Copra Finance
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:
Brian Limiardi
Project Name:
Copra
Project Description:
Copra is the marketplace for fixed-yield protocol debts.
Our fixed-rate loan’s initial use case is to help other DeFi protocol raise protocol-managed liquidity that they can deploy to 1) bootstrap new pools while reducing reliance to excessing token emission, and 2) enhance protocol income by taking the yield spread from performing strategies.
For lenders, our loan is a simple way to earn fixed-yield with a protocol-level exposure, that is 1) secured on-chain by restricting funds deployment only to whitelisted pools, and 2) insured by buffers to cover against whitelisted pools drawdown and liquidity risks.
Team Members and Roles:
| Name | Role |
|---|---|
| Brian Limiardi | CEO |
| Christopher Dimitri Sastropranoto | CTO |
| John Chapman-Fortune | BD |
Project Links:
Website — https://www.copra.finance/
dApp — Copra
Twitter (X) — https://twitter.com/CopraFi
Telegram Community — Telegram: Contact @coprafi
Debank — DeBank | The Web3 Messenger & Best Web3 Portfolio Tracker
Docs — https://docs.copra.finance/
Contact Information
Point of Contact (note: this should be an individual’s name, not the name of the protocol):
Point of Contact’s TG handle:
Twitter:
https://twitter.com/BrianLimiardi
Email:
brian@copra.finance
Do you acknowledge that your team will be subject to a KYC requirement?:
Yes.
SECTION 2a: Team and Product Information
Provide details on your team’s past and current experience. Any details relating to past projects, recent achievements and any past experience utilizing incentives. Additionally, please provide further details on the state of your product, audience segments, and how you expect incentives to impact the product’s long-term growth and sustainability.
Team experience (Any relevant experience that may be useful in evaluating ability to ship, or execution with grant incentives. Please provide references knowledgeable about past work, where relevant. If you wish to do so privately, indicate that. [Optional, but recommended]):
| Name | Qualifications and Experience |
|---|---|
| Brian Limiardi (Co-founder & CEO) | Serial FinTech entrepreneur (P2P SME lending platform and IT leasing platform in Southeast Asia) with successful exits. Ethereum Foundation Next Billion Fellow. MBA @ Yale University. Computer Engineering @ The University of Illinois at Urbana-Champaign (UIUC). |
| Christopher Dimitri Sastropranoto (Co-founder & CTO) | Ex-Smart Contract Engineer at Chainlink. Ex-Software Engineer at Alo and Aptio. Masters in Computer Science @ The University of Illinois at Urbana-Champaign (UIUC). Industrial Systems Engineering @ University of Washington. |
| John Maurice Chapman-Fortune (Business Development) | Previously (academic and social) independent crypto researcher. Published patents on coatings and porous materials. PhD in Chemistry @ University College London (UCL). Masters in Chemistry @ University College London (UCL). |
LinkedIn profiles:
Brian Limiardi: https://www.linkedin.com/in/brianlimiardi/
Christopher Dimitri Sastropranoto: https://www.linkedin.com/in/christopher-dimitri-sastropranoto-b952a2104/
John Maurice Chapman-Fortune: https://www.linkedin.com/in/johnchapfort/
Additionally, we have raised an equity round in March 2023 from a number of investors: Saison Capital, Insignia Ventures Partners, East Ventures, Pintu, Block Odyssey, and Avant Blockchain Capital.
What novelty or innovation does your product bring to Arbitrum?
In order to bootstrap TVL, DeFi protocols oftentimes need to offer token emission programs (i.e., liquidity mining) that are excessively dilutive. Copra offers DeFi protocols an alternative novel way to bootstrap TVL by raising protocol-managed liquidity via fixed-interest undercollateralised loans. This allows DeFi protocols to grow not only in a scalable way, but also in a more equitable way for token holders.
On top of that, protocols could use our loans to produce an additional source of revenue by taking the spread between the fixed-yield of the loan and the floating-yield of their pool strategies.
In general, when depositing to a protocol’s pool/strategies, users find it difficult to analyse each pools for its specific risks and certainty of the yeilds. Copra abstracts this complexity by offering lenders a direct protocol-wide exposure (instead of pools), and by providing certainty through fixed-yield (instead of variable yields). Furthermore, the loan is fully secured on-chain, made possible through:
- Restricting the deployment of borrowed funds only to whitelisted pools, enabled via our liquidity warehouse contract mechanism
- Having insurance buffers posted by borrower protocols to protect against drawdown risk and liquidity risk of the whitelisted pools
- Real-time monitoring certain debt covenant metrics which could trigger loan liquidation to protect lenders
Our product is partly inspired by TradFi’s corporate bond instrument, which has yet to be made available in the DeFi space. In TradFi, corporations can finance themselves through equity and/or debt. The status quo of DeFi protocols is purely reliant on equity (token) financing such as private/public sales and liquidity mining. Similarly, we believe DeFi protocols should have the optionality of both, and Copra loans enables DeFi protocols access to debt financing.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes, being a protocol that helps other DeFi protocols scale, we pride ourselves with a composability-first approach.
To date, we have secured partnerships with Steadefi, Orange Finance and Teahouse Finance and have 5 new borrowers in the final stages of onboarding.
All of these loan partnerships are in Arbitrum, the only chain we are live on.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
No.
How do you measure and think about retention internally? (metrics, target KPIs)
Our key retention metric for borrower protocols is their loan’s rollover percentage.
On the lenders side, we track their retention ratio through how likely a lender is to re-lend to another pool.
All three existing borrowers have rolled over their loans, thus the borrower retention ratio is at 100%.
We are previously on a private beta phase where we have been doing a more controlled experiment on the supply-side (lenders), which requires whitelisting to interact with the dApp (up until February 28, 2024). This allows us to better study and engage with the lenders as we refine the product. Based on this, the lender retention ratio for the batch was around 70%.
Relevant usage metrics - Please refer to the OBL relevant metrics chart 13. For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:
| Category | Relevant Metrics |
|---|---|
| General | Daily Active Users, Daily User Growth, Daily Transaction Count, Daily ARB Expenditure and User Claims, Incentivized User List & Gini |
| Lending | TVL, Withdrawals, Daily Deposits Volume, List of Borrowers |
| Yield | TVL, List of depositors |
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? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant):
No.
SECTION 2b: 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?:
Yes, Arbitrum’s rapidly growing space allows us to tap into various protocol borrowers that would benefit from our offering (undercollateralised loans to help them grow).
On what other networks is the protocol deployed?:
No other chains, we are native and currently only live on Arbitrum.
What date did you deploy on Arbitrum mainnet?: [Date + transaction ID]
January 3, 2024.
Do you have a native token?:
Planned. We will issue our governance token, $COP, once we have deemed product-market fit.
The rough utilities of our future token can be found in our docs: Tokenomics | Copra: Docs
Past Incentivization:
N/A. We have not previously ran an incentive program.
Current Incentivization: How are you currently incentivizing your protocol?
We are not providing any additional incentives, just the underlying organic yield, which is paid by the protocol borrowers.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program? [yes/no, please provide any details around how the funds were allocated and any relevant results/learnings(Note: this does NOT disqualify an applicant)]
Yes. We have received a milestones-based (still a work in progress) deployment grant from the Arbitrum Foundation with a total of 30,000 ARB. The planned grant usage were as follows:
50% - Two smart contract audits
25% - Hiring additional team members
25% - Marketing budget
Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]
Our first loan offer was issued on January 25, 2024. Within the first month of our issued loan, we have originated and sourced a total of $500k worth of protocol loans for 3 unique borrower protocols.
75+ lenders showed interest in our private beta, to which 25 of them has lent into 1 or more of the vaults, displaying a strong conversion rate of 33%.
We currently have several borrower protocols ready to be on-boarded.
On data reporting, we will be building a Dune dashboard according to the OBL standard.
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application. Include tangible milestones over the next 12 months.]
On the product side, we are working on a V2, which would introduce perpetual loans where the loan issuer is made public (not just the borrower protocol) and lenders have flexible withdrawals. The expected release date (including audits) is early April 2024.
We will continue focusing on onboarding and scaling different borrower protocols, with the target of at least 10 unique borrower protocols before 1H2024. Our next order of magnitude growth will be driven by expanding our partnerships to larger protocols, which would have larger loan sizes ($1mn+), whereas our current borrower base is on the small-medium scale and has an average loan size of ($100k).
We also have an internal target of $8mn outstanding (active) loans (and thus $8mn TVL) before 1H2024.
We are beginning to ramp up our marketing (social media presence) and lenders outreach, with the goal of acquiring 800 unique lenders by 1H2024.
Audit History & Security Vendors: [Provide historic audits and audit results. Do you have a bug bounty program? Please provide details around your security implementation including any advisors and vendors.]
Our current codebase is audited by Zokyo: https://2971947424-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F7IUb6hmEj08b42Hg3Nry%2Fuploads%2FYwDQjeQfXdFl4ueywH04%2FCopra_Zokyo_audit_report_Sep6th_2023.pdf?alt=media&token=d98d2635-a9e6-4710-8982-930ac3014859
Our V2 will be undergoing an audit by Sherlock on March 18, 2024, any developments from the audit will be shared in this forum post accordingly. Once the Sherlock audit has been completed, a bug bounty program will be in place.
Security Incidents: [Has your protocol ever been exploited? If so, please describe what, when and how for ALL incidents as well as the remedies to solve and mitigate for future incidents]
No.
SECTION 3: 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: [Enter Amount of ARB Requested]
30,000 ARB.
**Justification for the size of the grant 20: [Enter explanation. More details are better, including how you arrived at the required funding for individual categories of expenses covered by your grant plan]**
Based on our projections, with the requested amount, we will be able to scale our TVL by more than 7-fold (from about $310k, at time of writing, to $2.1mn).
By strategically allocating the incentives to high-quality borrowers, we will be able to onboard new users (both borrower protocols and lenders) and introduce the wider Arbitrum Ecosystem with our novel product offering (undercollateralised protocol loans).
By not overcompensating potential borrowers, we will be able to filter off ‘mercenary’ borrowers who might be utilising our services solely for the rebated interests.
We believe that should the grant be approved, it will be a net positive addition to the Arbitrum Ecosystem as protocols will get access to previously unavailable debt-based financing and lenders will get access to previously unavailable yield opportunities.
For additional context, at ARB’s current price of $2.00, our grant-to-TVL multiple would be around 0.19, which is conservatively on the lower spectrum for similar-sized protocols during the STIP. Based on historical data, the average multiple for protocols between $100-500k TVL during the STIP submission was 1.76.
Grant Matching: [Enter Amount of Matching Funds Provided - If Relevant]
N/A. Copra does not have a token yet.
Grant Breakdown: [Please provide a high-level overview of the budget breakdown and planned use of funds]
| Percentage (%) | Amount (ARB) | Category | Description |
|---|---|---|---|
| 70% | 21,000 | Lenders | The amount of ARB allocated to each lending vault is to be confirmed, and to be shared and updated in the bi-weekly progress updates. |
| 30% | 9,000 | Borrowers | Interest rebates will be up to 15% of the paid interest. Only borrowers who commit for at least 4 weeks within the duration of LTIP is eligible. The amount of ARB allocated to each borrower is to be confirmed, and to be shared and updated in the bi-weekly progress updates. |
Funding Address: [Enter the specific address where funds will be sent for grant recipients]
Copra’s Arbitrum Gnosis Safe Multisig: arb1:0xf580CD32f85B230e19C83eec74cc3E0B28873E5f
Funding Address Characteristics: [Enter details on the status of the address; the eligible address must be a 2/3, 3/5 or similar setup multisig with unique signers and private keys securely stored (or an equivalent custody setup that is clearly stated). The multisig must be able to accept and interact with ERC-721s in order to accept the funding stream.
3/4 multisig.
Treasury Address: [Please list out ALL DAO wallets that hold ANY DAO funds]
Copra’s Ethereum mainnet Gnosis Safe Multisig: eth:0xcdc3977Bcb75eaB25E3c1B87BDAE5B099dFB327B
Contract Address: [Enter any specific address that will be used to disburse funds for grant recipients]
The distributor contract is to be created. More details on the setup (e.g., bi-weekly Merkle, etc.) and is to be shared in the bi-weekly progress updates.
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Clearly outline the primary objectives of the program and the Key Performance Indicators (KPIs), execution strategy, and milestones used to measure success. This helps reviewers understand what the program aims to achieve and how progress will be assessed.
Objectives: [Clearly state the primary objectives of the grant and what you intend to achieve]
Our key objectives are:
- To introduce and encourage users (lenders) on Arbitrum to a new DeFi primitive that enables secure fixed-yield lending to DeFi protocols
- Offer otherwise-unavailable undercollateralised loans to DeFi protocols in a scalable manner
Incentivising lenders with ARB for using a novel product, while being a positive addition to the Arbitrum ecosystem, by having the liquidity from the loan used to bootstrap the growth of different Arbitrum protocols.
Overall, the lenders and borrowers will form a flywheel which the ARB incentives can help boost.
Execution Strategy: [Describe the plan for executing including token distribution method (e.g. farming, staking, bonds, referral program, etc), what you are incentivizing, resources, products, use of funds, and risk management. This includes allocations for specific pools, eligible assets, products, etc.]
We are requesting 30,000 ARB.
The high-level distribution of the proposed grant is as follows, funds will be fully distributed to our users and partners.
| Percentage (%) | Amount (ARB) | Category | Description |
|---|---|---|---|
| 70% | 21,000 | Lenders | The amount of ARB allocated to each lending vault is to be confirmed, and to be shared and updated in the bi-weekly progress updates. |
| 30% | 9,000 | Borrowers | Interest rebates will be up to 15% of the paid interest. Only borrowers who commit for at least 4 weeks within the duration of LTIP is eligible. The amount of ARB allocated to each borrower is to be confirmed, and to be shared and updated in the bi-weekly progress updates. |
The requested amount and distribution would allow us to scale to at least $3.4mn worth of loans (see mechanisms in the below section) and will be crucial to us reaching our KPI of achieving $8mn TVL by 1H2024.
The per vault (or per borrower) allocation is to be decided, and to be shared in our bi-weekly updates. V1 will be the main avenue for our incentives and pools, until which it will be migrated to our V2 upon completion of our V2 security audits.
The incentives will be fully distributed no later than the 12 week duration stipulated by the DAO.
Any ARB incentives not distributed will be returned to the Arbitrum DAO.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric? [Provide relevant design and implementation details]
On the borrower’s side, interest fee rebates will be up to 15% of the paid interest and rebates are only eligible to borrowers who will issue loans throughout at least 4 weeks of the LTIP’s duration.
Taking an average interest rate of 25% (based on our previous issues loans and conversations with borrowers), and a duration of 12 weeks. Taking ARB’s price of $2.00 (at time of writing), we will be able to incentivise about $2.1mn worth of originated loans . Note that these loans will be parallelly active (since they have to be active throughout the 12 weeks), and converts 1:1 to our TVL.
Assuming $2.1mn worth of loans, with a base APR of 25% and 21,000 ARB incentives to lenders, they will be earning about 34% APR (of which 25% is organic). Note that our preferred settlement currency will be ETH (instead of USDC), and such yield offering is in a highly competitive position. We will not be enforcing a locking mechanism on the lenders to ensure a smooth UX, and considering lender’s viewpoint as Copra is a relatively new player in the market.
Due to the competitive rate offered to lenders, the base interest can be lowered, which would in turn scale up the available incentivised loans.
Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy. [Please also justify why these specific KPIs will indicate that the grant has met its objective. Distribution of the grant itself should not be one of the KPIs.]
KPI 1: Onboard 10 unique borrower protocols
Source of truth: Copra’s dApp, Dune (to be built)
KPI 2: Onboard 800 unique lenders
Source of truth: Dune (to be built)
KPI 3: Achieve $8mn in peak TVL
Source of truth: DeFiLlama (under integration), Dune (to be built)
Grant Timeline and Milestones: [Describe the timeline for the grant, including ideal milestones with respective KPIs. Include at least one milestone that shows progress en route to a final outcome. Please justify the feasibility of these milestones.]
| KPI | 4 weeks milestone | 8 weeks milestone | 12 weeks milestone |
|---|---|---|---|
| KPI 1: Borrower protocols | 4 | 8 | 10 |
| KPI 2: Unique lenders | 300 | 600 | 800 |
| KPI 3: TVL | $2mn | $4mn | $8mn |
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem? [Clearly explain how the inputs of your program justify the expected benefits to the DAO. Be very clear and tangible, and you must back up your claims with data]
Receiving a grant will significantly amplify our ability to onboard high-quality borrower protocols from the Arbitrum ecosystem. By strategically allocating the grant towards lender and borrower protocols’ incentives, Copra unlocks a credit market that is not previously available.
Enabling credit to previously unaddressed/unavailable market would 1) open up yield opportunities not present before, and 2) allow for the borrower protocol’s to grow more sustainably, via debt instead of just equity (token) financing.
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/No]
Yes.
SECTION 5: Data and Reporting
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 16. Along with this list, please answer the following:
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? Are there any special requests/considerations that should be considered?
Yes.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? [Please describe your strategy and capabilities for data/reporting]
Yes.
First Offense: *In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.
Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.
Third Offense: Funding is halted permanently
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)
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?: [Y/N]
Yes.