[FINAL] Abracadabra DAO STIP Addendum

Abracadabra DAO STIP Addendum

Can you provide a link to your previous STIP proposal (round 1 or backfund)?

STIP Proposal:

STIP Success Review:

1. Amount requested in arb?

750k ARB

2. Amount received during STIP?

1.5m ARB

3. What date did you start the incentive program and what date did it end?

Started: 30th November 2023
Ended: 1st of April 2024

4. Could you provide the links to the bi-weekly STIP performance reports and Openblocks Dashboard?

  • Performance Reports:
  • OpenBlock Dashboard:
  • Abracadabra also created its own dashboard, which can be found at the following link:

https://dune.com/abracadabra_money/arbitrum-abracadabra-stip-metrics

5. KPIs:

Abracadabra received its grant on the first of december and ended its distribution on the first of April, as planned. Following the main KPIs.

MIM Liquidity on Arbitrum
Overall MIM liquidity across Curve, Camelot and other pools on Arbitrum.

Screenshot 2024-04-23 at 10.59.39

Graph:

Total Borrowed on Arbitrum

Screenshot 2024-04-23 at 11.01.44

MIM circulating Supply on Arb

Screenshot 2024-04-23 at 11.02.08

Graph:

All data can be found on the dune dashboard: https://dune.com/abracadabra_money/arbitrum-abracadabra-stip-metrics

A more complete report of the Abracadabra success during the STIP program can be found here:

6. [Optional] Any lessons learned from the previous STIP round?

The Previous STIP round showed clearly that for Abracadabra, borrowing incentives for users are not needed. Our products are deemed competitive and go sold out regularly without any need of incentives, therefore the only required focus is to improve MIM liquidity so that the products can be used by more and more users.

This is clearly showed by the MIM top ups going sold out in a matter of hours, over the STIP period.

The DAO topped up the gmCauldrons regularly and swiftly to make sure that more and more users could benefit from them.

Here are some examples of these close top ups:

https://x.com/MIM_Spell/status/1745491058916479064

https://x.com/MIM_Spell/status/1742507988793885019

https://x.com/MIM_Spell/status/1737875034499162549

https://x.com/MIM_Spell/status/1733091423803572705

This fast happening sold out, highlighted once more that the demand for Abracadabra products is there, and that no further incentives are needed to make our lending markets appealing to be used.

Additionally, here is a community research on the impact that gmCauldrons had on GMX TVL during their launch!

https://x.com/0xMagic_intern/status/1735966945563091112

Our ARB focus will now be on liquidity provision, MIM savings rate and potentially collateral apy boosts in partnerships with other protocols.

New Plans for STIP Bridge

7. Do you plan to use the incentives in the same ways as highlighted in Section 3 of the STIP proposal?

We have planned a slight change in the way rewards will be used, but it is coherent with the general idea expressed in the STIP proposal

8. How will the incentive distribution change in terms of mechanisms and products?

Abracadabra’s newly acquired ARB will be used differently from the previous batch. Lets see how:

1) 60% of the ARB rewards (450k ARB) - will be used to incentivise MIM LPers.

MIM LPers will not only be on the main MIM-2crv pool and MIM-crvUSD pool on curve finance, but we plan on deploying our own stableswap infrastructure, called MIMswap, that will allow users to receive ARB reward by providing liquidity in the Abracadabra in house AMMs. MIMswap staking contracts are not only controlled in full by the Abracadabra DAO, but they also allow for LP locking.

MIMswap has been live for more than a month now on Blast, allowing for seamless swaps between USDB and MIM. Our locking contracts have been incentivising Liquidity Provision there at full speed using the point system. Our expectation is that this same setup, but using actually ARB rewards, will be a killer product to add to our Arbitrum Ecosystem. MIMswap is ready to be deployed on Arbitrum, to offer one more avenue for users to LP MIM into!

MIMswap LPers will therefore receive ARB LP rewards coming from the STIP, similarly to other LP rewards systems. The more user lock their funds for tho, the bigger their boost will be.

MIMswap has gone through 2 rounds of audits, one with CodeArena and the other with Guardian Audits. MIMswap has been live for a month now on Blast.

It is pivotal to notice that the deployment of MIMswap will not make our DAO stop its rewards to both Camelot and Curve, but just add to it another venue that will be focused on MIM-USDT pairings, while leaving MIM-USDC to Camelot, and MIM-USDT-USDC to curve.

This three headed approach is intended not to create competition between the protocols, but just to increase the number of options available to LPers on Arbitrum.

We plan on adding MIMswap pool, next to Camelot and Curve pools on the same incentive dashboard on our main user interface, so that users can easily find these different avenues.

This new boost in liquidity will allow Abracadabra not only to expand its already successful gmCcauldrons, but also expand its collateral offering to other competitive yield sources. Following are some examples of integrations our developers have been working on:

  • Camelot LP Tokens by Camelot Dex
  • jUSDC by Jones DAO
  • Pendle Tokens
  • Native naked assets ($GMX, $GRAIL, $JONES and others)

MIMswap

The following section will be a short description of MIMswap, that will allow delegates and users to learn more on the product.

Abracadabra launched an Automated Market Maker DEX (AMM DEX) called MIMSwap with its own liquidity needs as the first use case. MIMSwap specializes is the exchange of tightly pegged assets (like stablecoins).

MIMswap utilises a continuous curve AMM (very different from the concentrated liquidity model), optimised to improve stableswap efficiency thanks to the addition of two new parameters:

  • K - which adjusts the concentration of the assets in the pool
  • I - which adjust the price at which the pool is correctly balanced, the target price.

MIMswap design allows LP tokens to be swiftly integrated in other defi legos, which requires much less work from protocols compared to concentrated liquidity LPs, while maintaining superior level of efficiency for tightly pegged assets.

On top of this, MIMswap uses a LP lock mechanism that commits users liquidity for a certain period of time, in exchange for immediate LP rewards, perfectly mimicking the need of the Abracadabra DAO in terms of Liquidity Provision.

MIMswap currently focuses only on tightly pegged assets with only two-assets pool but it can be expanded in the future for other asset types.

We expect MIMswap LP Tokens integration to be coming soon to our Arbitrum Cauldron lineup.

MIMswap has undergone two round of audits, one with Guardian and the second one with CodeArena.

MIMswap docs can be found here.

2) 20% MIMswap Founders Boost (150k ARB) - will be used to reward LPers that lock their MIMswap LP tokens for 3 months mimicking the strategy happening on Blast.

In order to better understand this system, the easiest example is MIMswap recent launch on blast. With only point rewards, MIMswap has attracted more than 13m in TVL in less than 3 weeks, out of this 13m, 9m worth of LPs have decided to lock their funds in MIMswap staking contracts for 3 months, in order to enjoy the founder’s boost. 20% of all the received GOLD points on blast have been dedicated to Founders.

Similarly we are aiming at distributing 20% of all the received ARB to MIMswap LPers that in the first 3 weeks of the program lock their funds for 3 months. This part of the system will also be incentivised with part of the SPELL rewards pledged towards it.

3) 20% MIM Savings Rate (MSR) (150k ARB) - We have now completed audits for our MSR contracts, we are happy to announce that MIM Savings Rate (MSR) is now ready to be deployed on Arbitrum to distirbutedARB rewards to users who lock their MIM tokens inside the MSR staking contracts.

MIM Saving Rate

The MIM Savings Rate (MSR) contracts are one of the new innovative tools that our DAO is experimenting with to improve MIM liquidity outside of plain LP incentives.

In its first iteration, the MSR contracts are staking contracts that allow for locking the deposited MIM for certain amount of times, and in exchange receive boosted rewards.

Currently, the MSR contracts will allow the distribution for SPELL and ARB, which will then be expanded to the plain MIM distributions coming from the interest collected by Abracadabra.

The MSR contracts were meant to be launched in our previous STIP, but because of the extreme focused our team put on the gmCauldrons, they have been only finalised 2 months ago. Audits are now completed tho, and the MSR is ready to be launched on Arbirtum.

The MSR has undergone one round of audit with Guardian audits, and can be found here.

For reference, During the STIP campaign, the DAO allocated 239,400,000 SPELL tokens to deepen MIM liquidity on Arbitrum (13.3M per epoch allocated to the MIM-2CRV Curve pool), compared to our initial commitment of 160,000,000 SPELL tokens. Despite the reduced size of the bridge TIP, our DAO is committing to match the ARB grant with 200m SPELL tokens.

9. Could you provide the addresses involved in the STIP Bridge initiative (multisig to receive funds, contracts for distribution, and any other relevant contract involved), and highlight if they changed compared to the previous STIP proposal?

Multisig: https://app.safe.global/home?safe=arb1:0xfBDf75866904767dE1Caa8B64eb18a7562517F5A

Contracts for Distribution: MIMswap and MIM Savings Rate contracts will be deployed shortly, and will be communicated to both the DAO and Grant trackers accordingly.

10. Could you share any feedback or suggestions on what could be improved in future incentive programs, what were the pain points and what was your general evaluation of the experience?

The STIP has been one of the most successful incentivisation protocols that Abracadabra has experienced. The DAO has been great in giving constructive feedback and recommendations on adjusting the grant distribution methods.

Delegates have been responsive throughout the STIP voting campaign and after.

The only pain point we have experienced has been with correctly tracking the effects of our rewards. Abracadabra incentives trickle down to the whole ecosystem, and they are not usually displayed only in our protocol’s own TVL.

As an example, STIP arb rewards have allowed Curve Finance TVL to grow exponentially as well. In the screenshot below you can see that at its peak, MIM liquidity on arbitrum increased to nearly 37m, bringing trading fees, TVL and users to other protocols that are not directly related to Abracadabra.

These findings have been reflected in our MIMswap deployment for the STIP Bridge, which will allow the Arbitrum DAO to track more easily the actual ecosystem effect that the ARB allocated had.

Hello @Romy ,

Thank you for your application! Your advisor will be @JoJo.

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

1 Like

Thank you so much, already incorporated the first batch of suggestions received by JoJo!