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:
Project Name:
DeltaPrime
Project Description:
DeltaPrime is a DeFi margin protocol on Arbitrum and Avalanche. Users can borrow up to 5x their collateral from lenders, which can be used for a wide variety of DeFi protocols, simply by connecting their wallet and depositing any supported (LP-) asset. Through this, lenders utilize a bigger part of their capital, borrowers can borrow more and integrated projects see increased TVL and volume.
Team Members and Roles:
Piotr Duda: CEO:
- 6 years of experience in web2 & web3 development
- Previously led industrial projects with over 1.5M$ cumulative budget
- 2.5 years founding core member @ DeltaPrime
Gavin Hasselbaink: CBDO
- 10 years of experience in effective communication
- TA trading experience in stocks; FX; Crypto.
- 2.5 years founding core member @ DeltaPrime
Kamil Muca: CTO
- 7 years of experience in web2 & web3 development
- led 20-headed IT team in financial project for HSBC
- 2.5 years founding core member @ DeltaPrime
Project Links:
Website
Demo
Github
Contact Information
Point of Contact: @klazinggav
Point of Contact’s TG handle: @JosAkleen
Twitter: @Klazinggav
Email: Gavin@deltaprime.io
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
DeltaPrime’s founding team has worked closely together on DeltaPrime for a substantial amount of time. DeltaPrime launched initially on Avalanche in January 2023 after 18 months of active development. Void of (the notion of) airdrops, relying on product-market fit only, the protocol amassed $3M TVL in its first month, $12M in its second month, and $20M in its fourth month. At the time of writing the TVL on Avalanche is $35M, placing DeltaPrime #6 in the Avalanche ecosystem. Moreover, 2/3rd of GMX v2s TVL is provided by Prime Accounts.
DeltaPrime launched on Arbitrum in September 2023, albeit with a limited product. Since then GMX and Trader Joe have been added to the protocol, significantly improving the freedom of investment (and with that value) of the platform.
What novelty or innovation does your product bring to Arbitrum?
DeltaPrime is the only cross-margin borrowing protocol on Arbitrum that allows users to trade and invest with leverage, with a basket of assets as collateral. This means that users can e.g. provide $GRAIL as collateral, to create a delta neutral ARB-USD GM position on GMX v2. Or they can deposit 400 $DAI (while it earns yield on Wombex) to borrow $500 BTC and $500 USDC, for a Trader Joe v2 position. All positions collateralize all other positions, allowing users to create and manage their own unique strategies on DeltaPrime, which can’t be created anywhere else.
Since this allows borrowers significant upsides for their portfolio management, compared to alternatives, they are willing to pay more as well. This is why lenders can lend out their capital at exceptional interest rates while still achieving high utilization (and therefore high capital efficiency).
As liquidity flows from less efficient overcollateralized lending platforms into DeltaPrime, this liquidity flows to where it’s really needed: (perp) DEXs. Instead of resting idly in an Aave, it deepens pool liquidity on the chain, lowers slippage, and allows Ethereum whales to join Arbitrum.
This way, borrowers, lenders, protocols, and the chain as a whole, benefit from DeltaPrime.
Is your project composable with other projects on Arbitrum? If so, please explain:
DeltaPrime is built to integrate with other protocols. Literally. While users can manage their position(s) from DeltaPrime’s user interface, every action (whether trading or LPing) happens through and for underlying protocols. At the time of writing, DeltaPrime Blue (the Arbitrum version) has integrated with a range of Arbitrum protocols ranging from swap aggregators and perp exchanges to AMMs. The complete list of currently integrated protocols is: GMX v1, GMX v2, Trader Joe, Yield Yak Swap, Yield Yak Yield Aggregator, Sushiswap, Level Finance, ParaSwap, and Beefy Finance. Before the LTIPP goes live, we will have PenPie, MagPie and potentially UniSwap integrated as well. Our unique architecture allows us to scale rapidly and infinitely.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
While DeltaPrime is truly innovative (only Sentiment was comparable but failed due to poor security practices), it does combine the best of leveraged, isolated vault-like positions ( GearBox, Vaultka, Cian, etc.) with the best of fully cross-margin collateralized lending protocols (think Aave, Dolomite or Radiant).
Both types of protocol are comparable to DeltaPrime in one way or another, but only the combination leads to the high yields DeltaPrime boasts.
Historical stablecoin deposit APYs: $500k+ of 1) DeltaPrime, 2) AAVE V3, 3) Gearbox, 4) Radiant V2, 5) Dolomite
How do you measure and think about retention internally?
Similar to the goals of this program, we look at TVL, utilization and in turn borrowed funds deposited in partner protocols primarily. In the single incentive program we have finished previously on Arbitrum we saw a 25% decrease in partner deposits and 15% decrease in DeltaPrime TVL before picking back up. While we understand that outflow at the end of an incentive program can’t be avoided, we aim to lower both numbers to with ~5% which is achievable due to the wider range of products being incentivized. This allows users to use a combination of protocols they would otherwise use as well, improving overall stickiness.
Relevant usage metrics(OBL Data Reporting + KPIs - Google Docs). For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:
Daily Active Users
Daily User Growth:
Daily Transaction Count
Daily Protocol Fee
Daily Transaction Fee
Daily ARB Expenditure and User Claims
Incentivized User List & Gini
TVL:
Withdrawals:
Borrowed Amount:
Daily Borrowing Volume:
Daily Deposits Volume:
List of Depositors:
List of Borrowers:
Utilization Ratio:
Loan Origination Volume:
Default/Liquidations:
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. We do request one publicly shared team-controlled wallet to participate. In the past we have done so in order to show the results of a delta neutral strategy (answer: 1,645% mean APY over 70 days with daily, constant growth), and we would like to keep doing this to show the power of DeltaPrime. While we would want to include the ARB incentives (in order to give the full picture), if accepted, we will commit to distribute any ARB this wallet receives back to the community at the end of the program, in the form of a game. See here the an example of the reporting during the previous incentive program: https://x.com/klazinggav/status/1757394847059910777?s=46
The address for this wallet would be: 0x326BAB3c053D54C5c206B7d378D715bc7864A1A1 and it would be funded with 2.000 USDC. Any ARB rewards it receives would be randomly given away to a user with over 2.000 USDC in supplied TVL for a minimum of 8 weeks. Upon request from the Arbitrum DAO these rewards can alternatively be returned to the DAO at the end.
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):
We created a channel in our Discord to discuss ideas with the community the first week. We then put it up for feedback and discussion in our Discord once the draft’s draft was finished.
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?:
No, we expanded from Avalanche to Arbitrum 7 months ago
On what other networks is the protocol deployed?:
Avalanche
What date did you deploy on Arbitrum mainnet?:
September 7th, 2023 Transaction ID Arbitrum Transaction Hash (Txhash) Details | Arbiscan
Do you have a native token?:
Planned, tokenomics docs are not yet publicly available
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
On Arbitrum, we ran an incentive program from GMX in ARB, valued at the time of approval at $100k. This achieved $8.7M TVL / $10.0M planned TVL in 10 weeks. On Avalanche we started a revised version of this program with GMX (with lessons learned), worth ~$350k at approval, which 3 weeks in is at $18.7M / $15M planned TVL. The current program builds upon the lessons learned from both prior programs, which are further elaborated on in the “Have you received a grant” section of this proposal.
Current Incentivization:
Currently DeltaPrime Blue has no incentives, and attracts capital solely through the protocol’s value-add to users.
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)]
If the GMX grant is considered an Arbitrum ecosystem-related program, then yes. Funds were allocated linearly to users for every borrowed dollar provided to one of our GM pools. Every 3 weeks a milestone deadline was set: if the TVL milestone was achieved, 100% of the incentives would be paid out, if the TVL milestone was not achieved, 50% of the incentives would be paid out for the next 3 weeks.
While this did have the desired effect of rallying the community behind a common goal, there was a principal-agent problem. For both DeltaPrime and GMX, the best outcome would be constant growth, whereas the community benefited from staying on as low TVL possible, until the milestone deadline approached. That way every GM user would maximize their share of the incentives. This however, led to TVL stagnation whenever a new milestone was hit, as no-one was incentivized to share the pools on social media until the very last moment, limiting the reach of the program. In the end on the day of the second to last milestone deadline, the TVL reached was 8.7M/9M.
While Avalanche is outside of the scope of this proposal, I do want to use this opportunity to share the outcomes of a similar program including our lessons learned. The main problem in our initial program was that the community benefited from postponing TVL increases until the very last moment. In our second iteration of this grant program, we therefore reversed that: Milestones lead to an increase in incentives for everyone, and there is a temporary speed-bonus. The faster a milestone is hit, the more incentives the community will receive the following week. For sustainability, this speed bonus is temporary and decays over a period of 2 weeks. This program led to the $19M TVL milestone being hit in the first 3 weeks.
Protocol Performance:
DeltaPrime has garnered $51M in protocol TVL, without a publicly traded native token. It has done so in collaboration with a vast number of protocols, ranging from GMX to Trader Joe, all of which are shown immediately when opening DeltaPrime’s landing page. It has opened up a range of new investment strategies, all of which allow users greater control over their risk/reward than otherwise possible.
With over 6000 total users, 1000 of which are currently on Arbitrum, DeltaPrime users have cumulatively transacted a total volume over $1B+, $30M of which has been transacted on Arbitrum. This while ‘only’ having amassed $12M on Arbitrum so far. While DeltaPrime doesn’t discriminate between integrated protocols, it has provided unique value to GMX.
At the time of writing, DeltaPrime’s Prime Accounts account for 66.9% of GMX v2’s TVL on Avalanche. 44.1% of GMX v2’s total liquidity on Avalanche comes from borrowed funds: This is liquidity that would otherwise be stuck in Aave, instead of deepening GMX pools, allowing traders more efficient trades. We aim to extend this value-add not only to the GMX ecosystem on Arbitrum, but to all of Arbitrum’s most popular protocols initially (from Uniswap to Sushiswap, from Magpie to Beefy) and to the wider ecosystem over time.
Protocol Roadmap:
Launch on Arbitrum: September 7th, 2023
Yield Yak / Beefy / Trader Joe: September 20, 2023
GMX: November 27th, 2023
UniSwap: Q2 2024
SushiSwap: Q2 2024
PenPie: Q2 2024
LiFi Bridge: Q1 2024
- The LiFi bridge is a bridge which allows users to bridge their assets from any chain, straight into a DeltaPrime lending pool on Arbitrum. This means that the high yields are not only highlighted and increased by the program, but will also more easily attract external capital into the Arbitrum ecosystem. Apart from deepening our pools, this also leads to more capital flowing into partnerprotocols like Pendle, MagPie and Trader Joe.
Audit History & Security Vendors:
DeltaPrime has been live for 14 months, without any code exploit. All major upgrades we perform go through multiple internal code reviews, in collaboration with Jakub Wojciechowski, prior independent auditor at OpenZeppelin and CEO at RedStone. They also get audited by top-tier third party auditing firms like Peckshield. To date, DeltaPrime has had 6 external audits, all of which can be found here. Next to these audits, we have a live bug bounty program together with HackenProof which pays up to $100,000 per bug found (soon to be increased to $200,000). DeltaPrime additionally works with Salus to protect against front-end / social attacks and Cloudvisor for best AWS security practices. If DeltaPrime or one of our integrated protocols was the victim of an exploit, we protect our user’s funds in collaboration with Hexagate, who monitor underlying smart contracts continuously and alert us if an exploit is about to happen. In the next stage of our collaboration, once a critical risk of an exploit is detected, Prime Accounts will automatically withdraw deposited funds to protect our users.
If an integrated protocol or DeltaPrime itself was to be exploited, we have an ever-increasing reserve fund, which at the time of writing underwrites $1.759.000 worth of risk. This is to be used for lenders of liquidity primarily. In the case of an exploit, we work together with Chainalysis, relying on their vast network in web3 to retrieve and / or freeze funds before they can be offramped.
Security Incidents:
DeltaPrime has never been exploited.
One of our integrated protocols, once leading Avalanche platform Platypus, was exploited in February, July and October 2023. The first exploit led us to set up and fund the stability pool to cover for potential future losses. Platypus’ July exploit led us to set up a partnership with both Atomica and Hexagate. Then in October, we removed Platypus from the platform and sharpened our exit-strategy with integrated protocols for faster future removal of integrations.
All lenders and part of the borrowers who were victims of the Platypus exploits, have been made whole by DeltaPrime’s ever increasing reserve fund.
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: 750.000 ARB
Justification for the size of the grant:
Grants can be used in one of two ways:
- To sustain inefficient protocols so they keep their users (as long as the grant lasts)
- To support efficient protocols and allow larger players to join for faster growth
DeltaPrime is the latter, a protocol that consistently boasts high real yield for lenders across chains, across pools.
The highest non incentivized stablecoin yields across all chains
DeltaPrime’s efficiency stems from its ability to safely match supply and demand of capital, as opposed to enforcing supply for every user. This means that passive lenders earn the fair interest rate on their capital, instead of the artificially low interest rates of overcollateralized protocols. Simultaneously, being able to borrow up to 5x, while keeping freedom of your portfolio as if it were your own wallet, gives greater capital efficiency to borrowers.
Since DeltaPrime will incentivize with this grant only borrowed funds which are allocated to partnerprotocols, incentives from this grant will only be used to support the wider ecosystem.
A grant for DeltaPrime is a grant for Arbitrum.
As for the specific size of the grant:
Prime Account: 650k ARB
30D Real Yield on stables is generally 16%, borrowers pay 18%
DeltaPrime has given excellent stable coin results, ever since its inception. Still we have seen that a rate of ~25% leads to consistent rapid growth of stable pools.
18% real borrow rate + 10% mean incentivized = 28% borrow rate
28% borrow rate = 24.5% deposit rate on Stables
30D Real Yield on volatile assets is generally 7%, borrowers pay 8%
During bullish sentiment, demand for volatile assets drops, lowering APY and slowing down growth on DeltaPrime. For this reason, it is important that these assets too get significantly incentivized, even if just to prevent a borrowing imbalance, leading to a lack of hedging opportunities, slowing down stable growth in turn.
8% real borrow rate + 10% mean incentivized = 18% borrow rate
18% borrow rate = 15.8% deposit rate on non-stables.
Goal of the grant (as specified in the following sections) is to reach $70mm TVL with 87.5% utilization, meaning 87.5% is borrowed and used to support partner protocols. With these rates we expect the borrowed amount to increase to ~$30mm rapidly due to initial hype + Pendle integration leading up to the grant. From there we expect to increase to $61.25mm borrowed, linearly, over the course of 12 weeks. This means the borrowed amount will increase with $2.61mm weekly. At 10% incentives with 30mm borrowed this means we need $3mm annually in incentives, which comes down to ~$57.54k in the first week. The week after we will need $62.54k. For the total duration of 12 weeks, we would need:
$57.54k * 12 + (5k / 2) * 12 * (1+12) = $1.080.480
Adding 1/5th ($220k) for speed bonuses, we propose using $1.3mm (650k ARB) to incentivize Prime Accounts.
Savings: 100k ARB
DeltaPrime naturally has fair deposit rates due to high demand in the protocol, and this program is expected to supersize that. For that reason our Savings accounts won’t need excessive incentives. With 8.33k ARB weekly, we can incentivize the pools for 12 weeks. While incentives are paid out on every dollar deposited rather than over every pool individually (in order to prevent larger pools from stagnating in growth), this would mean a mean incentive pool of 1.66k ARB per week, per pool. It is on the low end of the incentive spectrum, primarily used to garner attention to the Savings side (in order to prevent the borrowing cap of 92.5% to be the source of stagnation), with the Savings converting primarily on their own merits.
We’ll also add to deepening pool liquidity in the savings accounts (and attracting liquidity to Arbitrum) by finishing our
Grant Breakdown:
Prime Account incentives: 540k ARB
These funds will be used to incentivize using borrowed funds to deepen pools of our partner protocols.
Prime Account milestone bonuses: 110k ARB
These funds will be used as a bonus to those community members who helped us reach the next milestone. The faster a milestone is reached, the larger the bonus.
Savings incentives: 100k ARB
Incentives for the Savings pools, primarily used to attract eyeballs to the higher Real Yield of the platform.
Funding Address:
0xbb65FA45082035341b5748494B47dB2ac027a50d
Funding Address Characteristics:
2/3 safe multisig controlled by cold wallets securely stored by each of the founders
Treasury Address:
Arbitrum: 0x0E8822Cfb8374dAD12e15d72a95FAAe25a24faDb, 0x764a9756994f4E6cd9358a6FcD924d566fC2e666
Avalanche: 0x44AfCcF712E8A097a6727B48b57c75d7A85a9B0c, 0x18C244c62372dF1b933CD455769f9B4DdB820F0C
Ethereum: 0xF3F57c7C77C51DBaC85436E20623cb06959bD2fD
BNB: 0xf41B6dfB4e53936C893CFFE0501024cC07Cebf90
Contract Address: 0xf51B0bEe97C7aD45d272e07819e6b1B96de3fd1C
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:
Inefficient lending protocols enforce supply over demand in order to achieve security. This leads to artificially reduced yields, as users are disabled from increasing demand, without increasing supply further. DeltaPrime’s consistently high stablecoin yields are not the result of any difference in perceived risk. They are the result of a higher utilization and better use case of the protocol. Our main goal, therefore, is to use this to Arbitrum’s advantage, by attracting liquidity and allowing users to efficiently allocate this to deepen pools in their favorite DeFi protocols. While DeltaPrime on Arbitrum has only $11mm TVL at time of writing, it is extremely scalable, due to borrowed funds utilizing the deepest-liquidity protocols on Arbitrum: GMX, Pendle and Uniswap amongst others.
This makes our Primary Objectives:
- Unlock 17.5% of Aave’s liquidity on the Arbitrum Chain (~$70M TVL)
- Use 87.5% of this unlocked capital to deepen partnerprotocols (87.5% mean utilization)
Execution Strategy:
DeltaPrime has $11m TVL on Arbitrum, additionally users have transacted a total volume of $5.3mm in the month of February. For this incentive program we propose to allocate incentives to two main categories: 1) Prime Account pools, 2) Savings pools
Prime Account Pools (650k ARB)
The Prime Account is the essence of DeltaPrime: the place where users can borrow, trade and LP their assets freely and permissionless. Here, users design their ideal R/R strategy, with or without leverage, and are able to unlock liquidity to be deepened in our partnerprotocols. The Prime Account APY at the top of the account shows, ceteris paribus, the expected APY over the course of a year, and includes any borrowing costs made and any incentive token earned. The higher this number (given similar risk), the more borrowers are willing to pay for borrowing their assets.
Based on our experience with previous incentive programs, we propose a point-based system, where users earn points based on the unlocked (read: borrowed) liquidity LPd with one of our partners. We will not incentivize or discourage specific partnerprotocols, instead leaving it up to the market to decide where liquidity should be assigned to. Internal user research shows that most DeltaPrime lenders choose DeltaPrime as an alternative to overcollateralized protocols (like Aave), while Prime Account users choose DeltaPrime as an addition to partnerprotocols (like Pendle). The difference between the “alternative” and the “addition” is that the latter still keeps their collateral in the partner’s protocol as well as using borrowed funds to further strengthen those pools. This means that by solely incentivizing borrowed funds (as opposed to including collateral), we reward users for moving liquidity from inefficient lending protocols to innovative products, while both lenders and borrowers still fulfill (and generally improve on) their own needs.
The supplied TVL are all funds which are deposited in a partnerprotocol through DeltaPrime. A social element comes into play as incentives increase whenever a supplied TVL milestone has been reached. This is a milestone for total liquidity LPd with our partners. As noted earlier, we anticipate this number to increase with $2.61mm weekly. With the first weekly milestone at 32.61mm, whenever a milestone is reached, a 9k ARB speed bonus is allocated to the top 200 largest LPers at that point in time based on their contribution. Immediately after, the new milestone is set 2.61mm from the previous supplied TVL, to be hit within the next 7 days. If a milestone is not hit within the allocated time, that week’s speed bonus is instead used as a ‘retention bonus’, with the new milestone being 2.61mm away from the previous supplied TVL. At the end of the program, all allocated speed bonuses will be paid out. Additionally, 75% of the retention bonus pool will be paid out to Prime Accounts based on their minimum supplied TVL over a period of 8+ weeks. The other 25% will be paid out to all Prime Accounts based on their minimum supplied TVL over a period of 4 to 8 weeks.
This speed bonus incentivizes users to share the program with other (potential) DeFi users, with the pro-rata rewards nullifying the effects of sybil accounts making the leaderboard (allowing smaller wallets to get in the top 200 as well). From a user-perspective this strategy is highly intuitive: the more they borrow and allocate to partners, the more incentives they receive. Hit a milestone, and a team-bonus for the top 200 LPers is paid out. Note that “borrowing a lot” does not equate to higher risk, as Prime Accounts are oftentimes used for hedging purposes.
Savings (100k)
All the demand in the world won’t help if there is no supply. In order to help speed up the depth of the Savings pools, we propose to allocate $200k (100k ARB) to these pools. Since the first meters are the most important, we suggest allocating the full $200k evenly over a period of 12 weeks. Due to the consistent high demand of stables (and oftentimes the lack of supply in the stablepools) USDC and DAI would be incentivized in a 1.5:1 ratio as opposed to the volatile assets. With $200k (100k ARB), the total ARB distributed would amount to 8.33k ($16.66k) weekly which, while shallow, enables us to promote the Savings accounts with incentives as well. This leads not only to an increase in demand from airdrop hunters, but more importantly, to more eyes on the Savings page leading to long-term depositors. Additionally with the integration of LiFi, which allows users to bridge assets from any other chain directly into our Arbitrum pools, we’ll attract outside capital to Arbitrum as well.
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]
In the Prime Account a leaderboard will be added, to give a sense of achievement. Other than that we will not implement additional designs to the Prime Account to incentivize stickiness. The best way to achieve sticky liquidity, is to have a product that provides value even without the incentive program. DeltaPrime is this product. Large players currently not being able to enter slows down our growth, but once TVL is in, and a sufficient share of pool liquidity is utilized (borrowed), TVL does not tend to flow out from Prime Accounts. This is in part due to the effort committed to set up a successful strategy in the first place, and in part due to DeltaPrime implementing over time the vast majority of popular protocols. There are no additional fees in using DeltaPrime (except for liquidation fees should your health reach 0%) and collateral can be used with partnerprotocols regardless of whether you borrow or not.
Per illustration, the previous grant we received led to an increase from $3mm DeltaPrime TVL and $0 contributed TVL (to that partner), to a $13mm DeltaPrime TVL and $8.7mm contributed TVL at the last day of the program. While outflow from the partner on DeltaPrime was 25% due to ending of the program, outflow from DeltaPrime itself was only 15%, meaning that the remaining liquidity still provided value to the Arbitrum ecosystem due to the stickiness of DeltaPrime itself.
The Savings side is a bit different. The best way to achieve stickiness with lenders is to provide a safe and easy platform, with the best rate in the market. For this reason our main priority is to cater to Prime Account development, integrating the most popular protocols in the Arbitrum ecosystem.
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.]
The key KPIs will be TVL and Utilization ratio. TVL signifies the immediate potential for DeltaPrime to contribute to Arbitrum at any given moment depending on its efficiency and the utilization ratio shows the efficiency of DeltaPrime at any given moment. Together they show the added value DeltaPrime brings to Arbitrum. For both an LTIPP dashboard will be created for governance to use to verify accuracy.
Grant Timeline and Milestones:
The grant will be distributed over a period of 12 weeks, starting from the moment fundstreaming starts.
TVL – 12 weeks
Month 1: $43.3mm
Month 2: $56.6mm
Month 3: $70mm
With a number of exciting integrations coming up in the weeks leading up to the grant (including Pendle and Uniswap), in addition to the initial anticipation for the grant, we expect to increase our TVL from $11M to $20M before we start the program. In our Avalanche counterpart, DeltaPrime increased its TVL with 47% within the first week after starting its incentive program, in part due to speed bonuses. During this period utilization remained at record levels. Expecting similar (if not more) hype for this program, a 50% increase in the first week is feasible at worst. This would set us up to start the program with a minimum of $30M of TVL. In the following weeks we assume a gradual increase, where the effects of fading hype get replaced by wider recognition within the Arbitrum ecosystem. This means we expect $13.3mm monthly increase in TVL for a period of 3 months (12 weeks).
Utilization ratio
As the positive flywheel effect leads to increased volatility in utilization, the incentivized demand tends to regularly cap tokens to their 92.5% borrowing capacity. Because of this, we can expect high utilization rates throughout the whole program. The 87.5% mean goal will not change over time.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
DeltaPrime exists by the grace of its partners. DeltaPrime fosters growth within the Arbitrum ecosystem by unlocking idle liquidity from less efficient lending platforms. This liquidity is then used by our users in order to deepen pool liquidity of more useful protocols Like GMX, Yield Yak, Pendle or Trader Joe. For those who read through the whole proposal, you will note that we look at borrowed funds and reward not that which is borrowed, but only that which is borrowed AND is provided to one of our partners. While we are here to help support our partners, we do not decide which protocol the community can or can’t support with borrowed funds (except for reasons of security). This grant proposal is structured in a way that users can choose themselves which integrated protocol they support. Whichever protocol that is, as long as they provide a benefit to the wider ecosystem, they are eligible for rewards.
DeltaPrime fosters innovation within the Arbitrum ecosystem by allowing users to borrow undercollateralized and fully cross margin across applications, with a range of assets as cross-margin collateral. An innovation that currently does not exist on Arbitrum or Ethereum. While this benefits the chain as a whole as specified above, it benefits individual borrowers by giving them the ability to control their delta- and beta exposure like never before, while simultaneously leveraging their positions. Lenders of capital, on their turn, enjoy greater use of their capital, as they are no longer forced to compete with users that do not want to lend in the first place. Additionally, due to the strategic advantage Prime Accounts give, their high yields are sustainable, as shown by the consistent high yields DeltaPrime has generated for over a year now, despite continuous growth.
The LiFi integration, allows users to seamlessly migrate funds from their wallet from any other chain, into DeltaPrime’s lending pools with the click of a button. This allows anybody to bridge their assets from eg Ethereum to Arbitrum DeltaPrime pools to A) benefit from the historically high yields and B) provide additional value as 87.5% of these funds will end up in protocols like Pendle, GMX, Trader Joe and Uniswap.
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
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 21. 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, we are. We do request that participating in this program does not require active growth-prevention of potential control groups. In part because we have no control over this (an integrated protocol can choose to incentivize their own pools which we have integrated for example), in part because we would not want to stand in the way of our own growth, whether that is on Avalanche or on Arbitrum.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Yes, DeltaPrime has worked with flipside in the past for the GMX incentive program. During this program we also reported on the success of the program with bi-weekly updates. We did not miss an update during this period.
*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
