[FINAL] Pendle STIP Addendum

Archive STIP Bridge Addendum
1

pendle_logo
pendle_logo1115Ă—335 4.67 KB

Information about STIP/STIP Backfund

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

  2. How much, in the previous STIP proposal, did you request in ARB?

    • 2,000,000 ARB

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

    • Started: 9th November, 2023
    • Ended: 28th March, 2024

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

  5. Could you provide the KPI(s) that you deem relevant for your protocol, both in absolute terms and percentage change, month over month, for the first of each month starting from October 2023 until April 2024, including the extremes? If you don’t know what KPI might be relevant for you or how to properly define them, please refer to the following document:

TVL

Month Amount MoM Change %
Oct-23 48mil -
Nov-23 54mil 12.5%
Dec-23 90mil 66.7%
Jan-24 108mil 20.0%
Feb-24 115mil 6.5%
Mar-24 424mil 268.7%
Apr-24 325mil -23%

Monthly Trading Volume

Month Amount MoM Change %
Oct-23 15mil -
Nov-23 32mil 113.3%
Dec-23 55mil 68.8%
Jan-24 212mil 292.6%
Feb-24 659mil 210.4%
Mar-24 1.9bil 191.6%
Apr-24 1.2bil -36%

Monthly Active Users

Month Amount MoM Change %
Oct-23 3970 -
Nov-23 4468 12.5%
Dec-23 4925 10.2%
Jan-24 6305 28.0%
Feb-24 17467 177.0%
Mar-24 62032 225.1%
Apr-24 122862 98%

Monthly Transaction Count

Month Amount MoM Change %
Oct-23 8635 -
Nov-23 12585 45.7%
Dec-23 11387 -9.5%
Jan-24 16863 48.1%
Feb-24 38870 130.5%
Mar-24 143817 270.0%
Apr-24 278724 94%

In summary:

  • Pendle has outperformed all KPI targets (i.e. TVL, daily trading volume, MAU) by significant margins;
  • We’re one of the largest protocols on Arbitrum by TVL ($547mil), up 832% since the start;
  • Pendle contributed ~32% of Arbitrum’s overall TVL growth (in USD terms) during the course of STIP;
  • 30DMA trading volume is at $1.8B, up +11150% since the start. The majority of this volume can be traced to LRTs and “Points Mania”;
  • Monthly Active Users (MAU) is at 62032, up +1160% since the start;
  • Pendle owns the majority of the LRT TVL (567mil) on Arbitrum, and will continue to spearhead the growth for this front;
  • Outperformed KPI TVL milestone of $80M by +430%;
  • Arbitrum STIP has been a major success for the growth of Pendle and thus the ecosystem;
  • Why the downturn in April for TVL and monthly trading volume? We had 2 LRT markets mature at the end of April which resulted in users redeeming to realize their fixed-rate yields. The overall crypto market downturn has contributed to this as well. We expect inflows to return for May especially once we start spinning up new maturity markets. So we should expect to see steady growth again;

Data can be found here: https://arbitrum.pendle.finance/
A summary of our STIP performance is also posted here: Pendle Arbitrum STIP Summary

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

  • Our initial plan of allocating ARB incentives based on vePENDLE votes proved ineffective since new pools and pools with notable metrics (i.e. TVL and trading volume) would be insufficiently incentivized with ARB. The team now decides on which pools to allocate ARB to on a per-epoch basis, and this has proven to be much more effective given the overall growth of the protocol.

    We found out very early during the campaign that certain pools would be capturing most of the ARB incentives since they would consistently be the most-voted pool on Arbitrum due to bribes. If we went towards using vePENDLE vote weight as a measure of distributing ARB incentives, then for the duration of the STIP, those pools would take the lion’s share of it even when they are not contributing much to TVL and trading volume growth.
    Since we’re motivated to grow overall traction, from our historical data we found that heavily incentivizing pools that fit the current market interest and the overall narrative would get more TVL and trading volume growth. Our data-driven approach as opposed to incentivizing based on vePENDLE votes has allowed us to grow traction to what you see today.

  • On insights on the success of our strategy on allocating across the 3 categories indicated in our STIP:

    Pendle pools (55%): We managed to grow TVL from 58mil to 690mil (~11x growth). One of the main success factors was coordinating and bringing the different LRTs such as EtherFi and Renzo to Arbitrum.

    Pendle campaigns (40%): The goal was to drive trading activity, with 16mil 30DMA to 1.8bil 30DMA at the end of the STIP. We’ve done a lot of campaigns throughout, mainly Swap Fee Rebate campaigns and Maker Order campaigns. Price impact for big size has always been an issue back then with only market AMM swaps, so introducing Limit Orders was an important milestone to help users make huge purchases with size. With the Maker Order campaign, we managed to incentivize users to try that new feature out, and it has since been an instrumental feature for our users. As of now, almost 40% of trading volume is from limit orders.

    Pendle integrations (5%): This expanded our reach of protocols building on top of Pendle by making use of the different PT/LP/YT Pendle assets. As a result, we had protocols such as Dolomite, Timeswap, Stella, Silo, and many more others to integrate Pendle in some way. The ARB incentives used here encouraged users to explore these integrations and experience the burgeoning DeFi ecosystem on Arbitrum overall.

  • Why we did an “Arbitrum Mega Week” and why it worked so well:

    The “Mega Week” has always been a campaign that we’ve been planning for quite some time as we wanted to start and end a week with a bang. It took some time to materialize as we needed to wait to get enough ARB incentives vested in order to execute this.

    The Mega Week helped get the majority of the CT mindshare and attention on Pendle and Arbitrum. As a result, new users completely new to Pendle and Arbitrum were able to “try” things out without much downside, such as being able to try Limit Orders for the first time as we’ve incentivized it heavily. This was quite timely as LRTs were getting popular in the market and users wanted exposure to them. With this Mega Week, we were able to rally strong interest from users to bridge over and use the LRT pools on Arbitrum instead of the existing ones on Ethereum.

    As a result, it was well received! We had KOLs talk about it and we’ve gained a lot of new users and community members. We’ve also managed to achieve high trading volume and broke TVL records throughout the week. While it only lasted a week, the overall outcome was a net good and actually held on even until today.

    This event prompted our feedback of wanting more flexibility in using the ARB rewards to push hard on certain weeks without having to worry about vesting incentives as you’ll read further in the incentive program feedback below.

New Plans for STIP Bridge

  1. How much are you requesting for this STIP Bridge proposal?

    • 1,000,000 ARB

  2. Do you plan to use the incentives in the same ways as highlighted in Section 3 of the STIP proposal? [Y/N]*

    • No

  3. [Only if answered “no” to the previous question] How will the incentive distribution change in terms of mechanisms and products?

    • The original mechanism of distribution will remain the same. The only difference here is the proportion across the different categories we’d incentivized, as initially stipulated in the first STIP.
    • The proportion of the distribution of ARB incentives will be changed from and to the following:
    Category From To
    Pendle Pools 55% 30%
    Pendle Campaigns 40% 65%
    Pendle Integrations 5% 5%

    • With the flexibility that Pendle Campaigns give, what we’ve observed in STIP is that periods of “boosts” or “double rewards” in campaigns, especially when aligning to new pool launches or existing Trading Competitions or Maker Order campaigns, typically return better results compared to linear incentivization in pools and integrations.

    • Throughout the Mega Week, we’ve seen:

      • TVL grew from 546mil to 722mil, a 32% increase;
      • 30DMA Trading volume went from 1.3bil to 1.8bil, a 38% increase;
      • DAU went from 3094 to 4184, where it was the highest DAU throughout the campaign;

    • Campaigns will still include Trading Competitions/Leaderboard Campaigns, Maker Order Campaigns, Swap Fee Rebates, as well as possibly include a couple more new ones.

    • We have started seeing more integrations use Pendle assets in some way. We’d love to continue incentivizing users to explore and use their Pendle assets such as their PTs in other DeFi protocols in Arbitrum.

    • With this new proportion, we aim to achieve the following KPIs:

    KPI Current Progress on Arbitrum Milestone by Progam End
    TVL for Pendle Pools $324mil $450mil
    Average Monthly Trading Volume $1.1bil $1.3bil
    Monthly Active Users 47,400 MAU 60,000 MAU

  4. 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?

  5. 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?

    • Reduce vesting intervals to encourage flexibility

      There are weeks where the market is picking up, mindshare and attention are plenty, and where traction is the highest. In such weeks, we want to push hard on our initiatives without having to worry about having enough incentives since the amount we need is still vesting. Based on our strategy, we can be given the flexible choice of allocating more ARB in certain weeks and less ARB in others while still adhering to the total amount of ARB to be used for the program.

    • More clarity on timelines

      While it was appreciated that STIP was extended, ending in March instead of January, this sudden change led to an adjustment in our overall allocation of ARB across our different initiatives as well, which tends to create suboptimal decisions given the short timeframe we need to adapt.

    • Allow tracking of data from other platforms

      We use Sentio for all our analytics needs mainly because of the flexibility it provides by being able to code queries in Javascript. While this wasn’t a problem and we weren’t shoehorned into using popular analytics platforms, it is good to note that there are protocols like ours that use newer platforms like Sentio. For instance, PT and YT are priced from our backend hence it’s not compatible with usual products like Dune, etc.

1 Like
2

Hello @EynSoph ,

Thank you for your application! Your advisor will be Castle Capital @CastleCapital @Atomist.

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
3

The proposal above was updated. Many thanks to our advisors @CastleCapital @Atomist for the feedback.

4

@cliffton.eth our application can now be marked FINAL.

5

Hey there, the post has been marked FINAL and locked.

1 Like