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: Kurapika
Project Name: Factor
Project Description: Factor is building the composable layer of DeFi. The protocol introduces a unique blend of modular financial primitives allowing users to create, automate, and share their DeFi strategies on Arbitrum. We aim to bridge the gap between TradFi and DeFi by simplifying complex financial strategy creation and making them available on a user-friendly platform.
Team Members and Roles: Detailed in section 2a in full.
Project Links
Website: http://www.factor.fi
dApp: http://app.factor.fi
TG: Telegram: Contact @FactorDAO
Discord: Factor
Twitter: x.com
Email: info@factor.fi
Contact Information
Point of Contact (note: this should be an individualâs name, not the name of the protocol): [forum handle]: Kurapika
Point of Contactâs TG handle: KurapikaDAO
Twitter: Kurapika_DAO
Email: kurapika@factor.fi
Do you acknowledge that your team will be subject to a KYC requirement?: Yes
SECTION 2a: Team and Product Information
Provide details on your teamâs 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 productâs 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]):
Our team comprises of DeFi natives with extensive backgrounds in smart contract development, risk management and financial instrument building. Our key members have previously contributed to notable projects in the DeFi space and beyond, such as Synthetix, Kyber, JPM, IBM and more, bringing innovations in liquidity provision, yield optimization and beyond. Weâve successfully executed projects that have attracted substantial user bases and TVL, as well as demonstrating our capability to deliver high-quality, impactful financial solutions.
| Member | Responsibilities |
|---|---|
| Kurapika | Project Lead |
| ShortCall | Treasury & Security |
| Andrea0x | Product Manager |
| Imran | Marketing Strategy |
| Sandra | Dev Rel |
| Lianne | Growth Manager |
| Hailey | Ecosystem |
| Kai | Technical Writer |
| Yanzero | Lead Developer |
| p37a | Smart Contracts |
| Dewaxindo | Smart Contracts |
| Nakano | Smart Contracts |
| Fasih | Smart Contracts |
| Dims | Backend |
| Sandro | Backend |
| Pollen | UI/UX |
| Pham | Design |
| Asaadam | Frontend |
| Owklama | Frontend |
| Ahsan | Frontend |
*Excluding freelancers and part-time contributors
**References: Available upon request, respecting privacy and confidentiality agreements.
What novelty or innovation does your product bring to Arbitrum?
Factor brings a new level of accessibility and composability to the Arbitrum DeFi ecosystem by simplifying the creation and management of complex, cross-protocol strategies. Our innovative infrastructure empowers users to build and automate sophisticated DeFi strategies using a simple interface, without the need for coding knowledge or deep technical expertise.
At the core of Factorâs innovation are the âBuilding Blocksâ, which abstract operational logic of into modular, reusable components. These Building Blocks provide a standard interface for users to interact with different protocols, allowing them to focus on strategy creation rather than the intricate details of implementation. For example, the Leverage Building Block encapsulates all the functions required for users to manage loans across multiple integrated lending protocols, making it easy for users to incorporate leverage into their strategies.
Factorâs Adapters further enhance the platformâs composability by enabling secure and permissionless interactions with external DeFi protocols. Adapters generalize core financial operations by implementing protocol-specific smart contracts that interface directly with external protocol smart contracts. This abstraction of protocol-specific code allows multiple financial functions to be combined into a single multi-step transaction, streamlining cross-protocol interactions and making it easy for users to create complex strategies.
By simplifying strategy creation and streamlining cross-protocol interactions, Factor lowers the barriers to entry for various market participants within the Arbitrum ecosystem:
- Strategists can quickly build and deploy sophisticated strategies without needing to
worry about the technical details of integrating with multiple protocols. - Depositors can easily access a wide range of community generated strategies via Discover, enabling them to participate in DeFi and earn yields with minimal technical knowledge.
- New protocols can rapidly integrate with Factorâs ecosystem, leveraging the platformâs composability to offer their services to a broader user base and tap into new liquidity pools.
By providing these rails and lowering barriers to entry, Factor is driving innovation and growth within the Arbitrum DeFi ecosystem. The modular architecture and user-friendly interface are poised to unlock new opportunities for collaboration, experimentation, and value creation, cementing Factorâs position as a key enabler of DeFi innovation on Arbitrum.
Is your project composable with other projects on Arbitrum? If so, please explain:
Factor is highly composable with other projects on Arbitrum, serving as a connective tissue between a wide range of Arbitrum-native DeFi protocols. Our platform integrates with these protocols, allowing users to leverage their diverse functionalities, such as borrowing, lending, trading, and liquidity provision, within a single, automated strategy.
This composability enables users to create highly effective and tailored strategies that capitalize on the strengths of various Arbitrum-based protocols. By combining multiple protocols and their respective functionalities, Factor empowers users to access diverse yields and opportunities across the ecosystem, all within a single, user-friendly platform.
Moreover, Factorâs composable infrastructure will foster a thriving ecosystem by allowing developers to create custom strategies using our SDK and integrate them seamlessly into their own applications or backends. This promotes collaboration and innovation within the ecosystem, as developers can build upon existing strategies and contribute to the growing library of primitives available on Factor.
By serving as a central hub for creating and managing composable DeFi strategies, Factor is uniquely positioned to drive the growth and adoption of DeFi on Arbitrum. Our platformâs ability to integrate with a wide range of protocols and provide users with the tools to create and share innovative strategies sets it apart as a key player in unlocking the full potential of Arbitrumâs DeFi ecosystem.
A full list of integrated protocols (with more pending) can be found here: Supported Protocols | Factor Docs
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
While there are several protocols within the Arbitrum ecosystem and other blockchains that can compete with isolated aspects of Factorâs infrastructure, such as Furucombo for strategy building, DeFiEdge for LP management, and Summer Fi (Leverage). At Factor we are able to distinguish ourselves by providing a comprehensive and unified platform that surpasses the limitations of these individual categories provided by other protocols.
How do you measure and think about retention internally? (metrics, target KPIs)
Our approach to collecting protocol data utilises both on-chain and off-chain sources to achieve a comprehensive understanding of our platformâs performance. Growth and variability across the aforementioned datapoints (see Section 4) will provide a reliable indicator of user retention. In addition, we have set up off-chain analytics to learn more about usage patterns to better identify bottlenecks in user retention.
Relevant usage metrics - Please refer to the OBL relevant metrics chart 6.
For your category (DEX, lending, gaming, etc) please provide a list of
all respective metrics as well as all metrics in the general section:
General
- 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
Lending/Leverage
Although Factor is not a lending protocol, some of the metrics below are suitable as the ability to manage leverage is an integral part of the infrastructure.
- TVL
- Withdrawals
- Borrowed Amount
- Daily Borrowing Volume
- Daily Deposits Volume
- List of Depositors
- List of Borrowers
- Utilization Ratio
- Loan Origination Volume
- Default/Liquidations
Yield Aggregation
Pertains to Factorâs yield aggregation capabilities.
- TVL
- Trading Volume
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, the team agrees to this.
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, the proposal was drafted in-house by the core team.
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 is the home of Factor.
On what other networks is the protocol deployed?
Factor is not deployed on any other networks.
What date did you deploy on Arbitrum mainnet?
Our native token was deployed Feb 19, 2023.
- Timestamp: Feb-19-2023 09:27:45 PM +UTC
- Tx hash: 0xc84c252d3c539c12d59a43453fe5172558dfd4f277e26c3e223234cc1c1d948a
Do you have a native token?
Yes, our native token is FCTR. Please see our governance docs for additional details: FCTR Token | Factor Docs
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
Factorâs first on-chain incentive programs, Scale and Boost, launched on February 27th, 2024. Scale involves staking FCTR tokens to vote on the distribution of weekly gauge rewards to various vaults on Factor. This democratizes the allocation of protocol rewards through community voting. Between February 27 to March 6, every dollar spent on Boost (direct incentives) generated 56x more in TVL. Factor has also seen additional growth as the first emissions from Scale have commenced.
Boost allows for the allocation of any ERC20 token as additional rewards for depositors in a target strategy vault, automatically apportioning the reward tokens to vault depositors.
Effects of Boost and Scale
A prime example of the impact of incentives can be seen in the performance of the Siloâs wstETH/WETH and PT-eETH/WETH vaults. Despite offering modest incentives of approximately $1k/week, the vaults quickly grew to $410k.
Current Incentivization: How are you currently incentivizing your protocol?
There are currently two incentives mechanisms running on Factor; Scale and Boost. See the linked documents for more information.
Scale: Factor Scale | Factor Docs
Boost: Factor Boost | Factor Docs
Have you received a grant from the DAO, Foundation, or any Arbitrum
ecosystem related program?
No, Factor has neither applied for nor received grants from the DAO, Foundation, or any other Arbitrum related ecosystem programs in the past.
Protocol Performance: [Detail the past performance of the protocol
and relevance, including any key metrics or achievements, dashboards,
etc.]
TVL / MoF Growth*: Within a couple weeks of beginning our GTM push, the total value Managed on Factor grew from approximately 80k to 860k, an increase of more than 10x. This is based on existing curated strategies with the total value expected to grow exponentially once users are able to create their own strategies (expected early Q2) and even share their strategies (Q2) via Studio Pro. The release of self-managed automated strategies on Studio is expected to coincide with the distribution period thereby greatly amplifying interconnectivity between various Arbitrum protocols.
MoF = collateral + debt + yield vault deposits
This differs from Defillamaâs TVL definition where debt is not included
Voter Engagement: The latest Scale epoch garnered 71.9k votes from a total supply of approximately 125k veFCTR. This represents a voter turnout of >57%.
DeFiLlama available here: https://defillama.com/protocol/factor
Endpoint for collateral and debt values here: https://factor-api.fly.dev/value-managed-breakdown
Protocol Roadmap: [Describe relevant roadmap details for your
protocol or relevant products to your grant application. Include
tangible milestones over the next 12 months.]
Q2 2024
- Factor Studio:
- Finalize personal strategy builder, an open tool that enables users to create and manage customized DeFi strategies with ease
- Release templates for simple strategy creation, including:
- Delta neutral yield
- One-click leverage
- Yield-bearing basket
- Index
- Multi-token swap
- Additional templates such as pseudo delta neutral LPs and auto-compounding yield might also be ready, enhancing the versatility of the strategy builder.
- Bribes
- Bribe market for Factor Scale where protocols can further incentivize veFCTR holders in return for their votes
- Additional layer of incentives to the platform which currently includes Boost, Scale, and potential multipliers for veFCTR holders.
- LP Management
- V3 (concentrated) and V2 style liquidity management
- Simple creation of delta neutral LP strategies
- Multiple integrations, including Camelot and Uniswap.
- More Protocol Integrations that are new to the Arbitrum ecosystem
Q3
- Factor Studio Pro:
- Introduce advanced features for both self-managed and externally managed vaults, incorporating an intuitive UI and supporting a wide array of strategies leveraging Factorâs composable building blocks.
- Roll out advanced templates, including flashloan arbitrage, governance aggregation, and yield generation using borrowed assets.
- SDK Launch:
- Release a comprehensive SDK to empower builders to leverage Factorâs architecture for independent protocol development, accompanied by a custom UI library for streamlined frontend creation.
- Scale x Studio & Boost x Studio Integration:
- Incorporate Scale and Boost as modular offerings within Studio, enabling a white-label gauge and bribe system respectively, further enhancing the customizability and utility of Factorâs platform.
Q4
- Modular L3 using Orbit
- Launch a unified liquidity engine for vault tokens, facilitating efficient and optimized liquidity management.
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.]
The majority of Factorâs audits have been carried out by Peckshield. We have also worked with Solidity Finance / SourceHat on previous occasions. Factor has retained Chainalysis for incident response and ongoing smart contract monitoring.
Full details can be found here: Security | Factor Docs
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]
Factor has not had any security incidents since inception.
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: 340,000 ARB
**Justification for the size of the grant 13:
[Enter explanation. More details are better, including how you arrived
at the required funding for individual categories of expenses covered by
your grant plan]**
Factor offers various strategies compatible with protocol emissions and will utilize its Boost mechanism to incentivize liquidity growth among all Arbitrum ecosystem protocols integrated into our infrastructure. As a collaborative protocol with over 40 partners to date, any grant emission will directly benefit these communities.
At the time of writing, users manage $860,000 in deposits via Factor, including yield vault deposits, collateral, and borrowed assets. If considering only yield deposits and the net value of leveraged positions, the current TVL stands at approximately $355,000.
Factor believes the ARB incentives will drive strong growth in user deposits. Between February 27 to March 6, every dollar spent on Boost (direct incentives) generated a 56x return in TVL. The total Factor and partner provided incentives of $2,454 resulted in a TVL growth of over $138,000. Since then, TVL has doubled as emissions from the first epoch of Scale went live. The elevated APRs from ARB incentives are expected to bring Factorâs TVL above $20M, along with significant increases in volume, protocol fees, and product awareness within the Arbitrum ecosystem.
The requested grant size of 340,000 ARB tokens will be allocated entirely to our userbase, with 100% of the incentives distributed to depositors. The community will decide on the allocation of these incentives, ensuring that the distribution aligns with the communityâs priorities and the protocolâs growth objectives.
Factorâs go-to-market strategy, launched February 27 this year, has already demonstrated promising results in terms of TVL growth and user engagement. While the available data is limited due to the short timeframe, the initial response to Factorâs has been overwhelmingly positive, indicating a strong demand for the offerings within the Arbitrum ecosystem.
By offering innovative ways to utilize a wide range of established projects on Arbitrum, Factor aims to attract a diverse user base and foster greater collaboration within the ecosystem. The ARB grant will play a crucial role in accelerating this growth and strengthening the ties between Factor and its partners.
In addition to the ARB incentives, Factorâs strategies are also eligible for Scale rewards, where depositors receive esFCTR , a vested equivalent redeemable for FCTR on a 1:1 basis. Scale implements MoF milestones to ensure an equitable distribution of emissions, with weekly emission rewards starting at 25,000 FCTR and progressively increasing up to 100,000 FCTR as depositors unlock each subsequent MoF milestones.
| MoF Milestone | Weekly FCTR Reward |
|---|---|
| On Launch | 25k FCTR |
| 1M TVL | 50k FCTR |
| 5M+ TVL | 100k FCTR |
MoF milestones are calculated based on the moving average of the total MoF across all Factor vaults during the specified emissions epoch. This reduces the impact of short term spikes and minimizes rewards misappropriation.
With incentives coming from ARB, Boost, and Scale Rewards, Factor is primed to achieve significant growth and contribute meaningfully to the development of the Arbitrum ecosystem given itâs unique value proposition. The requested grant size is essential to realizing this potential and driving the adoption of the protocolâs services among users and partners alike.
Why 340,000 ARB?
*Assuming an ARB/USDC price of $2.00
- Current status and desired improvements:
- Current TVL: $860,000 if counting collateral, borrowed assets, and yield vault deposits, whereas the yield vaults account for approximately $100,000. The TVL is $355,000 if considering only yield deposits and net value of leveraged positions.
- Desired Leverage TVL: $10,000,000 across Leverage ($9,000,000 target) and yield vaults (1,000,000 target)
- Ratios based on current splits
- Incentivization mechanisms:
- 100% of the ARB incentives will be allocated to the userbase through APR incentivization
- Allocations will mirror the Scale voting results, with voting taking place every 7 days
- Estimating the impact of the proposed plan:
- Based on the protocolâs past performance, for every dollar spent on Boost (direct incentives), Factor attracts 56 dollars in TVL.
- If we conservatively assume the effect of LTIPP will be 1/4 of this, a grant of 340,000 ARB ($680,000) is expected to increase TVL by $9,520,000
- Calculating the required grant size:
- To increase TVL from $860,000 to $10,000,000, an additional $9,140,000 in deposits is needed
- Assuming a 14x return on incentives (25% of the observed effect of incentives), the required grant size is: $9,140,000 / 14 = $652,857 = 326,429 ARB
- To account for potential fluctuations in ARB price and provide a buffer, a grant allocation of 340,000 ARB ($680,000) is requested
- Factor has more than 40 partner strategies, and a significant grant size is necessary to ensure that the incentives are not diluted too quickly and lose their effectiveness. The requested 340,000 ARB will allow Factor to maintain a strong, concentrated impact on liquidity growth and user adoption across its diverse range of offerings.
- Impact of achieving the targeted KPIs:
- Reaching a TVL of $10,000,000 will position Factor among established DeFi projects on Arbitrum, attracting more users and partnerships
- The resulting volume will generate significant revenue for the protocol and its users, ensuring long-term sustainability
- Retaining KPI growth post-incentives:
- By offering innovative functionality and long term incentives programs (Boost, Scale), the protocol aims to retain users and maintain TVL growth beyond the incentive period
- Continued community governance and engagement will ensure that the protocol remains responsive to user needs and market conditions
- Partnerships with other Arbitrum ecosystem projects will create a virtuous cycle of growth and collaboration, driving long-term success
Grant Matching: [Enter Amount of Matching Funds Provided - If Relevant]
Factor will match grants through Scale and Boost emissions of up to 150,000 FCTR per week. Scale emissions are designed to progressively unlock higher rewards as the protocol achieves certain TVL milestones, while Boost emissions directly incentivize user deposits and liquidity provision. The current dollar value of these emissions is approximately $15,600 as of March 01, 2024.
The protocol will maintain these matching emissions for the duration of the 12-week grant period, potentially providing an additional $187,200 worth of incentives to support the growth of the ecosystem.
Furthermore, the protocol will leverage its extensive network of partners within the Arbitrum ecosystem to provide additional Boost emissions on top of the grant-based rewards.
Grant Breakdown:
100% of the grant is allocated for incentivizing liquidity of protocols in the Arbiturm ecosystem by boostung strategies managed via Factor.
Funding Address: [Enter the specific address where funds will be sent for grant recipients]
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.
The address will be a Safe multisig that requires 3/4 signatures to execute a transaction.
Treasury Address: [Please list out ALL DAO wallets that hold ANY DAO funds]
DAO Ops: 0x9bA7d0F6aB3c94C2114635fde04d0c7c2Dbeb073
DAO Treasury: 0x2f8393a3aC972A6a00453D0384e8495f91a2f6Ed
LP Wallet: 0x6E04cF2341F12D3E895F6eAA1Fe23ADF5bb9D08E
Contract Address: [Enter any specific address that will be used to disburse funds for grant recipients]
DAO Incentives + FUNDING ADDRESS: 0xf95c7FE0F5b4166E13ef64C77ef90F81A27eeD2a
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]
The primary objectives of this grant are to:
- Increase user adoption as well as liquidity depth and connectivity within the Factor ecosystem.
- Improve the DeFi user experience and foster innovation in DeFi strategy creation, making it accessible to a wider audience without requiring deep technical knowledge.
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.]
The execution strategy for the ARB incentive program aims to distribute rewards to users who have staked deposits in strategies built and managed using Factorâs infrastructure. Operationally speaking, the allocations will mirror the Scale votes and will subsequently be distributed as direct incentives via Factorâs Boost mechanism. Example:
If Vault A receives 9% of the Scale votes within a given epoch, it will also receive 9% of ARB emissions.
The program will run for 12 weeks, with the primary goal of attracting and retaining TVL and volume within the platform. ARB emissions will be streamed linearly per epoch, with each epoch lasting 7 days.
The incentives will be allocated across two main constituent buckets:
- Leverage vaults: Users can access more than 40 options for one-click looping on integrated lending protocols such as Silo, Aave, Compound, and Lodestar. These include pairs like wstETH/WETH and PT-eETH/WETH.
- Yield vaults: There are 4 auto-compounding vaults focused on Perp LP (MUX LP, GLP) and LSTs such as rETH and wstETH (Penpie)
| Name | Address |
|---|---|
| AAVE WBTC/USDC.e | 0x5f1915e42c560Ab8BBaC244F0e72a259460C9ca7 |
| AAVE WBTC/USDC | 0x1DAD8f57C313c7b640fB002903536A89AE3aE94C |
| AAVE USDC.e/WBTC | 0x795528B40120Cc4cb5255D550e7a6ECa3ceb3255 |
| AAVE USDC/WBTC | 0xeeaabbd9FBBF996703a0ECf38B4227d571A77C15 |
| AAVE WETH/USDC.e | 0xa0f906AA1787B6a42381Ff4D7Ea665c129d31616 |
| AAVE WETH/USDC | 0xe96c9e0d99B07490B064a48bE79a6537f2c0Fc79 |
| AAVE USDC.e/WETH | 0x253c8D7E76820F8e57ca6aa5de377bd4ca51e6DA |
| AAVE USDC/WETH | 0xd1F7f84733b0944a19A949f23e563EA93800E886 |
| AAVE WstETH/USDC.e | 0x0f77baFA9BF1E581053846F0B081b8F0092D204B |
| AAVE WstETH/USDC | 0x2743bb3FEA6874D08283aC2B043255872AD6aE27 |
| Silo WstETH/USDC.e | 0xb82DFB8363436b405F80110ee6132ad379000A9b |
| Silo USDC.e/WstETH | 0x5214b2AE3f5A03e9A25753cE0FFF75846C518ad9 |
| Silo ARB/USDC.e | 0x3F09d5A0b1F344A086f099291A73E333788408A9 |
| Silo USDC.e/ARB | 0xC75CcaD9Ef04345Cf477e7b481C365C7FfdB87d4 |
| Silo RETH/USDC.e | 0xBa95b068Eb95d815d922c0653D1C3CCc4bfef728 |
| Silo USDC.e/RETH | 0xA28108635fE9f2EF07cc15c80D8bbc210069392A |
| Silo GMX/USDC.e | 0x302f3BF57376075139477B787B9093567C02173F |
| Silo USDC.e/GMX | 0xC239Fde682A90d5F34C1528190c34b0E848868bB |
| Silo wstETH/WETH | 0x26b1E2C6fDA1E77eF193d424fcc4c4a42C7162aF |
| Compound ARB/USDC.e | 0xB3Bbe09e73D58dc9a2426cCF9fc9670B3632AEBC |
| Compound ARB/USDC | 0x83563b18637b1f74060716986d402A3251Be0dC9 |
| Compound GMX/USDC.e | 0x450f82ebB492Ed7436ba85E5931d17B9292dEc01 |
| Compound GMX/USDC | 0x2F3E40519afb77ed193A654B27CFb2374bFf9F51 |
| Compound WETH/USDC.e | 0xC9E1F57236CBA5B9C01b588f32f5BbE30a4f1cA0 |
| Compound WETH/USDC | 0xD76205E103cEEC0BD32F54b1d74efa40A106f5bf |
| Compound WBTC/USDC.e | 0x5E8DC310EC9153bB5fB5F1746e1D01fa37Ad2536 |
| Compound WBTC/USDC | 0xAFdDe701D5A46DA4C91cF925F0E1444E02F58058 |
| Lodestar WBTC/USDC | 0x244D9Bc6DeB67cd9CC91cEF5DACEc4024Ee85128 |
| Lodestar WBTC/USDC.e | 0xdB5b99eE73A0fE5e7FB287fcFE3b38604728d723 |
| Lodestar USDC.e/WBTC | 0x540Ad76CcFCfa0DD34c316Dc116a99f7F9C458e9 |
| Lodestar USDC/WBTC | 0xF907FB245A551dC78205Eee050bB6bb32B4a0d61 |
| Lodestar WstETH/USDC.e | 0xeB5D20AB27f985CB3130Ab9Bf6c2804542427CB9 |
| Lodestar WstETH/USDC | 0x2e2b6A4849a3D10a17b0E30b0678199Aa9aC8496 |
| Lodestar USDC.e/WstETH | 0x11e5b795016f01C3317BD1E07427deAC2e8ce9e8 |
| Lodestar USDC/WstETH | 0x72aa569cAE6DB3DCA89D9F918B8F6Cc660955C66 |
| Lodestar ARB/USDC.e | 0xF59369f467dC303A392192F7E6A36677578b5C7d |
| Lodestar USDC.e/ARB | 0x05caAE28fdB3d69A32009d557707bb0eC535E2bE |
| Lodestar USDC/ARB | 0xC478EbfBe4aD2E4cc9E16ba3EEd244F4B2f6b83d |
| Lodestar ARB/USDC | 0x0062d16983d197B73c855d376206a455Ab1FDcb3 |
For more context on Scale and Boost:
Scale: Factor Scale | Factor Docs
Boost: Factor Boost | Factor Docs
What mechanisms within the incentive design will you implement to
incentivize âstickinessâ whether it be users, liquidity or some other
targeted metric? [Provide relevant design and implementation details]
To ensure sustained user engagement and liquidity, we will deploy the grant via the following mechanisms:
- Dynamic Reward Allocation: With Factor Scale, reward allocations will dynamically adjust based on community votes thereby democratically responding to market conditions and platform needs, encouraging active participation and long-term engagement.
- Targeted Boost Incentives: Through Factor Boost, we can target specific strategies or user behaviors with additional rewards, encouraging users to maintain their engagement and contribute to the platformâs liquidity.
- Enhanced Rewards for veFCTR Holders: Users with veFCTR (staked FCTR)
tokens may receive up to 2.5x more rewards in vaults they deposit in, compared to depositors with no staked FCTR. This mechanism incentivizes long term staking and usage of the protocol. - Vested Rewards with esFCTR: Scale rewards are emitted as esFCTR, which have a 90-day vesting period.
These mechanisms are designed to adapt to changing conditions and user needs, ensuring that incentives remain effective over time.
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.]
Success will be measured using the following KPIs:
- User Growth: Increase in the number of active users on the platform.
- Total Value Locked (TVL): Growth in the total value of assets managed through the platform.
- Protocol Fees: Growth in protocol fees and thus emissions to veFCTR holders.
- Number of Strategies Created: Increase in the number of unique DeFi strategies created using the platform.
- Community Engagement: Growth in community size and participation in governance.
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.]
Factor intends to distribute the ARB incentives in weekly epochs over a 12 week period. The goal is to attract âstickyâ TVL and subsequent usage volume. There are two main KPIs that dictate Factorâs long term success:
- TVL managed using Factorâs smart contract infrastructure.
- Target: >$10M TVL
- Transaction volume driven by user actions.
- Target: > $500,000 per day
- Number of Active Users (Last 30 Days)
- Target: 2,422, representing 100% growth
Factor intends to distribute the ARB incentives in weekly epochs over a 12 week period. The goal is to attract âstickyâ TVL and subsequent usage volume. There are two main KPIs that dictate Factorâs long term success:
- TVL managed using Factorâs smart contracts.
- Transaction volume driven by user actions.
KPI Milestones and Distribution Targets:
- Current Status
- Yield Vaults TVL: $100,000
- Leverage Vaults TVL: $760,000 (inc both collateral and debt assets)
- Number of Monthly Users (Last 30 Days): 1,211
- Milestone 1 (Week 4):
- Yield Vaults TVL: $250,000
- Leverage Vaults TVL: $2,250,000
- Total TVL: $2,500,000
- Volume Target: 100% increase in weekly protocol volume
- ARB Amount Utilized: 33% of grant
- Excess APR: 117.87%
- Number of Monthly Users (Last 30 Days): 1,526
- Milestone 2 (Week 8):
- Yield Vaults TVL: $500,000 (100% increase from Milestone 1)
- Leverage Vaults TVL: $4,500,000 (100% increase from Milestone 1)
- Total TVL: $5,000,000 (100% increase from Milestone 1)
- Volume Target: > 200% increase in weekly protocol volume compared to Week 1
- ARB Amount Utilized: 33% of grant (67% total)
- Excess APR: 58.93%
- Number of Monthly Users (Last 30 Days): 1,922
- Milestone 3 (Week 12):
- Yield Vaults TVL: $1,000,000 (100% increase from Milestone 2)
- Leverage Vaults TVL: $9,000,000 (100% increase from Milestone 2)
- Total TVL: $10,000,000 (100% increase from Milestone 2)
- Volume Target: 300% increase in weekly protocol volume compared to Week 1
- ARB Amount Utilized: 33% of grant (100% total)
- Excess APR: 29.47%
- Number of Monthly Users (Last 30 Days): 2,422
The protocol will maintain a public dashboard that displays these KPIs, which will serve as the source of truth for governance to verify the accuracy of the reported data.
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 enable Factor to foster growth and innovation within the Arbitrum ecosystem by serving as a hub for creating strategies and managing positions on various Arbitrum-based protocols. The grant will provide incentives for users to access and interact with these protocols through Factor, driving liquidity and encouraging experimentation with novel strategies.
Factor has already demonstrated the effectiveness of its incentive programs, with every dollar spent on Boost (direct incentives) generating > 50x more in TVL. The Silo boosted vaults, wstETH/WETH and PT-eETH/WETH, also showcase the marketâs responsiveness to incentivized yields on Factor, attracting $410k despite modest incentives.
By creating strong network effects, Factor will contribute to the long-term growth and adoption of the Arbitrum DeFi ecosystem, ultimately benefiting all participants. The grant inputs will directly lead to increased user adoption, liquidity, and innovation, resulting in increased network activity and protocol revenue.
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, the team accepts this.
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 9. Along with this list, please answer the following:
Is your team prepared to comply with OBLâs 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, Factor is prepared to comply with OBLâs data requirements. The team has no special requests or considerations.
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]
Factor will provide biweekly reports supplemented with a dedicated Dune dashboard.
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, acknowledged.
Does your team acknowledge that failure to comply with any of the
above requests can result in the halting of the programâs funding
stream?: [Y/N]
Yes, acknowledged.
