Dolomite STIP Program Updates

DAO Programs & Initiatives Biweekly Updates (STIP)
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Dolomite Final + Bi-Weekly STIP Update 3/22/2024

Recap of the Previous Two Weeks

ARB Received Last Disbursement: 0

ARB Utilized as Incentives in the Last Two Weeks: 72,000 oARB

Contracts incentivized over the last 2 weeks: 0x6Bd780E7fDf01D77e4d475c821f1e7AE05409072

ARB left over: 0

Plan for leftover ARB: All ARB has been utilized by oARB vesters!

Summary of incentives: Over the past week, we distributed oARB to the same markets as the prior bi-weekly updated. APRs remain elevated and we have seen a sustained increase in TVL and usage of the platform.

STATS

Average daily TVL: $64,489,298.48
Average daily transactions: 967.86
Average daily volumes: $5.43M
Number of unique user addresses: 504
Total unique user address growth: +218
Transaction fees: $154,147.80
Link to Dashboard showing metrics:

Plan For the Next Two Weeks

oARB rewards has been turned off after a final emission on March 27. Our UI also transitioned to no longer show rewards being factored into the interest rates. If we are made recipients for the STIP Bridge, we will honor all old oARB and will continue running the program with a lower output to taper off yields.

Reflection on Dolomite’s Growth during STIP

Dolomite has grown considerably thanks to the STIP grant, bullish tailwinds from the market, and continuously shipping meaningful updates and listings that drive the usefulness of Dolomite. We are extremely grateful and humbled to be recipients of the grant, and we hope some of the stats below show how well the grant was put to use!

Overall Stats and Growth from STIP

Since our first bi-weekly update,

  • Dolomite’s daily average TVL grew from $12.25M to $64.5M (+426%)
  • Dolomites average daily volumes grew from $1.99M to $5.43M (+173%)
  • Total unique wallets grew from 6,934 to 13,627 (+96.5%)
  • Bi-weekly transaction fees grew from $8,940 to $154,147 (+1,624%)
  • oARB Data:
    • A total of 2,482 vests have been opened up
    • 723,004 oARB opted into max vesting to receive their ARB for free
      • This is spread across 1,785 vesting positions
    • 276,996 oARB opted into non-max vesting to receive their ARB faster (for a fee)
      • Of this amount, 44,011.49 has not not matured yet
      • This is spread across 697 vesting positions
    • Dolomite accumulated 126.57 ETH in POL from short-term oARB vesters who opted for a shorter vesting duration, instead of choosing the max vesting duration
      • This ETH is currently deposited in Dolomite and is helping underwrite additional liquidity. Most popularly, this liquidity has been instrumental for PT-eETH looping strategies, which recently has played a big part in Dolomite’s growth

Impact of Using oARB

Choosing to create a novel distribution mechanism for the ARB that the Arbitrum DAO allocated to Dolomite was the best decision we could have made. While oARB was initially met with friction, the adjustments we made to allow for a longer vesting in exchange for free oARB conversion was met with significant usage, TVL growth, and positive sentiment. We even mixed in our XP Program into oARB vesting, enabling level 4+ users to accelerate their vesting to 3.75% discount per week instead of 2.5%

Now that STIP is over (for now), we have 1,785 long-term oARB vesters who have 723,004 ARB locked up with oARB for vesting, which matures between May 22, 2024 and December 31, 2024 (depending on when they began vesting and if they achieved level 4+). Due to their lingering oARB vesting positions, they established a relationship with Dolomite that will bring them back to the dapp continuously for months to come.

The Arbitrum DAO should be extremely pleased with the results of the oARB distribution mechanic. Dolomite successfully warded off predatory value extractors, was able to lock up almost 75% of the ARB that was granted to Dolomite for months beyond the end of STIP, and even created a sink for the paired ARB that is coupled with each oARB vesting position. This sink and time-based vesting process has resulted in more distributed ARB sell pressure and more users that are committed to Arbitrum over the long term.

Interestingly, if you dig into the profile of each long term oARB vester, you’ll notice a few strategies that were executed for this pairing process:

  1. Borrow the ARB for oARB pairing on Dolomite. This was a particularly smooth UX flow, since users were able to tap into Dolomite’s virtual liquidity for this borrowing process (paired ARB is sourced from user’s Dolomite Balances). It spurred additional borrowing activity for Dolomite which led to more transactions, sequencer revenue, and fee accrual for Dolomite and the Arbitrum DAO.

  2. Acquire ARB for oARB pairing across the various DEXs in the Arbitrum ecosystem. The realization for many that Arbitrum was going through a renaissance of activity led some to acquire a long term position in ARB, and they didn’t mind locking it up in an oARB vest for months.

  3. Withdraw ARB for oARB pairing from CEXs. We noticed various users would withdraw ARB from CEXs like Binance to their wallet and then would deposit this ARB on Dolomite to initiate the pairing process. This user journey was especially exciting to see unfold, because it brought activity back on chain that was otherwise lost to Binance being used as a place to custody the users’ assets.

How is Dolomite doing now with incentives turned off?

We have been monitoring usage closely since oARB’s final distribution on March 27, 2024. So far, Dolomite has been able to retain nearly all of the TVL it has accumulated. At the time of writing, we have $62M in TVL and total value borrowed (TVB) remains elevated at $21.8M. We’re humbled by the retained users, lenders, and borrowers, and we intend to continue shipping exciting features and new listings to make Dolomite the best possible lending protocol on Arbitrum.

What would we change with oARB if Dolomite is granted STIP.B?

The primary complaint we heard from users with significant capital deposited was that completing tasks from the XP program is not feasible from such high-value wallets. In exchange for the capital they’re providing, they really wanted Dolomite to implement a threshold number (like $100,000+ in net equity across their deposits/positions) that allows them to receive the 3.75% preferential discount per week. This way we can still encourage high net worth users, institutions, DAOs, and funds to participate who, for various reasons, feel like they cannot utilize the XP program. Perhaps we’ll explore this for STIP.B if we’re able to receive an extension.