Applicant Name:
Chiel Ruiter
Project Name:
Florence Finance
Project Description:
Florence is an RWA platform that allows users to seamlessly integrate real-world (SME) yield into their cryptocurrency portfolio in the most transparent and sustainable way. Florence Finance tokenizes real-world, Euro-denominated, private (i.e not securities & not subject to banking/deposit-taking regulations) SME loans through standardized ERC4626 vault contracts (currently $5.3m TVL). Florence Finance sources its loans through existing lending partners with excellent/long track records in SME lending.
We built/deployed our platform on Ethereum mainnet and are migrating to Arbitrum to make it our native chain.
Team Members and Qualifications:
CHIEL RUITER - (Project lead) TradFi M&A veteran (MD @ Goldman Sachs, CS & UBS) turned restructuring professional & entrepreneur.
ALEX - (Product & Development Lead) Senior Backend Developer 10+ years, Senior Solidity Developer 4+ years
LEO GREVE - (Lending Advisor) TradFi fixed income and financing market veteran (MD @ CitiBank & ING) turned corporate finance advisor and Sr. Advisor to Florence Finance.
Florence Finance also has a full-time solidity developer, a full-time front-end developer, and a full-time community/marketing manager.
Project Links:
Website: https://florence.finance/
Twitter: https://twitter.com/FinanceFlorence?s=20
Docs: https://docs.florence.finance/
### Contact Information
TG: @DukeofFlorence
Twitter: @financeflorence
Email: Chiel@florence.finance
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes
# SECTION 2: 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: 250k ARB
Grant Matching: The Florence Finance Medici (FFM) token is currently not listed/liquid but when our token is live we will be using it to incentivize participation in our platform.
Grant Breakdown:
Florence Finance aims to fuel the adoption of RWA on Arbitrum by being one of the first movers in RWAs to be native to the Arbitrum chain. RWAs have been gaining significant traction over the past few months and have the ability to onboard large amounts of liquidity to any given chain, as many key players are chasing real (world) yield.
In order to bootstrap our initial two RWA vaults on Arbitrum (current fixed RW yield of 7.25% for vault 1 and 9.5% for vault 2) we will use 100% of the 250k ARB grant as incentives to increase the overall APR of the Florence vaults. These incentives will be strictly used for new vault depositors rather than the existing vault participants, as we aim to onboard new liquidity to the Arbitrum RWA ecosystem.
Incentive distribution:
We will distribute these ARB rewards over a 3-month period (ending January 31 2024) to new vault depositors therefore increasing the overall yield offering of Florence Finance with the aim of attracting new users to our platform and growing the broader RWA offering on Arbitrum.
Any new vault depositor will be able to stake their vault receipt token and begin earning the ARB rewards over the 3-month incentive period, this means that both vaults are equally incentivized with ARB rewards, so users will be able to earn the real-world yield on top of their incentivized ARB rewards.
Funding Address: [Enter the specific address where funds will be sent for grant recipients]
arb1:0x8EfF111277625213d49fe2e98021f20def58905C
Funding Address Characteristics: [Enter details on the status of the address, eligible address must be a 2/3 multisig with private keys securely stored]
â…” Mutisig Gnosis Safe secured by 3 separate HardWare wallet controlled adresses/keys
Contract Address: [Enter any specific address that will be used to disburse funds for grant recipients]
[TBD]
# SECTION 3: GRANT OBJECTIVES AND EXECUTION
Clearly outline the primary objectives of the project and the Key Performance Indicators (KPIs) used to measure success. This helps reviewers understand what the project aims to achieve and how progress will be assessed.
Objectives: [Clearly state the primary objectives of the grant and what you intend to achieve]
With this grant, Florence Finance aims to kickstart RWA adoption on the Arbitrum network by attracting more sticky liquidity to the ecosystem that is on the hunt for real-world yields onchain. We aim to attract new participants to our Florence Finance vaults and give them a taste of real-world sustainable yields with an extra perk of ARB incentives with the intention to ARB-pill them to this thriving DeFi ecosystem that we now call home.
We aim to increase the number of individual depositors in our vaults and increase the overall TVL of our platform with the help of these ARB incentives. We hope that new participants like the experience of earning real-world yield and are happy to stay in the vaults when the incentives end. We hope that this grant leads to the growth of our community as new users discover our platform through the increased yield making our platform more visible and attractive.
Key Performance Indicators (KPIs): [Specify the KPIs that will be used to measure success in achieving the grant objectives]
Increase Protocol TVL: We aim to increase the overall platform TVL, including protocol-owned liquidity.
Increase the number of vault token holders: We will measure the level of participation in our protocol by monitoring the number of new holders of our vault tokens as this represents new users earning our real-world yield.
Community growth: We aim to grow our community through this grant as the higher yields should make our platform more visible and help onboard new community members to our real-world asset vision. We can measure this through new Twitter followers and new members in our Telegram community.
Volume in our vault token liquidity pool: as more people enter and exit our pools the volume of the liquidity pool should increase symbolizing growth in the number of participants.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?: [Provide details]
With the goal of offering a low-risk yet attractive yield through RWA, Florence acts as a safe haven for crypto users. As we focus on offering sustainable yields for the long term, we believe we have the ability to onboard very sticky liquidity. With the help of composability, our offering can form the building blocks for many different and exciting DeFi projects and products.
As RWA has a great appeal for institutional investors as well as retail participants we hope that by fostering growth in the Arbitrum RWA ecosystem we can help onboard institutional capital to the chain. As well as institutional investors we hope we can entice other RWA projects to follow our path and make Arbitrum their native chain.
We hope that making ourselves known as the go-to RWA platform on Arbitrum will mean that existing Arbitrum users who desire some RW yield in their portfolio no longer need to bridge to another chain to satisfy this desire, they can start earning RW yield natively in the Arbitrum ecosystem through Florence Finance. This should help with user and capital retention for the broader Arbitrum ecosystem.
Justification for the size of the grant: [Enter explanation]
As a native RWA platform on Arbitrum, we have already secured $5.4m in TVL through our institutional partners and have another $2m committed to fund new loans in the near future. We have built a novel platform that is unique and ambitious and has the ability to bring real growth to the crypto space and onboard more users while doing good in the real world by satisfying the shortage of SME funding in Europe.
Execution Strategy: [Describe the plan for executing including resources, products, use of funds, and risk management. This includes allocations for specific pools, eligible assets, products, etc.]
We plan to distribute the ARB tokens as incentives for new Vault depositors, we will achieve this by creating a separate staking contract where new Vault depositors will be able to stake their Vault tokens (receipt tokens for depositing in the vault) and begin earning ARB emissions.
We have two vaults currently on our platform, “Caple Vault” with 7.25% APR and “Junior Vault” with 9.5% APR, both vaults will be eligible for the ARB rewards. Currently, the largest depositors in the vaults are our institutional lenders, these wallets will not receive any of the ARB incentives as we are only rewarding new depositors to the vaults. The eligible vault contracts are:
Caple Vault: 0xB982D9534A55a221d43be3bb120AA923bB7b917d
Junior Vault: 0x2f6B213a1331ba981cb740794B2AD58C31f8400f
The emissions of the ARB token rewards will be over a 3-month period and will be linearly emitted on a per-block basis. We will allocate the entire grant as emissions to this pool meaning that we will be emitting ~83,333 ARB tokens per month for 3 months totalling 250k ARB tokens. We believe this will create a big incentive for new depositors to enter the RWA vaults and be great marketing for the whole RWA ecosystem on Arbitrum as it draws attention to the sustainable yields we offer.
Grant Timeline: [Describe the timeline for the grant]
We will begin distributing the ARB incentives once the tokens are received and we will distribute the rewards over roughly 3 months ending on the 31st of January 2024.
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/No]
Yes
# SECTION 4: 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
On what other networks is the protocol deployed?: [Yes/No, and provide chains]
Florence Finance was originally deployed/built on Ethereum but has now fully migrated to Arbitrum to make it our new home. We moved to Arbitrum to take advantage of the low-fee environment and the thriving DeFi ecosystem.
What date did you deploy on Arbitrum?: [Date of deployment]
Our Arbitrum testnet for early users was launched on June 13th 2023 and our deployment to Arbitrum One mainnet began in September 2023.
Our Arbitrum Goerli testnet vaults were a great success and attracted many users interested in earning some real-world yield, this enthusiasm was a key factor in our decision to move natively to Arbitrum. The testnet vault contracts are as follows:
Caple Loan Vault upgradeable Beacon Proxy 0x9Bcf222610871435d6D737fA85247a417a0FA33e
Junior Loan Vault upgradeable Beacon Proxy 0x36734Fe0aE25A68B5AA6F91E57Cf63A98474980e
Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]
Since the launch of our protocol we have:
- Deployed $5.3m into working loans that are currently earning interest (avg ~8.5% APR) and can be seen in the vaults on our platform ($5.3m TVL).
- Secured an additional $2m in commitments from institutional partners to be deployed to new loans that will be added to our platform.
- Grown our community from sub 1k followers on Twitter to ~5.6k followers on, grown our Telegram from 100 users to ~1.3k users.
Dune dashboard: https://dune.com/p_dot/florence-finance
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application.]
We plan on writing a new $500k loan in Q4 2023/Q1 2024 to add to our loan book, this will strengthen our overall loan book as it adds additional diversification. (We still have $2.1m in senior lending capital committed to deploy to loans from our institutional lenders).
We aim to create an advanced portfolio tracker and credit & performance metrics on our app to allow users to easily assess their portfolio and track their performance. These features will help users choose the right risk-reward option for them and their portfolio and will overall improve the Florence Finance offering.
We will launch our Florence Finance NFT and incentive system accompanied by the rollout of our new marketing campaign to kick off the RWA revolution on Arbitrum and onboard more users to the Florence Finance platform.
Audit History: [Provide historic audits and audit results]
# SECTION 5: Data and Reporting
Provide details on how your team is equipped to provide data and reporting on grant distribution.
Is your team prepared to create Dune Dashboards for your incentive program?: [Please describe your answer]
Yes, our team will create a separate Dune Dashboard that will monitor:
- TVL growth over the period of the incentive program
- Number of new vault token holders
- Volume of our vault token liquidity pool
- Any other metrics we see fit that outline the progress/result of the incentive program
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread? [Please describe your strategy and capabilities for data/reporting]
Our team will happily keep the community and Arbitrum DAO updated and report all data collected during the course of the incentive program.
Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?: [Y/N]
Yes