[FINAL] Vela Exchange STIP Addendum

Information about STIP/STIP Backfund

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

2. How much, in the previous STIP proposal, did you request in ARB? 1,000,000 ARB

3. What date did you start the incentive program and what date did it end? December 27th 2023 - March 29th 2024

4. Could you provide the links to the bi-weekly STIP performance reports and Openblocks Dashboard?
Biweekly updates
Full list here: Search results for 'Vela Biweekly' - Arbitrum

OpenBlock Labs 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:[[Arbitrum DAO] OpenBlock Labs Incentive Onboarding Spec]

([Arbitrum DAO] OpenBlock Labs Incentive Onboarding Spec - Google Docs)

More details pulled from STIP summary post:

Overall, we saw a highly positive result in growth across all key metrics. This is a huge win for both Vela Exchange, as well as the greater Arbitrum ecosystem. Below is an overview of the start and end of STIP outcomes:



Of note, nearly all $4,000,000 of the TVL that was secured during our STIP incentives were locked for 6 months, beginning in February.

Our team took special care to distribute the rewards in a long-term effective way that will provide a lasting value to both the exchange and the network as a whole. Creating solutions that earn user’s commitment is paramount to stability and longevity, which is why we assessed our original distribution model and pivoted. Although it required more bandwidth from our team to innovate, we created a new locked bridging contract that facilitated our onboarding of $2,000,000 new TVL from other networks. It’s crucial to highlight that we have specifically targeted new liquidity, rather than competing for TVL that has already been established on the network.

After evaluating the success of the locked multi-chain bridging and staking contract, we also applied a new (optional) locking opportunity to any new or existing VLP holders. This followed in the successes of the former event, resulting in over $1,850,000 additional TVL being locked for 6 months.

Volume & Fees

Volume surged as the popularity of our gamified trading competition grew, seeing the largest impact out of all other performance indicators. We believe that delivering socially competitive events is one of Vela Exchange’s key differentiators, and that the Grand Prix has solidified itself as a prime example of how to maximize user engagement through trading and rewards (as a ratio).

During the Grand Prix, users were pushed to the limits of their trading potential as they competed alongside one another in five themed rounds. Each round presented new challenges, new opportunities, and exciting new ways to earn credits - the currency of the Grand Prix. This approach to the social gamification of trading has illustrated enormous popularity and desirable KPIs throughout the duration of the STIP. Recently, we’ve kicked off Season 2 of the Grand Prix, introducing new assets and game mechanics to further challenge our traders! You can read more about the Grand Prix here .

Each round created new problems to solve and emphasized valuable user actions throughout the various avenues of the platform, attracting users of all types. Liquidity providers and yield farmers could take advantage of limited time events in which their contributions to VLP minting would net them greater credit multipliers, whereas the top traders knew when the time was right for a large leverage short position during a clandestine Black Market event. These excitingly unique variations on the traditional trading competition engaged and challenged users to learn and adapt, since any moment of the day could provide their best shot at carving their name out on the Grand Prix leaderboard. The success of this host of trading events can be seen in our analytics, which illustrate:

  • Cumulative volume more than doubled since the onset of STIP rewards
  • Daily volume spiked to their highest amounts, peaking at $59.5M
  • Although reduced to promote the Grand Prix, protocol fees broke record highs

Importantly, Vela Exchange did not utilize a paid market maker during this duration, resulting in solely organic trading. All metrics provided during include absolutely no wash trading.

Fees on Vela Exchange were slashed to their lowest levels while earnings for liquidity providers and the treasury remained very healthy. During STIP, our liquidity token holders saw an overall appreciation of 6.3% to their USDC.e on top of their additional ARB and esVELA rewards from staking VLP.

A staggering 51% of all liquidations since official launch (June 2023) occurred during the STIP incentives period. Meanwhile, protocol revenue was also an impressive $1,100,000, representing 47.8% of all cumulative revenues.

Over the course of the STIP incentive period Vela Exchange amassed a significant uptick in fees:

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

What went well

  • Adding a lock period for liquidity increased stickiness overall
  • Trading competition attracted an incredible amount of new wallets

What could be improved:

  • Multi-chain incentives are very difficult, and getting users to bridge funds worked but required lots of marketing efforts
  • Incentivizing bot creators was not easy, and next time we intend on moving towards a different support model for any integration partners

Overall, STIP was a very fast-paced first step that can establish valuable precedence and structure. However, as a project that has now been through the full process, there were some areas that produced friction or felt left out.

Quoted text from STIP summary post for Vela:

Reporting Frequency: Bi-weekly reporting seemed unwarranted and lacking in oversight. We strongly believe that there should be frequent updates provided to the community and grant program managers, but the requirement to provide these every two weeks without receiving any feedback came off as an area that could be improved upon. We would suggest extending this to monthly updates and to assign personnel who could review and start discussions based on these updates. Any feedback midway through the STIP program or future programs would be so helpful and are likely to have a positive result.

Retention: Throughout the STIP, our team was challenged with creating and delivering thoughtful and effective mechanisms for users to engage with. There is a looming pressure for all decisions to be KPI driven, yet we soon realized that a KPI such as TVL might not consider longevity. In our bi-weekly updates we were to include an average TVL, however this did not capture the duration that TVL would be committed to Vela Exchange and, subsequently, the Arbitrum network. We believe that it is extremely valuable to establish the long-term value and effect of KPIs in addition to reporting snapshots of a given timeframe. This applies to most KPIs

New Plans for STIP Bridge

7. How much are you requesting for this STIP Bridge proposal? 500,000 ARB (50% of STIP ask)

8 Do you plan to use the incentives in the same ways* as highlighted in Section 3 of the STIP proposal? Yes, but directing ARB to liquidity incentives and gamefied trading competition (GP)

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

10. 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 to receive: 0x678c29a2DA4Ae423457db591FF78bE8C9c63378C

Contract for disbursement of incentives: GrandPrixRewardDistributor | Address 0x4ecFfD9694C7Bc7acb45bd44354492Bd7D12085D | Arbiscan

11. 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 single biggest pain point was that we had to quickly stand up the experience after initially expecting not to receive the STIP as a result of the backfund. Developing real-time in a rather sophisticated experience across new vaults, trading competition experiences, and other programs was an intense rush to keep up with STIP timelines.

Hello @Djinn ,

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.

Per @JoJo, adding a few items to addendum to better illustrate our addendum request:

  1. Added % changes to stats

  1. Adding more details about our STIP success shown by our STIP performance summary post:
  • Gamefied trading competition UX
  • Successes / learnings
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