[Election & Application Thread] Arbitrum D.A.O. (Domain Allocator Offerings) Grant Program

Applications for DAO programs
18

Applicant Information

Pitch deck 20-01-2025

Name of Applicant & Applicant’s Representative (If applicable): Castle Labs (represented by NDW and Chilla)

Twitter/x (if applicable): @castle_labs

Representatives: @cryptondee / @chilla_ct

Telegram (if applicable): @cryptondee / @chilla_ct

The role being applied for: New Protocols and Ideas

Background & Skills

Castle Labs, a decentralized research collective, has been deeply embedded in the Arbitrum ecosystem since its inception. The team has contributed extensively to governance and incentive program design. This includes advisory roles in the Long-Term Incentive Program Pilot (LTIPP) and STIP Bridge initiatives, which provided insights into refining Arbitrum DAO’s strategic frameworks, with over 60 protocol applications reviewed followed by a close working relationship with the teams throughout the distribution of their incentives

Key contributions to Arbitrum include:

  • Publishing research and analyses on Arbitrum-native protocols,

  • Producing educational content that simplifies complex topics, including dashboards and reports on STIP performance.

  • Participating in governance initiatives, such as the Multisig Signer Service (MSS) and the ARB Staking Rewards Source working group, to ensure transparency and alignment with the ecosystem’s goals.

Castle Labs, a research-driven advisory collective, operates at the forefront of decentralized finance (DeFi) and blockchain innovation. Originating as a community meritocracy, Castle Labs has evolved into a sustainable organization emphasizing transparency, collaboration, and innovation. The team engages across diverse sectors like DeFi, AI, interoperability, and privacy, collaborating with leading ecosystems such as Arbitrum and Berachain. With expertise spanning research, funding, and advisory, Castle Labs provides tailored support to projects, ensuring their success. Through initiatives like The Castle Chronicle newsletter, the collective shares insights and fosters education, solidifying its role as a trusted partner in different ecosystems. Castle Labs will be represented by Chilla and NDW.

Chilla’s primary experience stems from his previous full-time role at Dewhales Capital, an investment DAO for nearly two years, where he reviewed projects daily for investment purposes. He has also advised crypto startups on tokenomics, go-to-market strategies, product development, and pitch deck preparation.

NDW brings over a decade of experience in stock trading, investment due diligence, and strategy development. During his career, he has reviewed hundreds of pitch decks, whitepapers, and teams to assess their potential. As a lead at Castle Labs, he spearheaded the creation of a dealflow arm, where in less than a year, over 150 projects were reviewed for potential investment. This effort resulted in six investments totaling $700k, applying rigorous due diligence frameworks to evaluate projects effectively.

Domain-Related Experience and Vision

Castle Labs’ experience in dealflow, governance, consulting numerous protocols of different sizes, and incentive structure design is pivotal for evaluating new protocols and ideas. Our due diligence methodology emphasizes a holistic evaluation process covering technical design, team capabilities, financial risks, governance, and community engagement. This approach ensures we prioritize the most innovative and impactful projects to drive ecosystem growth. Resources are limited, so prioritizing the most innovative and impactful projects is essential.

NDW has over 10 years of experience across intrinsic value investing, distressed debt analysis, start up evaluations, and blockchain funding (ICOs, IDOs, IEOs, LBPs, etc.). He has a well-rounded perspective on projects of all sizes and stages. This enables him to assess the idea and the execution capabilities of founding teams. Feedback is crucial—even for teams not approved for grants, we aim to provide actionable insights and feedback to help them refine their proposals and stay within the Arbitrum ecosystem.

Chilla’s academic background allows him to proceed through a quantitative and qualitative analysis of projects in a systematic and structured way. Furthermore, the experience accumulated during his work in web3 by reviewing more than 600 projects in various verticals of the crypto world in about 2 years allowed him to develop a deep vision for the fundamental properties of a crypto start up, as well as the development of a series of methodologies to help them in their all-round development.

Vision

For Arbitrum’s ecosystem, the focus should be twofold:

  1. Strengthening Arbitrum’s DeFi Presence: Despite Arbitrum’s strong foundation in DeFi, innovation has slowed compared to emerging trends on other chains like Solana and Base. We believe Arbitrum’s dominance can be reignited by fostering experimentation and composability in DeFi. Funding projects that push boundaries at the intersection of new innovations like AI, RWA, payments, to name a few, rather than sticking with"safe" ideas, will catalyze breakthroughs and draw developers back to the ecosystem.

  2. Leveraging Arbitrum’s Advanced Tech Stack: Orbit chains and Stylus present transformative opportunities. However, projects must utilize these technologies because they are integral to their success, not just as showcases. For example, a Stylus-built AMM on an Orbit chain might demonstrate technical proficiency but may not drive meaningful user adoption. Instead, we should focus on:

  • Applications that significantly enhance user experiences, such as seamless account abstraction.
  • Games that leverage Orbit chains for engaging experiences beyond financial speculation.
  • Novel financial primitives and dApps that solve real problems and attract sustainable user bases.
  • Scalable solutions with long-term potential and meaningful impact across the ecosystem on metrics like Total Value Locked, Daily/Monthly active users, total new users onboarded.
  • Teams that push the Arbitrum stack to the edge of what is possible.
  • Dev tooling to further improve developer experience and lower the barrier to entry to develop new dapps on Arbitrum

Our broader vision extends to nurturing high-growth sectors that have yet to establish a foothold in the ecosystem. These include:

  • AI-driven agents and tools.
  • On/off ramp payment solutions that simplify blockchain interactions.
  • Consumer-facing applications that make blockchain intuitive.
  • DePIN (Decentralized Physical Infrastructure Networks) and DeSci (Decentralized Science) initiatives.

We also see immense potential in leveraging Arbitrum’s Timeboost technology. By mitigating spam, minimizing MEV exploitation, and streamlining user interactions, Timeboost not only enhances the user experience but also creates an opportunity for the Arbitrum DAO to capture new revenue streams that do not come at the expense of users since the value being captured already exists.

Ultimately, our vision is to empower builders with the resources and guidance to create groundbreaking applications that drive meaningful adoption and ecosystem growth. We aim to enable projects that can onboard the next 100k users and showcase Arbitrum as the go-to platform for innovation.

Grant related Experience

Castle Labs has extensive experience managing and advising on grants within the Arbitrum ecosystem, notably through our advisory roles in the Long-Term Incentive Program Pilot (LTIPP) and Short-Term Incentive Program (STIP) Bridge. These programs provided invaluable insights into designing efficient grant frameworks and evaluating protocol applications. Besides, our expertise in dealflow and due diligence processes along with our core advisory business that drives go-to-market strategies and content strategies are also key assets in our ability to assess and support projects effectively post grant applications.

LTIPP and STIP.b Contributions

  1. Application Refinement and Guidance:

  • Reviewed over 60 protocol applications across both programs, ensuring alignment with Arbitrum’s goals and facilitating iterative improvements through structured feedback.
  • Worked closely with protocols to refine their applications, helping teams define realistic goals, justify funding needs, and strengthen overall proposals.

  1. Framework Development:

  • Assisted in designing scoring rubrics and application templates that streamlined evaluation processes and enhanced transparency for applicants and stakeholders.
  • Shifted the focus from delegate-heavy reviews to a council-led analysis process, improving efficiency and accuracy in application evaluations.

  1. Pilot Outcomes:

  • Helped reduce total grant requests by 50% (from 152.4M ARB to 65.9M ARB) through collaborative revisions, ensuring resources were distributed judiciously.
  • Supported teams in building strong incentive mechanisms aligning their goals with short-term program objectives.

Key Insights and Methodology

Our advisory work emphasized:

  • The importance of feedback loops to improve application quality and program outcomes.
  • A data-driven approach to assessing project viability and alignment with ecosystem needs.
  • Transparent documentation and reporting practices to maintain accountability and build trust.

This extensive grant management experience underscores our ability to evaluate proposals, provide actionable feedback, and effectively allocate resources to drive meaningful impact in the Arbitrum ecosystem. Operating as a decentralised collective, Castle Capital has honed project management skills through its involvement in the Arbitrum ecosystem. An internal committee efficiently handles Castle’s responsibilities as an Arbitrum delegate, including research, feedback, proposal support, and voting, in a decentralised manner. As LTIPP and STIP Bridge advisors, Castle Capital managed collaborations with over 60 protocols and took ownership of the database management system used by advisors and council members. This experience underscores the firm’s ability to effectively manage complex, multi-stakeholder projects.

How a Good Grant Proposal is Structured

A good grant proposal should include:

  • Team Strength: The founding team must have relevant expertise, such as technical skills for building a product or specific domain knowledge.
  • Clear Objectives: Applicants should articulate their goals, if applicable using data-driven KPIs, detailing what they aim to achieve and how their project aligns with Arbitrum’s priorities.
  • Market Validation: Evidence of market research, target audience identification, and potential product-market fit.
  • Competitor Analysis: Applicants should demonstrate an understanding of existing solutions and how their project differs or improves upon them.
  • Implementation Plan: A clear roadmap, including milestones, metrics for progress, and success measurement.
  • Budget Transparency: A well-researched budget, supported by quotes and breakdowns, to justify the grant amount.
  • Measurable Impact: A clear explanation of how the project benefits the Arbitrum ecosystem and its broader user base.
  • Post-Grant Roadmap: Plans for sustainability and long-term contributions to the ecosystem.

Key Points for Approval

  • Alignment with Arbitrum’s ecosystem needs and technological advantages.
  • A strong, capable team with demonstrated experience.
  • Novelty and innovation, addressing gaps, or introducing new ideas.
  • Implementation should be feasible with a detailed plan and clear deliverables.
  • Measurable impact, including ROI and potential ecosystem growth.
    • Bonus if the requested amount is justified by price research.

Deal Breakers

  • Weak team with no relevant experience (unless other factors score highly).
  • Lack of budgeting and cost justification.
  • Absence of market research or understanding of the crypto ecosystem.
  • No measurable output, no capacity for producing such output, and no impact on Arbitrum or the broader ecosystem

Declaration of Conflict of Interest

Castle Labs has the following potential Conflicts of Interest:

  • Research Member of ARDC V2.
  • Grantee of the Education Domain Questbook (Season 2).
  • Member of the MSS
  • Atomist (Castle Labs Founder) sits on the GMX Governance Committee.
  • Castle Labs offers sponsorship services for our newsletter and research blog to a number of vetted protocols - currently, none are service providers or participants of the DIP.
  • Castle Labs offers marketing, growth, and content services to a number of protocols - currently, none are service providers within the DAO or are participants of the DIP.
  • Castle Labs has previously worked with clients on Arbitrum such as Level Finance, Aark Digital, Bonsai DAO, Maia DAO, Gloop, Brahma, and many other non-Arbitrum protocols.
  • Castle Labs has an ongoing working relationship with Curvance.
  • Castle Labs is available to answer questions on any of its future or past engagements to address issues of conflict of interest in the future.
  • NDW is a multisig signer of Gearbox DAO
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