption. The integration will allow donations in ARB and spotlight Arbitrum through marketing efforts.**
- Funding allocated: 7,500$
- Milestones: Front-end and back-end development and user interface improvements needed for network integration. Milestone should be paid once ARB can be donated to projects on Giveth (5,000$), Run an Arbitrum sponsored QF Round. We will migrate $25,000, or more, of our donation.eth Matching Pool if we can gather Arbitrum related sponsors. Milestone should be paid once we have $20,000 (or more) in donation.eth’s Safe on Arbitrum (2,500$).
- Funding disbursed: 0$
- The proposal, developed in collaboration with Griff, was justified by the potential to open up new opportunities for projects through mechanisms not available in existing grant programs, aligning with objectives of developing infrastructure, expanding or migrating protocols/products to Arbitrum, and benefiting from the team’s proven experience. Supporting Giveth’s expansion on Arbitrum was seen as a net positive for the community and the blockchain ecosystem.
Address labeling - walletlabels.xyz
- The proposal outlines a project aimed at addressing the challenge of non-standardized and anonymous contracts and accounts on the Arbitrum One chain by developing a smart contract labeling system. This system will utilize both manual community-driven contributions and advanced automatic labeling to provide comprehensive and standardized datasets for labeling already deployed smart contracts and accounts on Arbitrum. The approach combines a manual labeling engine, where community members can contribute labels, with an automatic labeling engine that employs heuristic algorithms and machine learning to improve labeling accuracy. This dual approach aims to create a reliable database of smart contracts and account labels, enhancing the user experience across the Arbitrum ecosystem.
The project’s deliverables include a user-friendly platform for label contributions, real-time scanning for up-to-date labeling, and a comprehensive range of labels for various entities such as exchanges, protocols, and bots. The datasets will be freely accessible to users and developers, with an API endpoint provided for integration with applications built on top of Arbitrum One.
The long-term vision includes transitioning to a decentralized model, opening up access to other contributors, and creating an economic model that balances open-source ethos with business viability. The proposal outlines additional milestones for platform development and public launch, with a total estimated completion time of 10 weeks. - Funding allocated: 23,700$
- Milestones: Labeling Engines and Frontend Interface (8,000$), Platform Development (API Endpoints and Contributor Dashboard) (8,000$), Public launch (7,700$).
- Funding disbursed: 0$
- Address labeling and data enrichment services are not entirely new concepts, but there’s currently no comprehensive solution in Arbitrum. The project is positioned as a public good, with plans to eventually allow third parties to contribute data, creating a self-sustaining model that could serve the community. This innovative approach merits support, as it could significantly benefit the ecosystem. Moreover, the development of a wallet address data enrichment solution could be just the beginning, potentially attracting interest from larger entities in the crypto space.
Hunt NFT
- Hunt NFT is a cross-chain raffle marketplace that enables trading of NFTs across various blockchains, including Ethereum and Arbitrum, allowing participants to buy chances to win NFTs. The platform supports five blockchains and plans to include BTC Ordinals NFTs, with Arbitrum as the main bridge.
The team is focused on expanding Hunt NFT’s capabilities to include NFT bridges between Arbitrum and EVM chains, support for Bitcoin NFTs through a centralized bridge, and the integration of Bitcoin inscription for BRC20 inscribed assets. - Funding allocated: 7,500$
- Milestones: support nft bridge arb <—> evm chains (4,500$), support bitcoin NFT (bridge to evm & raffle bitcoin NFTs) (2,000$), support bitcoin BRC20 inscriptions (bridge to evm & raffle BRC20 inscriptions) (1,000$).
- Funding disbursed: 0$
- The recognition that the NFT market in Arbitrum is underserved means there is the need for more infrastructure development in this area. Similarly, the growing narrative around Bitcoin inscriptions/NFTs underscores the importance of building native bridges not just for Bitcoin but for other types of assets as well. Given the project’s thematic, NFT, the utility, bridging, and the raffle system, it was worth to support it in the program.
Mystic - enabling whitelabel NFT economies on Arbitrum
- Mystic offers whitelabel solutions and APIs aimed at empowering games, artists, and NFT-based projects to build and monetize their own economies. Recognizing the challenge creators face in monetizing transactions due to external marketplaces often not enforcing royalties, Mystic simplifies the creation and maintenance of a trading infrastructure. This enables creators to control transactions, enforce royalties, and facilitate buying, selling, exchanging, and renting of NFTs cost-effectively. Built by the team behind Mysticswap, Mystic plans to expand its services to the Arbitrum ecosystem, enhancing the platform with features like loyalty mechanics, a whitelabel NFTfi protocol, and a website builder to become the "Shopify for NFT marketplaces.
- Funding allocated: 13,260$
- Milestones: Arbitrum Deployment (4,260$), Growth and Ecosystem Adoption (9,000$)
- Funding disbursed: 0$
- The system is what I would define as a pick & shovel type of system, enabling tooling for NFT exchanges under some centralized rules (like royalty enforcement). The fact that there is an SDK that allows third parties to integrate the solution, for example, in their games, is quite important in my opinion.
Buddyguard
- Buddy-Guard is a social safeguard dApp, coupled with an attachable NFC wristband, conceptualized to enhance safety at in-person events. Launched in November 2023 and recognized as a finalist at ETH Global Istanbul, Buddy-Guard aims to address safety concerns by facilitating the creation of safety-guard groups through a simple tap of an NFC-enabled wristband. This wristband, storing the user’s private key, integrates seamlessly with a social app, allowing event attendees to easily connect and monitor each other’s safety. The project was born out of a real-world need identified by its co-founders during their stay in Istanbul for a series of Web3 events. By leveraging NFC technology and blockchain, Buddy-Guard not only aims to make post-event socializing safer but also introduces a privacy-preserving, in-real-life social application. The application incorporates a reputation and attestation system, incentivizes trust within safety groups using cryptocurrencies like ARB, USDC, or USDT, and plans to integrate a decentralized identity protocol to further enhance user security and privacy.
- Funding allocated: 22,500$
- Milestones: MVP development - Deployed in Arbitrum testnet, MVP → React Native application/test demo video, Log In with WaltID/Arbitrum account, Group creation, Adding/removing Buddy-Guard, SOS message sharing, Reputation system (11,000$), Alpha Testing- Functional wristband prototype, Test application with 30 individual users, New features → Safety tracking, GPS Map Group Members, Hangout Feature (=Event matching) (7,500$), Beta Testing - Test application with 200 users, 10 buddy-guard group created, 10 hangout events set up (4,000$)
- Funding disbursed: 0$
- This protocol is quite particular, and initially I was conflicted. The team showed capabilities and this is why they were able to win a few hackathons, so technicals are there for sure. But I thought that the connection with web3 was weak: everything was doable with web2 infra, by eventually using apple pay or samsung pay instead of the staking for the slashing penalty, and the usage of crypto, except maybe for making the PII (Personally Identifiable Information) truly unaccessible.
This is why I suggested the team to look into identity protocols: it was always natural to be able to share your own information through other protocols that are already live and solving this problem in arbitrum. The team took the matter in their hand, scouted several protocols which were then presented to me, and together we assessed the best to be integrated based on several characteristics, not only technicals but also culturals.
I am very happy the team was flexible enough to deviate a bit from their initial plan, because the current iteration of the product is way more complete in my opinion.
Would like to finally add a remark on one of the expenses, the “traveling” ones. While from the outside these could look like an unnecessary overspending, it’s actually needed in this case to test the product on the field, with different people and different needs, and gather feedback.
Unitap
- Unitap is designed to streamline the onboarding process for new users into web3 ecosystems, addressing the challenge of educating newcomers and preventing exploitation by bots and airdrop farmers. It offers a blend of educational content, simple and free onboarding, rewards, and Sybil-resistant mechanisms to ensure rewards go to real users. Unitap provides four main services: Learn Tap for web3 education, Gas Tap for free gas tokens to start on various networks, Token Tap for distributing tokens with specific requirements, and Prize Tap for raffle creation. Unitap aims to expand on Arbitrum, incentivizing new users and engaging DAO members in governance through reward programs. The team behind Unitap has good experience in web3 and previous contributions to projects like BrightID.
- Funding allocated: 25,000$
- Milestones: Improvements and Deployment of the Token & Prize Taps in Arbitrum One (11,000$), Launch an Arbitrum Onboarding incentive program for the next 1000 new Arbitrum unique users that bridge at least $25 to Arbitrum One. These funds will be passed to end users (2,500$), Launch an Arbitrum Governance incentive program through five raffles with a $500 prize in each raffle. These funds will be passed to end users (2,500$), Finalize the development of the dashboard provider to allow anyone to create Incentive programs and Raffles in a permissionless way (9,000)
- Funding disbursed: 0$
- The proposal is quite unique in the value that it wants to bring: a multi modular dApp that will, among others, allow users to claim gas tokens, incentivise small holders to vote and participate in governance, allow third parties to build their own incentivisation program and create a raffle system. Quite unique indeed. I like a lot especially the spin of governance, in a chain like arbitrum that is so vibrant in this sense. Beside this, the team has been behind this application for a lot of time showing commitment, and they have a broader vision that makes it worthwhile to finance their efforts.
Scattering
- Scattering is a project designed to improve the liquidity of NFT trading on Arbitrum by allowing users to instantly trade NFTs much like ERC-20 tokens. It introduces a system where users can deposit their NFTs into a Safebox, receiving in return sTokens, linked to the NFT’s floor price, and a Key, representing its unique value. This setup divides NFT trading into two markets: one for the general value on Uniswap V3 and another for unique value via auctions.
The project plans to support major ERC721 and ERC404 NFT collections on Arbitrum and aims to facilitate cross-chain transfers for top ERC404 collections from the Ethereum mainnet. - Funding allocated: 20,000$
- Milestones: ERC 404 Marketplace by Combining ERC404 Token Trading and ERC404 NFT Trading in One Portal on Arbitrum (10,000$), Advanced Functionalities and Growth of Adoptions (10,000$).
- Funding disbursed: 0$
- The idea of tokenizing NFT is not novel, but the approach taken here has some novelty indeed: separating the floor value of the token from the specific value, either aesthetically or in terms of traits. It’s indeed a very cool experiment to see, because one of the issues of NFTfi is that, so far, it could only be applied to floor NFT, unless the protocol (like jpegd) introduces a multiplier for traits. But this solution, the multiplier for traits, needs to be manually curated by an analyst, updated over time based on the market, it can only be applied to very liquid and traded collections, thus being an unscalable option for more generalistic protocols.
This introduction, paired with the intent of furtherly experimentation with ERC404 tokens, place Scattering in almost an R&D category in my opinion, and this is (also) why it’s worth exploring all of the above.
AMLOK
- AMLOK aims to solve on Arbitrum how entities can raise funds by introducing a blockchain-based liquidity solution. This solution is designed to ease the liquidity provisioning mechanism faced by web3 projects, which often struggle due to complex or inefficient funding mechanisms. AMLOK’s white-label tool will enable projects to launch customized funding campaigns, offering fractionalized investments and NFT-based rewards to backers, thereby enhancing user engagement.
The project plans to migrate its current platform from Polygon to Arbitrum and expand its services to cater to the web3 sector, facilitating fund raises in both USDC and FIAT. The key deliverable is a platform that allows for transparent investment campaigns and provides backers with fractionalized investment options and NFT rewards. The team aims to complete this within six months. - Funding allocated: 24,560$
- Milestones: Releasing AMLOK on Arbitrum (14,000$), Pilot Launch and Market Validation (6,500$), Integration of On-Ramp (4,600$).
- Funding disbursed: 14,000$
- With the Amlok team the biggest hurdle was to find the right milestones for a product that is mostly aimed to offchain activity, and that uses crypto as a way to reduce friction in already existing use cases in the world.
One of the thing i was very happy to see was the professionality and experience of the team: they were able to properly address not only the characteristics of their product, but also the compliance side of it and in general the approach in showing why their idea has value. Top notch team/approach, something you want regardless of you building a web3 app or a fridge.
Idea per se is good but not totally novel: you could simplify it as a funding platform putting together blockchain and more classic IRL mechanics. What I really like is the way the team is approaching the problem, in a very value oriented and professional way. So the idea, while being relatively “simple” (no offense for anybody, I love simple ideas), could have amplification just because of the team approach to it.
Note: for this project, milestone 1 was paid upfront. This is because the funds are effectively needed for the team to operate. While this is a (small) risk for the program, the professionality of the team and the amount is such that is a risk worth taking, especially because it is needed for the application to move forward.
Conclusion
Thanks to the growth of $ARB, starting from an initial budget of less than 180,000$, we managed to allocate more than 250,000$ for severak protocols.
We are going toward the natural end of this program, and the numbers above (proposal approved in particular) could be an indication of what comes next in a future iteration.
I really like how a lot of these protocols are, indeed, “smaller” dApp that are niche enough to not be able to access higher fund routes, but also important enough that users will be indeed able to exploit the value of their idea.
Because of this, I am personally proud of what we achieved, and the builders we have helped: I don’t know how many of these would have been able to get to their personal finish line on their own, my educated guess is “some” of them due to how hungry these teams are.
Despite this, having the breathing room of knowing that some costs are covered can really help you focus on what you want to do most: build.
One that that is clear is the following: protocols tend to ask for the maximum amount possible.
And, if I can be honest, there is nothing wrong with that: in their shoes (and I have been there and I am already there) I would do the same, where same is trying to get the most out of a very positive opportunity.
Why am I writing this? Because is an important statistic to take in account for a next iteration of this program, or in general for any development grant program, in term of rules vs behaviour of grantees. Food for thoughts.
As stated in Report 1, I am looking forward to opening a discussion on how we can further enhance and improve this program.