Edit Note: This proposal was amened to reduce the ARB grant size down to 200k ARB per the feedback from the council (3 May 2024)
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: Tao Ree
Project Name: HMX
Project Description: HMX is a perpetual protocol (PerpDEX) with cross-margin and multi-asset collateral support. HMX offers low-fees trading on crypto, FX, and commodities markets with up to 1,000x leverage.
Team Members and Roles:
Shu Wei (Co-founder, Head of Engineering)
- 6 years in smart contract development
- Elected as a Pythian Council Member (Link)
- Experience working with notable projects such as OPN (previously OmiseGo) and large corporates such as Agoda
Rockman (Co-founder, Head of Marketing & Community)
- 6 years experience in DeFi
- Ex-TradFi professional having worked extensively in corporate banking and wealth management
Tao Ree (Co-founder & Head of Strategy & BD)
- 6 years experience in DeFi
- 2 years experience in banking industry
- Ex-Management consultant
John Xina (Head of Product)
- 6 years experience in smart contract & product development
- Led technical consultant for a large technology consulting firm
Kim Hera (Engineering Team Lead)
- 6 years in smart contract development
- Experience working with various DeFi projects
Jinlong9922 (Senior Developer)
- 4 years in smart contract development
- 6 years in frontend development
Yingyang888 (Senior Developer)
- 4 years in smart contract development
- 6 years in frontend development
Kangdaiyu (Senior Developer)
- 4 years in smart contract development
- 6 years in frontend development
Chentang88158 (Developer)
- 1 year in smart contract development
- 1 year in frontend development
Asaki-Katsu (Developer)
- 1 year in smart contract development
- 1 year in frontend development
In addition to the team members above, we also have 2 business analysts and 6 community managers
Project Links:
Contact Information
Point of Contact: Tao Ree (@HMX)
Point of Contactâs TG handle: @taoree88
Twitter: @HMXorg
Email: Taoree@hmx.exchange
Do you acknowledge that your team will be subject to a KYC requirement?: Yes
SECTION 2a: Team and Product Information
Provide details on your teamâs 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 productâs long-term growth and sustainability.
Team experience (Any relevant experience that may be useful in evaluating ability to ship, or execution with grant incentives. Please provide references knowledgeable about past work, where relevant. If you wish to do so privately, indicate that. [Optional, but recommended]):
The selected experiences of our team members can be seen in the section above.HMX is developed from the ground up with many innovative features such as multi-collateral and cross margin support.
Since our full-scale launch in August 2023, HMX has established , which is a testament to our team commitment and capabilities to execute. We highlight some of the key platform statistics below:
- Total trading Volume: $15Bn+
- Avg. Daily Trading Volume: ~$90Mn+
- Avg. Daily Trading Transaction: ~1k
- Platform TVL: ~$29Mn (Liquidity Pool + Tradersâ Collateral)
- HLP TVL: $26Mn (Liquidity Pool)
- No. of Unique Users: 5,600+
- No. of Trades Supported: 174,000+
- Telegram + Discord members: 9,300+
- Twitter Followers: 17.7k+
For complete platform statistics, please visit:
What novelty or innovation does your product bring to Arbitrum?
HMX is a Perpetual Protocol (PerpDEX), bringing many innovations to the Arbitrum Ecosystem. We highlight the key features below:
- Cross-margin Collateral: Allows for the sharing of margin balances across multiple positions, increasing the capital efficiency and flexibility for users.
- Multi-asset Collateral: HMX supports multiple assets, including yield bearing tokens, as collateral (BTC, ETH, wstETH, stables, etc.) Traders are not restricted to a single collateral asset or a specific collateral type based on their trade direction. This will allow them to execute certain strategies much more effectively - i.e. carry-trade strategy.
- Oracle Data Compression: Utilizes âTick Mathâ (similar to UNIv3) in order to compress price data, making trades on HMX more gas efficient
- Customized Index Market (CIM): Allows users to trade on a basket of related assets, betting on an overall trend while minimizing idiosyncratic risk. Our first CIM launched is the US Dollar Index Market (DIX).
- Multi Asset Classes Support: Support 50+ markets on Crypto, FX, and Commdity
- Adaptive Trading Fees: Variable trading fees based on trade size relative to reference liquidity depth, allowing us to list more crypto markets including ones with lower market cap, and increase Max trade size while still safeguarding LPs.
- High Leverage: Max leverage of up to 1,000x for FX markets
- 1-Click Trading: HMX offers a one-click trading feature through our use of account abstraction. Users do not need to sign the transactions via their wallets every time they want to execute a trade. Instead, they simply need to input their PIN to confirm and complete their trade - a much faster and simplified experience, on-par with using a centralized exchange!
- On-chart Trading: Ability to drag and drop to adjust order (take-profit, stop-loss, etc.) directly on the chart
- Advanced Order Types: HMX supports advanced order types such as limit order, take profit, and stop loss.
- Subaccount Support: HMX supports multiple subaccounts under the same wallet address. Using subaccount allows users to employ different trading strategies, segregate risks, and provide an easy way for users to track their performance under the same wallet address, improving the overall user-experience.
- Robust price oracle: HMX utilizes Pyth Network for price feeds for a fair and reliable price source. The robust setup also protects traders and liquidity providers from scam wicks or short-term rapid price movements in a volatile market condition.
- LP protection: HMX has multiple mechanisms in place to ensure our liquidity providers are safe from various risks.
- Instant Liquidity Provision: Efficient On-Chain computation to accurately track the real-time PnL of all active positions to enable liquidity providers (HLP) to enter or exit the pool fairly.
- Progressive Web App (PWA): HMXâs mobile interface delivers an experience that rivals that of a centralized exchange, ensuring seamless and intuitive usability.
Is your project composable with other projects on Arbitrum? If so, please explain:
We believe in a composable, highly capital efficient DeFi ecosystem. Thus, we have built HMX for maximum composability with other projects on Arbitrum. We list the current integrations with HMX below and their benefits:
1. Leveraged Market Making:
- Description: Our HLP token integrates with other LP tokens, namely, GMXâs GM token. As we re-hypo the GM tokens, our LPs are market making for both GMX AND HMX traders.
- Benefits: Depositors get yields from both protocols. They continue to earn 100% of the yields from GMX while also earning additional yields from fees generated on HMX.
2. HLP Integration with Other Protocols
Pendle, Penpie, Equilibria
- Benefit to Protocols: Provide an additional high-yield source option for users to earn fixed yields or trade on yields.
- Benefits to HMX: Improve HLP Liquidity, which means HMX can support higher OI, and also provide more flexibility for depositors to manage their yields
Vaultka:
- Benefit to Vaultka: Provide an additional yield farming sources for farmers; Increase lendersâ APR%
- Benefit to HMX: Improve HLP Liquidity, which means HMX can support higher OI
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
PerpDEX is one of the most popular DeFi categories on Arbitrum. Many protocols in this category are well known players. However, we believe the combination of HMXâs features distinguishes itself from other players and offer additional value to the Arbitrum ecosystem. For a detailed exploration of what makes our product uniquely valuable on Arbitrum, please to âWhat novelty or innovation does your product bring to Arbitrum?â section above.
How do you measure and think about retention internally? (metrics, target KPIs)
Relevant usage metrics - Please refer to the OBL relevant metrics chart . 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: A time series metric representing the daily count of unique addresses interacting with the HMXlâs contracts.
- Daily User Growth: A time series metric representing the daily user growth interacting with the HMXâs contracts.
- Daily Transaction Count: A time series metric representing the daily number of transactions interacting with the HMXâs contracts.
- Daily Protocol Fee: A time series data representing the daily total protocol fee generated. This includes borrowing fees, HLP fees, trading fees, and liquidation fees.
- Daily Transaction Fee: A time series, daily total transaction fees generated daily by interactions with the HMXâs contracts.
- Daily ARB Expenditure and User Claims: Data on individual ARB incentive claim transactions made by users, as incentivized by the protocol. It should include the timestamp, user address, and the claimed ARB amount. The spent ARB will allow for the normalization of growth metrics.
- Incentivized User List & Gini: Data of individual esHMX incentive claim and vest transactions made by users, as incentivized by HMX, as well as a list of traders and HLP stakers with their respective performance metrics.
HMX Metrics
- TVL: A daily time series expressed in USD.
- Trading Volume: A daily time series, also measured in USD.
- Open Interest: A daily time series measured in USD.
- List of Traders: A comprehensive record of individuals or entities that have engaged in HMXâs trading activities.
- List of Liquidity Providers: A list of current and past participants who have provided HLP during the incentivized period.
- Trader Net P&L Improvement: The change in tradersâ profit and loss accounts, reflecting on the platformâs fairness and attractiveness to traders.
- Funding Rate Stability: Tracks the fluctuations in the funding rates, assessing the balance between long and short positions and market sentiment.
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/No]
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
On what other networks is the protocol deployed?:
HMX is live on Arbitrum and Blast
What date did you deploy on Arbitrum mainnet?:
Our first contract was deployed on Arbitrum on 29 May 2023
0xd48f5004e7b30b8976dc3b86d259299e43a0ce3587fcdaaa1f9f6108a214389d
Do you have a native token?:
Yes. $HMX is our Governance token. You may refer to our tokenomics here.
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
HMX have extensive experiences running incentives program, with many of them in place since the launch of the protocol. Most of these incentive programs are still ongoing. The incentives are distributed in the form of USDC.e, Dragon Points (loyalty points), and esHMX (escrowed version of HMX token which needs to be vested for 1 year to fully convert into HMX token) Here is the HMX platform statistics dashboard. We provide details of each program we ran below.
HLP SURGE
- Description: We bootstrapped the HLP vault to build up the market making liquidity. The Surge program gives bonus esHMX to users who committed the liquidity to our protocol at launch.
- In total, ~$6.3 Mn participated in the HLP Surge. See results of the HLP Surge here.
HLP Staking
- Description: In addition to the share of protocol revenue, HLP token stakers also earn esHMX incentive rewards
- Total incentives from staking the HLP token include:
- Earn 65% of protocol revenue in the form of USDC.e when staked
- Earn a share of esHMX token emission when staked
- Earn ARB incentive from GMXâs GM token (During ARBâs STIP)
- HLP remains one of the most attractive yield farming opportunity in its category with ~50%+ APY
HMX & esHMX Staking
- Description: HMX and esHMX stakers earn rewards and yields from several sources.
- Incentives:
- Earn 25% share of protocol revenue in the form of USDC.e when staked (shared with staked esHMX & Dragon Points)
- Earn a share of esHMX token emission when staked
- Earn Dragon Points at 100% APR when staked
- Earn PYTH from PYTHâs retrospective airdrop
Trader Loyalty Credit
- Description: For every $1 of trading volume, HMXâs users will be awarded at least 1 TLC (depending on the asset that they trade). Each week, esHMX rewards will be distributed pro-rata to traders based on their TLC amount.
- Incentives:
- Receive a share of esHMX rewards
- Receive a share of PYTHâs retro active airdrop
Open Interest Incentives
- Description: Rewards to users who have active positions on HMX. The incentives are distributed pro-rata based on duration and position size.
- Incentives:
- Receive a share of esHMX rewards
HMX-ETH LP Staking
- Description: To increase on-chain liquidity, we incentivized liquidity providers of the UNIv3 HMX-ETH pool.
- Incentives:
- Receive a share of esHMX rewards
Referral Program
- Description: The participants of the referral program receive rebates of fees for referrers and discount on trading fees for code users.
- Incentives:
- Receive rebates in the form of USDC.e for referrers
- Receive discount on trading fees in the form of USDC.e for code users
Trading Discount
- Description: A tiered trading fee discount based on the userâs trading volume OR the amount of HMX staked. More details here.
- Incentives:
- Get up to 12.5% discount, paid on a weekly basis
Current Incentivization: How are you currently incentivizing your protocol?
Currently, our incentive programs include HLP Staking, HMX & esHMX Staking, Trader Loyalty Credit, Open Interest Rewards, Referral Program, and Trading Discount (You can check the description of each incentive program from the previous question)
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program? [yes/no, please provide any details around how the funds were allocated and any relevant results/learnings(Note: this does NOT disqualify an applicant)]
No
Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]
We highlights our key performance metrics below
Activity Stats (as of March 11th 2024)
- Total trading Volume: $15Bn+
- Revenue distributed to users: $4.5Mn+
- Platform TVL: ~$29Mn (Liquidity Pool + Tradersâ Collateral)
- HLP TVL: $26Mn (Liquidity Pool)
- Avg. Daily Trading Volume: ~$90Mn+
- Avg. Daily Trading Transaction: ~1k
- No. of Unique Users: 5,600+
- No. of Unique Traders: 3,800+
- No. of Unique HLP Depositors: 3,200+
- No. of Trades Supported: 174,000+
More complete stats on our Dashboard here.
Community Stats
- Telegram + Discord members: 9,300+
- Twitter Followers: 17.7k+
- HMX token holders: 3,100+
- No. of users issues Tickets Supported: 1,100+
- No. of Community UI/UX Suggestions: 100+
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application. Include tangible milestones over the next 12 months.]
Q2 2024
- Gasless trading via Intent-based architecture
- Allow order adjustments without paying gas, greatly improving the overall UX
- A foundation for supporting collateral deposits on other chains, while consolidating trade transactions on Arbitrum, effectively making Arbitrum as our root chain.
- A foundation for on-boarding users without needing a web3 wallet.
- Launch of Governance process for HMX
- Community have more voice can vote on protocolâs future directions
- Users can vote on adjusting various parameters of the protocols
- Add more markets
- Various UI improvements
Q3 2024
- Trading model UX improvements
- Remove borrowing fees
- Remove individual positionâs ADL
- Integration with other derivative protocols to allow for more efficient hedging
- Launch of HMXv2 with undisclosed features (can discuss in private with the panel)
Q4 2024
- Improvements on HMXv2
- Additional cross-chain expansion
- Listing on additional CEXs
Audit History & Security Vendors: [Provide historic audits and audit results. Do you have a bug bounty program? Please provide details around your security implementation including any advisors and vendors.]
HMX has 3 formal audits. The reports can be found below:
- Cantina (backed by SpearbitDAO) Audit Report LINK
- WatchPugâs Audit Report: LINK
- 0xfoobarâs Audit Report: LINK
Security Incidents: [Has your protocol ever been exploited? If so, please describe what, when and how for ALL incidents as well as the remedies to solve and mitigate for future incidents]
No, our protocol has never been exploited.
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:
200,000 ARB (actual distribution amount will be based on the trading volume growth, trading tx, and new users acquired. Any unused funds will be returned.)
Edit Note1: Please note that the requested amount has been reduced by ~66% from the original 2,375,000 ARB. While we believe we have a strong basis to justify our original grant size, we are cognizant of the fact that the total amount of grant requested are over subscribed by ~3x. With this reduction, our ask should be more in line with the amount available and spread the LTIPP to more protocols.
Edit Note2: (3 May 2024) After a further feedback from a council member, we further reduced our grant size ask to 200k ARB.
All the analyses below still show the original requested number because it still reflects the reality of the current baseline and what we can achieve. The 800k ARB would still go a long way in achieving these goals.
Justification for the size of the grant :
1.) HMX is currently doing ~$90Mn in daily trading volume. (last 7-day avg.) Our target is to increase the daily trading volume on the platform to $270Mn, representing a 200% growth.
2.) With the trading volume increase, the # of trading transaction should also increase, but at a lower percentage. HMX is doing ~1k of trading tx / day. We are expecting 100% growth to ~2k tx / day.
2.) We believe these targets are realistic and achievable with the support of the grant. HMX has run trading discount programs in the past and have seen a noticeable uptick in the platform trading volume, showing that users are sensitive and respond to the decrease trading fees.
Note:
- The 1st campaign started on 12th December 2023, where we reduced trading fees of BTC and ETH to 0.02% (50% Discount), other crypto and commodities to 0.03% (57% Discount) Details here.
- The 2nd campaign has just started on Feb 29th 2024, where we reduced the trading fee for BTC and ETH down to 0.02% from 0.04% (50% Discount). Details here.
3.) The ARB incentives will be used for three purposes and will run over 12-week period
- Trading fees rebate
- Gas fee rebate
- New users bonus
4.) Trading Fee Rebate: The protocol is currently charging trading fees between 0.01% - 0.05%, depending on the asset class, with the blended rate of ~ 0.025%. We are aiming to rebate 100% of all trading fees paid to the platform back to users. With these target and a program running for 12 weeks, it would require:
- Total fees paid by users: $270 million * 12 weeks * 7 days / week * 0.025% = $5,670,000
- ARB equivalent = 5,670,000 / 2 = 2,835,000 ARB (Assuming ARB = $2)
5.) Gas Fee Rebate: The gas fee for each trading transaction = 0.0003ETH (~$1.2) We are aiming to rebate 100% of the gas fees to repeated users (at least 5 txns over 3 separate days, see more details in section4) With this target and the program running for 12 weeks, it would require:
- Total gas fee paid by users: 2k transaction * 12 weeks * 7 days / week * $1.2 / tx = $201,600
- ARB equivalent = 201,600 / 2 = 100,000 ARB (Assuming ARB = $2 and round down)
6.) New Users Bonus: One of our objective is to attract CEX users to try DEX and convert them into long-term users. As such, we are allocating a small portion of the grant for this purpose. Qualified new users are defined as follow:
- Wallet addresses must have received deposits from CEXs wallet - Binance, Bybit, OkEX, or Gate prior to March 1st 2024 (using past snapshot to prevent sybil)
- Must not have used HMX before
- To qualify, must trade at least $500 on HMX, making at least 3 txs on 2 separate days
- Bonus awarded to the first 1,000 users who complete the tasks above
- Users will receive 25 ARB (~$50 USD), which is in line with the bonus we have seen being given out to incentives new users on trading platforms.
- Total budget = 1,000 users x 25 ARB = 25,000 ARB
Grant Matching:
HMX has been and will be providing incentives with its Governance Token ($HMX) alongside the grant incentives from Arbitrum. The incentives to the traders over a 12-week period will roughly be 130,000 HMX = $1,170,000 USD ($HMX price at $9)
The ARB incentives will only be used to top up the fee rebate, up to 100% of the fees paid, beyond what the HMX incentives donât cover. In the case where HMX incentives already cover the trading fees paid by users, no ARB incentives will be distributed. This method of distribution will ensure there is no incentives for sybil and wash trading.
Example1:
- Total weekly fees paid = $100,000
- HMX incentives distributed = $40,000
- ARB incentives used = $60,000
Example2:
- Total weekly fees paid = $39,000
- HMX incentives distributed= $40,000
- ARB incentives used = $0
With the esHMX incentives in mind, the required grant amount will be:
- Trading Fees Rebate = $5,670,000 - $1,170,000 = $4,500,000 = 2,250,000 ARB
- Gas Rebate = 100,000 ARB
- New User Bonus = 25,000 ARB
TOTAL = 2,375,000 ARB
Grant Breakdown:
The ARB incentives will be used for three purposes and will run over 12-week period, with the following allocation. (Refer to the grant size justification above on the rationale for this split.)
| Purpose | ARB Amount | ARB % |
|---|---|---|
| Trading Fees Rebate | 2,250,000 | 94.7% |
| Gas Fee Rebate | 100,000 | 4.2% |
| New Users Bonus | 25,000 | 1.0% |
| Total | 2,375,000 | 100% |
Edit Note1: With the reduction in grant size requested. Our updated use of grants are as followed:
PurposeARB AmountARB %Trading Fees Rebate742,00092.8%Gas Fee Rebate33,0004.1%New Users Bonus25,0003.1%Total800,000100%
Please note that we keep the new user bonus amount the same, while doing a pro-rata reduction on the Gas Fee & Trading Fee rebate.
Edit Note2: (3 May 2024) With the further reduction in grant size requested. Our updated use of grants are as followed:
Purpose ARB Amount ARB % Trading Fees Rebate 180,000 90% Gas Fee Rebate 10,000 5% New Users Bonus 10,000 5% Total 200,000 100%
To make sure the grant goes to best use, we have anti-sybil and anti- wash trading mechanics in place:
| Purpose | Anti Sybil / Wash Trading Mechanics |
|---|---|
| Trading Fees Rebate | - Users cannot get back more than the actual fees paid (including all incentives), so there is no incentives to watch trades |
| Gas Fee Rebate | - User cannot get back more than the actual gas paid |
| - Only rebate to users who make at least 5 txs on at least 3 separate days in each week to incentivize repeated usages | |
| New Users Bonus | - Wallet addresses must have received deposits from CEXs wallet - Binance, Bybit, OkEX, or Gate prior to March 1st 2024; since snapshot has passed, users cannot sybil. |
| - Must not have used HMX, GMX, or Gains before (No wallet tx interaction with these protocols) |
Distribution Timeline
- To ensure we have enough grant to run for the entire 12-week campaign, we will cap the the max cumulative distribution amount according to the formula below. This is to safeguard against the case where we achieve a higher trading volume than expected and will run out of the grant early, but allow for a catchup in the later weeks
MaxDistributeAmount = Week# * (800,000 / 12)
- The distribution will be done on an epoch basis with a total of 12 epochs, and each epoch lasting 1 week.
Funding Address: 0x24d53494dc9e260a6b2ddb0b40c1ed222471779c
Funding Address Characteristics: [Enter details on the status of the address; the eligible address must be a 2/3, 3/5 or similar setup multisig with unique signers and private keys securely stored (or an equivalent custody setup that is clearly stated). The multisig must be able to accept and interact with ERC-721s in order to accept the funding stream.
This address is a 2 / 3 gnosis safe address
Treasury Address:
HMX does not have a DAO wallet at the moment.
Contract Address:
Contract address will be provided at a later stage once we deploy the distribution logic.
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:
Leverage the ARB incentives to accelerate 1.) trading volume growth 2.) trading transaction growth, and 3.) Attract new users, especially CEX users, to the HMX platform, converting them into long-term users.
- ARB incentives will help subsidize trading costs for users (trading fees + gas cost), making the barrier to try HMX lower, accelerating its adoption. We would like to emphasize here that HMX already offers one of the lowest trading fees amongst PerpDEX. Our fees for BTC and ETH markets are on-par with major CEXs, such as Binance, so the primary objective here is to grow the size of the PerpDEX ecosystem on Arbitrum (through acquisition of new users) and not to take market shares from existing PerpDEX on Arbitrum. To this effort, we have marketing initiatives lined up to run concurrently during the rewards period to
- We are also providing a new user bonus targeting CEX users, who have not traded on any PerpDEX before to try out HMX.
- Being a grant recipient would help increase HMXâ visibility and credibility, acting as another social proof for many users on the Arbitrum ecosystem to give HMX a try.
- By rebating up to 100% of the trading fees, we also lower the cost for arbitrageurs to execute carry trade strategies, which would help balance open interest skew faster, positively impacting the protocol. This approach would reduce one-sided exposure for HLP and stabilize the overall funding rate, leading to lower overall costs for traders, and improving UX.
- We believe HMX has many unique features and strong value propositions. We hope to turn a significant percentage of these new users into long-term users even after the incentive program ends, creating sustainable value for the Arbitrum network.
- We have a tier-based trading fees discount program. So once users achive a high-tier with high discount, they will be incentivize to continue using HMX
- Once users start trading and have open positions on the platform, it becomes inconvenient to move as they would have to wind down all the positions before being able to remove their collateral.
Execution Strategy:
1.) We will allocate the necessary development resources to prepare for the campaign and upgrade our UI so users can easily track their statistics and rebate live.
2.) The trading fees rebate and gas fee rebate will be calculated on a weekly basis, every Thursday. The USD-equivalent value of ARB to be rebated will be determined on a weekly basis (epoch) at the time of calculation.
3.) To ensure we have enough grant to run for the entire 12-week campaign, we will cap the the max cumulative distribution amount according to the formula below. This is to safeguard against the case where we achieve a higher trading volume than expected and will run out of the grant early, but allow for a catchup in the later weeks
MaxDistributeAmount = Week# * (800,000 / 12)
4.) Distributed ARB on each epoch will be released linearly over a 90-days period. Users can claim them any time.
- To rewards loyal users and increase platformâs stickiness, we will allow for accelerated releasing schedule for users who continue to trade on HMX after the incentivization period
- The maximum acceleration will be 30 days
- The exact formula for acceleration rate will be finalized at a later date. It will be a function derived from their total fees paid and trading volume during the incentivized period vs. after the period.
Example,
Epoch1: April 4th - April 11st
Rewards Distribution: Released Linearly from April 11st - July 10th
5.) We have marketing campaigns lined up that we will run concurrently during the incentives period (using our own marketing budget) to achieve the maximum impact for the grant.
- Advertising on top DeFi-focused publications such as Alpha Made Here, DeFiant, Coinmarketcap Reserach, and Messari, etc.
- Utilize our social channels, KOLs, and other marketing channels available to us (e.g., ad banners) to promote and maximize the awareness for the upcoming fees rebate campaign.
What mechanisms within the incentive design will you implement to incentivize âstickinessâ whether it be users, liquidity or some other targeted metric?
1.) ARB will be released over 3 months, but with an accelerated releasing schedule available for returning traders. This will be a big factor for continued usage beyond the incentive periods for some users who want to accelerate the unlock. HMX also has a strong track record of continuous product improvements, so during that time, our improved features will also help improve the stickiness to the users.
2.) At the very least, for the users that donât continue to trade on HMX, they will still return to the platform to claim the vested rewards over the next quarter, which will give us opportunity to market any new product & feature release to them along the way.
3.) Even after the LTIPP runs out, HMX will still have its own incentive programs running which is rewarding and competitive, which will make the platform âsticky.â
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.]
To measure the success of the grant objective, the following KPIs are selected based on its impact on our objective:
-
Trading Volume
- Targeting a 200% growth from baseline of $90Mn / day â $270Mn / day
- Source of Truth: HMX Dune Dashboard
-
Trading Transaction
- Targeting a 100% growth from baseline 0f 1k tx / day â 2k tx / day
- Source of Truth: HMX Dune Dashboard
- New Users Acquire
- Targeting 1,000 users
- Source of Truth: HMX Dune Dashboard
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.]
We list the key milestones below. Please note that each Epoch is 1 week. The cumulative stats is based on the target set in section#3.
| Epoch | Cumulative Trading Vol (Mn) | Cumulative Tx (k) | Cumulative New Users |
|---|---|---|---|
| Epoch1 | $1,890 | 14,000 | 100 |
| Epoch2 | $3,780 | 28,000 | 200 |
| Epoch3 | $5,670 | 42,000 | 300 |
| Epoch4 | $7,560 | 56,000 | 400 |
| Epoch5 | $9,450 | 70,000 | 500 |
| Epoch6 | $11,340 | 84,000 | 600 |
| Epoch7 | $13,230 | 98,000 | 700 |
| Epoch8 | $15,120 | 112,000 | 800 |
| Epoch9 | $17,010 | 126,000 | 900 |
| Epoch10 | $18,900 | 140,000 | 1,000 |
| Epoch11 | $20,790 | 154,000 | 1,100 |
| Epoch12 | $22,680 | 168,000 | 1,200 |
We will evaluate the milestones achieved every 2 weeks and try to make adjustment to the campaign design if the actual volume, # of tx, and new users acquired are materially below the target.
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]
This grant will generate awareness, increase HMX platform trading volume & transaction, onboard new users and get them to try many of our upcoming feature release over the next quarters.
The grant is directly used and tied with the growth of our platform (trading volume & tx growth.) And the fact that our base trading fee is currently one of the lowest in the industry, the grant is being used very effectively and not being used to subsidized an above-market-rate fees.
| Asset Class | Trading Fees (% of Position Size) |
|---|---|
| BTC & ETH | 0.02% |
| Other Cryptocurrency | 0.05% |
| FX | 0.01% |
| Commodity | 0.05% |
The fact that HMX could continue to put up strong statistics and maintain ourselves as one of the top PerpDEX in the space over the past several months despite not having received the STIP is a testament to our strong product market fit.
- $15Bn+ cumulative trading volume
- $75-$100Mn daily trading volume
- ~200 DAU
The teamâs ability to consistently shipping out new features and improvements is a testament to our commitment to creating value to the Arbitrum ecosystem. The grant will accelerate the growth of HMX and open a door for us to the next stage of growth.
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 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 . Along with this list, please answer the following:
Is your team prepared to comply with OBLâs 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?
*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
Yes, we will provide bi-weekly program on the Arbitrum forum thread. We will allocate the necessary resources to create Dune Dashboards specifically for this program for easy and transparent performance tracking.
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 programâs funding stream?: [Y/N]
Yes
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