[Artichoke Protocol][FINAL][STIP - Round 1]

Archive Short Term Incentives Program (STIP) Round 1
1

SECTION 1: APPLICANT INFORMATION

Applicant Name: 0xCXXVIII & @Lysis

Project Name: Artichoke Protocol

Project Description: Artichoke is a single-sided liquidity protocol (SSLP) built on top of the Arbitrum Network. Artichoke enables users to provide liquidity to a universal liquidity pool (Omnipool) using only a single asset on top of AMMs - unlocking the yield opportunities in DeFi liquidity provision for everyone.

The Omnipool is comprised of isolated subpools, further referred to as “tails” which enable single-asset liquidity provision (for example for tokens like GMX, GRAIL, MAGIC, ARB etc) - all tails are interlinked through the synthetic liquidity asset tCHOKE. More information can be found in our gitbook.

Team Members and Qualifications:

  • 0xCXXVIII - BD Lead - BSc in Telecom Engineering
  • 0xCCLVI - Smart Contract Lead & Engineer - BSc in Computer Engineering
  • 0xjpq - Sr Smart Contract Engineer - BSc in Computer Engineering
  • TheSwissAlpaca - UX/UI Lead
  • HL - Head of Comms and SMM
  • WhiteTPoison - CM

Project Links:

CONTACT INFORMATION

  • TG: @CXXVIII128
  • Twitter: https://twitter.com/MNJQQQQ_
  • Email: 128@articho.ke
  • Do you Acknowledge That Your Team Will Be Subjected to a KYC Requirement?: Yes

SECTION 2: GRANT INFORMATION

Requested Grant Size: 370K ARB

Grant Matching: Current CHOKE/USDC LP on Camelot can immediately start rewarding ARB allocation with CHOKE rewards on Nitro Pools.

Grant Breakdown: Upon receiving the grant, we plan to allocate the funds in the following manner:

  • 60% (222K ARB) for Liquidity Incentives over Artichoke’s Omnipool and Tails, distributed alongside users that allocate funds to specific Tails

  • 26% (96,6K ARB) for LP incentives for a newly set up $CHOKE/ARB pool on Camelot

  • 14% (51,8K ARB) allocation for future partner tail deployment & incentives

Funding Address: 0x23B5f64C56277fdBa138EF02361c61a7f5E4D137 (GnosisSafeProxy | Address 0x23b5f64c56277fdba138ef02361c61a7f5e4d137 | Arbiscan)

Funding Address Characteristics: ⅔ Multisig.

Contract Address: TBD when Omnipool and Tails are live.

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Objectives: This grant will be used to incentivize Omnipools growth and help the Artichoke ecosystem grow as a whole.

Key Performance Indicators (KPIs):

  1. Omnipool TVL: We aim to achieve sustainable and constant TVL growth across the Omnipool with a 2 Million USD equivalent being a first milestone.

  2. Number of tailAssets supported by the Omnipool: Starting out with 4 supported tokens initially (USDC, ARB, CHOKE and PartnerTail) as a stable basis, we aim to add at least 2 new tail assets per month for 6 months, focusing primarily on Arbitrum native projects with proven track record that show growth potential.

  3. Trade volume: Trade volume routed through the Omnipool shall follow the growing TVL & tailAsset metrics and show consitent growth - tracking via Dune dashboards on a daily/weekly/monthly level will be made available upon mainnet deployment.

These 3 key metrics are in our opinion ideal to monitor platform utilization and growth in order to provide verifiable proof of the effectiveness of potential incentive campaigns in an AMM/SSLP setting.

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:

Artichoke’s primary aim is deepening liquidity for Arbitrum native projects, many of which struggle with an overabundance of idle treasury tokens & fractured liquidity - both of which can be addressed by our Omnipool-based single-sided liquidity solutions. Project teams & DAOs can utilize their native tokens by setting up a tail on our protocol without the need to use additional treasury funds held in ETH or stablecoins for pairing.

The simplicity and low-risk (pertaining to Impermanent Loss risk) design of Artichoke can open the Arbitrum ecosystem up to liquidity providers who are seeking new yield opportunities without having to engage with the complexities of token pairs, liqudity ranges, impermanent loss etc. - thus providing growth opportunities for the entire ecosystem and first-mover advantage for Arbitrum DeFi.

Being able to provide incentives to kickstart TVL growth & tail deployment will be a catalyst not only for Artichoke’s growth, but all projects whose native assets are supported by the Omnipool via tails.

In order to scale and maintain this piece of potentially critical DeFi infrastructure, there can be no compromises made on the security side - audits by highly reputable providers & bounty programs are required to ensure the safety of user funds & foster user’s and partner’s trust in the protocol - the portion of the grant not used for incentive programs will be dedicated to these efforts.

In order to scale and maintain this piece of potentially critical DeFi infrastructure, there can be no compromises made on the security side - audits by highly reputable providers & bounty programs are required to ensure the safety of user funds & foster user’s and partner’s trust in the protocol.

Justification for the size of the grant:

Our main objective is TVL growth for Arbitrum, establishing ARB as a default asset in DeFi both in pair based AMMs & SSLPs, and the growth of Artichoke through deployment of additional tails of partnered Arbitrum projects - the grant request & intended use are built around these three aspects.

1. TVL growth/LP incentives - requested funds: 370K ARB

ARB incentives for liquidity providers to kickstart TVL growth for Artichoke will be tailored such, that rewards are allocated towards the most relevant tails & can be sustained until Feb 2024, the intended date by which all grant funds of this round are to be utilized by recipients

Besides incentivizing liquidity provision for core assets such as ETH, USDC & ARB, rewards for newly added tails by Arbitrum ecosystem partners are another important element meant to foster Arbitrum’s cohesion & mutually beneficial growth - in order to mitigate predatory listings (for example to “farm” ARB rewards), adding of new/low liquidity assets is to be a guided process and subject to community consensus.

2. Establishing ARB as a core DeFi asset

We strongly believe that the ARB token will play a vital part not only in the governance but also in the liquidity landscape of Arbitrum and beyond - as a core pairing asset besides ETH and stablecoins.

As the native asset, organic demand for ARB should be facilitated wherever possible - in the context of this grant request, we aim to launch an ARB/CHOKE pool on Camelot as our second main pair besides ARB/USDC and incentivize LPs via Nitropool rewards.

This initiative goes hand in hand with deploying the ARB tail as a “Day 1” asset of the Artichoke Omnipool, allowing anyone to provide liquidity for it without the need to pair with other assets.

3. Artichoke Protocol growth

Following the deployment of the initial USDC, ARB & CHOKE tails, the Omnipool is equipped to onboard project tokens with lower liquidity & higher expected volatility - a base pool of relatively stable assets is required as a foundational buffer upon which these “riskier” tails can be layered.

The ability of the Omnipool to absorb and thereby utilise formerly dormant treasury tokens without the need to pair with other assets, offers project teams an avenue towards deeper liquidity and revenue, which in turn helps with sustainability, strengthens investor confidence and makes for an overall healthier ecosystem.

Artichoke aims to onboard all relevant Arbitrum ecosystem projects as partners & add tails for their native tokens to the Omnipool.

In order to incentivize deployment of new tails & maintain a high TVL for these tokens, a portion of the grant will be used for LP incentives as well as one-time rewards for successful deployment.

Ultimately the Omnipool should contain significant liquidity for all established Arbitrum native project tokens & offer a low barrier to entry for new LPs through single-sided liquidity provision - serving as a central piece of DeFi on the network.

Execution Strategy: If ARB funds are allocated to Artichoke’s Ecosystem, we will immediately start incentivizing existing pools on current AMMs (Camelot V2 & V3). On the other hand, after completing all the necessary security audits, we will start deploying Omnipool tails such as:

  • ARB/tCHOKE
  • USDC/tCHOKE (with ARB incentives)
  • Further pools: ETH/tCHOKE, wBTC/tCHOKE, GRAIL/tCHOKE, GMX/tCHOKE, LINK/tCHOKE

Artichoke will take into account pairs that are already being incentivized such as the CHOKE/USDC pair on Camelot.

Grant Timeline:

  • October 3 to October 11, 2023: Application Review Deadline
  • Mid October: KYC and Grant Administration
  • Late October: Deployment and Tail Contract Implementation (informed to Arbitrum Foundation)
  • November - December - January: Artichoke Incentives Program Starts on ARB/tCHOKE and USDC/tCHOKE Tails.
  • February: Incentive Program Ends, presenting final report.

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

Is the Protocol Native to Arbitrum?: Yes

On what other networks is the protocol deployed?: No

What date did you deploy on Arbitrum?:

Protocol Performance: Since the CHOKE token went live on Arbitrum (and Camelot) we’ve reached the following milestones:

Protocol Roadmap: Until 2024, our public roadmap is detailed as follows:

  • September
  1. Implement Audit Corrections.
  2. AMM In-House Prototype: ensure compatibility with Artichoke’s existing infrastructure for composability.
  3. Conduct Final Pre-Release Testing
  • October
  1. Beta launch for CHOKE stakers
  2. dApp monitoring and user feedback
  3. Initiate Second Audit with Security Firm
  • November
  1. Complete Final Security Audit: Implement necessary changes based on the audit results and finalize security measures.
  2. First External Tail Deployment: Vetting and integration for partner token tails into the omnipool.
  3. Public Beta Launch: Release the beta app for public testing.

Audit History:

SECTION 5: Data and Reporting

Is your team prepared to create Dune Spells and/or Dashboards for your incentive program?: Yes

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread? 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

3 Likes
2

Grant is intended entirely for liquidity mining incentives and thus, the grant should not be accepted with the current strategy outlined due to the fact 157.5k ARB is marked to use for audit costs.

Please re-read the application guidelines and amend to be reconsidered.

2 Likes
3

Hello @0xCXXVIII thank you for submitting! Please make the following changes to your proposal to comply with the program rules.

  1. The funding address you provided is not a multisig as seen on Arbiscan. Funding addresses must be a multisig per the following program stipulation.
  1. Please note grant funds may only be used to incentivize Arbitrum contracts and can not be used for “Security Audit, consistent bounties and mathematical research” as per the following rule.

Please edit your submissions to be considered for a snapshot vote.

1 Like
4

Hi @Matt_StableLab. We appreciate the feedback and we’re working on complying on both suggestions. Hopefully we will get updated by tomorrow, thanks!

5

Hi @flindy! We’re working on an update for today. Appreciate your feedback!

6

Grant Breakdown: Upon receiving the grant, we plan to allocate the funds in the following manner:

  • 65% (292.5K ARB) for Liquidity Incentives over Artichoke’s Omnipool and Tails, and to boost current CHOKE LPs on Camelot.
  • 35% (157.5K ARB) for Omnipool’s Security Audit, consistent bounties and mathematical research.

If I understood correctly, you are going to use 35% of ARB funds to finance an audit? While an unspecified amount of the other 65% goes to incentivize your own native pair.

If that’s the case, that would be ridiculous. The grants are meant to bootstrap the ecosystem activity and engage users and on-chain activity. Paying an audit (something that should be the baseline for any project), definetely doesn’t help anyone other than your auditing firm or yourself to finance costs.

7

Agree with the fact that the required funds won’t bring any value to arbitrum’s ecosystem and looks like an opportunistic way to squeeze some funds. On top of that, being allergic to artichoke’s since a very young age, I must say I do not have any sympathy towards your project Sir

8

image

It requests a subsidy higher than the tvl of the protocol.

What are the reasons for incentivising a new pool with its own token? How does this benefit the arbitrum ecosystem?

Can you explain in more detail what criteria you will take into account when awarding incentives?

1 Like
9

I think the size of request is fine given that they are aiming to deploy their tails soon in the subsequent month which can potentially increase their TVL to their first targeted milestone mentioned.

But I agree that the allocation to future partner tail deployment & incentives should be written in better details, through explaining how it will roughly work since it is not yet a feature. This will aid in both clarity and future accountability.

1 Like
10

Hey @axlvaz_SEEDLATAM.eth. Thanks for sharing your concerns. I’ll try to address them one-by-one:

(1) Those numbers shown on Arbitrum’s Omnipool are from our Alpha Version (only available for a few users plus auditors). This is going to change once Beta Version is live for CHOKE stakers. Protocol TVL - from liquid staking - is currently 760K USD (ref: Artichoke | Single-sided L2 LP protocol on Arbitrum), which currently represents over 32% of the whole supply. Moreover, Camelot’s CHOKE TVL is 425K USD.

(2) As you can see from our documentation (ref: Virtual Omnipool and Tails - Overall), Artichoke first version is built on top of Camelot. Both LPs (CHOKE/USDC and CHOKE/ARB) are going to be key suppliers for our Omnipool, Tails and our synthetic asset tCHOKE. The ratio between CHOKE & tCHOKE is crucial for Omnipools overall health. On the other hand, ARB allocation will be used to incentivize new liquidity providers that will help make Artichoke’s Omnipool Ecosystem more robust. Documentation will help understand in detail.

(3) As stated on Execution Strategy, partners are crucial for Artichoke’s Omnipool as well. We’re in talks with several protocols that will deploy their own Tails and also supply highly-liquid tokens.

To further incentivize SSLP for new users, those who stake partner tokens on our Tails are going to be rewarded with ARB tokens as well. In that sense, with more users using SSLP, the overall protocol TVL will increase exponentially. In parallel, AMM partners (such as Camelot) with Artichoke’s implementation will have its TVL increased: consequently, Arbitrum TVL will keep increasing with DeFi usage.

Looking forward to hear from you again.-

11

hey @0xCheeezzyyyy, glad to see you here as well sir. We will get further into detail on this. You can read what I replied above quoted here:

12

Thanks for your feedback! We’ve already updated our proposal in order to fully comply with Arbitrum’s framework. Looking forward to hear from you again

13

Hi @Matt_StableLab. We’ve modified current STIP to meet the Arbitrum’s framework criteria. Looking forward to pre-approval for Arbitrum’s Snapshot so we can notify moderators for [FINAL] version.

Thanks in advanced.-

14

After modifying our STIP according to comments, we’d like to be considered to [FINAL] version @stonecoldpat @cliffton.eth

15

Post has been marked FINAL and locked.

16

Sadly I have to vote no on your proposal. The proposal on its own would be more reasonable if CHOKE wasn’t being incentivized, that outweighed the benefit to the ecosystem.

I hope there are enough funds for Round 2 to go on and you can reapply without incentives for CHOKE LPs.

17

Firstly, thank you for your proposal. Although the requested grant amount is relatively lower, the way the grant is to be used did not satisfy us. We think that the purpose is to benefit the native token holders/stakers of the protocol rather than the Arbitrum ecosystem.

Therefore, as ITU Blockchain, we are voting “Against” this proposal.