Handle.fi LTIPP Application - FINAL

SECTION 1: APPLICANT INFORMATION

Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.

Applicant Name: handle finance

Project Name: handle.fi

Project Description: handle.fi is a decentralised trading & multi currency stablecoin protocol. The protocol enables spot & leveraged trading across both crypto and FX markets. borrowing and earning from multi-currency stablecoins (called fxTokens); allowing users to hedge, settle, speculate, transfer and borrow in their currency of choice.

Team Members and Roles:

Name Role
trooper Protocol Lead
trooperF Full-stack developer
trooperR Back-end developer
trooperN Front-end developer
ltrooper Support & community
trooperJ BD & ecosystem
trooperL Strategy & BD

Project Links:
dApp: https://v2.handle.fi

Website: https://www.handle.fi/

Twitter: https://twitter.com/handle_fi

Github: handle.fi · GitHub

Discord: handle_fi

Telegram: Telegram: Contact @handle_fi

Contact Information

Point of Contact: trooper

Point of Contact’s TG handle: @trooper42

Twitter: @handle_fi

Email: support@handle.fi

Do you acknowledge that your team will be subject to a KYC requirement?: Yes

SECTION 2a: Team and Product Information

Provide details on your team’s past and current experience. Any details relating to past projects, recent achievements and any past experience utilizing incentives. Additionally, please provide further details on the state of your product, audience segments, and how you expect incentives to impact the product’s long-term growth and sustainability.

Team experience

trooper is the protocol lead, with more than 2 decades of tradFi experience across the buy and sell side; quantitative system development, derivatives and asset management. trooper has been building in the ethereum ecosystem since 2017, and Arbitrum since 2021.

trooperF has 8 years of professional software development experience, 3 of which are building handle’s deFi systems on the EVM & Arbitrum; consisting of EVM smart contracts, subgraphs, front-end applications, and partially off-chain services such as bridges.

trooperR career spans over a decade, developing and deploying distributed scalable systems. He has extensive experience in financial sector in credit and derivative markets

trooperN brings over a decade of world-class design work, allowing us to bring our visions to life and providing our users with a best-in-class user interface.

What novelty or innovation does your product bring to Arbitrum?

Handle strives to have the best in class UX - bridging the web2 => web3 divide. We believe the web3 experience can often be confusing or daunting for users and a blocker to true adoption. To unlock its true potential it should be simplified - with its complexities abstracted - as a means of giving access to deFis novel financial instruments beyond the tech-savvy crowds they’ve currently been the domain for.

We were pioneers in implementing an original pull-based oracle system in 2022, as part of our v1 perpetual futures, which we call h2SO (handle high speed oracle). This allowed v1 traders to gain access to the latest market prices with low latency, in a scalable and affordable way, thanks to both Arbitrum One rollup and our oracle solution.

We offer a range of products within our protocol, including multi currency stablecoins (fxTokens), trading (spot and perpetuals), all of which are integrated with our Arbitrum-native ecosystem. We were the first protocol to offer a wide range of fiat stablecoins minted through a multi-collateral CDP loan.

We have just released our v2 perpetual futures to Arbitrum One - the key focus for this grant proposal. The system consists of a novel design with three main components: a processing sequencer, the Arbitrum One blockchain and a decentralised subgraph for indexing events. The novel part of the system is that no application data is permanently stored on the blockchain other than for access control. All application data is emitted as events, which are indexed via the subgraph, from where the final application state is built. This allows for our exchange to be flexible and parametric, while remaining fully transparent. We have plans to decentralise the sequencer in the future, which may possibly consist of our own L3 chain on Arbitrum. This design allows for anyone to deploy a liquidity pool and configure it with any tradable assets supported by our H2SO oracle system. i.e- permissionless perps.

Because Handle aims, and is eager to onboard tradFi users into the platform, having an excellent UX that is capable of abstracting deFi’s complexities is critical. For this reason, we offer gasless transactions and were also early adopters of social sign in and actively monitor the ecosystem for new technologies that can improve the overall user experience. Combining the ease of web2 with all the benefits of web3.

Is your project composable with other projects on Arbitrum? If so, please explain:

Yes – we strongly believe in interoperability and adhering to existing standards.

We always try to use existing third party solutions where appropriate. For instance, we price our fxToken vaults based on Chainlink oracles. For our perpetual futures, we use an aggregated oracle that combines Stork decentralised price feeds and our own h2SO.

Our v2 perpetual futures protocol is tokenised by default. Trading accounts and liquidity pools are tokenised as NFTs, abstracting the account management from EOAs. This brings various benefits and allows for further composability with other projects. For instance, trading accounts have an access control system which allows them to be easily transferred between wallets, facilitating many processes such as incentive programs and features like copy-trading which is on our roadmap - we recently implemented a pre-funded trading account giveaway using this novel NFT implementation.

Our CDP protocol is not adherent to ERC4626 as the standard was finalised in December 2021, after we had deployed our first implementation (in October). Should we work on a new major version of the fxToken CDP, one of the top priorities would be to implement the standard to increase the ecosystem interoperability.

Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?

Yes:

  • Liquity protocol has a similar CDP mechanism, although handle’s CDP is multi-collateral and multi currency
  • Angle, an EUR stablecoin protocol
  • GMX and Gains, have synthetic LP-backed perps. However besides this, the design of the handle perps protocol is both novel and unique to Arbitrum

How do you measure and think about retention internally? (metrics, target KPIs)

We actively monitor various metrics on our front-end application and the blockchain. Including page views, on-chain interactions, volume of transactions and token holders (for the various tokens that we have, including account and LP NFTs).

Relevant usage metrics - Please refer to the OBL relevant metrics chart 25. For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:

General metrics:

  • Daily active users
  • Daily user growth
  • Daily transaction count
  • Daily protocol fee
  • Daily transaction fee
  • Daily ARB expenditure and user claims
  • Incentivised user list & Gini

Perpetuals:

  • TVL
  • Trading volume
  • Open interest
  • List of traders
  • List of liquidity providers
  • Trader net P&L improvement
  • Funding rate stability
  • Liquidations

We currently track liquidity pool stats in our LP dashboard – we are actively developing this page and will add more stats over time.

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

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, the protocol is native to Arbitrum. We have been strong and active supporters of Arbitrum since inception

The initial part of the protocol – the fxToken vaults, created through collateralised debt positions – was deployed to Arbitrum One in October 2021. All fxTokens are native Arbitrum stablecoins, and newer parts of the protocol such as the v2 perpetuals exchange, deployed in November 2023, continue to be novel and native to Arbitrum.

On what other networks is the protocol deployed?

The core protocol remains native to Arbitrum.

fxTokens are available on Ethereum and Polygon mainnet for interoperability via our bridge.

What date did you deploy on Arbitrum mainnet?

The initial deployment for handleCDP stablecoins happened on 22 October 2021.

Deployment of the treasury CDP contract can be found at the following TX hash: 0xadc140b8a3e0ff17756ffea5eab2cd3aab5386ef9df957bdc29f8905b096caeb

v2 perpetual futures was deployed on 3 November 2023. The treasury deployment can be found at the following TX hash:
0x649995a69b98bba69f027109d85901a079327e60b949d677a66064f29810e930

Do you have a native token?

Yes. Handle’s native token is $FOREX: https://www.coingecko.com/en/coins/handle-fi#markets

Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?

Handle has run multiple FOREX incentive programs:

  • Protocol Incentive Experiments (PIEs): various tasks varying from meme creation to trading and referrals. Shared via social media. See more information and results here.
  • Trader Incentive Pool Rewards (TIPR): distribution of protocol fees to traders. See more information here.
  • t0 troopers NFT campaign: handle NFT holders are eligible to participate in various incentives such as TIPR.
  • most recently, whilst beta testing v2, pre-funded trading accounts using handle trade NFTs

Current Incentivization: How are you currently incentivizing your protocol?

The main protocol incentive consists of a reward pool contract that emits $FOREX rewards to different areas of the protocol. Distribution rates to each pool are controlled by parametric weights which can vary over time. See below the current status for each pool within our reward pool contract.

As shown above, the majority of incentives are currently directed at the governance pool, which emits FOREX based on a users veFOREX balance.

The reward pool contract can be found at 0xDE17Af0E4A6c870762508DcB7dCc20719584CBd0.

Up to this point extensive efforts have been expended in product development. For 2024, incentives will be a primary focus to drive usage and growth.

We are finalising the development of a completely new partners program which will be integrated with our v2 perpetuals exchange, allowing for referrers to earn a share of their referee trading fees. The design of this program is novel and we are not aware of its existence across any defi protocols at this point

Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?

No.

Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]

  • Deployed multi-collateral fiat stablecoin protocol

  • Deployed v1 perps with an original pull-based oracle (H2SO) and a diverse forex liquidity pool

  • Deployed v2 perps with a novel design

  • Processed over 144 M in perps volume for handlePerps v1

  • Participated in Arbitrum Odyssey with over 60k users

  • Over 2.92 M (15/3/24) in TVL across CDP deposits, hLP and perps v2 liquidity

  • handlePerpsV2 is just recently launched and has processed ~ 1.1M in trade volume

Protocol Roadmap:

We have recently launched handlePerps v2, our ground up perpetual rebuild, which was a significant milestone.

handlePerps v2 is both novel and native to Arbitrum. Its unique design emits events to the Arbitrum One blockchain, the application state is built by a decentralised subgraph and trades are executed by an off-chain sequencer – this results in a flexible and parametric system while retaining transparency and being open for full decentralisation across time.

Our roadmap for the next 12 months includes:

  • Reduce trade costs and increase settlement speeds for v2 – potentially as handleChain L3 :eyes:
  • Enable new and unique markets
  • Improve the liquidity and the LP experience - risk minimisation, capital efficiency
  • Finalise and launch a novel affiliates and referral partners program
  • AI-powered trading copilot with zAIus
  • Multi-modal access to handle
  • Implement a range of complex order types and trade management and reporting tools

Audit History & Security Vendors:

Peckshield audit: PeckShield-Audit-Report-Handle-v1.0.pdf - Google Drive

Security Incidents:

There has been no protocol exploit to this date. The team actively monitors deployments as well as updates in the ecosystem to ensure all components are safe and up to date.

SECTION 3: 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: 840,000 $ARB

Justification for the size of the grant 28: [Enter explanation. More details are better, including how you arrived at the required funding for individual categories of expenses covered by your grant plan]

We propose traders on the platform receive trading rewards in the form of $ARB. Traders receive a % of the weekly reward pool based on their weekly trade volumes . This grant size, distributed over 12 weeks, has the unique design where the distribution system scales exponentially with trade volume in a way that will incentivise traders to collectively meet the target KPIs, whilst also being structured to minimise opportunities for abuse. The dynamics of the exponential proportion is explained in depth in the grant breakdown section.

Grant Matching: N/A

Grant Breakdown:

The grant, if accepted, will be distributed each week retrospectively as part of a weekly rewards program.

Each week is considered an epoch, and at the end of each epoch may distribute up to 70,000 $ARB, which over the 12 weeks can add up to the total grant size of 840,000 $ARB. Rewards will be distributed to traders based on their share of the total volume for that week and any undistributed funds will be returned to the Arbitrum DAO.

This reward system could be thought of as a fee rebate system that can potentially turn into net reward emission for users if the protocol achieves its objectives. Therefore we believe all parties involved (the handle.fi protocol, the Arbitrum DAO, and the users) benefit from this program.

The exact amount of ARB distributed weekly is decided by the exponential curve x^e, as seen in the figure below. An exponential curve has been chosen so that the majority of rewards are only emitted if the incentive is successful, benefiting all parties involved.

The Y axis consists of the fraction to be distributed that week, and the X axis is the ratio of the weekly average product of DAU (daily active users) and DV (daily volume) to the target product of DAU and DV.

The targeted parameters are 100 DAU and $50 M DV. These numbers were chosen as a conservative target with reference to performance of other perpetual protocols; some approximate comparators include gTrade @ 400 DAU, 150M volume; Vertex @ 400 DAU, 350M volume; MUX @ 350 DAU, 150M volume.

If a week averages the target amounts, the weekly epoch will distribute the maximum amount of 70,000 $ARB. Each trader within an epoch will receive a share of the reward proportional to their share of the total volume traded that week, across all markets.But if a week is not entirely successful, any undistributed funds at the end of any epoch will be returned to the Arbitrum DAO.

* The table below shows the relationship between target achievement percent, rewards distributed and fees charged, using a trade fee of 2 bps.

The spreadsheet is also available in this link: LTIPP Rewards Distributed @ fees - Google Sheets

Note how at 100% target reached and 2 bps trade margin fees charged, the amount of gross fees charged in a week is $70 k but traders are charged a net fee of $-70 k when considering the $ARB distributed via the grant. Meaning, they are actually credited $70k from the ARB distributed via the grant. This is equal to a net reward of 2 bps on the traders’ volume, so they trade effectively at zero fees and still get some reward on top (200% fee rebate).

image

This trading incentive on handle, paired with our highly performative UI/UX and unique product offerings have been designed to accelerate the growth of both handle and Arbitrum by giving users unique products and best in class trading experience.

Funding Address: 0x623E035722E54d7819DF70CBc35d0b1C9f2F8f86

Funding Address Characteristics: 3/4 Safe multisig

Treasury Address:

  • 0x420220B72bbd307db8615e7aa0eAdCA399cf2FC0
  • 0x623E035722E54d7819DF70CBc35d0b1C9f2F8f86
  • 0xcafe1Ff994293F286eb88561F9B6bF1B69C06be1
  • 0x8f84771bd2c8ff62b7ca563fcf381b052ca6bc6d
  • 0x02F7f5a744c1509f216AB118CE989F91E22e8c73
  • 0xEE8cc5AE6341148E90b985fc55DDb06f5F3ab086
  • 0x5CE8dDD04F3576C93eDdDf0eb58bf2c7f643Ad0A

Contract Address:

A new contract will be deployed for distributing the ARB funds. The contract will be a new instance of our RewardPool contract (at 0xDE17Af0E4A6c870762508DcB7dCc20719584CBd0) but configured with ARB instead of our $FOREX token.

SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES

Clearly outline the primary objectives of the program and the Key Performance Indicators (KPIs), execution strategy, and milestones used to measure success. This helps reviewers understand what the program aims to achieve and how progress will be assessed.

Objectives:

The primary objective of handle’s grant proposal is to drive users to Arbitrum via both a competitive incentivisation program and our compelling UX. Throughout development, we have strived to build an intuitive platform with novel deFi products and a trading experience capable of matching some of the best platforms in web3 and web2.

With this grant, Handle aims to strengthen its position as a first class provider of web3 trading technology for both existing on chain and new off chain users. Handle’s objectives are:

  1. Increase number of users trading on handle.fi
  2. Increase trading volume on handle.fi
  3. Help drive growth of the Arbitrum ecosystem, through continual user acquisition programmes

Execution Strategy:

What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?

The exponential nature of the reward distribution means that users are rewarded exponentially more if the protocol has, or is close to, reaching its target KPIs for the weekly epoch (trade volume and user count). This should incentivise users to collectively trade more on the platform so that they can get higher rewards based on their actions, which work effectively as fee rebates.

It also means that the majority of $ARB tokens will not be distributed unless we reach, or are close to reaching, our target KPIs. Any tokens not distributed in an epoch will be returned to the Arbitrum DAO at the end of the program.

We believe that users will be incentivised to trade more because of the low trade fee (of 2bps) paired with the dynamic rebate/reward distribution program.

We aim to retain users through our constantly evolving UI and user experience, providing an extensive universe of both tradeable and view-only assets for analytics - even for users that are not actively trading.


FURTHER, we intend to enhance acquisition and retention through combining the LTIPP with concurrent rollout of one or all of;


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. [Please also justify why these specific KPIs will indicate that the grant has met its objective. Distribution of the grant itself should not be one of the KPIs.]

There are two KPIs that will be measured: daily active users (DAU) and daily volume (DV). We are targeting a DAU of 100 and a DV of $50 million USD. These numbers have been chosen after referencing users and volumes across other Arbitrum perps exchanges, and we believe that they are a reasonable target for us to gain traction with our recently-deployed v2 trading system.

(some approximate comparators include gTrade @ 400 DAU, 150M volume; Vertex @ 400 DAU, 350M volume; MUX @ 350 DAU, 150M volume. )

The data source for analysing and verifying the KPIs is the subgraph, which in our perps design also holds the entirety of the settled application state. The subgraph is found at the following link:

We are also planning to build relevant dashboards to more easily access and visualise this data.

Grant Timeline and Milestones: [Describe the timeline for the grant, including ideal milestones with respective KPIs. Include at least one milestone that shows progress en route to a final outcome. Please justify the feasibility of these milestones.]

The KPIs of 100 DAU and daily volume of $50 M USD will be tried every week for the entire duration of 12 weeks. Therefore, at the end of each week we will have a measurable progress of the overall target.

While we will work to target 100% of the KPIs, the program can still be successful without reaching 100%. Due to the nature of the distribution function $ARB tokens provided via the grant will be distributed proportionally and efficiently.

LTIPP Targeted Milestones & KPIs
Epoch (Week) Volume (USD) DAUs (Avg) Max $ARB Notes
1 $350 m (7* 50M) 100 70,000 Any tokens not distributed under the exponential rewards function will be returned to the Arbitrum DAO*
Milestone 1 2 $350 m (7* 50M) 100 70,000
3 $350 m (7* 50M) 100 70,000 Any tokens not distributed under the exponential rewards function will be returned to the Arbitrum DAO*
Milestone 2 4 $350 m (7* 50M) 100 70,000
5 $350 m (7* 50M) 100 70,000 Any tokens not distributed under the exponential rewards function will be returned to the Arbitrum DAO*
Milestone 3 6 $350 m (7* 50M) 100 70,000
7 $350 m (7* 50M) 100 70,000 Any tokens not distributed under the exponential rewards function will be returned to the Arbitrum DAO*
Milestone 4 8 $350 m (7* 50M) 100 70,000
9 $350 m (7* 50M) 100 70,000 Any tokens not distributed under the exponential rewards function will be returned to the Arbitrum DAO*
Milestone 5 10 $350 m (7* 50M) 100 70,000
11 $350 m (7* 50M) 100 70,000 Any tokens not distributed under the exponential rewards function will be returned to the Arbitrum DAO*
Milestone 6 12 $350 m (7* 50M) 100 70,000

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem? [Clearly explain how the inputs of your program justify the expected benefits to the DAO. Be very clear and tangible, and you must back up your claims with data]

The grant will be used to incentivise new and existing users of the Arbitrum ecosystem. If accepted, the grant will be implemented alongside the novel rewards distribution mechanism for handlePerps v2 which will exponentially increase rewards in relation to how much of the weekly KPI targets have been met.

The handlePerps v2 release is a substantial step forward towards bridging the gap between web2 and web3 - creating a fast, intuitive and efficient trading experience for everyone. Additionally, handle.fi’s unique FX stablecoin offering trading UI puts it best in class product in both the tradFi and deFi space.

This grant (and subsequent incentives) would be;

  • an accelerant to raise awareness and supercharge handle’s product offerings for 2024 and beyond.
  • highlight handle’s unique & innovative product offering to both tradFi and deFi users.

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.

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 25. 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, we are prepared to comply with no special requests.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? [Please describe your strategy and capabilities for data/reporting]

Yes.

*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.

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Hello @handle.fi

Thank you for your application! We can confirm your application has been submitted and you will be assigned an advisor shortly.

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Hello @handle.fi ,

Thank you for your application! Your advisor will be SeedLatam Gov @SEEDGov

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.

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@handle.fi Arbitrum LTIPP

Hi @cliffton.eth @raam, we are happy to mark this as FINAL.

thankyou! :gorilla:

Hey there I’ve amended the title post to reflect that this proposal is FINAL. All the best!

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