Grant Request: CyberCash - Driving Crypto Adoption on Arbitrum

Proposals
1

Non-Constitutional: Grant Request for CyberCash

Abstract

CyberCash ($CASH) is a novel cryptocurrency designed to drive real-world crypto adoption through aligned incentives. Built on Arbitrum One, CyberCash leverages a dual burn mechanism, fixed inflation, and passive income rewards to encourage a balance in spending and savings behaviour. This proposal seeks a grant from the Arbitrum DAO to bootstrap CyberCash’s fair launch liquidity pool using ARB instead of ETH, increasing ARB’s on-chain utility while fostering transaction-driven adoption.

CyberCash Deep Dive: CyberCash: The currency that pays. | by Possum Labs | Feb, 2025 | Medium

Motivation

Despite the original goal of crypto to replace fiat money, most cryptocurrencies are not widely used for transactions. Bitcoin is almost exclusively hoarded as a store of value, while stablecoins like USDT dominate real-world adoption, relying on centralized issuers and the banking system by extension. Existing incentive structures do not encourage spending of common tokens and coins, limiting mainstream crypto adoption.

CyberCash solves this problem by integrating mechanisms that reward users for transacting, rather than just holding. By pairing CyberCash liquidity with ARB, this proposal increases ARB’s utility, deepens its liquidity, and drives transaction volume on Arbitrum. Supporting CyberCash aligns with Arbitrum’s goal of fostering real-world blockchain adoption while reinforcing ARB’s position within the ecosystem.

CyberCash Deep Dive: CyberCash: The currency that pays. | by Possum Labs | Feb, 2025 | Medium

Rationale

CyberCash is launching on Arbitrum due to its fast, low-cost transactions, great UX, vibrant DeFi ecosystem, and pioneering spirit of L2 decentralisation. The scalability and efficiency of Arbitrum One make it the ideal environment for a transaction-intensive currency like $CASH while forthcoming L2 decentralisation ensures security and neutrality going forward. This is vitally important for the long-term goal of real-world adoption in an international context.

By launching on Arbitrum, CyberCash contributes to network growth by:

  • Driving on-chain transaction activity through its burn-based incentive structure.
  • Encouraging developers to integrate $CASH as a native payment token which consolidates network effects of capital and links it directly back to ARB through the LP pairing.
  • Supporting Developers & Merchants: Developers who integrate $CASH into applications benefit from a built-in revenue model, which incentivizes the creation of public goods. In the long run, merchants gain an attractive payment alternative to traditional systems and access to an innovative revenue model.

Benefits to ArbitrumDAO

  • Increased ARB Utility: Using ARB/CASH as the primary liquidity pair deepens its integration into the ecosystem. Adoption of CASH will directly translate into demand for ARB.
  • Higher On-Chain Activity: Transaction-based rewards encourage frequent $CASH transfers, increasing gas fee revenue for Arbitrum.
  • Sustainable Adoption Model: CyberCash’s self-sustaining incentives foster long-term growth without reliance on continuous grants.

Specifications

CyberCash is an ERC-20 token deployed on Arbitrum One and has the following characteristics:

  • Immutability: The unchangeable mechanics of CyberCash provide the highest degree of predictability and reliability to users and businesses.
  • ERC20 standard: CyberCash follows the ERC20 standard, allowing it to function with any application out of the box.
  • Uniswap V2 fair launch:
    • ~66% of the initial supply is paired with ARB at LP launch
    • The LP tokens are subject to a vesting schedule:
      • 10% vested immediately
      • 10% permanently locked
      • 80% vested linearly over 8 years
  • Possum Community Migration:
    • The community supporting Possum Labs can migrate their PSM tokens to CASH at a ratio of 1:1. The migration accounts for the remaining 33% of initial supply and kickstarts the initial growth of CyberCash.

Steps to Implement

Step 0: Development & Audits (completed)

Step 1: Liquidity Pool Deployment (Q1 2025)

  • Deploy the CyberCash liquidity pool on Uniswap V2 with ARB as the paired asset.
  • Initial liquidity provided by grant funding
  • Cost: 200k ARB tokens

Step 2: Developer Onboarding & Support (Q2-3 2025)

  • Produce comprehensive guides and provide hands-on technical support for developers who seek to integrate CASH into their products
  • Organize a hackathon to familiarize developers with CyberCash’s unique capabilities in DeFi & web3
  • Cost: 60k ARB tokens

Step 3: Community Engagement & Growth (continuous)

  • Migrator deployment and PSM migration (at launch)
  • Marketing campaigns to raise awareness and adoption of CyberCash
  • Educational resources and partnerships within the Arbitrum ecosystem
  • Cost: 40k ARB tokens

Step 4: Long-Term Expansion (continuous)

  • Expand $CASH utility through integrations with gaming, DeFi, and other Arbitrum-native projects.
  • Foster real-world adoption via merchant collaborations.
  • No cost to the Arbitrum DAO

Timeline

  • February 2025: Audits and Deployment of CyberCash on Arbitrum (finished)
  • Q1 2025: Launch CyberCash liquidity pool with ARB pairing & PSM migrator
  • Q2 2025: Initiate developer support and produce integration guides
  • Q3 2025: Expand integrations and drive adoption through partnerships
  • 2026 & Beyond: Scale adoption efforts within crypto and expand to the physical world through merchant partnerships and payment gateway integrations

Overall Cost

  • Liquidity Pool Seeding: 200k ARB
  • Developer Onboarding & Support: 60k ARB
  • Marketing & Community Engagement: 40k ARB
  • Total Grant Request: 300k ARB

On approval, the ARB tokens are received by the Possum Labs multi-sig.

About Possum Labs

Possum Labs is an independent development studio supported by a community of DeFi enthusiasts that has been building immutable DeFi protocols and token-based governance structures on Arbitrum for over 1 year with 5 successful launches, reaching 600k TVL and 0 security incidents.

Homepage

Twitter
https://x.com/Possum_Labs

Conclusion

CyberCash’s incentive-driven model offers a compelling solution to crypto’s real-world adoption challenge. By supporting this initiative, ArbitrumDAO strengthens ARB’s position as a key transactional asset while driving meaningful on-chain activity. We seek the community’s support to launch CyberCash successfully on Arbitrum and establish it as the leading crypto-native currency for everyday transactions.

Thanks in advance and we’re looking forward to all feedback and questions.

2

Candidly, we would not support a proposal like this as it currently stands, and we ask if this proposal could be made more granular (additional details provided on GTM strategy, how the capital will be allocated, etc). Over the past few months the Arbitrum delegate community has debated over spending for incentives and grants, and this proposal lacks clearly defined KPIs, and an explanation as to what the protocol even does/accomplishes for the Arbitrum ecosystem and does not explain how the DAO benefits providing thi grant.

Some more high-level questions/points:

  1. With Uniswap V4 out, why use Uniswap V2 for a fair launch mechanism (see Flaunch)? Is there a plan to transition?
  2. What is the inflation fixed at and why? What was the reason for this?
  3. The token is brand new, and has approximately 600 holders and under 30,000 transfers with a market cap of $266K. This proposal is requesting a grant that’s larger than the market cap of the token, and I have not checked how much value is locked within the protocol, but I would think these statistics would be provided to the DAO.
  4. The social media account has very low numbers, so there is little to no visibility that can be provided to the DAO by providing this grant.
  5. Can we see the exact cost break down for some of the steps involved?

With this in mind, we do not see the need to provide this grant at this stage in time. Furthermore, we would heavily recommend to rework the proposal, perhaps lower the funding, and consider alternative avenues of grant funding, or provide more tangible benefits to the DAO in the proposal.

3

Thank you for sharing your proposal, innovation is always welcome in Arbitrum. However, I am inclined to vote against this proposal for the following reasons:

One of the primary obstacles for cryptocurrencies to be widely accepted as money is volatility, a problem that stablecoins effectively address. CyberCash’s complex tokenomics, which include a dual burn mechanism and fixed inflation, require far more rigorous testing to ensure they don’t trigger unintended market dynamics. As it stands, these mechanisms may lead to considerable volatility, rendering CyberCash unsuitable as a medium of exchange, a role for which, arguably, even Bitcoin struggles to meet expectations.

Furthermore, the transition from incentivizing transactions to achieving true real-world adoption is a significant leap. Without a proven track record or robust empirical evidence, this initiative risks becoming a speculative experiment (and an expensive one) rather than a reliable solution to the “real-world adoption” challenge.

Finally, Arbitrum is at a pivotal moment, with the community favoring allocations that align closely with ARB’s long-term strategic objectives and deliver tangible impact. The request for 300k ARB tokens is substantial, and in a competitive environment, these resources could be better invested in projects that more directly help network security, decentralization, and overall infrastructure.

For these reasons, I do not support this proposal.

3 Likes
4

Thank you for the initial feedback @BlockworksResearch, we’re happy to respond to your questions and explore how to refine the proposal.

We have highlighted the benefits for the Arbitrum DAO in the proposal, kindly refer to the respective key points under Rationale.

KPIs can only be measured in retrospect and any forecast is guesswork as it hinges on too many variables. Since we don’t see value in practicing pseudo-science, we kept the benefits statement qualitative so that it’s easy to understand. In our opinion, this experiment either becomes the most successful project on Arbitrum over time or a total flop. A middle ground is hardly imaginable in the long run, given the incentive structure of CyberCash. This makes KPI forecasts useless in practice.

UniV4 is very new and while certainly developed and audited by the brightest minds in crypto, it does not yet have the Lindy effect that we seek for the foundation of our project. Since the Genesis LP will be full range anyways, there is no significant benefit of using V4. In contrast, V2 is tried and true, easy to handle and does the job we need.

It can be expected that additional liquidity pools on V4 will emerge organically as market makers want to express their view in concentrated ranges and dynamic strategies, but this is up for market participants to decide.

We would highly recommend reading the linked deep dive where these details and more background information is outlined (we wanted to keep the proposal concise).

In short: the initial supply is 10Bn with an annual inflation of 1Bn.

However, we would caution against the mental shortcut to think of 10% inflation. Not only does the inflation amount stay constant, meaning the percentage inflation declines over time, but due to the burn effect it’s even likely that CASH is deflationary at times, especially during the early adopter phase.

The starting parameters were chosen after careful modelling of expected adoption and inflation dynamics and observable cashflow return expectations for a new DeFi / crypto project. (The burn can be compared to long term staking)

The goal is to incentivize strong adoption early with incentives gradually shifting towards spending over the long term. This solves the hoarding dilemma that BTC experiences albeit its significant market cap. Hoarding is desirable in the beginning to reach size fast but excessive hoarding reduces liquidity and increases volatility, which is bad for a currency.

CyberCash is not yet available for trade and has no holders. If you refer to PSM, the liquidity has dried up almost entirely in anticipation of CASH, making the market cap meaningless. It was multiples higher not long ago. Metrics of our past product can be viewed on DefiLlama.

We think there is a misunderstanding and would like to clarify that the proposal is requesting 300k ARB tokens, not 300k USD in ARB. Since the market didn’t look friendly upon ARB either these days, the USD value is more like 120-150k.

Agreed. The goal of this proposal is not to bring immediate awareness to Arbitrum from our community (which we brought to Arbitrum already) but rather cement alignment between ARB and CASH’s success via LP pairing, higher on-chain activity and long term growth opportunities that attack the biggest market, money itself.

If the project is successful, it will logically result in higher awareness of Arbitrum, but that is not realistic for the immediate short term. In fact, it serves the other way around. If Arbitrum openly supports CyberCash with a grant, the chance of success increases, leading to a higher expected value for Arbitrum.

The LP budget of 200k ARB makes up for the majority of the grant request and should be self-explanatory.

Marketing & engagement amounts to 40k ARB, less than 20k USD which we frankly think is a one-line item. The usual practices can be expected here, like KOL collabs, competitions but also content and media production itself (infographics, videos, etc.). The budget request will be a contribution but not even cover the expenses that Possum Labs will have in this department and simply allow us to do more.

As for Developer onboarding, the 60k ARB would be split into two hackathons (a smaller pilot and larger follow up after evaluation and growth), and contribute to overhead related to support and guidance. A realistic split would be 10k/30k/20k.

All that being said, our main goal is to create alignment between ARB and CASH.

If we would eliminate all budget items and only leave the 200k ARB (ca 90k USD) for LP seeding, would this change your evaluation?

5

Thank you for the welcoming words @0xDonPepe - Arbitrum is at the forefront of DeFi innovation, which is the reason why we’re building on it for >1year. It is great to hear that experiments are welcome, irrespective of the proposal outcome. :slight_smile:

That is true! However, stable coins are not money. They are fiat currencies on crypto rails with all the related problems. On topic, fiat currency is not money as it is not a store of value.

Bitcoin is a great store of value but arguably too good at that because it incentivizes excessive hoarding. This perpetuates low liquidity and high volatility which counteracts its adoption as currency.

To prove the point, BTC is much more volatile against the USD than the USD/CHF albeit having a higher market cap already according to fiatmarketcap.com.

CyberCash has inbuilt incentives that foster liquidity and velocity of its supply at scale.

To reach scale, incentives are present that reward early adopters with signficiant upside potential. In short, CASH solves the coldstarting problem and the terminal adoption problem.

We could not agree more!

In our opinion, CyberCash is a multi-year, even multi-decade project.

It took Bitcoin over 10 years to reach the 1Tn dollar mark, which is ca. 2% of the goal that CyberCash has. Not by accident, CyberCash has precisely the same goal that BTC had when Satoshi conceptualized it. It is about creating sound, digital money according to the established definition of money.

The leap to the real world can only happen after CASH established itself within crypto as a desireable medium of exchange & savings instrument (store of value). Realistically, CyberCash must reach at least a billion USD in market cap before real world adoption is thinkable. We’re prepared for a long journey.

And you’re right, it is fundamentally an experiment. It either becomes the most successful project on Arbitrum after years of hard work, or it flops. We are prepared to invest our time and energy into this experiment and would love to see Arbitrum join forces with a little kickstarting of the LP.

Every resource allocation is a risk and we agree that potential payoff and probability of success should be weighed carefuly. The potential for tangible benefits has been explored in the proposal and we’re happy to highlight the outsized potential once more in case of success.

Do you categorically decline the idea behind CyberCash, or do you have a specific concern that we can address?

1 Like
6

Thanks, @PossumLabs, for the proposal. The idea of ​​rewarding users for spending instead of just holding tokens is very interesting and cool as for me.

However, I want to know about how CyberCash will attract new users and merchants inside and outside the crypto space?

I’m also interested to know why you didn’t apply to participate in the Stylus Sprint program to receive a grant for CyberCash project?
It seems to me that there was a good opportunity for you to get financing if the project was able to prove its advantage for the Arbitrum ecosystem over others

1 Like
7

Hello! Thanks for your proposal!

Can you expand a bit on this topic? What are those launches? Where can we access more info about them? Are they deprecated or are part of CyberCash?

A stablecoin “business” is capital intensive, and around 150k does not seem to be enough to bootstrap it. What would be the actions/KPIs for the next steps after this grant?

1 Like
8

It looks interesting, were can i learn about $CASH tokenomics?

1 Like
9

Excellent questions, thanks everyone!

The core of CyberCash is its mechanism design that incentivizes organic integration and adoption. For example, think of a DeFi infrastructure such as a DEX, lending market or even prediction markets. Integrating CASH provides a default benefit due to the turnover based accrual of burn score and resulting revenue for the developer. This means that integrating CASH makes development of public goods profitable and is a competitive advantage over extractive business models. These dynamics do not take place when integrating any other neutral currency such as ETH or BTC because they don’t offer intrinsic yield based on turnover.

The first step of off-chain integrations will likely still be crypto-adjacent such as CEX listings and on/off-ramps. These businesses profit again from the turnover created by their customers which increases the company’s burn score and therefore creates revenue. E.g. when a CEX customer withdraws CASH, the 0.5% burn cost will be born by the customer, leaving the CEX with extra burn score. The ultimate goal is to be able to use CASH in the grocery around the corner which has similar benefits for the store due to the business-independent passive revenue that is building up over time. However, we would like to focus on the more near term, as this form of real world adoption is likely a decade in the future.

All that said, Possum Labs will be a driving force in the beginning, achieving first integrations through BD, partnerships and the mentioned hackathons that provide solid proof of concept. We also have some ideas for DeFi protocols / public goods ourselves that integrate CASH and we look forward to develop those in the months & years ahead.

The project, specifically the mechanism design was not ready before the deadline in early January, so there was no basis on which we could apply. As a nimble startup, we iterate rapidly and ship products as soon as we develop & get audits. The chance that grant deadlines coincide with our delivery schedule is rare, unfortunately, hence this proposal.

Happy to provide a quick overview of our launches:

  • Nov 2023, Portals V1 - upfront yield for the HLP token (like GLP from GMX but from the HMX perp DEX)
  • Jan 2024, Time Rift - positive sum onboarding tool for the Flashstake community (open source alternative to airdrops that creates value for all parties and actively involves the onboarded community)
  • May 2024, Portals V2 - upfront yield on Vaultka’s lending pools for ETH, USDC, WBTC, ARB, LINK. Including the launch of our composability solution called “Adapters” which greatly improved Portals UX by composing 1Inch swaps with the upfront yield mechanism. (receive yield in any token instantly)
  • September 2024, Possum Core V1 - PSM staking and immutable on-chain governance experiment with the goal to give direct agency to PSM holders over treasury allocations.
  • November 2024, tripple launch of Passel NFT collection, custom NFT marketplace & on-chain questing system - the original vision behind the Passel NFTs were a special governance role in Core V2, based on observations and learnings from Core V1.

For detailed information we can recommend our docs.

It’s important to highlight the significance of CyberCash’s breakthrough in incentive alignment which has greatly impacted our roadmap. Instead of continuing to develop secure on-chain governance for treasury management, we will burn the remaining PSM treasury, let our community migrate to CASH and then use the inbuilt incentives of CASH ourselves in future product development. This means that Core + NFTs + PSM become obsolete as governance over treasury allocation ceases to be relevant. (NFT holders have been reimbursed and PSM holders can migrate to CASH)

Portals V1+2 are being phased out as well for multiple reasons. First, the underlying protocols, HMX and Vaultka, are upgradeable and make use of this feature frequently while Portals are immutable. This will eventually brick them and for the protection of our users we decided to pro-actively phase out Portals. Second, after extensive experience with upfront yield, we came to the conclusion that it’s practically impossible to balance supply & demand incentives, leading to inherent resistance to TVL growth. Therefore, we decided to not build new Portals on immutable protocols but rather lay the idea to bed and focus on more promising projects, like CyberCash and our upcoming perpetual yield swaps protocol (think PENDLE but without expiry dates, greatly improving UX for traders).

For a general impression of the fidelity of our products, please visit our dapp. :slight_smile:

CASH is not a stable coin, but strives to be digital money - just like BTC originally aspired to before the store of value narrative took over due to absolute scarcity.
CyberCash is not a business, it’s a currency. As outlined above, we’ll help other businesses integrate CASH and build protocols ourselves that make use of CASH, furthering its adoption.
The proposed grant serves as a kickstart but by no means is sufficient to reach the end goal. However, the expectation is that the inherent game theory will create a growth dynamic that is contagious and also allows us to finance increasingly bold steps using the value of the long term vesting of the LP tokens (10% + 80% over 8 years).

Thanks! :slight_smile:
The best source of information is our blog post on Medium.

2 Likes
10

Absolutely against this proposal. I know the previous project which didn’t gain any traction to be honest. When asking critical questions about the protocol and its future I got kicked out of the discord.
This new idea won’t be interesting to the market again and is in my opinion just a cash grab/money extracting project. Swap token from PSM to Cash, sell as much as possible and leave. At least that’s what I predict.

And looking at the proposal it self the amount asked is way too high for a protocol this size. It’s bigger than the TVL.

11

A lot of community members ask critical questions in our Discord and they all get answered thoroughly and respectfully just like we did here. In fact, we encourage critical questions because that helps us to potentially uncover blindspots and improve. It is part of the startup process that some ideas simply don’t work out as expected. But we’re still here building and improving.

Aside from bots and scammers, there was a single person banned from our Discord because of toxic behaviour. He was spreading false and damaging information about the project and team and continued to be rude after multiple warnings. That happened on October 21st last year.
Apparently you were that person.

We’re always happy to engage in respectful conversations, but we have basic rules of communication on our server and we do enforce them.

Your disapproval of the proposal is noted, but the above context should shed some light on the situation for everyone else.

If anyone wants to verify the truth, feel free to join our Discord and ask the community about that incident and/or scroll back in history of the general chat to that date. People remember.

Like several times in the past, you’re stating objectively false information trying to support your negative opinion. The current TVL of Portals is still around 300k USD despite being in withdraw-only mode for a while already. The original grant request is for 300k ARB, ca. 150k USD and does not even relate to our existing protocols which makes a comparison pointless to begin with. But even then, your statement is simply false.

12

Obviously nobody except you can check who else got banned. I don’t remember when I was kicked for asking questions about the state of the project and the direction it’s going. But obviously you can now state it’s toxic behavior pointing to a flaw in the protocol.

What kind of “several times” did I state something wrong?

I think your post should also shed some light to the DAO showing that you are only here looking for a grant although you should have made at least the same amount of money with your other successfully projects. So why not use those funds?

Just making the DAO aware about this.

13

Hi @PossumLabs, thank you for the proposal. I really like seeing new ideas coming to Arbitrum, especially in DeFi.

First, I’d like to ask if you’ve received any other grants or funding for the project. Also, I don’t think this makes sense to fund as it seems the protocol lacks a way to attract users and become a medium of payment. Other protocols, like Olympus DAO, have tried in the past to become a medium of exchange through innovative coin distribution methods, and they have failed to do so even though they once got traction and thousands of users. I would like to point it seems your tokenomics are strangely designed for insiders to get most of the profit. I’m not really convinced by how the project is structured.

I don’t want to go into too much detail, but I agree with other delegates that $150k is not enough to create a medium of exchange, which even ETH or BTC have yet to achieve.

I think this would be better designed if it aimed to become a stablecoin with a more innovative design, including payment features.

Finally, I don’t mean to sound rude, but Arbitrum has already gone down the path of doing LTIPPs, and they have not been that impactful in the long term. So, I disagree with all the benefits to ARB that you mentioned. I think if you want a lower grant to fund development and specific objectives, you should consider applying to Questbook in the next season.

1 Like
14

Hi @Gabriel, thank you for the well meaning feedback.

We did not receive any grants to date and this is our first and only grant application in this context. Possum Labs is not VC funded but rather supported by our community which gives us the freedom to explore these “crazy” ideas. :slight_smile:

Speaking personally, I’m familiar with Olympus DAO, but their economic model didn’t solve the part where spending and organic integration of OHM is natively incentivized. This is the core mechanism and innovation of CyberCash because it allows developers and businesses to earn from integrating CASH.

We agree that 150k is not enough to instantly establish a new medium of exchange. That would take hundreds of billions, realistically.
Though, BItcoin itself started merely as an idea with little to no capital. An experiment to solve the flaws of fiat money which happened to gain traction to everyone’s surprise.

Upfront cost can be replaced with effort over time, if the fundamental game theory is sound. The main purpose of the grant is to align economic incentives between CASH and ARB by pairing them in the Genesis LP.

To clarify, contrary to the LTIPP or STIPP, the granted ARB is not distributed as incentives to create a temporary farming opportunity, but it is locked in the Genesis LP.

Could you please elaborate on your doubt? Why do you think it is designed for insiders?
In case you mean early adopters, then yes, they certainly have a huge opportunity if the project takes off. But they also take the biggest risk which must be compensated, otherwise nobody is incentivized to participate early.

Appreciate your constructive criticism! :slight_smile:

15

The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas. It’s based on their combined research, fact-checking, and ideation.

We appreciate the ambition behind this grant request for CyberCash and the outlined plans to boost ARB’s on-chain utility. However, we have several questions/points that we believe should be addressed before the proposal is even at a stage where a temp-check is needed.

  1. Liquidity Pool

    The majority of the grant is supposed to help bootstrap the liquidity pool which while we understand, we find a bit premature. But aside from whether the timing is correct, there are a bunch of other things that make us skeptical:

    • Why was Uniswap V2 chosen? Apart from the fact that there are native Arbitrum DEXs you could maybe use, there are also newer deployments of Uniswap that can provide a fair launch (e.g., V4 and Flaunch).
    • If we’re providing the sole counterpart for the CASH, we’re basically taking on all the risk and none of the upside of LPing. And since CyberCash is a relatively new protocol, there is a high chance that the DAO’s funds will simply be used as exit liquidity.
    • To mitigate the point directly above, we could either match the ARB that your own team puts up in the liquidity pool. Or, you could provide the CASH, the DAO provides the ARB, and we use a multisig wallet to jointly provide liquidity, sharing both the risk and the upside.

  2. Additional Budget Breakdown:

    Aside from the 200,000 to the liquidity pool, the proposal also requests 60,000 ARB for ‘Developer Onboarding & Support’ and another 40,000 ARB for ‘Community Engagement & Growth.’ There’s little in the way of justification for these amounts or an explanation on how they’ll be used or what success would look like.

  3. Custody of the funds

    This isn’t really feedback for the proposal as much as it is us pointing out something that you might not be aware of. In August 2024, the DAO established the Multisig Support Service (MSS), which is the way most funds that need to be held in a multisig are held. It’s worth updating your proposal and pointing out that the funds will be held by the MSS.

16

Thank you for submitting your proposal, @PossumLabs. After reviewing it, we’re not inclined to support it at this time. Here’s our reasoning:

The project itself seems quite new, and there isn’t enough clarity about the “PSM swap to CASH.” Specifically, it’s unclear what was the PSM token for, who the PSM holders are, and why it needs to be swapped into CASH.

The proposal also raises a red flag with the 1bn annual inflation. Given the limited traction so far, such a large inflation rate could significantly undermine the value of CAS even with a burn mechanism in place because the growth in supply likely won’t be offset by usage.

Additionally, the referenced “audit” appears to be conducted internally rather than by a third-party, which raises more questions than it answers. If you do secure funding, we’d like to see a clearer plan for how these funds will be utilized beyond simply denominating the token in ARB rather than ETH.

We also share the concerns expressed by others:

Nothing in this proposal convinces us that the project is positioned to make that leap successfully. Likewise, as @BlockworksResearch has pointed out, the proposal requires a complete overhaul and a refinement of how it will positively impact Arbitrum:

In its current form, we don’t see a compelling case for Arbitrum to provide a grant. We appreciate your effort so far, but we believe more substance, transparency, and a stronger roadmap are needed before we can support this proposal.

17

I will honestly say that I do not really like this proposal for the following reasons:

  1. At the moment, we have suspended grants and are deeply working on updating the Detox program. Therefore, I think the majority will not support the allocation of funds for a grant at this point in time. Perhaps after the formation of a general grant strategy.
  2. I do not understand how 200k ARB will help your tokens be liquid. This is simply a very small amount and will not provide any liquidity.
  3. Why will ARB be the main pair? After all, anyone can create another one that the Uzbeks like more and where there will be millions of dollars and then it will make sense.
18

After reviewing the proposal, we have some concerns regarding the nature and scale of the requested grant.

Most of the grant is intended to bootstrap a liquidity pool, effectively allocating ARB tokens toward Protocol Owned Liquidity (POL). This raises broader strategic considerations beyond just this proposal. Allocating ARB for POL should not be treated as an isolated funding decision for a single project but rather as part of a comprehensive treasury management and ecosystem growth strategy. Such decisions require a more holistic evaluation to ensure alignment with Arbitrum DAO’s long-term sustainability and goals.

More generally, support for community projects—whether through grants, incentives, or other funding mechanisms—should be assessed in the broader context of ecosystem growth rather than on a case-by-case basis. The DAO is already funding grants through the Arbitrum D.A.O. program and is actively discussing the re-launch of incentives for community projects following a detox period. We encourage CyberCash and other projects to explore these structured avenues, ensuring alignment with Arbitrum’s overarching funding strategy.

Given these considerations, we believe the CyberCash proposal lacks the necessary foundation to justify a grant of this scale at this time. We strongly recommend evaluating alternative funding options within the existing ecosystem-wide frameworks.

1 Like
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I have read the proposal carefully and would like to express several concerns that I consider fundamental for its long-term viability. First, I am troubled by the lack of quantifiable KPIs and the apparent refusal to define any meaningful metrics, which greatly complicates the task of evaluating the project’s success. Without clear objectives—such as transaction volume, the number of active users, or the number of integrations—it becomes very difficult to track progress and drive improvements. This uncertainty is compounded by the risk of initial liquidity, as investing 200k ARB in a pool with no adoption history is a high-stakes move, especially when the migration of the PSM, which accounts for 33% of the supply, relies on a community whose liquidity is described as almost “dry.” This issue is further exacerbated by worrisome centralization, given that the funds are managed by Possum Labs through a multisig wallet, without any community governance mechanisms to ensure a more distributed and transparent management process.

Furthermore, there are serious doubts about the realistic adoption of the project. The competition with stablecoins like USDT and other payment tokens on Arbitrum, such as GMX or RDNT, raises the question of how the proposal will attract merchants outside the typical crypto bubble—a challenge that is not addressed with sufficient clarity. On the security and sustainability front, although the contracts are audited, the proposal does not outline explicit plans to mitigate potential exploits (for example, flash loan attacks), and the fixed inflation model might dilute the value for holders if demand does not grow proportionately. The reliance on the ARB token also presents a significant risk, as a drop in its price could erode both the liquidity’s value and the incentive for $CASH holders.

Critical questions also arise that require clear answers. If KPIs are dismissed as “useless,” how will the DAO measure the project’s success to justify such a significant investment, and what would be the specific conditions that would classify the project as a total failure? Regarding the incentive mechanism, it is crucial to understand how the project will prevent users from hoarding $CASH instead of spending it, as seen with Bitcoin, and what guarantees exist that the revenue model for developers will be competitive compared to other alternatives. The migration of the PSM, representing one-third of the supply, also raises concerns: if liquidity is so limited, why would this migration provide an effective boost, and what measures are in place to prevent PSM holders from selling $CASH immediately? Finallly, it is vital to address how the project will handle ARB’s volatility—especially during an eight-year vesting period—and whether the possibility of using stablecoins like USDC for part of the liquidity, thereby reducing exposure to ARB’s price fluctuations, has been considered.

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The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.

Thank you for putting forward this proposal and plans to boost ARB’s on-chain utility.

The idea is interesting, but we have questions and clarifications regarding certain aspects of the proposal.

Could you provide a more detailed breakdown of how these budgets will be utilized, including specific campaigns, targeted audiences, and any KPIs you can provide to measure success?

There isn’t enough clarity about the PSM swap to CASH and how it will be executed. What measures are in place to prevent PSM holders from immediately selling $CASH upon migration, potentially causing sell pressure? Additionally, how does the team plan to ensure that the PSM community retains trust in this transition, given that PSM liquidity has already dried up in anticipation of CASH? Are there any mechanisms planned to encourage long-term holding and engagement?

While we understand the challenges in forecasting precise KPIs, could you outline specific qualitative or quantitative milestones you aim to achieve in the short to medium term? For example, are there target numbers for user adoption or transaction volumes within the first year that would indicate the project is on the right path?

Lastly, are there any plans to upgrade to V4 in the future?

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