SECTION 1: APPLICANT INFORMATION
Applicant Name: MajeStyle
Project Name: Gravita Protocol
Project Description: Gravita Protocol is an interest-free and non-custodial borrowing platform focusing on advancing censorship-resistant stablecoins and the decentralization of Ethereum. It is a friendly fork of Liquity, with a couple of key differences:
- The one-time only fee is streamed over 6 months
- It is multi-collateral, with a single Stability Pool, and a LayerZero integration for the Debt Token, GRAI, allowing cross-chain bridging
Gravita supports high-quality LSTs and LRTs as collateral, excludes censorable assets, and focuses on giving further utility to minority LSTs and LRTs as well as, in the future, ecosystem-centric productive collateral like LP positions. The codebase also supports managed positions, which will go live later this year.
Team Members and Roles:
Project Links:
- Gravita Protocol Website
- X
- Discord
Documentation - GitHub
- Dune Dashboard from Murathan:
- Dune Dashboard from Gravita
- DefiLlama - Gravita Protocol
- DefiLlama - GRAI Liquidity on Arbitrum
Contact Information
Point of Contact: MajeStyle
Point of Contact’s TG handle: Telegram: Contact @MajeStyle69
Twitter: https://twitter.com/Majestyle69
Email: marketing [at] gravitaprotocol.com
Do you acknowledge that your team will be subject to a KYC requirement?: Yes
SECTION 2a: Team and Product Information
Team experience :
- Rhett Shipp, Founder - background in DeFi at Wave Financial and data science at a SaaS company.
- Spider, CTO, Smart Contract Lead - Lead Blockchain Engineer with over 15+ years of professional experience.
- CCleaver, Designer and Developer - Lead Frontend Developer and Creative Lead, co-founder of a successful venture acquired for $100M in the past 3-4 years.
- MajeStyle, Growth & Strategy - Dedicated community contributor and DeFi enthusiast, serial entrepreneur managing over 140 employees.
What novelty or innovation does your product bring to Arbitrum?
Gravita Protocol caters to the (in our opinion underserved) niche market of users seeking to utilize censorship-resistant stablecoins across DeFi. As a friendly fork of Liquity, Gravita aims to extend the ethos of resilience to Arbitrum, all while striving to maximise censorship-resistance and ensuring costs remain low for users.
This also addresses another significant gap where there are limited interest-free borrowing options and insufficient support for borrowing against minority LSTs/LRTs, which is crucial for promoting Ethereum’s decentralization.
Finally, Gravita utilises a fee-streaming mechanism, meaning that the one-time only fee is streamed over 6 months, with the intent to cater to both short and long term borrowers.
Is your project composable with other projects on Arbitrum?
Yes, our debt token, GRAI, is an ERC-20 token that can be widely used in DeFi. Our Governance Token is not live yet.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
Gravita is deployed also on Mainnet and other L2s. We are, to our knowledge, the only Liquity fork operating on Arbitrum with more than 400k in TVL. There are other Liquity forks supporting LSTs as collateral on Ethereum Mainnet.
How do you measure and think about retention internally? (metrics, target KPIs)
We measure the success of Gravita in terms of the following KPIs:
- TVL
- GRAI liquidity depth
- Average LTV
- GRAI peg
This data is available on our resources:
Dune Dashboard from Murathan:
- Dune Dashboard from Gravita
- DefiLlama - Gravita Protocol
- DefiLlama - GRAI Liquidity on Arbitrum
Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan: Yes
Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant): No
SECTION 2b: PROTOCOL DETAILS
Is the protocol native to Arbitrum?: No, Gravita Protocol was first deployed on Mainnet, and then, in August 2023, on Arbiturm
On what other networks is the protocol deployed?: Ethereum Mainnet, zkSync, zkEVM, Linea, Mantle, Optimism : because of our LayerZero implementation, GRAI can be easily bridged from other chains to Arbitrum. For most of Gravita’s existence on Aribtrum, GRAI inflow to the chain was higher than the GRAI natively minted there. This grant is an excellent opportunity to reach new power users and communities across other ecosystems.
What date did you deploy on Arbitrum mainnet?: 10th of August 2023 - First GRAI approval on the chain
Do you have a native token?: GRAI is an OFT, native to all the chains Gravita is deployed on, and bridged using LayerZero. We are considering where to deploy our governance token, with Arbitrum being an option.
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable? Here you can find a detail of our Liquidity spent and TVL on Arbitrum valid as of the 18th of February 2024.
Current Incentivization: How are you currently incentivizing your protocol? By reinvesting protocol revenue in Liquidity incentives, and other GRAI integrations. By rewarding users with Marks for our Gravita Ascend program.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program? Yes, from the Foundation.
Protocol Performance: 10M TVL and growing, first protocol to support an high quality LRT as collateral on Arbitrum (weETH from Ether.fi), excellent efficiency with liquidity incentives.
Protocol Roadmap: Expand GRAI utility through more diverse Liquidity pairings and offerings, as well as other platforms (Silo, Dolomite etc.). Support all high-quality LSTs and LRTs with a reliable Oracle. Add support for other chain-aligned / native productive collateral. Launch of the governance token.
Audit History & Security Vendors: Gravita was audited 3 times before its mainnet deployment. It held the first Hats Audit Competition without any High or Critical findings. Link to our Audits
Security Incidents: NA
SECTION 3: GRANT INFORMATION
For the calculations below, a value of $2 per ARB is assumed.
Requested Grant Size: 320’000 ARB
Justification for the size of the grant 6:
Current Status in KPI Terms
- Total Value Locked (TVL): $12M
- GRAI Borrowed: $4.5M
- Revenue Generated:
| Borrowing fees | Redemption Fees | Bridge Fees | Upcoming Borrowing fees | Total |
|---|---|---|---|---|
| 18900.49 GRAI | 0.49 rETH 1.87465 wstETH 0.12713 WETH |
4139.86 GRAI | 46109.96 GRAI | 75536 USD |
- Liquidity Spend: Approximately $61k since deployment in August
Goals and Improvement Targets
- Goal TVL: Increase to $36M (approximately a 3x from current levels)
- Goal GRAI Borrowed: Increase to $15M
- Liquidity Spend Target: 320`000 ARB (acknowledging that such amount of incentives will yield less efficiency at scale than our current methodology)
Incentivization Mechanisms
- Liquidity Provisioning: Incentivizing liquidity providers with competitive returns.
- Lending Platforms Onboarding GRAI (e.g., Silo): Creating more utility for GRAI and driving demand.
- Integrations: Partnering with strategic platforms to enhance GRAI’s utility and demand.
Expected Impact and Calculations
1 GRAI spent in incentives currently stimulates the existence of 73 GRAI. If we assume a bearish scenario of 3.5x worsening in liquidity efficiency, then 1 ARB in incentives will stimulate about 42 GRAI. 320’000 ARB x 48 = 13’440’000 GRAI, which would bring us comfortably above target given that about 4.5M GRAI are already minted on Arbitrum.
It is noteworthy that with the current parameters, such growth will generate approximately $90000 USD in fees per month for 6 months, allowing the protocol to sustain continued incentives by itself with the non-linear distribution outlined below.
Post-Incentive Retention Strategy
- Sustainability: The protocol aims to maintain growth by ensuring that the utility of GRAI remains high, supported by continuous development and strategic partnerships. The successful continuation of the Gravita Ascend campaign will attract users to continue deploying GRAI in DeFi to participate in the TGE.
- Long-Term Incentives: Gravita is committed to reinvest 100% of protocol revenues on Arbitrum incentives until at least the end of the year.
Grant Matching: We’ll continue to reinvest 100% of our Arbitrum Protocol Revenue (or governance token value and equivalent) into our growth over the duration of LTIPP and at least until the end of the year. Users participating in activities incentivised with the grant will also receive Marks for our Gravita Ascend program, in correlation with our Governance Token Generation Event.
Grant Breakdown:
320’000 ARB: Liquidity incentives across DeFi. To grow the TVL in the pools, stable/stable pools will have an initial target of 50% APR (excluding Marks for Gravita Ascend), with volatile pools targeting an initial APR of 120%. This is intended to decrease as they reach a satisfactory size. We wish to not commit to more specifics, as new LSTs/LRTs, pairs or venues can appear after this proposal is submitted and justify an adjustment of the current strategy. For example, we are finalising the integration of an oracle provider which will allow us to deploy GRAI on Silo.
Incentives will be spent where Gravita can get the best $ spent in incentives per TVL, with a weekly monitoring of such metrics.
Current pools:
- Trader Joe GRAI/ETH Pool:
- Ramses Pools
- GRAI/LUSD Pool
- GRAI/RAM Pool
- GRAI/ETH Pool
- GRAI/FRAX Pool
- GRAI/alUSD Pool
- GRAI/ARB Pool
- GRAI/weETH Pool
- Uniswap / Bunni / Merkl Pools
- GRAI/USDC Pool
- GRAI/LUSD Pool
Planned pools and incentives:
- Camelot GRAI/GRAIL Pool
- Silo GRAI/WETH/USDC
- Balancer - GRAI / rETH
- Curve - GRAI /crvUSD
- Dolomite
Planned incentives pending governance or other integrations:
- Aave V3
- Pendle (based on Silo, similarly to crvUSD)
Gravita Protocol intends to disburse the grant using the oARB token pioneered by Dolomite, which was already voted on and which proved to be successful. oARB works as follows:
- User receives oARB in the form of bribe or direct incentives
- User vests oARB: Vesting oARB allows the user to purchase ARB at a discount from the market price. To vest, the user needs to pair up oARB with an equivalent amount of GRAI and choose a lockup period. The longer the period, the larger the discount.
- During the lockup, the GRAI sits on a Dolomite lending pool.
- After the lockup, the GRAI that was used for pairing is returned to the user.
- The user can now purchase ARB using GRAI at the discount that matches the lockup period.
- The GRAI received by Gravita from users will be entirely reinvested in liquidity incentives, and will not quit the Aribtrum ecosystem.
As stated, the only differences between the approaches of Gravita and the already voted and approved Dolomite approach are:
- GRAI is used instead of ETH
- GRAI will not be sitting on a Dolomite lending pool after the vest ends, but disbursed as incentives in th ecosystem.
The maximum duration of the vest will be 40 weeks with the same discount parameters used by Dolomite, which guarantees for each passing week a 2.5% increase in the option discount.
Users will have access to detailed documentation.
This mechanism has the benefit of reducing the ARB sell pressure (thus increasing the value of the rewards offered) while allowing Gravita Protocol to maximise the value of the disbursed rewards. It also creates a strong “stickiness” for the TVL since the GRAI matched from this program will be continuously circulated in the ecosystem.
More info about oARB can be found on Domoite’s documentation as well as on their UI.
Funding Address: 0xfB0214D7Ac08ed0D2D9cA920EA6D4f4be2654EA5
Funding Address Characteristics: 3/6 Safe Wallet with unique signers and private keys securely stored.
Treasury Address: 0xfB0214D7Ac08ed0D2D9cA920EA6D4f4be2654EA5 - wallet used to receive protocol fees
0x1d1CfD4FfB8cFD0A903A38c3B41D593369B46103 - wallet used for liquidity incentives and our very minimal POL
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives: Accelerate the growth of Gravita Protocol, facilitate leverage and onboarding of high-quality LSTs and LRTs to Arbitrum, promote GRAI as a preferred volatility dampened token on Arbitrum.
Execution Strategy:
Gravita’s growth on Arbiturm has been consistent since deployment. However such growth has been limited by GRAI liquidity and demand / integrations.
Collaborating with Arbitrum to offer incentives for GRAI will naturally increase borrowing activities on the platform, leading to a rise in TVL, which in turn will generate higher protocol fees.
These fees will fuel additional incentives, leading to a virtuous cycle of engagement and growth.
Because GRAI is currently issued as a collateralized token by LSTs and LRTs, more demand for GRAI will lead to more net positive inflows on Arbitrum of both established and minority high quality LSTs and LRTs.
Due to its design, GRAI is expected to maintain its value within a specific range on decentralized markets, though it remains subject to fluctuations beyond this range depending on offer and demand. If demand for GRAI where to increase, users would naturally prefer minting GRAI rather than buying it.
Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy.
To accurately measure the success of our grant objectives, each KPI has been chosen based on its direct impact on our core objectives and their capacity to reflect the health and expansion of the protocol.
- Total Value Locked (TVL):
- Source of Truth: DeFiLlama
- Justification: TVL serves as a primary indicator of the protocol’s adoption and liquidity. An increase in TVL signifies enhanced trust and participation in the protocol, indicating successful leverage and onboarding of high-quality LSTs and LRTs.
- GRAI Market Cap / Total Borrowed:
- Source of Truth: DeFiLlama - Gravita’s Dune Dashboard
- Justification: This metric reflects the demand for GRAI. Higher volumes of GRAI borrowed indicate a successful increase in its utility and demand, aligning with our objective to promote GRAI as a preferred token on Arbitrum.
- GRAI Peg Stability:
- Source of Truth: Gravita Protocol’s Dune Dashboard and market data providers like Dex Screener, our (requested) oracle from DIA.
- Justification: The stability of GRAI’s peg is crucial because when GRAI is close to 1$, the risk of redemptions is much lower. This facilitates higher LTVs, welcomes riskier borrowers and generates higher volumes. Furthermore this ensures it remains a reliable and desirable asset for users.
- Secondary metric: Peg stability for GRAI allows users to increase the average LTV of their Vessels. This is due to the fact that Redemption risk would be minimal. In an ideal scenario, Vessels at or below 60% LTV should not be at risk with enhanced GRAI utility. The progress of this KPI is visible on our Dune Dashboard in the Average LTV section.
- Liquidity Depth for GRAI on Key Arbitrum Pairs:
- Source of Truth: DeFiLlama - GRAI Liquidity on Arbitrum and exchange platforms.
- Justification: Liquidity depth is a vital measure of market health and the ease with which users can trade GRAI without significant price impact. An increase in liquidity depth on Arbitrum pairs signifies effective incentive distribution and enhanced GRAI utility.
By monitoring these metrics, governance can accurately assess the impact of the grant funding and the success of the Gravita Protocol in achieving its strategic goals. The transparency and accessibility of the sources of truth ensure that all stakeholders can verify the progress and outcomes of the grant objectives, fostering trust and accountability within the ecosystem.
Grant Timeline and Milestones:
Our strategy involves distributing the grant in stages, initially allocating a larger portion to kickstart the program, followed by gradually decreasing the allocation to support a transition towards self-sustainability.
Below is the detailed timeline and associated milestones, backed by data-driven expectations for the impact of these incentives.
Timeline and Grant Allocation:
- Week 1-6: A total of 150,000 ARB will be deployed to initiate the incentive program. This phase focuses on laying the groundwork for GRAI’s adoption and utility expansion on Arbitrum, targeting initial engagement and liquidity provision.
- Week 6-9: An additional 100,000 ARB will be spent to scale up the incentives, capitalizing on the initial momentum and further boosting the protocol’s visibility and attractiveness to users.
- Week 9-12: The final phase involves deploying 70,000 ARB to consolidate the growth achieved and ensure sustainability. This stage will focus on deepening liquidity and fostering a robust borrowing environment.
Milestones with Respective KPIs:
- By Week 6:
- Total Value Locked (TVL): Aim to reach $14M, indicating a robust increase in the protocol’s adoption and the effectiveness of the incentives in attracting liquidity.
- GRAI Borrowed: Target $6M in GRAI borrowed, demonstrating the demand for GRAI as a borrowing asset and the success in leveraging and onboarding LSTs and LRTs.
- By Week 9:
- TVL: Increase to $25M, reflecting sustained growth and the protocol’s capacity to attract and retain liquidity.
- GRAI Borrowed: Elevate to $12M, underscoring the continued demand for GRAI and the effective use of incentives to encourage borrowing activities.
Justification and Expected Impact:
The phased allocation of ARB tokens is designed to match the protocol’s growth stages, ensuring that each phase builds on the success of the previous one. The initial allocation is conservative, aiming to gather data and gauge the response from the ecosystem. As confidence and evidence of effectiveness grow, the grant spending increases to amplify the impact.
The expected impact of these incentives, as supported by expectedly bearish data, indicates that 1 ARB spent in incentives currently stimulates the existence of approximately 48 GRAI.
These milestones and the strategic distribution of the grant are designed to not only achieve immediate growth targets but also to lay a foundation for long-term sustainability.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
Receiving a grant will significantly amplify our ability to facilitate the onboarding at scale of high-quality LSTs and LRTs to the Arbitrum ecosystem. By strategically allocating grant resources towards liquidity incentives and integration support, Gravita Protocol can offer unparalleled utility for these tokens. This not only enhances their value proposition but also encourages their issuers to prioritize Arbitrum as their Layer 2 solution of choice.
Our approach is grounded in data-driven strategies that have demonstrated success in similar contexts. For instance, our recent integration of weETH on mainnet and the launch of a user-centric marketing campaign around points have resulted in notable increases in TVL and user engagement.
By positioning Gravita as a conduit for these tokens to access the vibrant Arbitrum ecosystem, we anticipate a mutually beneficial outcome: the tokens gain increased utility and exposure (which also contributes to Ethereum decentralisation), while Arbitrum solidifies its status as the leading Layer 2 platform for Ethereum-centric activities.
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?
As explained before, we believe a non-linear distribution to be ideal. If a linear distribution is the only option, we are happy to adapt our proposal.
SECTION 5: Data and Reporting
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 4. Along with this list, please answer the following:
Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered? Yes
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? Yes, we can create bi-weekly posts on the Aribtrum Forum to present the data from the period in question.
First Offense: *In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.
Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.
Third Offense: Funding is halted permanently
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.): Yes
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?: Yes