Applicant Name: Jones DAO
Project Name: Jones DAO
Jones DAO is a yield, strategy, and liquidity protocol with vaults that enable 1-click access to institutional-grade strategies. These strategies unlock liquidity and capital efficiency for DeFi through yield-bearing tokens.
Team Members and Qualifications:
- IceCream: Cofounder
- Ultra: Cofounder / Lead Developer
- Gammamesh: Strategy Lead
- Nach211: Strategy / BD
- Halko: Strategy
- JoJo: Strategy
- Shreddy: Marketing Lead
- Beachball: Graphics Design / Marketing
- Fox: Design Lead
- Ivan: Lead Frontend Developer
- Ramzan: Developer
- N1mrod: Developer
- TS: Developer
- Fiery: Developer
- Yieldlord: Community Moderation
- Website: https://www.jonesdao.io/
- Twitter: https://twitter.com/JonesDAO_io
- Discord: Jones DAO
- Docs: Protocol Overview - Jones DAO
- Github: Jones DAO · GitHub
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?
Requested Grant Size: 2M ARB
- Reduced from the original ask of 3M after discussion with delegates, both big & small, and internalizing their critiques. Through this, we show goodwill to the Arbitrum ecosystem by allowing smaller and newer protocols a fair chance at receiving an impactful grant.
Grant Matching: N/A
Jones explicitly intends to use the grant tokens for the purpose of providing user incentives to Jones Vaults and lending integrations built on top of these vaults.
As an OG Arbitrum native protocol with an average TVL above $30M in 2023, our request is for 2M ARB token incentives, broken out into:
User Incentives for current vaults:
- 1.3M to jUSDC & jGLP holders
- 350k to wjAURA holders
User Incentives for future vaults:
- 350k to MV2 & Liquidity Provision Strategy users
For a more in depth look at reasoning, weighting, and distribution methods, refer to Section 3.
Funding Address: 0x092598bf1827052D1063Bbc583cBba295EB13daC
Funding Address Characteristics: 3/4 multisig, with private keys securely stored
- jUSDC: 0xe66998533a1992ecE9eA99cDf47686F4fc8458E0
- jGLP: 0x7241bC8035b65865156DDb5EdEf3eB32874a3AF6
- Arbitrum wjAURA: 0x873066F098E6A3A4FEbF65c9e437F7F71C8ef314
- To attract and onboard new users to Arbitrum.
- To increase Arbitrum’s stablecoin market share.
- To boost overall Arbitrum TVL by incentivising crypto-native yield solutions with enormous scale and wide appeal, for a variety of risk appetites.
- To make Arbitrum the primary hub for putting large positions to work, with Jones as the leader in spearheading safe and competitive yield strategies.
- To increase participation in Jones Vaults, which provide liquidity to underlying protocols and their users; boosting usability for products like perpetuals on GMX.
Key Performance Indicators (KPIs):
- Overall TVL
- Number of transactions across Jones Vaults & liquid token markets.total value locked (TVL) in our smart contracts.
- Value of individual wallets interacting with our smart contracts.
- TVL arriving during the incentive period, TVL leaving after the incentive period, and long-term TVL retained after the incentive period.
- Average deposit size and number of interactions before, during, and after incentives.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
Jones believes in a decentralized future, where novel financial tools enable positive-sum crypto-economics.
Arbitrum makes that vision possible.
New & existing users will frictionlessly benefit from systems that Arbitrum-native builders are creating right now. As an Arbitrum-native protocol, Jones is among those building that future.
This grant will allow Jones to onboard the next generation of DeFi by:
1) Providing the Bedrock of Decentralized Yield
In comparison to DAI’s DSR, which has allowed sDAI to soak up massive amounts of capital ($1.61B+) in a relatively short amount of time, Jones’ 7-day avg. yield for the jUSDC strategy almost always exceeds sDAI. Plus, jUSDC is presently scalable to mid-9-figures with no impact on yield performance, putting us within striking distance of DSR TVL at max capacity.
Instead of users flocking to RWAs such as DAI’s DSR as a source of scalable stablecoin yield, let them come to jUSDC. Jones has built a crypto-native solution which utilizes Arbitrum-native protocols like GMX to accomplish the same goal, while outperforming the incumbents.
Incentivization of jUSDC deposits will invite throngs of users to remove the mental & practical hurdles necessary to bridge their capital to Arbitrum and take advantage of the jUSDC strategy. Stablecoin inflows from Ethereum Mainnet will significantly enhance TVL on Arbitrum.
Similarly, various ETH LSTs provide 4-10% APY to users, enabling exposure to ETH price action as well as ETH yield, accounting for over $16B+ TVL. However, Jones’ unique architecture design makes jGLP a better offering. By leveraging the power of GLP, users get exposure to price action similar to ETH or BTC, while generating yield that often reaches high double digits. Yield is delivered in pure ETH, just like LST protocols. 7-day average yields have fluctuated between 6.96% and 120%, but always remained higher on average than most, if not all, of ETH LST yields.
jGLP incentives, coupled with jUSDC incentives, enable jGLP to meet already excessive LST demand by drawing more deposits to the jGLP Vault. This expands how much jGLP can be minted against jUSDC, while attracting users seeking high-yielding exposure to ETH.
2) Enhancing Liquidity Infrastructure
Jones has a rich history of interoperability. In addition to boosting TVL on Arbitrum, these new incentives will trickle down to protocols building on top of Jones. Numerous lending markets are already plugged into jUSDC & jGLP, and an even greater number of protocols have plans in the works for current & future vaults.
ARB incentives directed to these lending markets invite users to take advantage of unique strategies, allowing them to increase, hedge, or diversify their exposure. These protocols benefit from an influx of TVL, while Arbitrum benefits from more users using more protocols, generating more sequencer fees in the process.
3) Positive-Sum Network Effects
The most successful strategies on Jones - jGLP & jUSDC - are built on top of GMX; the leading crypto protocol for perps on Arbitrum. These strategies are unique in that every new user added to jGLP and jUSDC has the dual benefit of achieving growth in TVL for both Jones and GMX. The more jUSDC deposits there are means that more room in jGLP can open up, and when new tokens are then deposited into jGLP, GLP TVL increases as stables from jUSDC are deployed to acquire more GLP tokens through the strategy’s automated smart leverage system.
This creates a flywheel for the growth of two of the most important protocols in Arbitrum, where each ARB token given to a new jGLP or jUSDC holder benefits Jones users and GMX users alike. More GLP liquidity enables more GMX utilization from large token deployers on GMX V1. Thus, incentivization of jUSDC & jGLP is extremely efficient, creating a network effect that sends new Arbitrum users to both protocols.
This is just one example of the win-win scenarios which Jones is capable of executing. With this grant, Jones hopes to incentivize more positive-sum flywheels, which will bring on more builders, users, and tokens.
Justification for the size of the grant:
Jones is one of the largest and oldest Arbitrum-native protocols, and after having serviced up to $50M TVL, it is no stranger to DAOs, whales, and institutions as vault users. We’ve listened to them, and we know what they need. To move the needle on boosting Arbitrum’s TVL in a noticeable way, the requested grant size needs to be sufficient to service the large number of users Jones hopes to attract to Arbitrum. Jones Vault yields must be boosted by competitive amounts to satisfy these new users.
The TVL of Jones DAO has grown astoundingly from $11M in January 2023 to $48M in February 2023, and has stayed above $30M for several months, with a slight decline in the last 30 days in line with the rest of TVL decline of the whole Arbitrum ecosystem.
Our most successful strategies, jGLP and jUSDC, have generated (block 55870678, beginning of February, to block 134564088, September) a yield of approximately 1079 ETH and 105,000 USDC since inception, for a notional average dollar value of $1.9M considering an average value of ETH of $1700 for the aforementioned period.
The quality of jGLP is universally recognized by users.
If we look at the comparison chart, jGLP is the market leader when it comes to smart vaults built atop GLP.
Individual grant distribution justifications can be segmented as the following:
- jGLP & jUSDC - 65% allocation
jGLP & jUSDC Vaults deliver transparent and consistent yield to users, powered by smart leverage. They work in tandem to amplify the yield generated by GLP for depositors.
The conclusion to request 1,300,000 ARB tokens for jGLP & jUSDC was a very logical one. This number correlates to the notional value of yield generated so far on these strategies. This is explained in the section above. 1.3M ARB tokens will essentially double the yield of both jUSDC & jGLP. In doing so, these vaults will become the premier yield strategies on Arbitrum, bringing in new users and growing TVL.
Jones is constantly innovating on strategy improvements. Over the course of this program, with increased TVL & usage, some developments may come about which allow us to expand the jGLP & jUSDC strategies. The protocol requests that the tokens may also be used in any future evolutions of these vaults that might arise during the incentive period.
- wjAURA: - 17.5% allocation
jAURA is an auto-compounding & vote optimization strategy that allows depositors to earn yield on their AURA tokens. Over time, each jAURA token will become backed by more underlying vlAURA.
Aura has recently expanded to several chains, including Arbitrum. Despite jAURA’s current status as an Ethereum Mainnet strategy, the Jones team is close to completion of an upgrade for wjAURA that will allow deposits on Arbitrum. This 350,000 ARB token incentive will be given to depositors who bridge their wjAURA to Arbitrum, attracting greater AURA liquidity.
A specific staking contract will be created to distribute Arbitrum rewards to users who will bridge wjAURA from Ethereum Mainnet to Arbitrum. This new approach will help the most important Aura derivative to reach stability on Arbitrum, with the potential for developing further utility down the road.
From block 17335368 to block 18170066, the jAURA strategy generated a cumulative total yield of around 222k AURA since inception in mid-May. While it is difficult to quantify the notional dollar value due to market fluctuation; by taking the average token price of $1.54 from the time window of May - September, we can approximate that the vault generated $342k of yield for users. The 350k ARB will not only effectively double the yield, but also build a fantastic flywheel to help attract Aura users directly to Arbitrum.
- MV2 & Smart LP Strategy: - 17.5% allocation
Jones’ Metavaults allow users to provide liquidity while also automatically hedging or slightly levering price action on underlying tokens, all powered by options. The Metavaults take LP positions to the next level, mitigating impermanent loss and utilizing powerful Arbitrum-native options platforms.
Metavaults found success in its first iteration, and plans are in effect for it to return with a revitalized architecture before the end of the year. Jones must direct incentives to MV2 in order to incentivize new LP holders & partners to bootstrap this novel approach for liquidity optimization. If successful, this strategy could be one of the biggest drivers of TVL & options volume that has ever existed on Arbitrum.
The Smart LP strategy that Jones is currently testing and is yet to be announced. It will allow users to provide liquidity on V3 exchange architecture in an automatic, algorithmic way. The strategy will automatically manage and periodically update the range of the LP based on specific market metrics, provide autocompound functionality, and put in place failsafe triggers to alter the range asynchronously if needed.
NOTE: If, due to external and unpredictable factors, neither the second iteration of Metavaults nor the Smart LP strategy releases by the end of 2023, Jones pledges that the 350,000 ARB tokens will be distributed amongst live strategies: jGLP, jUSDC, and jAURA.
Jones’ execution strategy will supply 100% of ARB token incentives directly to Jones Vault users & lending strategies built upon Jones Vaults.
All work related to the distribution of ARB incentives will be undertaken & automated by Jones developers.
To recap, the proposed distribution is as follows:
- jGLP & jUSDC: 1.3M ARB
- wjAURA: 350k ARB
- MV2 & Smart LP strategy: 350k ARB
Total amount: 2M ARB
Incentives will be streamed to Jones Vault users as an APY on their vault position and claimable in a similar way to how yield from the vaults are currently claimed. Please interact with the Jones dApp for a demonstration.
The ARB rewards will all be distributed, starting mid/end October (pending precise date to the necessity of building and testing support infrastructure), up until the 31st January. The ARB will be distributed through processes that will match with the current yield distribution methods on Jones strategies. This means that: if a vault distributes the yield once per week, the ARB will be distributed once per week; if a vault distributes the yield constantly, the ARB will be streamed constantly.
Incentives will be distributed evenly from the date they are granted, until the completion of the short-term incentives program, January 31, 2024.
For example, if the 2,000,000 ARB grant begins on October 15th, 2023, Jones will distribute ~18,527 ARB per day for 108 days through to January 31st, 2024.
Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream?
Is the Protocol Native to Arbitrum?: Yes
On what other networks is the protocol deployed?: Ethereum Mainnet
What date did you deploy on Arbitrum?: January 30th, 2022
- Jones is one of the largest and oldest Arbitrum native protocols.
- The largest DAO holder of xGRAIL & vlAURA.
- Cumulative volume on Arbitrum (last 30 days): $2.5M+
- Peak TVL on Arbitrum: $54m+
- Total Unique Jones Holders on Arbitrum: 273,927
The jUSDC and jGLP vaults are an Arbitrum favorite — blue-chip products driving market leading yield strategies.
jGLP Yield and Performance:
jUSDC Yield and Performance:
In no particular order:
- MetaVaults V2
- Tokenomics Reform
- Smart Liquidity Provisioning Strategy
- GMX V2 Strategy
- Third party products built on Arbitrum protocols, key to the JonesDAO ecosystem and its strategies: Dopex V2 and Camelot V3.
Audit History: Security - Jones DAO
Is your team prepared to create Dune Dashboards for your incentive program?:
Yes, we have Dashboards already functioning for our strategies, and we can further evolve them or create new ones to track the progress.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
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?: