SECTION 1: APPLICANT INFORMATION
Applicant Name: Chris Dahmen, Head of Growth
Project Name: CIAN Protocol
Project Description:
CIAN builds open-source DeFi strategy vaults and advanced automation tooling enabling users to effortlessly onboard multi-protocol strategies mainly revolving around LSTs, LRTs, and RWAs.
Team Members and Roles:
- Luffy He: Founder, CEO
https://www.linkedin.com/in/luffy131419/ - Chris Dahmen: Head of Growth/BD
https://www.linkedin.com/in/chris-dahmen/ - Harudjin: CTO
- Nami: Product Manager
- Clover: Senior Dev
- Mihawk: Senior Dev
- Rayleigh: Senior Dev
- Crocodile: Lead Dev - Frontend
- Katakuri: Senior Dev - Frontend
- Chopper: Senior Dev - Frontend
- Enel: UI & UX
- Paoch: Testing
- Sanji: Testing
- Zoro: Testing
- Vivi: Marketing Manager
- Severine: Community Manager
- Barto: DeFi Research & Community
- Frank: DeFi Research
- Sabo: Finance & Legal
- Robin: HR
Project Links:
- https://cian.app
- https://twitter.com/CIAN_protocol
- CIAN Discord
- https://docs.cian.app/
- https://github.com/cian-ai/cian-protocol
- https://dune.com/luren9682/cian-lst-vault
- https://twitter.com/Luffy_He
- https://twitter.com/Castick7
Contact Information:
- Point of Contact: CDahmen
- TG: @ChrisDahmen
- Twitter (X): @Castick7
- Email: chris@cian.app
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes
SECTION 2A: Team and Product Information
Team experience:
The team has been running one of the earliest DeFi arbitrage funds since the beginning of 2019 (doing arbitrage across CeFi & DeFi initially). After years of successful management, in 2021, the team decided to contribute to the decentralization movement by creating CIAN, hence making their tools and strategies available to all. Luffy He is the main leader behind this team (Founder/CEO):
• Master in EE, Delft University of Technology
• Engineer, Intel Eindhoven, NL.
• Researcher, computer system lab of Stanford University
• Engineer, Maxeler Technologies Supercomputing R & D Center, Silicon Valley US.
• Strategy consultant, Accenture & Mckinsey
• Founder, Nature Lab, leading DeFi Asset mgmt. team
• Founder, Cian, DeFi protocol backed up by top-tier crypto VCs
What novelty or innovation does your product bring to Arbitrum?:
CIAN designs advanced DeFi yield strategies based on the most reliable and scalable DeFi yield sources. By abstracting all the complexities in 1 click, CIAN will help Arbitrum ecosystem to attract lots of new users, ranging from newcomers to institutional investors. CIAN is also the first DeFi yield protocol that will completely embrace AI. Our AI program will offer an array of choices ranging from the selection of strategies based on users’ favorite token(s) and strategy-related risks. From community governance-related issues to ecosystem discovery, users will soon be able to discuss anything related to CIAN and DeFi.
Furthermore, CIAN’s vaults act as catalysts for multiple layers of DeFi within the Arbitrum ecosystem. Since all strategy vaults combine multiple protocols in order to obtain sustainable & delta-neutral positions, assets deposited within CIAN generate revenues/benefits for many external protocols. Although CIAN always prioritized an operational approach and thus hasn’t been the most vocal/trendy in the Arbitrum ecosystem, the protocol grew silently while generating upsides for many others.
Is your project composable with other projects on Arbitrum?:
Yes, this is the nature of CIAN. Following the above description, CIAN’s vaults are mainly built on Lending Platforms and utilize DEXes & Flashloan to execute onchain strategies. One deposit/withdrawal in CIAN often results in fees generated on 2-5 external protocols alongside related gas fees.
Additionally, upon deposit, each vault outputs an LP token. This token can then be used to create additional layers of farming. Protocols such as Timeswap already integrated ciETH on Arbitrum.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?:
CIAN specializes in designing and automating the most advanced DeFi yield strategies. For Leveraged Staking in particular, protocols like InstaDapp and DeFiSaver share some similarities. However, CIAN will soon be releasing some state-of-the-art strategies currently unseen in DeFi.
How do you measure and think about retention internally?:
Retention goes hand in hand with our business model. So far, all CIAN’s users were gained organically, which lays a great foundation for retention. CIAN’s vaults are designed to be scalable, safe, and sustainable without external incentives. It is important to note that strategies presenting these qualities often come with low-moderate APY. Consequently, our vaults are rarely sought after by aggressive yield farmers. Most CIAN users are either institutional investors and/or long-term holders looking to safely amplify their yields over months/years.
This statement can easily be verified given CIAN’s stable TVL growth curve over the last 2 years.
Relevant usage metrics:
Since CIAN functions as a middleware platform, and that users only need to interact with the protocol once to embark on a long-term investment which directs all deposited assets to external protocol(s), the main metrics relevant to CIAN are the total value locked and total users.
- TVL (B2C): $112m
- TVL (B2C + B2C): $150m (currently, CIAN has 2 vaults only available to DeFi/institutional partners. Their public iterations should be released shortly)
- Total Users: 23,550
1183 holders are using CIAN’s strategy vault (newest architecture; ERC-4626). Other users created a smart wallet to invest in CIAN’s automated strategies. Automated strategies and vaults both feature similar investment choices, the main difference lies in their underlying architecture.
Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan: Yes
Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal?: No
SECTION 2B: PROTOCOL DETAILS
Is the Protocol Native to Arbitrum?:
No. CIAN was originally deployed on Avalanche. That being said, Arbitrum is now one of our most successful deployments, owing to that it constitutes 1/4 of our total TVL.
On what other networks is the protocol deployed?:
- Ethereum
- Polygon
- Avalanche
- Optimism
- BSC
What date did you deploy on Arbitrum?:
May 31, 2023 Arbitrum Transaction Hash (Txhash) Details | Arbiscan
Do you have a native token?:
Planned. Tokenomic details should be revealed this year.
Past Incentivization:
All of CIAN’s strategies strived without incentive, with only the exception of MaticX (Polygon). This strategy was directly incentivized by StaderLabs upon its initial release. Most of the incentives were distributed within the first two months, which is also when most of the TVL was gained ($0-$12m). Following these two months, as the below chart demonstrates, despite Stader ceasing the initial incentivization boost, the strategy was able to retain most of its original capital/users.
Current Incentivization:
No incentivizations are being distributed at the moment.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem-related program?:
Yes, CIAN previously received a small builder grant ($12k) from the Arbitrum Foundation. These funds were solely used toward covering part of our development & auditing expenses.
CIAN also received a builder grant from AAVE.
Protocol Roadmap:
Q1 2024
- 1 ongoing audit (by Paladin Blockchain Security)
- Deploy 3 high-performing long-short strategies for StableCoins, ETH, and wBTC (these LIVE strategies are currently private ‘‘B2C’’; will be released to the public shortly; $40m TVL undisclosed)
- Release 2 restaking-related strategies
Q2 2024
- Deploy new leveraged staking vault(s) utilizing Silo’s lending platform
- Deploy no less than 3 restaking related strategies
- Extend the above-mentioned long-short strategies to increase their capacity
- Lead the initiative to bring most LRTs on L2s (starting with Arbitrum)
- Make sure the ongoing integrations of CIAN by other platforms are finished and growth scheme is implemented: Staking Rewards, Idle, Ledger, OKX web 3 wallet, etc.
- Binance web 3 wallet integrates CIAN
Protocol Performance:
- Stable TVL growth; currently sitting at +$100m
- CIAN’s entire growth was achieved without Token
- Over 20,000 users since inception
- No smart contract breach since inception
- No liquidation since inception
- Integrated by most notable names in the industry
Audit History:
CIAN currently has 5 audits under its belt (6th ongoing). A total of 3 different auditing firms participated in these audits: Paladin Blockchain Security, Omniscia, and Peckshield.
Aside from the above-listed audits, many close partners thoroughly reviewed our codebase during integration, most notably, OKX, MatrixPort, StakingRewards, Ledger, Morpho, and Swissborg.
Security Incidents:
Since its inception, CIAN experienced no smart contract breaches or liquidation. For over 2 years now, despite offering strategies leveraged 3-8x, CIAN was able to successfully secure all their users against liquidation risks. This achievement mainly comes from 2 factors:
- Strategies featured on CIAN are inherently battle-tested. The team only selects and automates strategies that institutional investors actively execute.
- Every vault comes equipped with automation features able to monitor and readjust the collateral ratio to either optimize the position or protect it against liquidation.
SECTION 3: GRANT INFORMATION
Requested Grant Size:
250,000 ARB
Justification for the grant size:
After being live on Arbitrum for almost a year now, CIAN has become a valuable contributor to Arbitrum’s growing LST ecosystem. Moreover, as each singular vault utilizes multiple protocols, every deposit/withdrawal generates substantial fees going toward external markets, thereby making CIAN’s transaction volume very eco-friendly.
Despite its enormous potential, Arbitrum has yet to be perceived as a welcoming ecosystem for LSTs to thrive in. Since CIAN is known as a great catalyst within the “small” LST space, we are hoping that this grant’s projected success will encourage others to join in.
If CIAN ends up being selected for this grant, our objective is to sustain stable APY amplifications, directed toward 3 different markets, over a 12-week period.
3 targets: wstETH vault (AAVE), wstETH vault (SILO), and ciETH (TimeSwap)
To efficiently do so, we need to take into consideration that CIAN’s first vault, the wstETH vault (AAVE), currently holds $25m TVL and is the foundation on which ciETH (TimeSwap) was built. To meaningfully influence its APY alongside growth, especially over 3 months, a fair amount of incentive would be needed.
TLDR:
| Market | Allocation | Duration | TVL(now) | TVL(then) | APY |
|---|---|---|---|---|---|
| wstETH (AAVE) | 200k ARB | 84d | $25m | $40m (+15m) | 26% |
| wstETH (SILO) | 37.5k ARB | 84d | $0 | $6m (+6m) | 22% |
| ciETH (TimeSwap) | 12.5k ARB | 84d | $150k | $1.1m (+0.95m) | 10.5% |
More in-depth details on these numbers will be provided in Section 4.
Grant Matching:
N/A
Grant Breakdown:
100% of this grant (250,000 ARB) is to be distributed across 3 different markets. If, for any reason, CIAN fails to distribute the entirety of the funds within the predetermined timeline, the remaining funds are to be returned to the DAO.
80% of the grant allocated as incentives to wstETH vault (AAVE). If CIAN made it to bring LRT partners into the Arbitrum ecosystem and build strategies around restaking tokens, a part of this 80% might be dedicated to the new strategies.
15% of the grant allocated as incentives to wstETH vault (SILO)
Note: This vault hasn’t been released yet. If CIAN fails to deploy the vault before the end of the program, this untouched 15% would return to the DAO.
5% of the grant allocated as incentive to ciETH (TimeSwap)
Funding Address:
0x2970A6AECADFb0e8F396DaD8c48E566AdE010e5B
Funding Address Characteristics:
2/3 multisig
Treasury Address:
For the longest time, CIAN wasn’t generating positive income as the team is large and the protocol was free-to-use. Only recently, CIAN started to charge small performance fees on its newest vaults. For the time being, fees generated go towards supporting CIAN operating/auditing costs. Later on, alongside its TGE, a treasury and governance system shall be implemented.
Contract Address:
0x2970A6AECADFb0e8F396DaD8c48E566AdE010e5B
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives:
- Further accelerate Arbitrum’s ETH & LST ecosystem adoption.
- Strengthen Arbitrum’s ecosystem to later welcome emerging LRTs.
- Onboard new on-chain users.
- Increase partnered-institutional investments in the Arbitrum ecosystem vs other L2s.
- Generate substantial fees for LST holders on external protocols, hence attracting more onchain liquidity, hence making CIAN’s vault more capital efficient (slippage).
Execution Strategy:
100% of the grant is to be distributed as incentives across 3 specific markets during a 12-week period, starting from April 23* to July 16. (subject to change depending if the DAO can complete projects’ compliance in time).
Proposed allocation & duration:
| Market | Allocation (%) | Duration (days) | Incentivized via | Status |
|---|---|---|---|---|
| wstETH (AAVE) | 80 | 84 | CIAN’s vault | LIVE |
| wstETH (SILO) | 15 | 84 | CIAN’s vault | Coming soon |
| ciETH (TimeSwap) | 5 | 84 | TimeSwap | LIVE |
Daily Allocation:
| Target | Allocation (%) | Token | Allocation/Day |
|---|---|---|---|
| wstETH (AAVE) | 80 | 200000 | 2,381 |
| wstETH (Silo) | 15 | 37500 | 446 |
| ciETH (Timeswap) | 5 | 12500 | 149 |
Projected TVL & respective APY (include incentives):
| Market | TVL | Est. Util. Ratio | Allocation/Day | Est. APY |
|---|---|---|---|---|
| wstETH (AAVE) | 40m | 83% | 2381 | 26% |
| wstETH (SILO) | 6m | 44% | 446 | 22% |
| ciETH (TimeSwap) | 1m | 50% | 149 | 10.5% |
Note: Part of the incentives may be allocated to new strategies built on Arbitrum; TBD.
Note2: To accurately predict the above APYs, we need to take into consideration each vault’s respective market Utilisation Ratio (U.R.). This specific data is extremely hard to predict since it involves the wETH supplied as well as the amount borrowed. By the time the LTIPP begins, the market may completely differ from its current state. We did our best to base our estimations on the current market sentiment, thus projecting realistic APYs.
E.g: If we take Silo’s market (wstETH/ETH), the total ETH deposited was sitting a $5m 4 weeks ago. The current total deposited is of $12.7m. Following this simple logic, we conservatively estimated that the total deposited could at least reach $18m by the end of the LTIPP, thus allowing us to safely reach our target TVL without straining ETH’s U.R. (currently 29%).
Both wstETH vaults (AAVE & SILO) would be incentivized directly via CIAN. To do so, CIAN would deploy an airdrop contract allowing for LPs to start earning additional $ARB rewards upon deposit. LPs would then be able to claim their $ARB rewards periodically without having to exit their position.
As for ciETH (TimeSwap), incentives would be provided directly via TimeSwap’s wETH/ciETH pool. Many of our Arbitrum LPs have shown their interest and acknowledged this pool as a great 2nd use case, with minimal added risks, for after entering the wstETH (AAVE) vault. However, to properly scale, it requires external users to supply wETH. For this reason, most of the ARB incentives would be directed toward wETH lenders (supply-side).
Due to the current limited liquidity (wETH) in Silo’s wstETH/wETH isolated market, the wstETH (SILO) vault’s development was only set to commence in 3-4 weeks. CIAN certifies that this 15% allocation shall solely start being distributed once the vault has been successfully released. If CIAN fails to deploy the vault before the end of the pilot program, these allocated $ARB won’t go toward incentivizing the 2 other above-mentioned markets. Additionally, if this vault gets released halfway through the incentivization timeline, only 7% (instead of 15%) would be used as incentives.
The incentives should be fully distributed no later than July 16, 2024. If, for any reason, CIAN fails to distribute the entirety of the funds within the predetermined timeline, the remaining funds are to be returned to the DAO within 14 days.
Strategy to encourage stickiness:
CIAN’s strategies are extremely efficient in the long term, but much less efficient for short-term depositors due to slippages incurred by leveraging/deleveraging transactions (e.g. swap borrowed wETH to wstETH). Consequently, CIAN always focused on targeting long-term investors by providing an array of educational material and deposit warnings.
Following this logic, any incentivization events in which CIAN takes part in have to foster longevity and stability. Given the LTIPP selection, to mimic standard market behavior, incentives would be injected into each respective market in a daily stable inflow over a 3-month period, hence progressively decreasing in APY as the TVL grows.
Alongside this pilot program, CIAN will be launching a point program related to the LTIPP (CIAN Grand Adventure) which is guaranteed to outlive the LTIPP. In this program, users will be incentivized to hold their position(s) over time. Using a standard calculation method, the larger the position(s) & the longer held, the more points attributed.
KPIs:
As CIAN is a specific product that often attracts volume rather than numbers, we will limit the KPI to 3 tranches of TVL growth.
Note: The growth of CIAN’s vaults is sometimes constrained by the amount of wETH available to borrow. When such limitations occur, CIAN’s team always communicates with involved parties to find sustainable remedies.
Grant Timeline and Milestones:
| Market | 4 weeks TVL | 8 weeks TVL | 12 weeks TVL |
|---|---|---|---|
| wstETH vault (AAVE) | $29m | $33m | $40m |
| wstETH vault (SILO) | $2.5m | $4m | $6m |
| ciETH (TimeSwap) | $500k | $800k | $1.1m |
Note: The KPI targets for wstETH (SILO) are only viable given the launch of the strategy vault occurs on time. If the vault launches 2 weeks following the incentivization program start, we suggest initiating its KPI timeline then (first milestone on the 6th week instead of the 4th).
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
As previously described, CIAN’s vaults operate via multiple layers of DeFi protocol. Consequently, each transaction incurs fees that go towards DEX(es), lending platform(s), flashloan provider(s), and naturally, the Arbitrum chain.
Arbitrum has yet to be perceived as a welcoming ecosystem for LSTs to thrive in. Since CIAN is well known, amongst the ‘‘small’’ LST world, as a true catalyst, we are hoping that this grant will encourage others to follow.
Moreover, given that CIAN is a multi-chain platform, similar strategies are offered on rival chains. With the LTIPP complementing the current APY(s), we are confident that various old/new investors would find the offer appealing enough to decisively switch camps.
Ref. wstETH (AAVE) on Ethereum Mainnet
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 5: Data and Reporting
Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO?
Yes
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?:
Yes. CIAN already has a Dunes dashboard available. Some modifications will be made to better reflect data relevant to the LTIPP. Please note that the wstETH (SILO) vault would not be indexed until officially released.
We will also provide bi-weekly reports on all the KPIs mentioned above in the format desired by the DAO.
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program?:
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
