Boost (Prev. RabbitHole) STIP Addendum

Archive STIP Bridge Addendum
1

Information about STIP/STIP Backfund

1. Can you provide a link to your previous STIP proposal (round 1 or backfund)?

2. How much, in the previous STIP proposal, did you request in ARB?
1,000,000 ARB

3. What date did you start the incentive program and what date did it end?
December 25, 2023 → Mar. 29, 2024

4. Could you provide the links to the bi-weekly STIP performance reports and Openblocks Dashboard?
RabbitHole: Retro STIP Analysis
(4/1/2024)

Bi-Weekly Updates:
RabbitHole Bi-Weekly Update: Mar 29, 2024
RabbitHole Bi-Weekly Update: Mar 15, 2024
RabbitHole Bi-Weekly Update: Mar 2, 2024
RabbitHole Bi-Weekly Update: Feb 17, 2024
RabbitHole Bi-Weekly Update (Feb 02, 2024)
RabbitHole Bi-Weekly Update (Jan 19, 2024)
RabbitHole Bi-Weekly Update: January 5, 2024

Openblocks created a dashboard here.
Boost created a bespoke campaign dashboard here.

5. Could you provide the KPI(s) that you deem relevant for your protocol, both in absolute terms and percentage change, month over month, for the first of each month starting from October 2023 until April 2024, including the extremes? If you don’t know what KPI might be relevant for you or how to properly define them, please refer to the following document:[Arbitrum DAO] OpenBlock Labs Incentive Onboarding Spec
Daily query
Monthly query

DAU

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Transaction Fees

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ARB Expenditures/Claims

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month MAU MAU (% MoM Change) Claims Claims (% MoM Change) Actions Actions (% MoM Change) Total Txs Total Txs (% MoM Change) ARB Rewards ARB Rewards (% MoM Change) USD Rewards USD Rewards (% MoM Change) Monthly Claim TX Fees (ETH) Monthly Claim TX Fees (% MoM Change) Monthly Action TX Fees (ETH) Monthly Action TX Fees (ETH) (% MoM Change)
October 9982 N/A 17671 N/A N/A N/A 17671 N/A 2035.91 N/A 1767.840221 N/A 1.350106631 N/A N/A N/A
November 1887 -81.10% 2277 -87.11% N/A N/A 2277 -87.11% 234.56 -88.48% 239.3997852 -86.46% 0.4010748222 -70.29% N/A N/A
December 43287 2193.96% 75489 3215.28% 101390 N/A 176879 7668.07% 62360.75 26486.27% 92816.96447 38670.70% 79.80163477 19796.94% 6.411733159 N/A
January 33910 -21.66% 598029 692.21% 604828 496.54% 1202857 580.05% 241442.805 287.17% 452537.0801 387.56% 78.68796042 -1.40% 48.87434758 662.26%
February 51366 51.48% 713377 19.29% 713023 17.89% 1426400 18.58% 318903.065 32.08% 610572.603 34.92% 79.64767691 1.22% 78.83462613 61.30%
March 155756 203.23% 1018600 42.79% 1018546 42.85% 2037146 320440.8 0.48% 608650.0929 -0.31% 47.89438069 -39.87% 50.5111989 -35.93%

Boost integrated with 17 Arbitrum protocols as a result of the STIP grant. Integrations allow anyone to create incentives for these protocols, creating infrastructure that will last far beyond STIP:

  • Woofi
  • Balancer
  • Camelot
  • Zora
  • Knights of the Ether
  • Tally
  • Mux
  • JOJO
  • Sushiswap
  • GMX
  • Trader Joe
  • Pendle
  • Vela
  • handle.fi
  • Treasure DAO
  • Symbiosis
  • Connext

6. [Optional] Any lessons learned from the previous STIP round?
A few key lessons were learned in the initial STIP distribution:

  1. Boost optimized for metrics; but what does the DAO value?
    As an onchain protocol, Boost’s architecture was ultra-capital efficient for spurring onchain activity, driving at least two transactions at the network level (qualifying action + reward claim) and positioning Boost as the number one protocol in blockspace and user retention. One lesson was that some vocal DAO members are more interested in finding “quality users’, than driving onchain activity. To better understand what this means, we need to first distinguish it. Which is why we added the Farcaster/user targeting emphasis in the extension (see above).

  2. Users or Network Activity?
    During the STIP expirement, the Boost team realized that the network was driving extensive network activity, as demonstrated by the KPIs regarding blockspace demand, transactions, and network fees. As such, the team optimized for maximum onchain impact. With an addendum, Boost feels as though it demonstrated clear ROI for onchain impact, but understands why some members of the DAO care to emphasize on users instead.
    This understanding has shifted our focus to leverage new distribution channels to grow quality users onchain rather than focus on onchain impact alone.

During STIP, Boost also was able to conduct a few minor expirements. These types of expirements, that focused on outcomes rather than just on maximizing metrics, are the kinds of expirements Boost hopes to expand upon with the STIP Addendum. These can be viewed below:

  • Boosting Trading Volume on Camelot
    • Objective: Increase swaps on Camelot, emphasizing increasing swap volume.
    • Method: Setting action parameters to a minimum of 100 USDC swapped on Camelot.
    • Result: In January, we successfully tested the protocol’s ability to drive transaction value. Our case study was split into three boosts, each with varying completion slots and boost parameters.
Boost 1 Boost 2 Boost 3
Completion Slots 100 1,000
Completions 100 1,000
Reward/Completion 1 1
Reward/Completion ($USD) $1.57 $1.57
Min. Swap Amount $100 $100
Completion % 100% 100%
Volume Driven $22,791 $109,926
Total Cost $157 $1,570
Volume/$ Spent $145 $70

  • GMX Conquest

    • Objective: Attract similar users from alternative ecosystems to use platforms in the Arbitrum ecosystem.
      Method: Create an allowlist targeting historical traders on Optimism
    • Result: The GMX conquest was a targeted user onboarding campaign to onboard OP perps traders to GMX. The campaign lasted 10 days and incentivized 250 traders on either Synthetix (+ its frontends: Polynomial & Kwenta), Perpetual Protocol, or Pika with 5 OP to complete a trade on GMX.
      After the boost ended, 42% of the attracted users continued to use GMX.

  • NFT and Creator Mints
    We believe that NFTs and onchain creators are a critical use case for crypto. To date, Arbitrum has largely lagged behind. We’ve actively been in discussions with many of the gaming/NFT communities on Arbitrum (Rarible, Azuki, Apecoin, Treasure, KOTE, etc.) and believe that mint action types are critical to both their marketing, business models, and Arbitrum’s long-term relevance in creator markets and gaming. A perfect example of this is Azuki using NFT mints to promote their AnimeChain launch and their new Enter the Garden Ep 1 video.

    • Objective: Boost Organic Zora Mints.
    • Method: Incentivize a collection to trend on Zora, resulting in organic mints from Zora’s Trending page.
    • Results: Boosts offer an incredible tool for creator discovery on Zora, as the trending page can be utilized to surface any creator’s Collection and increase mints. Accounting for the fees that Zora returns to creators, boost deployers essentially earn a rebate on the incentives deployed.
Collection Boost <3 Blobs Boost: With Llama Totals
Boosts 4 2 6
Boost Completions 2,365 3,551 5,916
Reward/completion (ARB) 1 1 -
Total Rewards (ARB) 2,365 3,551 5,916
Total Rewards (USD) $4,592.19 $7,156.01 $11,748.20
Zora Unique Minters 3,066 3,590 6,656
Mints 4,010 4,715 8,725
Organic Mints 1,645 1,164 2,809
Zora Creator Earnings (ETH) 3.07 2.09 5.16
Estimated Earnings from Organic Mints (ETH) 1.26 0.52 1.78

Examples of learnings can be read in the RabbitHole: Retro STIP Analysis (4/1/2024).

New Plans for STIP Bridge

1. How much are you requesting for this STIP Bridge proposal?
Boost (Prev. RabbitHole) is requesting 500,000 ARB.

2. Do you plan to use the incentives in the same ways as highlighted in Section 3 of the STIP proposal? [Y/N]
No

3. [Only if answered “no” to the previous question] How will the incentive distribution change in terms of mechanisms and products?

While Boost became Arbitrum’s number one protocol in both blockspace demand and sustainable user growth according to a STIP Open Source Observer report, Boost plans to continue to further refine the next iteration of STIP by introducing two major improvements to its previous STIP grant: 1) A more aggressive and active sybil-deterrence strategy using Farcaster as a gated distribution channel, 2) an emphasis on sybil-resistant use cases.

1. Farcaster Growth Opportunity & Sybil Deterrence

Farcaster presents an exciting growth opportunity for the Arbitrum ecosystem, as a significant portion of its user base is currently on Optimism and not yet active on Arbitrum. Boost will leverage Farcaster as a sybil-resistance layer, leveraging the fact that participating requires paying for Farcaster’s FID storage cost. Lastly, Farcaster expands Boost distribution beyond Boost Studios hosted frontends (Boost Inbox, RabbitHole) to include Farcaster via “frames”. Some new advantages of this Farcaster approach are:

  • It enables a targeted “conquest campaign” to attract Optimism’s Farcaster users to bridge over and engage with Arbitrum.
  • Frames with incentivized calls-to-action like bridging assets or trying Arbitrum apps can drive meaningful user flows.

The team has identified 509,923 Farcaster IDs, with 15,881 IDs with Arbitrum transaction history, and 494,042 Farcaster IDs with no Arbitrum history, creating a massive potential for bringing external users to the Arbitrum ecosystem.

This Farcaster user acquisition initiative will run in parallel to broader sybil deterrence efforts like whitelisting/excluding addresses based on sybil probability scoring. Combining a sybil-resistant channel like Farcaster with aggressive mitigation tactics allows Boost to drive an influx of authentic new users at scale.

Farcaster Methodology
Boosts are smart contracts that allow Boost creators to distribute rewards to wallet based on a qualifying action. As such, there are two main targeting activities taking place:

  1. Whitelisting Users: this allows one to upload a CSV of addresses to define which wallets are either included in the whitelist (eligible) or addresses that are excluded from the whitelist (ineligible). Our intent is to use both Farcaster as a whitelist filter (we will also experiment with others) as well as exclusion (using OBL methodologies for Sybil) to create a higher bar for wallet participation in boost completion.
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  2. Distribution: Because boosts are smart contracts, anyone with an
    eligible address can complete the eligible action and claim the reward from a boost. To help facilitate this, the Boost team has integrated with many different frontends, who facilitate user discovery across many frontends.
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    Farcaster frames allow Boost to distribute boosts on social networks. This means that users will be able to both discover, and complete boosts that take place on Arbitrum, from the Farcaster feed as a new incentives network.

2. Objective and Use-Case based campaigns

In parallel, Boost will double down on some of the exciting and novel use cases highlighted in the previous Retro STIP Analysis report and leverage aggressive whitelisting strategies such as:
Some examples of this include:

This multi-pronged approach of sybil-resistant acquisition channels and novel incentive use cases aims to drive sustained user growth and engagement securely. Broadly, we aim to allocate incentives to the following verticals accordingly:

  • DEXes: 40%
  • Creator/NFTs: 20%
  • Perpetuals: 20%
  • Governance: 10%
  • Other: 10%

Proposed Distribution Plan/KPIs

Phase 1 (Experiment) Phase 2 (Iterate) Phase 3 (Scale)
KPI Month 1 Month 2 Month 3 Total
Transactions or Actions Driven 75,000 112,500 225,000 412,500
Monthly Unique Addresses 7,500 15,000 30,000 52,500
New Arbitrum Addresses 3,750 7,500 15,000 26,250
Avg CPA 0.5 ARB 0.33 ARB 0.33 ARB 0.364 ARB
ARB Distributed 150,000 150,000 300,000 500,000
Estimated Network Fees ($USD) 15,000 22,500 45,000 82,500

4. Could you provide the addresses involved in the STIP Bridge initiative (multisig to receive funds, contracts for distribution, and any other relevant contract involved), and highlight if they changed compared to the previous STIP proposal?

Arb1: 0xE54146EA0d40eC338339C4f784FBB4CE44322e92

No Changes.

5. Could you share any feedback or suggestions on what could be improved in future incentive programs, what were the pain points and what was your general evaluation of the experience?

The biggest shortcoming from STIP was by far the lack of clarity around outcomes. Boost is a flexible tool that can be used to target wallets with specific behaviors, characteristics, identity, and more. It can also be used to maximize actions onchain by optimizing cost markets for any action including parameters (transaction size, specific assets, etc.).

Because there is no guidance from the DAO on the specific goals, it’s hard for Boost to make all stakeholders happy, or even to know which opinions and stakeholders to serve. Until there is more clarity on the goals (whether blockspace, network fees, a definition of valuable users), it feels as though we will always underperform in some capacity, as every strategic decision has it’s tradeoffs…

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Hello @RabbitHole ,

Thank you for your application! Your advisor will be Castle Capital @CastleCapital @Atomist.

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

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Following the ARDC recommendation, we believe that this proposed addendum requires further review by the DAO. Therefore, we challenge its optimistic approval so that the delegates can form an opinion on the merit of renewing the incentives received during the STIP.

We are publishing the review conducted by Blockworks for greater visibility and advice to the applicant to provide an explanation for the concerns raised.

“Extremely high sybil ratio of ARB amount claimed at ~89%. Unsurprisingly, usage fell off a cliff after incentives ended. As activity was highly inorganic, the program could be seen as putting unnecessary strain on the blockchain by some. Technically, the project seems to have covered OpEx with incentives: ARB sent from STIP recipient wallet to the incentive distribution address, then to different Quest contracts. From the Quest contracts, ARB has been sent to the project’s treasury, from where project contributors have been paid in ARB. New distribution mechanism better positioned to deter farming through the Farcaster implementation, and seems sensible for attracting users from Optimism. STIP already puts a lot of emphasis on DEXs (largest vertical based on the number of projects), and Boost’s plan is to majorly focus on DEXs. Exact Bridge incentivisation mechanisms not given, so difficult to analyse possible effectiveness.”

4

Hey @cattin! Relaying the detailed feedback that we had in OpenBlock’s analysis here since it seems like a few people missed it:

Definitely recommend reading through the whole post, but the point is that you can use Boost to target quantity or quality users and is much different than other protocols. Therefore, our proposal is directly targeting valuable user segments (ie. Farcaster) therefore is a better “sybil” filter. Open to discussing this more with the community if there is other feedback!

5

Hey Cattin!

To further respond to Brian’s comment below, we’ve made pretty clear acknowledgements to exactly what the previous approach to the grant was, recognized the DAO’s preference to alternative goals/KPIs, and have meaningfully adapted our addendum to meet those preferences.

There’s a pretty intentional and directed effort here to address those criticisms directly, and I’m a bit surprised and somewhat disappointed to see a “challenge” when we’ve clearly heard the DAO and attempted to address this. There was a long period of feedback prior to vote where we could have discussed even MORE stringent requirements if that was desired, however at this point, we do believe there is a fairly direct solution described in the addendum above.

If you would like us to further expand upon the sybil detection and minimization efforts we plan to deploy we’re happy to, but the below strategies should be comprehensive, and should provide clarity on what an approach to attract a higher “quality user” looks like.

6

It sounds like delegates have also had questions regarding funds in the Boost Treasury - this is a result of the Protocol Fees outlined in our docs, the Arbitrum Stimulus Proposal (an updated fee structure to be implemented as shown below), and added to the proposal above for clarity. The funds in the “treasury” are a hard-coded protocol fee that goes to the boost Guild, a community-owned fund to deploy Boosts to the Boost community. Boost Studios does not control this account as it sits in a Llama instance managed by policy holders from the Boost community.

The rest of fees (creator/affiliate) were received by Boost in it’s deployer address and reinvested in further boosts for the program (so unaffected from an opps perspective).

The Fee Structure
The complete fee structure derives from two fees: A Protocol Fee (paid by the funder of a Boost) and a Claim Fee (paid by users claiming a Boost reward).

  • Protocol Claim Fee: 0.000075 ETH
    • Incentive Managers: 0.000025 ETH
    • User Frontends: 0.000025 ETH
    • Boost Guild 1: 0.000025 ETH
  • Supply Fees
    • Incentive Managers: 10%.
    • User Frontends: 5%.
    • Boost Guild 1: 5%.

From Orbit Proposal:

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On behalf of the Arbitrum community members who delegated their voting power to us, we’re voting Against this proposal.

Boost integrated with an impressive 17 protocols to enable novel incentive schemes during the initial STIP phase. The platform demonstrated an ability to drive substantial on-chain activity, with over 2M transactions and 608K ARB claimed in March 2024 alone. Reaching 155K MAUs in the final month was also a notable achievement.

However, the month-over-month volatility in key metrics like MAUs (-81% one month, +2194% the next) raises questions about the sustainability of this traction. It’s unclear how much represents consistent, returning users versus one-time engagement farming rewards.

The targeted experiments with partners like Camelot, GMX, and Zora showed promising results in incentivizing specific actions such as trading volume, cross-chain user acquisition, and NFT mints. The finding that 42% of Optimism traders continued using GMX after the boost ended suggests potential for these initiatives to seed lasting adoption.

For the 500K bridge round, the pivot to leveraging Farcaster as a user acquisition channel is intriguing. With 494K Farcaster users not yet on Arbitrum, there is a clear opportunity to tap a new sybil-resistant audience, since Farcaster IDs have a cost to create. Focusing more on objective-driven DeFi, NFT, and governance campaigns may also drive higher-quality participation.

The goals of 412K transactions, 52K MAUs, and 26K new Arbitrum users at a 0.36 ARB cost-per-acquisition are ambitious but potentially achievable given the new strategies. However, absent more details on the rationale behind these targets and their expected impact on long-term ecosystem health, it’s difficult to assess their merit.

Ultimately, while Boost’s tools are powerful and the Farcaster approach promising, the lack of clear sustained results from the initial 1M ARB allocation gives us pause in deploying more funding at this stage. We agree with Boost that clarifying the DAO’s specific objectives and priorities would help align incentives going forward.

We believe the most prudent path is for Boost to first demonstrate more consistent baseline usage trends and durable Arbitrum adoption through their revised tactics before scaling incentives back up. If the Farcaster initiative and targeted campaigns prove effective, we would eagerly reconsider a future request. But for now, we feel obligated to be judicious with the DAO’s resources until longer-term retention is proven.

8

I’ve voted FOR Boost (Prev. RabbitHole) STIP.

RabbitHole is a good educational community for all web3 users, especially for newborns. It’s necessary for Arbitrum the biggest L2 to support it.

9

Savvy DAO has voted FOR the Rabbit Hole Proposal

10

gm, voting to abstain on this.

FOR:

  • The team has addressed the sybil comments: it’s a known factor and a strategic decision, and just 2 wallets were actually profitable.
  • The farcaster integration is very intriguing, and worth exploring whether it is a valuable distribution channel.
  • Good overall results in terms of users

CONS

  • You seem to always incentivize the same “known” projects. I would like to see more experiments with innovative protocols as well.
  • You could argue that quest platforms could leverage the incentives that other protocols receive
11

We vote to approve funding the protocol.

Reasoning: We consider the Boost case is really interesting and great one for the DAO to learn from. The introduction of the sybil detection is appreciated and comparison to the previous experiment will be very interesting. We’d love to see the results from the new approach by an additional funding.

12

PBC voted to abstain from the Boost/Rabbithole STIP Bridge grant.

Our team was out of office this week and was unable to do a complete review of the request/challenge in time for voting.

13

We voted yes on funding this due to RabbitHole’s proven ability to drive on-chain activity and user engagement through their quest and incentive mechanisms. Their successful integration with 17 Arbitrum protocols demonstrates their capability to support ecosystem growth, and their plans to leverage sybil-resistant channels like Farcaster show a commitment to quality user acquisition. Additionally, RabbitHole’s detailed KPI tracking and lessons learned from previous rounds highlight their focus on continuous improvement and alignment with Arbitrum’s strategic objectives.

14

DAOplomats voted to Reject funding.

After looking at the sybil ratio and more comments from Blockworks, there was really no confidence to support this project.

15

We’re voting against the proposal on behalf of Arbitrum community members. Boost demonstrated significant initial activity, but volatility in key metrics and lack of sustained results from the initial allocation raise concerns. While leveraging Farcaster for user acquisition is promising, we need evidence of long-term retention before committing more funding. Boost should demonstrate consistent adoption with revised tactics before scaling incentives.

16

I’m sorry, but I don’t see much benefit from this project for Arbitrum

This does not provide large infusions, and it seems to me that the Sybils are taking advantage of these quests.

17

Below are the opinions of the UADP:

We voted FOR this proposal. The number of users that the protocol was able to mobilize was impressive. The large drop in subsequent activity is unforeseen, however, the Farcaster strategy in the addendum looks promising. We also appreciate the team’s further disclosure on the nature of their hard-coded fee structure. The recycling nature of these fees makes sense to us since they’ll be reinvested in further boosts.

18

For tracking purposes, I’m copying the reasoning given on my snapshot vote:

Reason: The protocol failed to show usage after the end of the first round of this program, so it seems not prudent to go for a second round.