Original STIP Application
Our STIP proposal can be seen here:
STIP Grant Amount:
750,000 ARB
STIP Timeline
Our STIP incentives started 18th of November 2023, ended 29th of March 2023
STIP Data
Below are some links to updates & data relevant to the STIP
Key STIP KPIs
Total Available Liquidity
In Perennial V2, total available liquidity can greater than protocol TVL
| DATE | 01/10/23 | 01/11/23 | 01/12/23 | 01/01/24 | 01/02/24 | 01/03/24 | 01/04/24 |
|---|---|---|---|---|---|---|---|
| TVL ($M) | 1.1x | 1.4x | 2.1x | 3.0x | 3.2x | 4.9x | 3.1x |
| TVL % | 0% | +27% | +50% | +42% | +6% | +53% | -36% |
TVL (V2)
| DATE | 01/10/23 | 01/11/23 | 01/12/23 | 01/01/24 | 01/02/24 | 01/03/24 | 01/04/24 |
|---|---|---|---|---|---|---|---|
| TVL ($M) | n/a | 1.3 | 4.8 | 4.3 | 5.96 | 4.0 | 3.07 |
| TVL % | 0% | ∞% | +369% | -11% | +38% | -32% | -25% |
Key Learnings:
Throughout the process we have gained a number of insights around the creation and administration of the grant. As with any direct to consumer grants program, a number of factors can affect the results of the applied incentives. Guided by our KPIs and the overarching KPIs, we modified the allocation of the STIP rewards almost each epoch.
The STIP program coincided with the launch of Perennial’s V2. This offered an opportunity to see its new mechanism in action. We saw makers take advantage of native leverage over the length of the program with Total Available Liquidity peaking at a multiple of 4.9x the TVL in the protocol. This efficiency is key to providing traders the best liquidity to trade with & offer sophisticated makers greater capital efficiency.
We found that applying incentives on newer markets helped de-risk them for makers and allowed us to experiment with new payoffs and price feeds. We’ll aim to continue this approach in the STIP bridge as it helps bring diversity to the Arbitrum perps landscape. Another learning was that OI rewards are a fickle tool that can attract mercenary capital. We experimented for two weeks and then removed them in favor of more sustainable mechanisms or subsidies.
A key outcome was de-risking the unique protocol design of Perennial V2 to building inside and outside the ecosystem. We aimed to bring dev teams to Arbitrum and the STIP has helped us secure a number of key partnerships with teams like Kwenta (Optimism).
New Plans for STIP Bridge
Note: In parallel to this STIP Bridge proposal, Perennial has a stand alone proposal to the DAO with Kwenta to build an incentives package to best support their launch on Arbitrum. See more info here
STIP Bridge Request:
375,000 ARB
Modify or Maintain the STIP incentives
We are looking to maintain the current incentives with slight modifications. Here is a summary:
Maker Strategies (50%):
- Reward makers for deep liquidity and long-term usage
- Bootstrap major pools with seasonal incentives for new products/features and user onboarding
- Offer higher incentives for novel markets (NFTs, RWAs, etc.) to develop userbases
Taker Strategies (50%):
- Offer fee rebates (capped at 75% of total fees) and onboarding incentives for high-value users
- Implement incentives for flattening skew & for consistent usage
Perennial’s strategy focuses on incentivizing makers and takers to create a robust and liquid market. Makers are rewarded for providing deep liquidity, while takers are incentivized through fee rebates and OI-based rewards.
Contracts involved for STIP Bridge
The address will be:
- Incentives Multisig: 0xcc2A6ef429b402f7d8D72D6AEcd6Dfd0D787AcfF8
- Distribution Contract: 0x4fc1cc62e5d0b12f5a9e3213b4177d2edb301f30
STIP Feedback
The STIP program was pitched as a learning experience for the Arbitrum community around how to devise, distribute and analyze a rewards program. Ecosystem partners like OpenBlock, and the STIP stewards team, have done an excellent job of pushing the initiative forward.
That being said the process was a little chaotic but the STIP successor (LTIPP) program looks to have found a nice balance. Going forward it think this approach will be useful for new teams coming into the Arbitrum DAO.