Following feedback on the proposal to establish the STIP Bridge, it was agreed to involve the LTIPP Advisors in this process with the mission to “help applicants gain insights into their proposals. This not only guides applicants through the process but also ensures that the DAO will review better proposals.”
Despite the inclusion of Advisors, this process does not involve the Council, leading us to believe that this addendum places a significant burden on the delegates who must review all the proposals. One of the reasons for the LTIPP was precisely to avoid this excessive burden. Moreover, the optimistic model adopted in this phase could raise concerns about the real control the DAO will have over these proposals, as reviewing six months of data for each applicant is time-consuming.
For this reason, we decided to accompany each application we reviewed with a brief report. We ask the delegates not to take this as an in-depth or definitive basis for deciding your vote, but rather as a high level overview that can potentially raise questions for your own analysis.
Regarding Camelot, STIP KPIs were:
- TVL growth
- Fees growth
- Volume growth
- Adoption of ARB as a base asset
- New partners and protocols supported on Arbitrum (both multichain and native protocols)
According to the metrics reported by OBL, the numbers are very encouraging:
They achieved considerable growth in TVL, fees, and volume, all of which have remained above their levels prior to the start of incentive distribution.It is particularly striking how they have managed to maintain very high levels of volume, generated fees, and DAU. Therefore, we congratulate Camelot on their success.
One point we emphasized when analyzing the execution of the plan outlined for the STIP was the discretion with which Camelot allocated incentives to over 75 pools, raising questions about the sustainability of the strategies.
Their explanations for this were included in the addendum and relate to a vision: ecosystem growth. Through incentives, they exposed many protocols to new users and even spurred the onboarding of new protocols. This is combined with an execution model that prioritizes sustainability, where the extra APR from incentives in ARB was a small part, with fees being the incentive that should prevail to prevent liquidity from migrating once those incentives are cut. For more data on their explanations, please check the Discord.
As can be seen in their reports, Camelot has shared very good data on the evolution of TVL, volume, and fees per incentivized pool in their epochs. Something we recommend to the applicant for the execution of this new program is to include more data in their biweekly reports about the amount of incentives allocated to a pool and the extra APR that ARB is boosting. This combined data will allow for gathering more information on efficient incentive allocation to later determine parameters in the Long Term Incentives Program.
Conclusions
The results shown during the incentive distribution are very positive, with the applicant having achieved the objectives set for the STIP. Therefore, it makes sense for them to propose continuing with the execution of their plan without any modifications.
We noticed in all the applications we reviewed that there is a significant drop in TVL during the last month. We believe there are multiple reasons for this, and there isn’t enough time to conduct a thorough and conclusive analysis of the long-term effectiveness of the STIP.