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: frondoto
Project Name: Beefy
Project Description: Beefy automates yield farming to make DeFi safe, easy and efficient for all. We deliver multichain yields to you using scale to unlock higher returns. Beefy is a globally-distributed DAO.
Team Members and Qualifications:
Weso - Solidity Developer
Roman Monk - Solidity Developer
Kexley - Solidity Developer
EPETE - Operations
Jack Gale - Finance
Frondoto - Business Development
Chebin - Backend Developer
Chimp - Backend/Frontend Developer
Eren - Frontend Developer
DefiDebauchery - Infrastructure
MrTitoune - Infrastructure
YR - Design
TBC - Marketing & Social Media
Email: frondoto@beefy. com
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: 900,000
Grant Matching: -
85% Beefy Boosts on Arbitrum vaults.
15% Bribes for Beefy tokens on ecosystem protocols.
Funding Address: 0x3f5eddad52c665a4aa011cd11a21e1d5107d7862
Funding Address Characteristics:
Beefy’s multi-sig Treasury is controlled by the Treasury Council which has 8 members, and requires consensus from any 4 to sign off on any multisig transaction before it can be executed.
Details of the current 8 members and their Treasury EOA wallets are:
0x3f5eddad52C665A4AA011cd11A21E1d5107d7862 for Arbitrum Treasury
0x2951C806A75B19954Ce0BEd477676A54f3c1C200 for Boost Factory smart contract that will be used to create the incentivization contracts for different vaults.
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.
The primary objective of this grant is to drive user adoption by introducing new users to the secure, fast and low-cost Arbitrum Ecosystem. We intend to showcase Arbitrum and its flourishing ecosystem of protocols and projects both to our diverse multi-chain user community, and to a wider pool of potential users through our marketing and promotions. Our proposal aims to implement a strategic rewards distribution approach that not only garners substantial participation but also yields measurable and impactful outcomes.
We believe that a clever, carefully-planned and consistent programme of incentives, deployed by experienced teams like Beefy, can dramatically improve the reach of blockchain projects and ecosystems. Our tried and tested formulas for deploying incentives have already yielded considerable value through our own initiatives and other grant funding; we look forward to expanding our existing work to focus more on the Arbitrum ecosystem.
Key Performance Indicators (KPIs):
Our experience working with large incentives programmes to date has shown us that a range of different indicators need to be considered together and in parallel to assess the performance of incentivized activities, both individually and in aggregate. Beefy has developed privacy-preserving, in-house analytics tooling that allows us to actively monitor and report on the following metrics:
total value locked (TVL) in our smart contracts;
volume and value of interactions with our smart contracts;
quantity of and value of individual users and wallets interacting with or with funds in our smart contracts;
user performance in each smart contract, including yield (i.e. regardless of price appreciation) and profit/loss (i.e. net of price appreciation) over time;
protocol performance from each smart contract, including fees and incentives paid from operations; and
value and volume of interactions using our peripheral services, such as our ZAP contracts (which facilitate optimal entry and exit from our smart contracts using any token obtained through swap aggregators like 1inch).
As Beefy is constantly monitoring these various metrics, we have access to a very large foundation of data (internally known as our “Data Barn”), which is used for analysis of our performance. In particular, the key performance indicators which we think demonstrate the effectiveness of incentives programmes well are:
- TVL arriving during the incentive period, pre-staking (i.e. after announcement but before the incentives are live) and immediately after the incentive period;
- Long-term TVL remaining in the smart contract at specific intervals after the incentive period, or even over multiple incentive programmes;
- TVL departure during the incentive period (e.g. as the average incentive yield drops with adoption), at the end of the incentive period and immediately after the incentive period;
- TVL change per incentivize token deployed, or per value of incentives deployed (e.g. in USD);
- Proportion of new versus existing users/wallets engaging with: (1) the incentivized smart contract; (2) the incentivized protocol; (3) the incentivized chain; and (4) Beefy.
- Average position size in the incentivized smart contracts before, during and after the incentive programme; and
- Average number of interactions with the incentivized smart contracts before, during and after the incentive programme.
Given the amount and range of available data and options, our internal analysis tends to focus on the metrics and indicators that we think are most relevant in the context of the incentive programme. For example, brand new protocols or products require adjustments to account for the product finding product-market fit at the same time as the incentive programme (so expectations must vary significantly between launch and long term performance).
As such, we propose to provide reporting covering a variety of metrics and indicators discussed (and any others which are relevant), rather than to report routinely on static KPIs across all incentives programmes supported by the grant.
Our team may also develop dashboard(s) for the community to monitor the spending or performance of the grant, including with the metrics and KPIs detailed above. The precise scope and content of a dashboard would need to be agreed after the degree of funding is confirmed, and as part of Beefy’s implementation plans.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
Beefy is a gateway into DeFi. Many of our users feedback that Beefy’s straightforward autocompounding vault design and user-friendly interface made interacting with different types of DeFi products and protocols substantially easier for them, which in turn has encouraged them to dive deeper into the space as their confidence in Web 3.0 grows. Though the number of new users entering the space right now is significantly below peak levels, adoption nonetheless continues to build momentum. Offering exceptional incentivized yields on Arbitrum will encourage new users to enjoy their Web 3.0 experiences, by way of the fast and reliable Arbitrum experience that we all know and love. And ensuring these experiences are taking place on captivating and user-friendly applications will help solidify those early experiences into longstanding habits.
Beefy’s app is designed from the ground up to be natively multi chain. This is no simple task, as presenting data on hundreds of vaults, across 22 different blockchains, in a way that’s still enjoyable and easy to understand, is an enormous engineering challenge. However the end result fosters enormous growth, not only for users - who benefit from easy access to hundreds of protocols all across Web 3.0 - but also for protocols aiming to increase their visibility among existing audience.
The majority of the proposed budget for this grant is targeted at deploying incentives on top of Beefy’s Arbitrum vaults. Incentivized vaults will automatically move to the top of the Beefy’s app filters, leaving them on prime display to all users and visitors on Beefy’s site. In addition, each incentive programme tends to be accompanied by support from partner protocols who are being boosted, who typically assist Beefy with co-marketing, community engagement and sometimes matching incentive contributions. Ultimately, the idea is not only to boost the rewards of certain vaults, but also to educate new and existing users on the protocols and tokens involved in our campaigns, and how their yields are being generated.
Justification for the size of the grant:
As the largest yield optimizer on Arbitrum One - that’s held down tens of millions in TVL for years at the time of writing, Beefy is an adept and proven project for executing on and delivering value from grant funding. Equivalent efforts on other chains have seen Beefy run multiple long term campaigns simultaneously, whilst attracting and capturing millions in TVL as a result of our natively multi-chain audience. Our well-established incentive programmes can therefore easily and effectively put tens of thousands of incentives to use at any given time, and so we are requesting the maximum amount permitted.
We at Beefy share the same values as the broader Arbitrum ecosystem. We know and understand that Ethereum’s scalability is crucial to onboarding the next billion users. As one of the first protocols to deploy on Arbitrum One in September 2021, we have been working closely with core players from across the ecosystem for years to help Arbitrum become the thriving ecosystem it is today. With the support of significant grant funding, we at Beefy expect to continue fueling growth and exciting use cases on Arbitrum for the next two years.
Our execution strategy is divided among there core categories:
(1) Boosts: The majority of the incentives (c. 85%) will be distributed through our Beefy “Boost” incentive campaigns. The standard duration for a boost is 28 days (though can vary), and the amount of tokens depends on the TVL of the pool, the contribution of the partners, the level of interest from the community and the general context. Beefy Boosts starts with a pre-stake period, accompanied with announcements through our social media channels to raise awareness. Rewards start accruing to users a few hours after. Due to the hands-off nature of Beefy users, after the boost finishes, many times users don’t withdraw, since the vaults still provides an underlying, unincentivized yield. Boosts will be run in partnership with other Arbitrum ecosystem projects, to support native and local tokens, liquidity and governance, and bolster the entire ecosystem.
(2) Bribes: As liquidity models have developed, many protocols have understood and adopted the liquidity flywheel which arises from allowing users to incentivize liquidity through incentive gauge voting, vote escrow and bribes. The Solidly model unlocks the power of bribes, by allowing early users to access disproportionate rates of incentives for minimal spend, and with incentives returning to the spender through rewards on veNFTs. Beefy has mastered the prevailing liquidity flywheel model, and works actively with a dozen or so partner decks to add moment, by providing liquidity, participating in gauge votes and conducting bribe campaigns. The proposed budget allocates c. 15% of funding to participate in the various core liquidity flywheels which power Arbitrum’s thriving DeFi ecosystem.
This proposal aims to distribute the proposed amount of funding over the course of 4 months, at a relatively even pace in line with the streaming of incentives into the Beefy treasury through Hedgey. In that time, we plan to showcase at least 12 different Arbitrum partners, together with dozens of different vaults and tokens from all across the ecosystem.
The ultimate implementation of the protocol is flexible, and can respond to the needs of Arbitrum community and our users, though we anticipate that Arbitrum-centered incentive programme will run more or less non-stop throughout the 4 month funding period. We plan to demonstrate our performance against the above KPIs through live dashboards, and regular reporting, we also anticipate that there will be external sources of truth to demonstrate progress, such as the change in TVL for Beefy and its Arbitrum partners arising from our incentives campaigns.
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?:
No. Beefy predates Arbitrum One’s launch. Instead, Beefy launched on BNB Chain in September 2020. Beefy arrived on Arbitrum One within the first month in September 2021.
Following the fall of Multichain, Beefy has migrated its $BIFI governance token to live natively on Ethereum and its rollups. Beefy has selected Arbitrum as a hub chain, through which it will route a majority of its revenue from other chains, and on which liquidity for the governance token will be actively supported.
On what other networks is the protocol deployed?:
- BNB Chain
- Polygon PoS
- Polygon zkEVM
What date did you deploy on Arbitrum?:
20 September 2021
Beefy has 200M of TVL of which 27M is on Arbitrum One (c. 13.5%)
The protocol had 1,000 transactions in the last 24 hours, of which 72 transactions were on Arbitrum One (c. 7.2%)
Total revenue (including all revenue sources, e.g. validators) of $634,827 in the second quarter. $695,229 in the first quarter. Annualized this equates to $2,660,112.
Revenue from our Arbitrum One vaults was $49,542 for the second quarter, and $41,963 in the first quarter. Annualized this equates to $183,010, or around 7% of Beefy’s total revenue.
In terms of fees, Beefy’s fees are broken down into treasury revenue from vaults and vault fees dedicated to governance incentives. Beefy does not charge fees on its other sources of revenue.
Beefy’s total fees were $817,628 in the second quarter, and $738,647 in the first. This equates to $3,112,550 in fees on an annualized basis.
Beefy’s total fees attributable to Arbitrum One were $72,204 for the second quarter, and $64,867 in the first quarter, which equates to $274,142 in annualized fees (8.8% of total).
Fees dedicated to governance incentives from our Arbitrum vaults were $22,662 for the second quarter, and $22,905 in the first quarter. Annualized this equates to $91,132 in incentives arising from Optimism alone.
*Current internal figures only
Quarterly Report - 2023 Q2 Beefy Quarterly Report June 2023.pdf | DocDroid
Quarterly Report - 2023 Q1 Beefy Quarterly Report March 2023.pdf | DocDroid
DAOMeter Report - daometer.xyz/review/beefy
DefiWars Page - defiwars.xyz/projects/beefy
Beefy generally does not adopt fixed roadmaps, in recognition of their limitations and propensity to distract from real operations on the ground. Instead, our decentralized contributor team tend to adopt various short-to-mid term plans covering our different competences and areas, and collectively focus on balancing priorities and timescales across the different competing areas.
With that backdrop in mind, our development team are currently focused on: (1) the completion of our
governance token migration beefy. com/articles/bifi-migration; (2) the rollout of concentrated liquidity products beefy. com/articles/beefy-cl; (3) the development of crosschain products beefy. com/articles/lz-aura; and (4) the development of new zap tooling beefy. com/articles/revolutionizing-beefy-zap-in-partnership-with-1inch. We are also constantly focusing on improving our interface and user experience, such as with new tooling like our Yield Module beefy. com/articles/insights-that-inspire-introducing-the-beefy-yield-module.
At the same time, our partnerships and marketing teams continue iterating on our core-product market fit by: (1) partnering with new chains and protocols; (2) promoting and boosting existing partner products and developments; (3) participating in incentivization and distribution of new/popular products/tokens; and (4) marketing the best of our products effectively to our target audience.
Separately our DAO is taking constant strides towards increasing transparency and safety across a very broad range of activities. For instance, in 2023 Beefy has: (1) adopting quarterly financial reporting beefy. com/articles/quarterly-report-q2-2023. to maximize transparency with respect to our operations; (2) implemented a Timelock Monitor service beefy. com/articles/safeguarding-in-plain-sight-the-beefy-timelock-monitor. to watch for upgrades in protocols incorporated into Beefy; (3) adopted a new Treasury Dashboard beefy. com/articles/offering-true-transparency-with-beefy-s-treasury-dashboard. to display live information about our DAO’s assets.
Beefy has undertaken 6 audits for our existing autocompounding vaults, which are all available in the our audits GitHub repo github. com/beefyfinance/beefy-audits. All major and critical issues have been resolved before code deployment of the relevant code. Beefy has never been hacked.
SECTION 5: Data and Reporting
Provide details on how your team is equipped to provide data and reporting on grant distribution.
Beefy’s contributor team collectively offers a range of skills and experience for monitoring and reporting on performance with grant funding.
On the technical side, our backend data infrastructure - Data Barn - collects, holds and analyzes a wide range of on-chain information about the Beefy protocol. For liquidity incentives of the kind contemplated by this proposal, we closely monitor protocol activity before, during and after a programme is deployed, to evaluate its effectiveness, the nature of the population interacting with the programme and the behaviors of participants. We use this data internally to refine and hone our approach to future programmes, and externally to inform partners and funders of the impact of our efforts.
Alongside this, our business development and finance teams closely track uses of grant funding against our agreed plans and targets, as well as carefully planning future uses to optimize for effectiveness. By targeting programmes around key time periods and events, and focussing on specific areas and narratives, we aim to effectively capture and disseminate information about our grant funding both publicly to users and the community, and internally or to our partners and funders. Details of all grant funding and spending are captured by our accounting systems and processes, and recorded in our quarterly financial reports Beefy Quarterly Report June 2023.pdf | DocDroid. to help maximize transparency and feedback.
Is your team prepared to create Dune Dashboards for your incentive program?:
Yes, we are aware that having reliable data is elemental for measuring success. That is why we developed in-house, privacy-preserving data tools to measure activity in our protocol. We are also keen to build a community accessible dashboard for people to follow determined KPIs.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
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