Jumper x Merkl // MAGA 2025 [Make-Arbitrum-Great-Again]

Proposals
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TL;DR

  • Overview: The Jumper x Merkl MAGA campaign will distribute a maximum of 60M ARB over 3x3 month seasons with the overarching goal of returning Arbitrum DeFi back to its former glory.
  • Campaign goals:
    1. Increase spot asset liquidity for bluechip assets on Arbitrum One, with a primary focus on stable-coins, bluechip assets, LRTs and high volume pairs like ARB/ETH.
      1. This will involve targets for maximum slippage and price impact for bluechip asset trading on Arbitrum AMMs.
      2. Allow for efficient liquidations that allow for more effective and efficient lending market operations, thus resulting in higher overall ecosystem TVL.
    2. Increase of lending market liquidity for bluechip and Arbitrum native assets.
      1. As spot liquidity increases, this enables more efficient liquidations allowing lending markets to list longer tail Arbitrum native tokens. This fosters a more cohesive DeFi ecosystem that will attract users to Arbitrum as they can access markets not available elsewhere.
    3. Increase trading volume across perpetual and spot DEXs on Arbitrum.
    4. Showcase Arbitrum projects, allowing new entrants to the industry to discover Arbitrum’s thriving DeFi ecosystem and enjoy industry leading opportunities within one seamless UI.
  • Design: Every 2 weeks, incentive allocations will be defined and streamed towards specific participating DeFi protocols pools via Merkl’s robust incentive distribution infrastructure. The incentive allocations and participating pools will be decided upon by Jumper and Merkl and will be sent to the elected Arbitrum MAGA campaign representatives for review. This design enables the campaign to be iterative and strategic towards meeting the primary KPIs.
  • UX: The MAGA campaign will have its own dedicated UI, designed and hosted by Jumper and Merkl where users will be able to view all participating protocols/pools and their associated incentives all within one central location. Users will be able to provide liquidity directly from the UI, from any token on any connected chain (including Solana) via a dedicated Jumper deposit widget. Pending ARB rewards will be able to be claimed directly from the Merkl incentive distribution contracts via the UI, removing the need to interact with each dApps UI and providing a cohesive experience.
  • KPIs and performance: MAGA campaign KPIs will be made public throughout the campaign design process, with public Dune (and other) dashboards built to provide transparency towards achieving these KPIs. In addition, detailed reports will be published at the conclusion of each season to provide further detail into the overall performance of the campaign.
  • Campaign oversight: The Arbitrum DAO will elect a board of representatives (MAGA success committee) that will oversee the MAGA campaign and ensure that the campaign is being run efficiently. The MAGA campaign will be overseen by a 5-person “MAGA success committee” with representatives from Offchain Labs, Blockworks, Gauntlet, Arbitrum Foundation, and Entropy Advisers. These delegates will be internally nominated, and the Arbitrum DAO will have the ability to veto the committee’s composition and call for an election to select new committee members.
    At any point in time, if unhappy with the campaign progress, the campaign representatives can cancel the campaign, in which all unused ARB incentives will be returned to the DAO after the current epoch concludes (2 weeks).

The STIP/LTIPP issues

The STIP and LTIPP programs were, at the time, the largest onchain incentive programs undertaken by any blockchain ecosystem. While these programs showed promise on paper, they faced widespread criticism regarding their effectiveness. Jumper and Merkl have conducted thorough reviews of these programs and their shortcomings, and will outline their findings below, with comparisons made to the Optimism Superfest campaign that Jumper and Merkl hosted over a 2 month period from July-August 2024. Following the STIP and LTIPP reviews Jumper and Merkl will propose an improved Arbitrum DeFi campaign that aims to return Arbitrum to its former DeFi glory — MAGA 2025:

Visibility

Total engagement on Twitter for LTIPP from January 1st 2024 to September 30th 2024

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Source: Kaito

In comparison, Optimism Superfest in a shorter period of time did almost two times more in total engagement and a similar number of smart engagement while being mentioned three times less.

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Source: Kaito

The main difference is that LTIPP distributed 35M ARB tokens: ~$40/60M at the time of the campaign while Superfest distribute 1.5M OP (~$2/3M at the time)

In our opinion there are four primary reasons that explain this disparity:

  1. Limited exposure to external ecosystem: Arbitrum’s incentive programs - both STIP and LTIPP - remained confined within their ecosystem, creating an echo chamber effect. As an example, Superfest addressed this challenge by collaborating with Jumper and Merkl to attract users from other ecosystems, effectively broadening their reach.
  2. Lack of coordinated marketing communication: Arbitrum’s STIP and LTIPP programs suffered from fragmented marketing efforts that failed to provide a coherent message or clear call-to-action. Social campaigns relied on disjointed communications via Twitter and blog posts, leading to diluted impact and reduced user engagement.
  3. Lack of clear program identity: Beyond communication challenges, the absence of recognisable and unified identity for STIP and LTIPP led to diminished user engagement. A strong branding effort could have helped users connect better with the program’s goals and created a more memorable impression across the ecosystem.
  4. Lack of a unified hub deterring user engagement: The absence of a central platform for STIP and LTIPP programs fragmented the user journey, making it difficult for participants to understand and fully leverage the incentives allocated to these programs. A unified hub would have streamline information access, simplify navigation, and enhanced both user adoption and retention.

A unified, user-friendly platform with strong brand identity and coordinated communication - as demonstrated by Superfest - could have amplified user engagement and awareness, creating a more cohesive narrative for the program. This would have had a ripple effect on user retention, ecosystem growth and overall incentive efficiency.

Reporting complexity and absence of KPIs leading to lack of accountability

As underlined in this post ([RFC] Incentives Detox Proposal - #71 by Sinkas), LTIPP had to face 510 bi-weekly reports to monitor - a truly Herculean effort. This process must have posed significant challenges in tracking incentives for each protocol, resulting in a reporting mechanism that was excessively lengthy, costly and prone to errors. In addition, participating protocols are not experienced, nor have the capacity to be shipping products and efficiently distributing a large amount of incentives in an aligned manner to achieve a higher, overarching goal.

This case by case allocation of incentives given directly to the participating protocols has proven to be an inefficient way of distributing incentives, leads to excessive over reporting and overall fragmentation of the ecosystems mission and goals.

Reward distribution standardisation and alignment

This logic of standardisation also extends to how rewards should be distributed. Tying rewards solely to transaction volume (and not to capital) always leads to adverse effects, as demonstrated in the Synapse case, which we analysed internally here: LTIP - Deep dive on Synapse. As you will see within this deep dive, when incentivisation is tied to volume alone this can result in cases where the amount of incentives rewarded for an action is higher than the cost of completing the action itself. This leads to exploitation of the incentive distribution mechanism and leads to value extractive behaviour, such as wash trading for profit. These edge cases can be avoided by reward distribution standardisation and constant monitoring of rewarded actions, resulting in incentives being distributed to value add actions only.

We also believe that a lack of standardised reward mechanisms presented several challenges:

  • Potential reward miscalculations: Since each protocol had its own unique distribution system, this increased the likelihood of errors and misallocated rewards, which could undermine trust in the overall program. The lengthy double-checking process further strained the Arbitrum DAO’s resources, detracting from more impactful activities. On the contrary by implementing an audited, verified, and standardised system - like the one Merkl offers - could have streamlined this process, ensuring fairness and accuracy.
  • Lack of reward control: If rewards are withheld, there is no guarantee that protocols will return unused funds. For example, while Furucombo eventually returned the unused funds, such cases highlight the risks posed by giving incentives to protocols directly and leaving their distribution entirely in their hands.
  • Lack of rewards coordination: Each protocol operates its own reward system and independently utilises rewards allocated by the Arbitrum DAO on their own schedule. This fragmentation prevents the alignment of incentive schedules, and even results in ecosystem protocols competing against one another for TVL and users, reducing the potential for amplified impact through coordinated efforts.
  • Time consuming process: Protocols were diverted from their core products as they had to establish their incentive systems and prepare detailed reporting for the DAO. Meanwhile, the Arbitrum DAO had to allocate resources and often rely on third parties to ensure proper fund usage. This dual burden significantly impacted efficiency on both sides.
  • No unified frontend: Each protocol’s system creates barrier to building a cohesive, user-friendly frontend, as integrating multiple data sources and claiming system is challenging.
  • No ranking system: Since each protocol had its own reward system, this lack of cohesion made it impossible to effectively rewards top contributors bringing the most value within the ecosystem. As a result, opportunities to gamify the program and drive further engagement were missed.

From awareness to stickiness

The last point that struck us - and one of the major shortcomings of the STIP and LTIP programs - was the lack of follow-up strategies to encourage liquidity stickiness and long-term user engagement. While STIP and LTIPP successfully attracted liquidity in the short-term, there was no initiative or strategy to retain capital post-program or foster deeper ecosystem participation once the incentives campaigns concluded. Since most protocols distributed their incentives independently, there was no overarching strategy at the chain level. Furthermore, protocols often lacked the expertise to design effective long-term approaches that balanced incentives between supply and demand - a crucial factor for achieving liquidity stickiness.

A well-though-out strategy could have included multiple reward seasons, badges serving as references for future reward allocations (acting as boosts in subsequent incentive campaigns), or even future airdrops. Also, without a proactive plan to encourage liquidity stickiness via gamification, game theory, and calibrated incentivisation of both supply and demand, capital inevitably left the ecosystem once the incentives ended, as users sought opportunities elsewhere.

Jumper x Merkl Solution

Building on the success of the Optimism Superfest, where Jumper and Merkl joined forces to seamlessly orchestrate and distribute 1.5M OP tokens, a more formal partnership has been forged to deliver DeFi’s leading ecosystem activation solution to ecosystems looking to efficiently and effectively distribute incentives and activate users within their ecosystem.

This partnership combines Jumper Exchange—one of DeFi’s largest and most successful dApps with 200k+ monthly active users and has facilitated over $10B of bridge and swap volume—with Merkl’s robust incentive distribution system, which has distributed over $70M in incentives across 36 blockchains and has over 100k+ unique monthly active users. Together, Jumper and Merkl offer ecosystems a streamlined, hands-off approach for managing DeFi activation campaigns, ensuring incentive campaigns are not only well-executed but also optimised for desired outcome through KPIs and continuous, data-driven assessments of efficiency and impact.

Jumper Exchange will act as the top-of-funnel user onboarding platform for the MAGA campaign, seamlessly allowing users to be onboarded by the most efficient bridging solution from 32 connected chains, including Solana and all major EVM chains. Merkl will act as the trusted technology provider, managing the infrastructure for the MAGA campaign by leading the design, coordination and execution of incentive distributions.

The Jumper x Merkl end-to-end solution ensures that users both bridge fresh liquidity into the ecosystem and deposit it into incentivised pools to qualify for rewards. This 2-step bridge and deposit approach addresses the inefficiencies of previous ecosystem campaigns, where bridges and DeFi protocols were incentivised separately. Such fractured designs often led to exploitation - bridges experienced wash trading as users cycled funds in and out to farm incentives, while DeFi protocols merely shifted liquidity between non-incentivised and incentivised pools. These practices fail to attract new liquidity from external chains, resulting in minimal ecosystem growth and benefit.
By requiring new liquidity to flow into the ecosystem and aligning incentives between bridges and DeFi protocols, Jumper x Merkl ensures that fresh capital is directed where it is most needed. This approach drives genuine growth and fosters sustainable ecosystem development by creating a cohesive and effective incentive structure.

Jumper x Merkl Optimism Superfest highlights:

  • 79k+ unique wallets participated with 19.5k of those new wallets that had never bridged to the participating chains before
  • $195M+ of fresh liquidity inflows through Jumper
  • 1,384,000 OP distributed
  • $101 of TVL increase in incentivised pools per $1 of incentives

Further data can be found here.

Addressing issues faced during STIP and LTIPP

We believe that the Jumper x Merkl solution is specifically designed to address the pain points we identified in both STIP and LTIPP programs:

  • Fragmented ecosystem exposure: By introducing a unified front-end with strong branding, the Jumper x Merkl solution allows user to easily navigate all opportunities of each protocols from the program all within the one UI. Streamlined access helps users discover and participate in opportunities more efficiently, broadening ecosystem exposure beyond fractured dApp communities within the same ecosystem. This approach also facilitates easier communication, as both Merkl and Jumper will actively market the program, while collaborating with protocols to amplify announcement and news. Their efforts will ensure that users stay informed about key updates and new opportunities, maximising the program’s reach and impact.

  • Cumbersome reporting and KPIs: Having a unified hub where all opportunities are displayed in one place and rewards are distributed by the same provider (Merkl) addresses the inefficiencies of fragmented reporting. By being able to consolidate all data into a single source using Merkl (for rewards) and Jumper (for chain inflows), this approach allows for seamless tracking of individual opportunities and the creation of standardised Dune dashboards, which provide insights at both the protocol level being incentivised and across the entire ecosystem. Merkl’s data capabilities ensure that this information is accurate, accessible and actionable. Furthermore, clearly defined KPIs from the start of the program will enhance transparency and accountability. With the data provided, DAO elected program representatives can monitor progress effectively, ensure that the program stays on track, and review proposed micro adjustments based on real-time insights. This approach also eliminates the burdensome requirement required during the STIP and LTIPP, such as building custom queries for each protocol and bi-weekly reporting provided by OpenBlock Labs which failed to provide value relative to its price point.
    Data showcase

  • Reward distribution challenge: Having one verified and audited reward system enables the creation of a unified front-end, as all incentive campaigns are creating using the same system. This approach allows such program to be gamified by visualising top contributors and rewarding them for the value they bring to the ecosystem. This fosters engagement and competition, both of which are pillars to a successful chain-wide program. Furthermore, with Merkl as the distribution provider, the Arbitrum DAO will maintain control over rewards, avoiding the risk of unused funds being held by protocols directly. Jumper will coordinate directly with the protocols to determine which assets, pools and actions to incentivise, along with how rewards are allocated to each. Strategic decisions around pool incentivisation and reward allocations will be modelled initially by Jumpers campaign data team, with reviews occurring every 2 weeks to ensure optimal distribution of rewards to best achieve the programs overarching KPIs. Both Jumper and Merkl bring valuable strategic expertise in this domain, leveraging their experience with large-scale, chain-wide programs such as Optimism Superfest, ZKsync Ignite, Sei Superseiyan, Mode Season III, and more to come.

  • Attracting new liquidity and avoiding internal recycling: The MAGA incentive distribution contracts will be created in a way that requires users to bridge new liquidity into Arbitrum and deposit it into incentivised pools, with incentives following a time weighted linear distribution model. By utilising a 2-step incentivisation flow, the bridge requirement results in fresh TVL being onboarded into the ecosystem, and the deposit results in this TVL becoming useful within DeFi — with both being required to earn rewards. This eliminates the example outlined above with Synapse, where funds are washed back and forth via bridges, showing large amounts of bridge volume without adding any true TVL gains within DeFi. In addition, requiring fresh liquidity to be bridged into Arbitrum before incentives can be earned on liquidity that is already on the chain ensures that liquidity is not just moved from pools it is currently deposited in across to incentivised pools.

  • Liquidity and user retention: Incentive campaigns are excellent at attracting liquidity and users to an ecosystem and its applications, however this is the easy part. The more difficult part is how to retain this liquidity and users over time, once the campaign period has ended and incentives have slowed or stopped completely. Jumper and Merkl attack this problem of liquidity retention using a multi-method approach:

    • Rewarding loyalty: While Jumper Exchange is primarily known for cross-chain swapping, it has spent the past 2 years building DeFi’s leading onchain loyalty system, the Jumper Loyalty Pass. This has enabled Jumper to collect extensive data about user loyalty across chains and understand user behaviour patterns. When combined with Merkl’s customisable incentive distribution system, this creates powerful capabilities to reward loyal users and target specific users across chains. The Jumper Loyalty Pass DID system leverages a traits system which will be utilised to issues MAGA season 1, 2 and 3 traits to participants who take part in the MAGA campaign. Holders of MAGA traits who also maintain their liquidity on Arbitrum between seasons will be eligible for boosted rewards in subsequent seasons as a reward for their loyalty. This data will be stored by Jumper in the JLP database and can be accessed via API by the Arbitrum DAO or any other interested parties who may want to reward the MAGA participants at later stages.

    • Excluding or penalising mercenaries: Merkl incentivisation contracts contain the ability to whitelist or blacklist certain contracts or wallets. This makes excluding addresses possible within the campaign. An example of this could be the exclusion of protocol owned liquidity from earning incentives, which would ensure that all incentives are going towards new liquidity providers and not back to protocols (or the Arbitrum Foundation) who own their own liquidity.

    • Increasing demand to lower the cost of capital: Having control over the incentive flow will enable Jumper and Merkl to better optimise the balance between demand and supply by creating synergies between different protocols. In turn, this creates a positive flywheel effect where the native APR on the supply side increases, thus lowering the amount of incentives needed to provide an attractive APR for liquidity providers. The end goal is to reach a native APR sufficient to keep the liquidity providers without incentives and punctually boosting the asset when the the native APR is too low. Native APRs will be closely monitored by the Jumper data team during the 2-weekly epochs to optimally design the following epochs incentive allocations.

    • Post-program hook: Incentive programs are often seen as short-lived efforts with limited retention post program, but it’s crucial to prepare and design the post program phase during the design of the main campaign. This allows for a cohesive transition and the ability to incorporate speculation or a hook into the program that will result in users becoming hesitant to leave immediately and move their liquidity and usage elsewhere. A simple way to do this is by distributing a collection of NFTs/items that prove an address’s participation in the campaign, based on defined criteria. These NFTs should then serve two purposes:

      • To be used for future rounds of incentives, benefiting the community of protocols or the ecosystem in general (e.g., airdrops)
      • To grant specific perks to users of certain dApps

      In the Optimism Superfest participants were eligible to mint a wristband linked to each participating L2 (OP Mainnet, Base, Mode and Fraxtal). To obtain these wristbands, participants need to engage with the Superfest missions on Jumper Exchange. Each time you claim OP rewards from a specific chain, you become eligible to collect the corresponding wristband NFT for that chain. Additionally, if you successfully mint all four wristbands, you can then mint a special SuperFest VIP NFT, which offers further rewards and benefits. Holders of these wristbands were eligible for the Optimism airdrop 5.

      Jumper and Merkl will facilitate the creation and minting of similar Arbitrum MAGA season NFTs, which will drive speculation of further utility and alignment with the Arbitrum ecosystem. The DAO can then decide what utility or benefits these NFTs are assigned in the future.

    Due to the permissionless open nature of blockchain ecosystems, it is not realistic to think that users will remain on one ecosystem indefinitely. We therefore must convince the user that the Arbitrum ecosystem is their ‘home ecosystem’ — The best place to return to when not exploring other ecosystems, the place where they feel comfortable using applications and where they are constantly rewarded for their loyalty.

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MAGA Execution Plan

Overarching goals of MAGA campaign

The MAGA campaign aims to restore Arbitrum’s position as the leading DeFi hub by establishing deep liquidity for bluechip assets, fostering innovative native applications, increasing trading volumes, and building a loyal user base. To achieve this, we will distribute 60M ARB across three 3-month seasons (with a 4 week break in between each season), with 20M ARB allocated per season as incentives. We’ve chosen an 11-month campaign structure because this timeframe allows user behaviours to become deeply established within the Arbitrum ecosystem. While shorter 12-week campaigns like Superfest work well for showcasing smaller chains (Mode & Fraxtal), they don’t give users enough time to make a chain their primary home for DeFi activities.

Campaign goals:

The goals of the MAGA campaign outlined below will be measured at the chain level by aggregating data from all protocols. Measurements will begin 4 weeks after the program starts and continue until its end. Rankings will be tracked through daily snapshots and compiled weekly. These goals will establish the foundation for detailed pool/protocol KPIs and guide overall incentive allocations. The MAGA success committee will receive bi-weekly reports, allowing for adjustments to protocol pools and incentive distributions to optimize program outcomes.

Overall MAGA campaign goals:

  1. Enhance liquidity and reduce slippage for key pairs such as USDC/USDT, WBTC/USDC, and WETH/USDC pairs to make arbitrum the best venue for traders, arbitragers and leveragers.
  2. Increase of overall Arbitrum TVL with a large focus on lending market liquidity for bluechip and Arbitrum native assets.
  3. Increase trading volume across perpetual and spot DEXs on Arbitrum.
  4. Showcase Arbitrum DeFi, allowing new entrants to the industry to discover Arbitrum’s thriving DeFi ecosystem and enjoy industry leading opportunities within one seamless UI.

The above goals are the optimal MAGA campaign goals as determined by Jumper and Merkl. These goals are subject to change due to discussions under this proposal by the Arbitrum DAO and its stakeholders. If required, we will open up seperate submissions for campaign goals, which can be proposed and voted upon during the campaign set-up process.

KPIs

To ensure alignment between all stakeholders and promote the most optimal use of incentives, the MAGA campaign will be designed and optimised around a series of KPIs decided upon during the design phase. These KPIs will be defined around the overarching campaign goals outlined above. In addition to these KPIs, Jumper and Merkl will specify their own performance KPIs (outlined in the compensation section) to ensure that the Arbitrum DAO has confidence that all stakeholders are working in the best interest of the MAGA campaign and are financially aligned to achieve the most optimal outcome.

The MAGA campaign’s specific KPIs will be evaluated and set every two weeks, with updates provided to the MAGA success committee. This flexible approach allows for fine-tuning of each two-week epoch and enables close tracking of successful and unsuccessful strategies for ongoing optimisation.

KPIs on a pool/protocol basis:

Goal 1 - Improved trading efficiency on stable and bluechip volatile asset pairs

  • Arbitrum to achieve the highest trading efficiency for trades over $100k on USDC-USDT, ETH-USDC, and WBTC-USDC pairs compared to all major L2s, as measured through major DEX aggregators (Odos, 1inch, Kyberswap) and verifiable through Dune’s dex_aggregator table.

Goal 2 - Increase in overall TVL

  • Ensure more than $10 of TVL per $1 of incentives into incentivised pools
  • Maintain over 50% utilisation rate incentivised pools on money markets (Aave, Fluid, Silo, Dolomite)

Goal 3 - Increase trading volumes across spot and perp DEXs

  • Arbitrum to achieve the highest overall chain volume compared to all major chains (excluding Ethereum Mainnet and Solana) as measured by DeFi Llama
  • Arbitrum to be the top EVM chain in terms of perp volume as measured by DeFi Llama (excluding Hyperliquid)

MAGA success committee

The MAGA success committee is comprised of 5 members. These members are industry experts and stakeholders who perform limited oversight functions to ensure that the program has continued alignment with the goals and target metrics approved by the Arbitrum DAO.

Membership: Members of the MAGA success committee who will be considered ratified by the Arbitrum DAO if this proposal is approved are:

  1. Offchain Labs
  2. Blockworks
  3. Gauntlet
  4. Arbitrum Foundation
  5. Entropy advisers

Members of the MAGA success committee may resign voluntarily or be removed from their position with approval from three MAGA success committee members. The MAGA success committee is responsible for nominating and appointing candidates to fill vacant seats. A replacement may be appointed with approval from three MAGA success committee members. There should always be a minimum of three MAGA success committee members.

Responsibilities:

  • Review eligible DeFi apps/protocols from the program, exercising veto as needed
  • Review bi-weekly modifications to reward incentives as recommended by Jumper, exercising veto as needed
  • Sign transaction via multi-sig for bi-weekly reward dispersement to active participants of the program
  • Conduct monthly meetings reviewing the status of the program hosted by Jumper and Merkl (publish public minutes of these meetings for the Arbitrum DAO)
  • Conduct in-depth seasonal reviews of the program every 3 months to ensure that the program is adhering to the metrics set forth in this proposal
  • Engage third party vendors, if needed, for limited marketing and audit duties
  • If necessary, add or remove DeFi apps/protocols from the program
  • If necessary, decide to end the program early if the program is not living up to the guidelines set forth by this proposal or for other reasons at the MAGA success committee’s sole discretion

Compensation: The MAGA success committee will receive a monthly budget of 16k ARB over the course of the 9 month campaign for a total of 144k ARB allocated to them for the nine month campaign. This budget excludes Offchain Labs and Arbitrum Foundation representatives.

MAGA campaign mechanics

The program will run over a 3 month period, called a season, with the option to extend for another 2 seasons, with a 4 week break between each season, for a maximum 11 month period. This decision will be made by the MAGA success committee who will oversee the MAGA campaign, monitor agreed upon KPIs and control ultimate veto power over the program if they are unhappy with the execution or success. At the end of season 2, if the vote for season 3 passes, a proposal will be published to the Arbitrum DAO and a vote held to renew the program as a whole (with a different budget and potential improvements).

During the program Jumper and Merkl will monitor the data collected from the previous 2 week epoch and adjust for subsequent epochs where required to ensure incentives are being efficiently streamed to program participants to optimise for the overarching program goals.

Every two weeks, pools will be ranked based on the benchmark KPI of their respective verticals.
Taking lending protocols verticals as an example:

  • Benchmark metric: Net inflows per $ of incentivisation

  • Tiers and adjustment:

    Protocol Benchmark metric Tier Adjustment for next epoch
    Protocol#1 74 Top +25%
    Protocol#2 42 Mid 0%
    Protocol#3 12 Low -25%

  • A few rules:

    • Tiers are defined based on the ranking of the protocol alongside the benchmark metric
    • One protocol cannot be allocated more than 70% of the liquidity within a vertical
    • Protocols decide to allocate rewards between incentivised pools of their choice
    • A protocol being under than a specific benchmark metric for a long time (i.e. at least four epochs) could be kicked out of the list

Each epoch incentive budget will be communicated to the MAGA success committee and published on the data page of the MAGA campaign UI, where the Arbitrum community members will have full transparency of how the incentives are being spent and the context around each pools allocation.

The MAGA success committee will approve each seasons budget and no later than 2 weeks prior to the beginning of the season, transfer the funds to the Jumper x Merkl MAGA campaign multi-sig, where the incentive contracts will be funded and deployed from.

Merkl will create the campaigns on a per pool basis based on the allocation methodology determined by Jumper x Merkl x Participating Protocols and approved by the MAGA success committee. Each users incentive allocation will then be dynamically computed based on their actions and share of each pools TVL during the epoch period. Users will be able to see and claim their earned incentives via the custom built MAGA campaign UI.

This rapid two week iteration cycle enables the program to be very targeted in the behaviours it wants to incentivise in order to reach target effectiveness metrics, double-down on specific mechanisms/applications/areas which are working well, and have the ability to dynamically adjust throughout the program. The MAGA success committee will ensure that the overall campaign remains on course to achieve the KPIs outlined below and Jumper x Merkl will ensure adequate data is provided the enable A/B testing of various types of incentives.

As mentioned above, if at any time the MAGA success committee are unhappy with the program, they are able to cancel the program, in which any unused incentives will be returned to the DAO upon completion of the current epoch.

Campaign design, management and execution

Jumper and Merkl have a strong track record in campaign design, incentive budgeting, project management, and campaign execution. Together they have designed and executed over 20 campaigns with $90M+ of incentives distributed onchain. Within the MAGA campaign Jumper and Merkl will collaborate to design and orchestrate the overall campaign, with a focus on the overarching goals outlined above.

Jumper and Merkl will leverage an extensive history in campaign design, management and execution, along with rich data sets and user profiling to ensure the MAGA campaign is designed in the most effective manner possible. To ensure that the campaign is designed and executed with the overarching MAGA campaign goals in mind, the MAGA success committee will retain ultimate veto power over the MAGA campaign and will hold an integral part in reviewing and approving each epochs incentive budget. This ensures constant alignment and ensures the MAGA program does not repeat failures of past campaigns, such as the STIP/LTIPP.

Below outlines some data from previous Jumper x Merkl campaigns:

  • Superfest #1:

35** protocols incentivised - 90 pools
$1.7M incentives distributed
$196M in bridge inflows through Jumper - $115 of inflow per $ of incentives distributed
$98M in DeFi TVL increase (incentivised pools) - $57 of increase per $ of incentives distributed

  • SuperSeiyan Week:

$200k incentives distributed
$11M in bridge inflows through Jumper - $91 of inflow per $ of incentives distributed
$105M in DeFi TVL increase - $525 of increase per $ of incentives distributed

  • zkSync Ignite (first three weeks):

15 protocols and 54 pools incentivised
$1.6m incentives distributed (so far)
$60M in bridge inflows through Jumper- $38 of inflow per $ of incentives distributed
$170M in DeFi TVL increase - $106 of increase per $ of incentives distributed

The campaign design elements include:

  1. Data driven incentive allocation and budgeting
  2. Liquidity orchestration, monitoring and optimisations which look back on data from prior epochs and take into consideration forward looking assumptions
  3. Stakeholder coordination and management between DeFi protocols, marketing agencies, the Arbitrum DAO and other MAGA campaign stakeholders

In addition to campaign design, optimisations, and project management Jumper and Merkl will provide real-time data analysis and post-mortems which will be available on Dune analytics to ensure full transparency of the programs metrics and effectiveness.

These real-time dashboards (available through Dune) will include:

  1. Inflows (granularity by wallet and by source chain)
  2. New wallets onboarded to the ecosystem
  3. Number of MAGA participants
  4. Time-evolution of Pools’ TVL
  5. Time-evolution of Chains’ TVL (according to DeFiLlama metrics)
  6. Pools’ and Chain’ TVL efficiency per $ of ARB incentives

Ad-hoc reports will include all of the above and also:

  1. Liquidity stickiness analysis(wallet level)
  2. Snapshot of bluechip asset swapping impact at certain trade sizes

MAGA allocation methodology

At the start of each season, Jumper will set bi-weekly ARB emission rates, allowing for gradual increases in ARB rewards to optimise liquidity payments throughout the season.

Every 2 weeks the ARB tokens will be allocated to pools/assets in 4 distinct phases

  • Phase 1 - Category allocation
    • Proposed by: Jumper
    • Validated by: MAGA success committee
    • Every epoch, Jumper will propose an allocation between all the protocol categories (DEX’s, Lending Markets, Perps etc)
  • Phase 2 - Protocol allocation
    • Proposed by: Jumper
    • Validated by: MAGA success committee
    • Based on agree upon public KPIs (defined below), the protocols of each category will be allocated a percentage of the ARB assigned to their category to best achieve these KPIs. Before the start of the next 2 week epoch, data will be analysed and alterations made to category and protocol allocations to best meet the MAGA campaign KPIs.
    • To ensure effective and targeted incentivisation during each epoch, a maximum of 15 protocols and a maximum of 5 pools per protocol will be incentivised at every epoch.
  • Phase 3 - Asset/Pool allocation
    • Proposed by: Protocols
    • Validated by: Jumper
    • Protocols will submit a list of assets to target with the ARB rewards that will be validated by Jumper. Protocols will be free to add extra incentives with the token(s) of their choice to further boost the APRs of their assets/pools. A failure to provide an updated list every 2 weeks will result in the protocols rewards to be re-allocated evenly between all the other protocols of the category.
  • Phase 4 - Campaign creation
    • All the campaigns will be created onchain.
      To facilitate this process, Merkl will craft batch transaction payload with all the campaign configurations (targeted asset, amount of incentives, duration etc), this payload will then be reviewed, signed and executed on the Arbitrum DAO multi-sig.

Example of allocation strategy per verticals

Every protocol would be free in designing their own strategy and refining with us the benchmark. We will provide some guidance per verticals in order to clarify the expectations:

Lending Protocol:

  • Action #1: Deposit
  • Metric #1: TVL inflow per ARB incentivised (adjusted from underlying asset price)
  • Action #2: Borrow
  • Metric #2: TVL inflow per ARB incentivised (adjusted from underlying asset price)

DEX Protocol:

  • Action #1: Provide liquidity
  • Metric #1: Increase in 2% liquidity depth per # ARB incentivised

Perpetual Protocol:

  • Action #1: Supply liquidity
  • Metric #1: Fees generated per # ARB incentivised or TVL inflow per ARB incentivised (adjusted from underlying asset price)
  • Action #2: (PnL competition) LONG/SHORT for 1 week on a set of pre-defined markets
  • Metrics #2: Amount of volume traded during the 1 week period per ARB incentivised

Safety of funds

The security of funds is the highest priority of the MAGA campaign. There will be 2 types of funds involved in this program:

  • Funds provided by users to participating protocols
  • ARB tokens that are distributed to the users as incentives

Security of user funds

Our DeFi protocol participation guidelines clearly specify which protocols can participate. To be eligible, protocols must meet several criteria: pass at least one security audit by a reputable firm (as detailed in the proposal’s change log), maintain a minimum TVL of $5M, and be integrated with DeFi Llama. Additionally, protocols must sign an agreement with the MAGA campaign pledging not to engage in—directly or indirectly—sybil farming, metric spoofing (TVL, user counts, etc.), or any other activities that abuse or contradict the program’s purposes.

Additionally, Merkl is a non-custodial solution. This means that user funds are never touched by Merkl contracts, ensuring that earning rewards does not expose users to additional smart contract risks.

Security of ARB tokens

The ARB tokens will touch 3 different contracts:

All Merkl contracts have been audited here: Code4rena | Keeping high severity bugs out of production

The main risk for the funds is to have the multi-sig compromised, Radiant taught us this the hard way.

To prevent this, we can setup an onchain gauge system (documented here: Deploy your campaign from a DAO | Merkl Docs)

In this setup:

  • The ARB tokens will sit on a very simple immutable contract that can only be called by a multi-sig controlled by Arbitrum DAO to give an allowance to the gauge contract
  • An immutable gauge contract that can only be called by the program multi-sig to:
    • pre-configure campaigns
    • notify rewards (in turn, this triggers campaign creation)
  • The gauge contract will only be able to transfer ARB tokens to the Merkl distributor
  • To create campaigns, the program multi-sig will call notifyRewards with the correct dates and amounts.

In this setup, even if the multi-sig is compromised it can only trigger transfers to Merkl contracts (where funds can be recovered) and only send up to the approval given by the Arbitrum DAO. This greatly reduces the impact of a multi-sig attack.

DeFi protocol participation guidelines

If the MAGA campaign proposal is approved by the Arbitrum DAO, the campaign will span across three, 3-month long seasons with a 4 week break between each season, for a total of 11 months. The application period for DeFi protocols will remain open for the entire duration of the program. Jumper and Merkl will review new applications on a rolling basis and can recommend applicants for inclusion to the MAGA success committee at the end of each month of the program. The MAGA success committee will have the authority to approve or reject these applications.

For the 1st Season of the MAGA campaign, the cutoff date for DeFi protocols to apply for the program is 1 week (7 days) post-execution of the program. Afterwards the ongoing rolling admissions of DeFi protocols at the end of each month will begin.

To participate in the MAGA campaign, all DeFi protocols must:

  • Complete and submit the application form
  • Have passed at least 1 security audit by a reputable firm
  • Be live on Arbitrum One mainnet
  • Must have a minimum $5MM DeFi TVL (as measured by DeFi Llama) at the time of the application submission
  • Must have sufficient space to grow TVL before any caps are reached
  • Be integrated into DeFi Llama
  • Fully cooperate and integrate relevant APIs, data streams, and platforms with the program providers: Jumper Exchange & Merkl
  • Must not encourage or participate (directly or indirectly) in sybil farming, spoofing metrics (such as TVL, users, etc), or other activities that are abusive or inconsistent with the purposes of the program
  • Actively assist in the administration of the program where necessary or advisable, for instance by helping with co-marketing and collaboration for the program

Failure to comply with the above guidelines may result in the DeFi protocols being removed from subsequent incentive rounds/seasons of the MAGA campaign.

The MAGA success committee has the authority to modify the above criteria at the beginning of Season 2 or 3 in the best interest of the program.

Merkl and Jumper protocol participants recommendations:

  • Money Market: Aave, Fluid, Silo, Dolomite
  • DEX: Uniswap, Camelot, Curve
  • Perps: GMX, ****Vertex
  • Yield: Pendle

Incident response

If an incident occurs with any participating protocol in the MAGA campaign, Jumper and Merkl will first pause all reward flows to that protocol and work with that team to assess the situation.

Based on this assessment, the protocol may be removed from the program—either permanently or temporarily until the incident is resolved. The MAGA success committee must approve all investigation findings and participation decisions. While we cannot recover incentives that have already been distributed due to the immutable nature of the Merkl distribution contracts, we can act quickly to freeze rewards that have not yet been pushed onchain. This has been done recently on Mode following the Ionic incident. All Ionic campaign rewards were frozen less than 2 hours after the hack and no rewards were pushed to the hacker. The unused funds were later recovered by Mode to be re-used on other protocols.

MAGA infrastructure solution

Whitelabel platform

Jumper x Merkl will build and host a custom ecosystem branded MAGA 2025 UI that will facilitate seamless user onboarding, participation, incentive claiming, and tracking for the campaign. By hosting the campaign on a central UI, this allows the campaign to work in a cohesive manner, increases marketability of the campaign as all stakeholders can direct their users to the 1 UI and allows for complete data capturing, allowing seamless KPI tracking.

  1. This UI will include:
    1. Landing page where users can get an overview of the MAGA 2025 campaign and what it entails, include FAQs and campaign data (incentive allocations, season length, TVL gained, etc).
    2. Explore page where users can get an overview of the participating Arbitrum protocols within the campaign, along with an overview of incentivised pools, their TVL, APY and other data points. Users will be able to filter by protocol, category or reward type to get an overview of the current opportunities within the campaign.
    3. Inbuilt Jumper bridge and deposit widget to allow for seamless onboarding from external ecosystems directly into the participating pools via the campaign UI.
    4. Custom campaign loyalty system, which will allow for tracking of campaign participation, allowing loyal users to be rewarded for their past participation in subsequent campaign seasons. This gamified loyalty system approach promotes loyalty over the long term, lock in of existing liquidity and reward concentration to loyal and aligned campaign participants.
    5. Claiming of incentives directly from the UI without having to navigate to each individual dApps front end.
    6. Data page with high-level metrics of the campaign: $ of inflows, number of participants, number of participating protocols.
  2. Additional services will provide:
    1. Data dashboard to monitor over time : 1. pools and protocol performance 2. rewards distribution
    2. Post-mortem analysis will be published to ensure maximum transparency on how the program is being run, its efficiency and overall progress towards program KPIs: inflows, liquidity stickiness.

Marketing

With over 210k+ X followers, 200k+ Discord members, 22k+ on Telegram, and 69k+ on Galxe, Jumper has built one of DeFi’s most loyal and passionate communities. Marketing a 9-month campaign like MAGA is a complex challenge. Success requires a multifaceted approach combining respected KOLs, community initiatives, and paid advertising. When executed in a novel, educational, and engaging way, this strategy will drive viral marketing and maintain constant mindshare—essential elements for the MAGA campaign to achieve its full potential. The below will give a brief outline on how Jumper will execute on the marketing strategy for the MAGA campaign. For a more in-depth overview, please check out this doc.

We will focus on four core pillars:

  1. Ecosystem Activation: Ensuring every participating protocol is actively involved in the campaign.
  2. Community Engagement: Making DeFi users care about Arbitrum again.
  3. KOL & Influencer Amplification: Getting top voices in crypto to push MAGA’s message.
  4. Performance-Driven Storytelling: Showcasing real-time data to reinforce the campaign’s impact.

Ecosystem Activation: Engaging Participating Protocols

Action Plan:

Goal: Ensure that every protocol involved in MAGA 2025 actively contributes content, community engagement, and co-marketing efforts.

Custom Marketing Toolkits:

  • Provide each protocol with branded marketing assets (banners, infographics, key messaging templates).
  • Pre-designed Twitter threads, Telegram announcements, and Medium articles.

Bi-Weekly Co-Branded Twitter Spaces & AMAs:

  • Feature top DeFi projects in the campaign
  • Cross-promote with protocol communities to drive organic reach.

Protocol-Specific Twitter & Blog Highlights:

  • Showcase each protocol’s role in MAGA via a content series.
  • “Why [Protocol] is Powering Arbitrum’s DeFi Revival” → Published every 3-5 days.

Live Data-Driven Campaign Dashboard:

  • Show TVL growth, trading volume, and liquidity improvements in real time.
  • Embed this dashboard in all marketing efforts.

Marketing Budget

Category Estimated budget
Influencer & KOL Activations $100k
Twitter & Content Marketing $50k
Community Incentives & Loyalty $100k
Paid Media & Ads (Podcasts, YouTube) $75k
Data Dashboards & Reports $25k
Total $350k

Responsibilities and pricing

Jumper Exchange and Merkl will have the following responsibilities:

  • Program management
    • Submit the governance proposal for the program and ensure that it passes
    • Review and recommend applying DeFi protocols for campaign participation
    • Onboard all protocols to the program (Jumper and Merkl will add support for protocols, not the other way around)
    • Provide user support in a dedicated Discord server
  • Marketing and distribution
    • Design and host the MAGA campaign UI on a dedicated domain
    • Add visibility to the program by listing all opportunities on Merkl’s main frontend
    • Provide marketing and GTM support for the campaign
      • Announcement on socials, on Jumper and Merkl website, Blog articles, Twitter Space with all participants
      • MAGA campaign video and content strategy
      • Activating Arbitrum active users and KOLs
      • Starting on week 3/4:
        Jokerace meme contest, Poker Night with all participating protocols
      • Once or twice per week: threads/contents focusing on specific DeFi strategies
      • Contact whales based on their DeFi positions on Debank
      • Contact highly trusted accounts in Twitter’s DM
  • Reward allocation, monitoring and performance
    • Create token allocation strategy that optimises for the campaigns overarching goals and KPIs
    • Automatically track the TVL of all the assets targeted by the program and their associated APYs
    • Manage campaign data capturing, reporting, and updating of the overall data insights on Dune and on the campaign UI
  • Program execution and infrastructure
    • Act as the exclusive bridging provider of the MAGA campaign and ensure that the most optimal bridging and swapping solutions are available to all users from both EVM and SVM ecosystems via a unified UI
    • Design and implement the season 2 and 3 MAGA loyalty program that enables boosts for loyal users and encourages sticky TVL
    • Enable protocols to seamlessly boost APYs by co-incentivising the assets of the program

Resources:

  • Lead Developer, Front-End Developer, UX Designer, Data Engineer, Project Manager, Marketing Lead, Customer Success, Backend Engineer, Integration Engineer

We will be answering questions twice weekly under this post — each Tuesday and Friday to ensure we can capture all discussions.

Accountability Framework

The accountability framework of the MAGA campaign is designed to ensure transparency, responsiveness, and adherence to the program’s goals. This framework outlines the procedures for monitoring performance, addressing deviations from expected outcomes, and making necessary adjustments to the program.

Monitoring and Reporting

  • MAGA success committee Accountability: The multi-sig that has permission distribute any funds for the program and that follows the Arbitrum DAO MSS service guidelines. have 4/5 signers from the success committee.
  • Bi-weekly Reviews: The MAGA success committee will conduct bi-weekly reviews to assess the progress against the program’s success metrics. These reviews will involve detailed analysis provided by the Analytics Manager (Jumper), focusing on metrics such as TVL growth, user engagement, and liquidity impacts. The MAGA success committee will release review notes to the Arbitrum DAO Governance Forum in the interest of transparency.
  • Seasonal Assessments (every three months): At the end of every season (three months), a comprehensive evaluation, created by the Analytics Manager Jumper and Merkl, will be submitted to the MAGA success committee to compare longer-term trends against the program’s objectives. The program may be cancelled at the discretion of the MAGA success committee within 14 days of the end of a season in response to goals being missed by a margin greater than 25% or as a result of significant industry or market changes which require an adapted strategy in order to best serve the Arbitrum DAO and community.

Approving Changes to Key Metrics

  • Proposal for Modification: Changes to key metrics can be proposed by the MAGA success committee if certain aspects of the program are found to be unrealistic or if external market conditions have shifted significantly. Such proposals should be put to the Arbitrum DAO and must detail the reasons for modification and expected impacts on the program’s goals. If a proposal is put to a vote and approved by the Arbitrum DAO, the MAGA success committee is required to implement any changes specified.
  • Community Involvement: Seasonal Assessments and modifications to key metrics will be subject to community feedback through the Arbitrum DAO Governance Forum, ensuring that the Arbitrum community has the opportunity to voice their opinions.

Program Cancellation

  • Cancellation by MAGA success committee: The MAGA success committee may cancel the MAGA campaign in response to a failure of the program to meet key metrics by a margin greater than 25%. The DSC MAGA success committee has two opportunities to cancel the Ignite Program MAGA campaign:

    1. The MAGA success committee may cancel the Season 2 and 3 of the program in the last 14 days of Season 1; or
    2. The MAGA success committee may cancel Season 3 of the program in the last 14 days of Season 2.

    Upon decision to cancel the program, the MAGA success committee is responsible for the final distribution of disbursements for work-to-date within seven days of the end of the active season.

  • Cancellation by Arbitrum DAO: The Arbitrum DAO may cancel the MAGA campaign by passing a proposal on the Arbitrum DAO governance forum to revoke the allocated ARB incentives and stop the program.

Legal & Compliance

The DeFi Ignite Program MAGA campaign will be administered in compliance with applicable law, including applicable sanctions and anti-money laundering rules and regulations.

Compensation:

Fixed fee

  • Merkl and Jumper fixed fee (combined): $400,000 in ARB at a 7-day TWAP prior to the payment due date

Reward calculation & Distribution fee

Merkl charges a 1.15% fee on the amount of tokens distributed to account for the complex reward calculation/distribution coupled with the important operational costs involved in powering such programs. This fee covers the following:

  • Hosting of the dedicated reward infrastructure
  • Distribution of the rewards (cadence chosen by the success committee)
  • Maintenance of the TVL/APR calculation system to onboard new protocols to the program
  • On-call team to:
    • Make live changes to active campaigns when requested by a protocol and/or by the success committee
    • Resolve incidents linked to external dependencies such as RPCs or subgraphs
  • Support team to answer user questions

This fee will be taken at the start of each month based on how many tokens will be distributed, thus, if the program stops ahead of schedule, the fee will only have applied to the tokens that were effectively distributed to users.

KPI bonuses

Season 1 to 3 (KPIs restart each season):

  • Jumper and Merkl KPIs will be defined on 4 criteria:
    • Arbitrum total TVS - verifiable through L2Beat API
    • Arbitrum Productive or DeFi TVL increase - verifiable through DeFiLlama API
    • Total Amount of inflows in incentivised pools per $1 of incentives - verifiable through Merkl API
    • Trade efficiency of large trades - (>$100k trades) amongst key trading pairs (ETH-USDC, ETH-WBTC, USDC-USDT) on large DEXes aggregators (Odos, 1inch, Kyberswap) verifiable through Dune’s dex_aggregator table.
      • Median highest trade efficiency should be higher than Base, zkSync, Optimism on the above pairs.
      • Trade efficiency snapshots will be measured 4 weeks after the program starts and will be measured measured weekly over the entire campaign, taking a snapshot every day. The KPI will be considered achieved and bonuses unlocked in stages as Arbitrum maintains the most efficient place for >$100k trades on bluechip assets amongst major L2s.
  • KPI bonuses are awarded each season, using the end-of-season figures as baselines to measure the next season’s KPI targets.
Threshold 1 Threshold 1 bonus Threshold 2 Threshold 2 bonus Threshold 3 Threshold 3 bonus Threshold 4 Threshold 4 bonus
KPI 1 ; Increase in TVS $100M 20k ARB $200M 50K ARB $300M 90K ARB $400M 125K ARB
KPI 2 ; Increase in DeFi TVL $100M 20k ARB $200M 50K ARB $300M 90K ARB $400M 125K ARB
KPI 3 ; Trade efficiency 3 out of 12 weeks 20k ARB 5 out of 12 weeks 50K ARB 7 out of 12 weeks 90K ARB 9 out of 12 weeks 125K ARB
KPI 4 ; Inflows per $ of incentives $10 20k ARB $20 50k ARB $30 90K ARB $40 125K ARB

FAQ

Who are the target users of the MAGA campaign?

The MAGA campaign will officially target both existing Arbitrum users and broader DeFi users which we would aim to convert to loyal Arbitrum users. Our main focus is increasing the number of users who adopt Arbitrum as their “home chain.” To attract new users, we will establish a dedicated reward pool for newly bridged liquidity, that will facilitate a yield boost for users who bridge in fresh liquidity then deposit this into incentivised pools. This two pronged approach allows us to reward existing Arbitrum users, whilst also attracting liquidity which is not currently on Arbitrum. In addition, we will also focus on larger LPs (retail/institutions), in which we have various strategies in which we can activate their liquidity to Arbitrum.

What other assets will be the focus outside of USDC-USDT, ETH-USDC, and WBTC-USDC?

Increasing liquidity and trade efficiency for bluechip assets, such as USDC-USDT, ETH-USDC and wBTC-USDC will be the primary focus of the MAGA campaign as we have seen in past experience that increasing trade efficiency for these assets yields the best overall results for the greater ecosystem. We will also work directly with the Arbitrum projects to incentivise other strategic assets/pools, such as LST/LRT pools and Arbitrum native assets.

How will Jumper x Merkl filter and exclude mercenary capital?

Merkl has a system to detect wash traders on CL pools, however blacklisting mercenaries is not very efficient as they can simply deposit on a CEX, transfer to another CEX and transfer back to another address. Instead we prefer the approach of loyalty, meaning that we boost loyal users.

How will the MAGA campaign monitor protocols to ensure that they engage in behaviour that is positive for the program?

Previously, some protocols have manipulated incentive campaigns—for example, by temporarily setting fees to zero to capture more volume and rewards. To prevent such behavior, we will implement a “peer policing” system where protocols, community members, and users can report suspicious activities to Jumper, Merkl, or the MAGA success committee. Reports will be investigated, and proven offenders will be removed from the program. Before the program begins, we’ll ask protocols to identify potential gaming strategies, which we’ll actively monitor. Since protocols compete for rewards every two weeks, they are naturally incentivized to watch their competitors and report any abuse.

4 Likes
2

Thank you for the large and detailed analysis of the problems and new proposals.
Grant programs definitely need to be restarted.
I have questions:

I don’t understand how we will know that we have achieved some better efficiency? Is there a link to the Dune tables? Why are we comparing only L2, since we compete with other chains as well.

This is certainly a good goal, but STIP and LTIP also had good indicators. The main problem with those programs, as you yourself wrote, is the lack of stickiness. Almost all the increase in TVL disappeared after the end of the incentives. It seems to me that this would be an important indicator of the effectiveness of the program.

It seems to me that we are again setting ourselves vague goals.
I propose to indicate specific indicators. For example, to set a target average weekly TVL.

  1. But the most important question, as it seems to me, is to understand why TVL is higher in other chains. I doubt that the problem is only in incentives.

I don’t like the approach where a good idea is accompanied by an undemocratic selection of committee members. I understand when the author of the proposal is appointed to manage the program, in this case there are no questions.
I propose to hold elections for this committee

  1. Also, I would like us to have seasons without restrictions on their number. That is, the program should not end - only in this case we can count on a stable increase in TVL.

  2. Are you sure that increasing the liquidity of the pools you mentioned will give a big increase in TVL? Is this the strength of other chains or is it a consequence?

3

  1. Trade efficiency data is verifiable through Dune’s dex_aggregator and dex table, we will use this to track trade efficiency improvements throughout the campaign across blue-chip asset pools such as the ones listed in the proposal.
    One example of such trade efficiency data can be found here:
    https://dune.com/queries/4181811/7038489.
    We are checking how efficient are the trades for a list of given dex aggregators over a 90d period timeframe for a specific list of token routes: Stable, Big [eth-usdc, wbtc-usdc, wbtc-eth] and Alt).
    We would apply the same methodology but looking at the breakdown of trade efficiency by DEX on a given list of token route mostly from the Stable and Big categories.
    We would apply the same methodology to compare the trade efficiency between L2s.
    This data will be utilised to shape the incentive distributions per epoch to optimise for the goal of Arbitrum having the highest trading efficiency amongst all chains (excluding Solana, BNB and Ethereum Mainnet) for trades over $100k. We are only comparing to all chains (excluding Solana, BNB and Ethereum Mainnet) at this stage due to this being a realistic achievable goal in the current campaign structure. I agree overall that Arbitrum is competing with all chains, but it is not realistic to design a campaign to have higher trade efficiency than Ethereum mainnet, BNB or Solana at this time.

  2. Both $ of TVL per $ of incentives and stickiness are important. It is important that TVL is acquired efficiently in the first place without being wasteful of incentives or overpaying for idle TVL that isn’t used to achieve the overarching goals of the program. In addition, keeping this TVL on Arbitrum between seasons or post campaign is also very important. This will be achieved by leveraging various loyalty mechanisms.

    • Jumper will leverage its experience building the Jumper Loyalty Pass DID system to design a MAGA campaign loyalty system. This will involve MAGA participants being issued traits for their participation in each of the seasons which will grant them benefits in subsequent seasons, such as boosted yields if their TVL remained on Arbitrum during seasons or over certain periods of time.
    • As outlined in the proposal, if the vote to move ahead with season 3 of the MAGA campaign is successful, Jumper and Merkl will publish a proposal to engage in an entirely new campaign, with new incentive budgets, goals and KPIs. This proposal would place significance on the loyalty aspects of the MAGA campaign which promotes TVL retention and rewards loyal users into the future.

  3. Increasing spot and perp volumes are an important factor to improving the base level APY for LPs beyond incentives. As liquidity increases, this will make Arbitrum the most efficient place for traders to trade, which in turn generates more fees for LPs and reduces the reliance on incentives. As the MAGA campaign progresses and spot/perp volumes increase we will be able to use the fast 2 week iteration cycles to fine tune the amount of incentives paid to LPs that are counterbalanced by trading fees paid by traders.

  4. First, using L2Beat data Arbitrum is the best L2 in terms of TVS and second behind Base in terms of DeFi behind Base according to Defillama. Arbitrum is already a top tier chain in those terms and it is not lagging behind.
    What we want to achieve with this campaign is consolidate the first place and not being caught up by contenders.
    It is very hard to give a reason on why TVL is higher on other chains, but the most plausible would be narrative around those chains, innovative apps deployed there which attracts users and TVL and overall positioning in the market. Arbitrum had first mover advantage and an early lead in the L2 space but after some failed incentive programs and narrative positioning this lead has gone. This is the primary goal of the Make Arbitrum Great Again campaign, we want to return Arbitrum to its former glory and reinstate it as the L2 DeFi hub.

  5. We are open to elections on the MAGA success committee but the requirements must be that the persons self nominating to participate in the elections have suitable experience and expertise to oversee such a program. We proposed the MAGA success committee be made up of Offchain Labs, Blockworks, Gauntlet, AF and Entropy members due to the experience they have within the Arbitrum and greater DeFi ecosystems.

  6. This can be a further proposal at a later stage on an evergreen program. For the current proposal we want to have a season based approach to allow the DAO to have clear objectives and timelines on the program, whilst maintaining the flexibility to stop it at anytime if they are unhappy with its execution or effectiveness.

  7. As shown in these two Dune queries https://dune.com/queries/4182014/7038750 & https://dune.com/queries/4740257/7871670, ETH/LST/LRT, Stablecoins, and BTC account for the vast majority of onchain trading volume. By growing the base liquidity for these assets on Arbitrum, we can efficiently increase aggregate TVL across the ecosystem. This increased liquidity will create better CEX-DEX arbitrage opportunities, improve money market liquidation efficiency, and provide deeper pools for longtail assets. Moreover, our experience running DeFi campaigns shows that bridged TVL isn’t limited to incentivized pools—users often deploy it for ecosystem speculation, NFT minting, and other economic activities.

1 Like
4

I love how the marketing (MAGA) is being play, I see some solid points but also some concerns:

Good stuff:

  • The 2-week iteration cycles + oversight committee is based. Way better than STIP/LTIPP where protocols got funds directly with barely any accountability
  • Clear KPIs tied to actual market impact
  • The double step of bridge + deposit requirement for incentives is smart to avoid internal recycling of funds

But here’s what id like us to discuss more:

  • Make sure funds are safu and dive deep on

** Contract security measures
** Audit requirements
** Fund protection mechanisms
** Incident response procedures
** Loss protection policies

  • The success committee structure feels too centralized - it’s mostly just big players who can veto stuff. Would be better to have some actual delegates/users in there who understand market dynamics
  • The loyalty system sounds cool but there’s no concrete mechanics spelled out. Need specifics on how they’ll actually make liquidity sticky beyond just “trust us”

My main suggestion: Add concrete penalties or clawbacks if KPIs aren’t hit. Right now the only real accountability is the committee can cancel future seasons. We should have more skin in the game - maybe put the fixed fees in escrow and release based on hitting targets.

1 Like
5

Okay okay okay, I really appreciate the proposal, extremely complete. I still have some doubts and observations that I would like to share. For example, it mentions a group of five expert overseers - the MAGA success committee - made up of representatives from Offchain Labs, Blockworks, Gauntlet, Arbitrum Foundation and Entropy advisers, but it does not go into detail about their specific roles, selection criteria or the mechanism that will ensure they act impartially and with the necessary expertise to oversee the campaign. Could you detail who exactly these overseers would be, what their specific responsibilities would be and how potential conflicts of interest or situations in which one does not meet expectations will be handled?

Also, the marketing and communication section is critical to the success of this campaign. Since this is my area of expertise in this area, I would like to know if you have seriously considered the above proposals related to ARB’s digital marketing, something I have always placed more emphasis on is content on YouTube, as well as considering collaboration with content creators in other languages to break the English barrier and expand global reach.

also, while mentioning the possibility of canceling the campaign if certain thresholds are not met, I would like to know if clear protocols are in place for communicating these changes to the community and for managing the transition in case it is decided to stop or modify the project abruptly.

6

Hello! Thanks for your proposal.

It is a comprehensive one, congrats for that. We need more proposals like this.

Regarding the points below, I have a few questions:

Possible gameable metrics

  • What prevents the user to bridge the funds out from Arbitrum and then bridge it back using your program? Is there any interest to prevent this type of situation?
  • Will the users that are already LPing on those pools not be rewarded?

Regarding committee election

I echo the previous comment. You mentioned at the beginning of the text that the committee would be elected by the DAO, but in this section you already provide its composition.

It is not a good practice to tie 2 different things (the program itself and the committee election) in the same proposal. Now, if you are open to propose actual elections, please edit the text.

Dedicated multisig

It is practice to use MSS services for any DAO-led program. It would be interesting to keep this for yours too.

small typos :wink:

About the fees

Can you provide a proper calculation of the total fees?

The way I see it, it is

Jumper: $200,000
Merkl: $200,000 + 1.15% * up to 60m ARB = $200,000 + up to 690,000 ARB.
KPI bonus: Up to 500,000 ARB

Is that correct?

I have nothing against the number itself, but want to have clarity on those. As feedback, I would suggest reducing a lot the 1.15% merkl fee.

Total cost of the program

Can you add a table with the total cost of it? The information is scattered around the proposal, so it is difficult to have a proper understanding. IIUC, it is:

Incentives: up to 60m ARB
Marketing: $350,000
Jumper: $200,000
Merkl: $200,000 + 1.15% * up to 60m ARB = $200,000 + up to 690,000 ARB.

Is that correct or did I miss something?

About whitelisting protocols

Here you provide eligibility criteria:

And then you provide a list of protocols:

I fail to understand why you provided this initial list, as it is not a fair competition for the other protocols. Why not having Balancer as a DEX, for example?

Thanks in advance!

1 Like
7

The key thing that I’m missing here is what’s the ROI of this campaign. It’s a nice sounding goal to enable efficient trading pairs and bring TVL but what’s the value of that to Arbitrum?

At this scale of a proposal, we shouldn’t be YOLOing money hoping it will be worth it but have a clear projection that at least we hope to hit. Without positive ROI (within a sensible time horizon), I don’t think incentive programs like these make any sense.

4 Likes
8

Proposal answers 20.02.2025

Thank you everyone for your comments and engagement so far. Moving forward, we will be answering questions twice weekly—on Tuesdays and Fridays. This schedule will allow discussions to develop naturally and help streamline the feedback process as we refine the proposal based on your feedback.

Several questions have been raised, so I will address them collectively below instead of responding to each comment individually:

Safety of funds

The security of funds is the highest priority of the MAGA campaign. There will be 2 types of funds involved in this program:

  • Funds provided by users to participating protocols
  • ARB tokens that are distributed to the users as incentives

Security of user funds

Our DeFi protocol participation guidelines clearly specify which protocols can participate. To be eligible, protocols must meet several criteria: pass at least one security audit by a reputable firm (as detailed in the proposal’s change log), maintain a minimum TVL of $5M, and be integrated with DeFi Llama. Additionally, protocols must sign an agreement with the MAGA campaign pledging not to engage in—directly or indirectly—sybil farming, metric spoofing (TVL, user counts, etc.), or any other activities that abuse or contradict the program’s purposes.

Additionally, Merkl is a non-custodial solution. This means that user funds are never touched by Merkl contracts, ensuring that earning rewards does not expose users to additional smart contract risks.

Security of ARB tokens

The ARB tokens will touch 3 different contracts:

  • The program multi-sig
    • This multi-sig will be controlled by Jumper, Merkl, and the MAGA success committee
  • Merkl Distribution creator: https://arbiscan.io/address/0x8BB4C975Ff3c250e0ceEA271728547f3802B36Fd
    • contract used to create the campaigns. The ARB never sits on this contract, it just flows through it when the campaign is created
  • Merkl Distributor: https://arbiscan.io/address/0x3Ef3D8bA38EBe18DB133cEc108f4D14CE00Dd9Ae
    • Contract where the tokens sit until they are claimed by users. Merkl regularly uploads a merkle root to update rewards and generates the proofs so that users can claim. The only way to steal the tokens is to compromise the root. A dispute system prevents malicious roots from being live, more information here: Technical Overview | Merkl Docs
    • As users will regularly claim the tokens from this distributor, our two-week iteration cycle ensures that only the current epoch’s budget is ever at risk.

All Merkl contracts have been audited here: Code4rena | Keeping high severity bugs out of production

The main risk for the funds is to have the multi-sig compromised, Radiant taught us this the hard way.

To prevent this, we can setup an onchain gauge system (documented here: Deploy your campaign from a DAO | Merkl Docs)

In this setup:

  • The ARB tokens will sit on a very simple immutable contract that can only be called by a multi-sig controlled by Arbitrum DAO to give an allowance to the gauge contract
  • An immutable gauge contract that can only be called by the program multi-sig to:
    • pre-configure campaigns
    • notify rewards (in turn, this triggers campaign creation)
  • The gauge contract will only be able to transfer ARB tokens to the Merkl distributor
  • To create campaigns, the program multi-sig will call notifyRewards with the correct dates and amounts.

In this setup, even if the multi-sig is compromised it can only trigger transfers to Merkl contracts (where funds can be recovered) and only send up to the approval given by the Arbitrum DAO. This greatly reduces the impact of a multi-sig attack.

Incident response

Incident response procedures are now outlined in the proposal (see change log). If an incident occurs with any participating protocol in the MAGA campaign, Jumper and Merkl will first pause all reward flows to that protocol and work with that team to assess the situation.

Based on this assessment, the protocol may be removed from the program—either permanently or temporarily until the incident is resolved. The MAGA success committee must approve all investigation findings and participation decisions. While we cannot recover incentives that have already been distributed due to the immutable nature of the Merkl distribution contracts, we can act quickly to freeze rewards that have not yet been pushed onchain. This has been done recently on Mode following the Ionic incident. All Ionic campaign rewards were frozen less than 2 hours after the hack and no rewards were pushed to the hacker. The unused funds were later recovered by Mode to be re-used on other protocols.

MAGA success committee structure

The MAGA success committee structure will remain as outlined in the original proposal, with delegates from Offchain Labs, Blockworks, Gauntlet, Arbitrum Foundation, and Entropy advisers internally nominating suitable representatives to oversee the MAGA campaign. Each organisation will provide an overview of their nominated person and their qualifications to oversee a campaign of this magnitude and complexity. Following the internal nomination of committee members, the Arbitrum DAO will have the ability to veto the committee’s composition and call for an election of new members.

Given the extensive responsibilities outlined in the MAGA success committee section of the proposal, nominated individuals must have relevant expertise to review data, evaluate protocols for inclusion or removal, and handle other complex tasks essential to the campaign’s management. For this reason, Jumper and Merkl believe that the nominated entities are best suited to nominate qualified persons to fulfill the roles required on the MAGA success committee.

Loyalty system

“While the loyalty system concept is promising, we need concrete mechanics rather than vague assurances about maintaining liquidity.”

To reward user loyalty we will distribute boosted rewards to loyal MAGA campaign users. Starting 1-3 months after program launch (as approved by the MAGA success committee), wallets can earn boosted rewards compared to others based on the below criteria:

Maintaining Arbitrum balance over the campaign

  • Each wallet’s deposited amount will be tracked weekly, with boosted rewards given to addresses that maintain at least 50% of their maximum deposit and have a current total deposit of more than $10,000 in the program.
    • The deposit balance would be extracted from Merkl API and would cover all the list of incentivised pools historically.

For example:

  • An Arbitrum wallet with a current balance of $10,000 in incentivised pools and a historical max balance of $18,000 deposited in incentivised pools on Arbitrum would receive an ARB boost on their deposits.
  • An Arbitrum wallet with a current balance of $10,000 in incentivised pools and a historical max balance of $30,000 deposited in incentivised pools on Arbitrum would not receive an ARB boost on their deposits.

Continuous program participation for more than 1 month

  • Boosted rewards will be given to MAGA campaign participants who have deposited their liquidity for 4 consecutive weeks without removing liquidity

Continuous program participation for more than 3 months

  • Boosted rewards will be given to MAGA campaign participants who have deposited their liquidity for 12 consecutive weeks without removing liquidity

Like the liquidity incentives, the loyalty system will evolve throughout the MAGA campaign seasons since we cannot determine the most effective strategy before launch. We will communicate all details of the MAGA loyalty program through campaign marketing channels before implementation, and provide updates to the DAO in the campaign reports at the end of each season.

Gameable metrics

“What prevents the user to bridge the funds out from Arbitrum and then bridge it back using your program? Is there any interest to prevent this type of situation?”

Bridging funds to and from Arbitrum will not be an incentivised action. The 2-step bridge and deposit flow is especially powerful here, as it uses time-weighted linear distribution contracts to reward liquidity in an incentivised pool and can filter depositors based on their bridging actions. This means that even if an address bridges funds out of Arbitrum and back in again, they won’t earn any incentives until they deposit into an incentivised pool. Additionally, Merkl contracts allow for blacklisting certain wallets—if we notice blatant extractive behaviour throughout the program, Jumper and Merkl will seek the MAGA success committee’s approval to blacklist those addresses. Blacklisting of wallets is not foolproof but is an option at our disposal in extreme cases.

The main approach of defending against users trying to game the campaign is via rewarding loyalty first and foremost. By rewarding loyalty as outlined above, Arbitrum users who are the most aligned with the goals of the campaign will receive additional yield boosts and perks throughout the program. This will drive alignment, value add behaviour and make TVL sticky to Arbitrum and the MAGA program.

“Will the users that are already LPing on those pools not be rewarded?”

Campaigns will be structured in a way where a each pool will be incentivised in two ways.

  1. A base level of ARB incentives will be distributed to all LPs within the incentivized pool, regardless of whether they bridged their liquidity during the campaign period or before it started. This ensures current LPs are rewarded without forcing them to unwind positions, bridge off Arbitrum and back, then re-deposit to earn incentives.
  2. An additional incentive allocation will go to depositors who fulfill the 2-step bridge and deposit criteria. For existing LPs to earn this additional yield boost, they must bridge new TVL into Arbitrum and deposit it into the pool. New LPs who bridge liquidity into Arbitrum and deposit into the pool will receive both the base incentives and the bridge + deposit incentives. Jumper and Merkl will calculate the ratio between base incentives and 2-step bridge + deposit incentives each bi-weekly epoch, with the MAGA success committee approving these during campaign creation.

Dedicated Multi-sig

The MAGA campaign will follow the MSS service outlined here: [RFC] Arbitrum Multi-sig Support Service (MSS)

This has been updated in the proposal (see change log).

Fee structure and KPI bonuses

The MAGA campaign fee structure consists of three components:

  1. A fixed fee of $400,000 to paid upon completion of season 1
    1. This fixed fee will be split between Jumper and Merkl and covers all aspects outlined in the responsibilities and pricing section of the proposal. However, this fee does not cover the entire campaign costs for both parties, as the remaining labor costs depend on successful completion of the campaign KPIs. This structure ensures minimal financial risk for the Arbitrum DAO while maximizing Jumper and Merkl’s stake in the campaign’s success.
    2. Resources covered under this fee: Lead Developer, Front-End Developer, UX Designer, Data Engineer, Project Manager, Marketing Lead, Customer Success, Backend Engineer, Integration Engineer
  2. Merkl’s 1.15% fee that is taken from all incentives paid through the Merkl smart contracts
    1. This fee accounts for all the offchain infrastructure needed to monitor user activity on Arbitrum and the maintenance associated. The 1.15% fee represents a 62% discount on Merkl’s normal 3% fee.
    2. This fee can be paid in monthly instalments by the Arbitrum DAO or taken directly by the Merkl contracts on campaign creation (taken from the Incentive amount)
  3. KPI bonuses as outlined in the proposal

Maximum cost for the MAGA campaign assuming all 3 seasons

Title Type Overall Budget Per Season Budget
Incentive amount Expense 60,000,000 ARB 20,000,000 ARB
Marketing budget Expense $350,000 $116,666
MAGA success committee fee Fee 144,000 ARB 48,000 ARB
Fixed fee Fee $400,000 N/A
Merkl 1.15% fee Fee 690,000 ARB 230,000 ARB
KPI bonuses Fee 1,140,000 ARB 380,000 ARB

Please note: The figures above represent the maximum possible cost for the MAGA campaign, assuming all KPIs are met, all incentives are distributed through Merkl smart contracts, and all budgets are fully utilised.

DeFi protocol participation

An initial list of DeFi protocols has been provided as a recommendation to the DAO for the first batch of MAGA campaign participants. While this list is not exhaustive, clear guidelines for participation are available in the proposal. Protocols can apply for inclusion throughout the program’s duration. Jumper and Merkl will review new applications on a rolling basis and may recommend applicants to the MAGA success committee at the end of each month. The committee will have final authority to approve or reject these applications.

Due to the KPI-driven nature of the program, it is crucial that protocols remain in the program primarily based on their performance rather than diversity of tech stack. Underperforming protocols may have their incentive budgets reduced or be removed entirely. All decisions regarding protocol incentive allocations will be purely data-driven, with the program’s overarching goals serving as the north star.

Change log of proposal updates 21/02/2025

  • TLDR of campaign oversight
  • Safety of funds section added to the proposal
  • Multi-sig requirements changed to follow the MSS service structure
  • Addition to the DeFi protocol guidelines
  • Incident response section added
  • Fix typos
9

For an incentive program, this is relatively well designed, but it’s hard to support it in currently as it is a large spend at a time when ARB price is not doing well and market conditions are not supportive.

Some comments:
-The success committee seems too dominated by big players, with little community input.
-There are no real penalties for missing KPIs, and the proposal lacks a clear breakdown of expected returns.

-The loyalty system is better than none, but could use more details on how to retain users long term.

  • Spending 60M ARB in the current market might not be the best move, and a clearer budget breakdown would help.

We do like that this campaign takes a focused approach to boosting liquidity, lending, and trading while highlighting Arbitrum projects. It’s got built-in accountability with a success committee overseeing things, bi-weekly KPI check-ins, and the long-term engagement plan through the Jumper Loyalty Pass is better than most similar campaigns .

Plus, it tries to fix past issues by requiring fresh liquidity instead of recycling funds. Security is also a priority, with audits, Merkl’s non-custodial setup, and multi-sig protections.

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To improve, the proposal should clarify the committee’s role, security details, and how protocols will be monitored. A solid marketing plan, including influencers and multilingual outreach, would also help.

And most importantly, this kind of incentive program which depends on ARB token price, would do well to be timed with more supportive market conditions.

1 Like
10

MAGA success committee selection and role

The MAGA success committee has been one of the main points of feedback within the proposal process so far. The below will outline the role of the MAGA success committee within the MAGA campaign and try to give some further context on why these entities are nominated to provide competent persons for a position on the committee.

Scope of MAGA success committee

The MAGA success committee will oversee, review, and approve/veto critical aspects of the MAGA campaign. Their responsibilities include:

  • Protocol admissions/removal from the program
  • Regular data review and approval/veto of incentive allocation modifications (per protocol/per pool)
  • Review of data reports, participation in monthly meetings, and acting as stewards of the DAO’s best interests
  • Signing transactions to disburse incentive allocations to Merkl contracts
  • Monitoring campaign KPIs to ensure optimization
  • Monitoring and ensuring effective implementation of the loyalty system

The MAGA success committee consists of Arbitrum DAO representatives nominated to ensure proper execution of the MAGA campaign according to the approved proposal. They will review relevant data and provide guidance as needed. The nominated parties are ideal for this role due to their experience in risk management, data analysis, financial budgeting, and their strong track record of representing Arbitrum DAO. At this stage, we prefer to avoid electing MAGA success committee members through a popular vote. Elections might prioritize popularity over competence, which could compromise the campaign’s execution and effectiveness—ultimately harming the DAO.

KPIs and expected returns

Due to the many variables involved, defining expected returns is challenging. We have addressed this through a KPI-based structure that covers both the campaign’s overarching goals and performance bonuses for Jumper and Merkl. This approach aligns all parties’ interests—Jumper, Merkl, and the Arbitrum DAO—by rewarding overperformance while protecting against underperformance.

Missing KPIs at either the campaign or performance level will result in penalties for Jumper and Merkl.

  • Campaign level: If campaign KPIs are not met, the MAGA success committee can vote to terminate the MAGA campaign early, resulting in a failed campaign for Jumper, Merkl, and the Arbitrum DAO.
  • Performance level: If performance KPIs are not achieved, Jumper and Merkl will receive no campaign upside and may operate the campaign at a loss.

Overall market timing

Market timing should not be a consideration — we are builders, not traders. The MAGA campaign implementation timeline is estimated at 8-12 weeks, accounting for protocol onboarding, campaign budget design, UI development, Merkl integrations, and other essential tasks. Attempting to predict market conditions 2-3 months ahead would only lead to paralysis for the DAO and prevent progress on any future incentive campaigns.

The MAGA campaign’s design effectively hedges against market timing risks and minimizes potential downside. Using a seasonal approach allows us to evaluate the campaign’s effectiveness during the first 12 weeks. If performance falls below expectations, the MAGA success committee can halt the campaign, reducing the incentive allocation from 60M ARB to a maximum of 20M ARB (which may not be fully utilized). Furthermore, since Jumper and Merkl’s KPI bonus structure is tied directly to campaign success, unsuccessful performance means these bonuses won’t be paid — providing additional cost protection for the DAO.

Marketing plan

The MAGA campaign marketing plan is outlined here: Jumper x Merkl // MAGA 2025 Marketing Plan

During the program’s onboarding phase, we will develop and coordinate a detailed marketing plan with the Arbitrum DAO, participating protocols, Jumper, and Merkl, contingent on the proposal’s approval.

11

Okay okay x2, I really want to highlight and congratulate the level of commitment, detail and high standards you have left for this proposal. I see that the MAGA 2025 proposal has evolved significantly and responds clearly to several of the concerns raised above, especially with regard to the security of the funds and the operation of the multi-sig. There is an effort to detail the security mechanisms, the structure of the multi-sig and the incident response protocol, which is very encouraging. However, some questions remain as to whether additional external audits or verification mechanisms have been considered to reinforce these measures, especially given the potential risk of a multi-sig compromise. As for the MAGA success committee, its description has been expanded, noting that it will be composed of representatives nominated internally by Offchain Labs, Blockworks, Gauntlet, Arbitrum Foundation and Entropy advisers, but it is still necessary to know more precisely what are the specific criteria for such nomination, how the suitability of the candidates will be assessed and in what way their impartiality will be guaranteed, since their role is crucial for proper monitoring and for making decisions in critical situations, including the possibility of canceling the campaign if the established KPIs are not achieved.

And, on the marketing side, I also want to congratulate you on how well structured it is, it is ambitious. Although I want to mention:
I think there is an overestimation of the participation of protocols and KOLs. Without clearer incentives, projects may not actively join, and the $100k influencer budget may be insufficient to generate real impact without looking like an artificial campaign.

Also critical is the focus on superficial metrics. LTV and trading volume do not always reflect real engagement, and it would be useful to incorporate qualitative KPIs such as user retention or satisfaction. In addition, execution presents operational risks, such as content saturation due to too frequent events or the possibility of bounty campaigns generating low quality material without a good curation system.
Did you not consider it useful to better align incentives by offering rewards to protocols that meet certain KPIs or by creating a community ambassador program or similar? In addition, metrics could be deepened with interactive dashboards and satisfaction surveys, optimize execution with a pilot of 3-5 protocols before scaling, and reallocate part of the budget to strengthen UX and respond to unforeseen events in the campaign.

12

Fee

There is an explanation from Merkle Docs:

So, can we try to reduce our costs by implementing JSON-based airdrop?

And I don’t understand what is fixed fee, because we already pay Merkle 1.15% fee

KPI bonuses

Given the main goal of the program - to involve capital for a long time, so that the money does not disappear immediately after the end of MAGA, I believe that at least half of the bonuses should be paid for KPIs, which should be calculated after the end of the program (for example, after 3-6 months)
I would like you to suggest your own option for this, or set a deadline for monitoring KPI 2 (Increase in DeFi TVL) six months after the end of the program

13

I appreciate the effort put into this proposal and agree with both the reasoning and motivation behind it. Strengthening Arbitrum’s DeFi ecosystem through well-structured incentives is an important initiative, and there are several strong points in the outlined plan that address past challenges effectively.

A few questions:

  1. regarding the methodology used to determine the optimal way to distribute these incentives - was there an in-depth analysis conducted on how best to allocate them across different protocols and use cases?
    If so, I’d love to see insights on why this structure was chosen over possible alternatives.

  2. user retention. While incentive-driven growth is valuable, do we have projections on user activity post-incentives? Specifically, what is the anticipated retention rate versus the potential drop-off in TVL, users, and trading volumes once the campaign concludes?
    Understanding this will help assess the long-term impact of the initiative.

  3. how were the five committee members selected?
    Ensuring that governance over incentive distribution is balanced and transparent is crucial to maintaining fairness and credibility in the process.

14

Thanks for this big proposal)

It’s really very sad that Arbitrum spent so much money for nothing :confused:

In general, MAGA 2025 is not bad and will help attract users and TVLs, but I have a couple of questions and also a couple of thoughts.

  1. Why take 60 million ARB if you completed the Superfest for Optimism by spending 1.5M OP ($2/3M) in two months? 60 million ARB now it’s around $24M. It seems to me that it would be reasonable to significantly reduce the number of tokens allocated to the program. Let’s say $3-4 million per season and get $9-12M for all MAGA 2025. This will help save the treasury DAO.
  1. Nowhere in the proposal is it stated what exactly is considered “success” or what specific threshold numbers are. I think it is better to set specific indicators to avoid vagueness and ambiguity. For example, today TVL is
    image
    image467×203 10.3 KB

We take 25% and get the result ~$650M . If we don’t reach these numbers in season 1, then the campaign needs to be curtailed. The same is true for other metrics that were mentioned above in the proposal. Without this specific goal data, the DAO has no effective control over the program’s effectiveness.

  1. Am I understanding correctly that if the campaign goals are not achieved in Season 1, you will still receive Fixed fee $400k? It would be nice to split the $400k into 3 seasons as well.

…

A couple more thoughts. Optimism spent one season for a period of 2 months. Why do we need to conduct 3 seasons in a row for a period of 3 months? I think it would be much more profitable if we paused between seasons. For example, after season 1, take a break for 3 months and see how key indicators change. If within 3 months they have dropped back to their previous levels, then we consider that the campaign MAGA 2025 was a failure and we either need to change something in it, or cancel it altogether

15

Thank you for sharing such a detailed proposal, @0xluude. The campaign is well thought out and covers many important aspects that we believe will contribute to its overall success. However, we do have a few concerns:

  1. Success Committee
    We agree with @jameskbh and @TodayInDeFi that the Success Committee should not be entirely preselected. Instead, it could include Offchain Labs, Arbitrum Foundation, and Entropy by default, with the remaining two seats filled through an application process and a vote by the DAO.
  1. Costs
    We find the base cost for a long-term campaign reasonable, given the scope of work from conception to execution. However, we feel the allocation of incentives across different phases could be optimized.

We propose a heavier weighting of incentives in later phases—for example, Phase 1 at 10,000,000 ARB, Phase 2 at 20,000,000 ARB, and Phase 3 at 30,000,000 ARB. This approach would allow the DAO to adjust allocations based on token performance over time and get a gauge on the initial performance of Phase 1.

  1. Branding and Campaign Design
    Will the Success Committee have oversight of the campaign’s design and final approval before execution? Since the campaign represents Arbitrum, we believe it’s essential for the committee to review and approve the marketing plan, creative materials, and any planned KOL involvement to ensure consistency and alignment with Arbitrum’s brand.

  2. Allocation for Incentive Changes
    If the DAO decides to reduce the number of allocated tokens in later phases (2 and 3)—for instance, if ARB’s price increases and we can maintain or exceed the initial dollar value of rewards with fewer tokens—is that an option within this proposal? Currently, the proposal only discusses campaign termination but doesn’t address adjusting incentives mid-campaign.

We believe including this flexibility would be beneficial, allowing the committee to adapt incentives for subsequent phases if market conditions change.

  1. Alignment with Goals
    Currently the DAO is undergoing an exercise to ratify its long term mission, vision and purpose . A part of this process is by determining the strategic objective settings (SOS) which the DAO is currently accepting recommendations. One thing to keep in mind is to align the goals of the phases with the SOS as they are being developed.

This is to ensure the campaign as a whole aligns with the DAO’s goals.

Overall, we appreciate the thoroughness of your proposal and look forward to the continued discussion on how to make this campaign as effective as possible.

1 Like
16

The following reflects the views of GMX’s Governance Committee and is based on the combined research, evaluation, consensus, and ideation of various committee members.

The Jumper x Merkl MAGA campaign aims to distribute a maximum of 60M ARB over 3x3 month period time frame. The idea of a unified frontend with strong campaign branding is good. The issues with cumbersome reporting and measuring success indicators were indeed significant. Reward distribution through a centralised frontend would be more effective.

. We are less convinced that they can avoid internal liquidity recycling and retain whatever liquidity flows in due to incentives.
• Arbitrum to achieve the highest overall chain volume compared to all major chains why is Solana excluded looking at the current view of the Solana ecosystem.
. Why aren’t ecosystem builders included in the committe. How does the committee plan to handle COI?
. Is there any extra incentive for Arbitrum Native protocols in this program?
. This program has a marketing budget which seems to be a good lesson learned from the previous incentive program.
. The Fee charged over here is really high which should be reduced. What if this fails will you guys take a cut?
. We think lending markets are a good go-to to increase liquidity long-term, but what about other protocols? Isn’t fully clear to us how much the difference of efforts will be for Lending Protocols vs perp or spot DEXs
. There is no detailed strategy on how you guys plan to increase the Trading volume for Perps.

17

Overall, we find this proposal well put together and ambitious, tackling many of the issues encountered in past incentive programmes. In particular, we’re impressed with the retention strategy, which is thoughtfully designed to keep users engaged well beyond the initial incentive push. This level of detail and foresight is promising for long-term growth and engagement.

We also agree with the approach to the MAGA Success Committee, especially tying it to KPIs and performance penalties. The chosen entities are indeed experts in their fields and well respected. However, as mentioned by others, we’re uncertain about the criteria used for their nomination. Because the committee plays such a critical role in overseeing the campaign’s success, a clearer understanding of the nomination process would help ensure confidence in both their impartiality and effectiveness.

We also question why the committee is pre-selected. For a proposal that could ask for up to 60 million ARB (~$24 million, $8 million per season), it might make more sense for the DAO to select the committee from the outset, rather than having it pre-established.

Another consideration is that you noted your previous campaign had an average incentives spend of no more than $2 million, yet here you propose up to 60 million ARB. It would be helpful to explain why this exact figure (roughly $24 million) is the right threshold to guarantee success, and how it scales from prior spending levels.

We also recognise that the DAO has already spent a considerable amount on STIP/LTIPP, and we acknowledge the shortcomings of those programmes. However, if this strategy does indeed work, is the cost-to-reward ratio truly justified? We would appreciate a clearer defence of how the potential return on investment outweighs the large up-front cost.

That said, the proposal is well thought out, with strong safeguards in place, and we’re excited about its potential to drive long-term growth and engagement. The marketing plan also appears solid, employing a variety of channels and real-time analytics to adapt as needed. This data-driven approach should keep the programme effective throughout its duration, provided the budget and governance aspects are clarified to the community’s satisfaction.

18

Proposal answers 03.03.2025

Multi-sig processes

As discussed above and changed in the original proposal, the MAGA campaign will follow the Arbitrum DAO MSS processes. This will enable Jumper and Merkl to build the payload every 2 weeks for the bi-weekly incentive campaigns and send these payloads to the MAGA campaign signers to execute.

This ensures adherence to the MSS process, and at no point will Jumper, Merkl, or the protocols participating in the MAGA campaign be in custody of any funds or signers of any wallets containing ARB incentives. All multi-sig security practises will be upheld by signers onboarded into the MSS scheme already implemented by the DAO.

MAGA success committee design

Based on feedback received, we have decided to adopt CastleCapital’s suggestion and update the MAGA Success Committee structure as follows:

5-Member Committee

Pre-Nominated Entities (3 seats)

  • Arbitrum Foundation
  • Offchain Labs
  • Entropy Advisors

DAO-Elected Members (2 seats)

  • DAO Elected Member 1
  • DAO Elected Member 2

Each pre-nominated entity will justify its representative to the DAO, providing background information and their qualifications for overseeing the MAGA campaign. The two DAO-elected positions will follow the selection process outlined below.

  1. Nomination phase

    1. Candidates can self nominate using the following template

  2. Community discussion

    1. Discussions will take place on the Arbitrum governance forum

  3. Community vote

    1. Voting will be completed via weighted voting—nominees with the highest number of votes will be elected to the open MAGA success committee positions

  4. Verification and compliance

    1. KYC verification
    2. Compliance checks

  5. Appointment and onboarding

Marketing budget (KOL allocation)

The MAGA campaign is designed to reward high-performing protocols while reducing or even stopping incentives for underperforming ones altogether. As a result, it’s in each protocol’s best interest to activate their communities and ambassadors to promote the program. Failure to do so may lead to poor performance and potential removal from the campaign.

Traditional incentive campaigns often rely on external marketing agencies, but these firms typically lack deep community connections and struggle with effective execution. In contrast, Jumper will oversee the user experience within the MAGA campaign, leveraging its proven track record of building a loyal DeFi-native community through relatable, edgy content. By engaging users in a way that resonates with the DeFi space, this approach is expected to deliver stronger results—without requiring a larger budget from the DAO.

Fees (Markl SaaS and fixed fee)

Merkl normally applies a 3% fee to all campaigns, this includes:

  • displaying the campaign in the Merkl frontend
  • calculating the TVL of the incentivized asset and the APR
  • monitoring the asset and tracking user liquidity to calculate the user rewards
  • distributing the rewards
  • providing all the data related to the campaign on the Merkl API (for whitelabel integrations)
  • user support

For JSON-based airdops, Merkl is only responsible for distributing the rewards (the incentivizor provides a mapping of user addresses and rewards), this is why the fee is much lower (0.5% for airdrops).

Technically we could reduce the cost to implement JSON-airdrops only but this would require all protocols to calculate the rewards themselves and remove most of the value added by Merkl (no APRs, no reward calculation etc)

The fixed fee is separate from this, it covers all the extra work required to run this program, as outlined in the Responsibilities and pricing section.

KPI bonuses (post campaign)

The current KPIs are structured on a per-season basis. For the MAGA campaign to succeed season after season, TVL and inflows per dollar of incentives must continue to grow at the same rate (or faster), while trade efficiency remains stable. As a result, KPIs measuring TVL stickiness can only be assessed after the campaign’s official end date.

That said, we have no objections to adjusting Season 3 KPIs to include a lookback period. The updated tables below reflect this change, outlining KPIs for each season individually. We’ve opted for a 3-month lookback instead of 6 months, considering the external factors that could impact a longer timeframe.

Season 1 KPIs Threshold 1 Threshold 1 bonus Threshold 2 Threshold 2 bonus Threshold 3 Threshold 3 bonus Threshold 4 Threshold 4 bonus
KPI 1 ; Increase in TVS $100M 6.66k ARB $200M 16.66K ARB $300M 30K ARB $400M 41.66K ARB
KPI 2 ; Increase in DeFi TVL $100M 6.66k ARB $200M 16.66K ARB $300M 30K ARB $400M 41.66K ARB
KPI 3 ; Trade efficiency 3 out of 12 weeks 6.66k ARB 5 out of 12 weeks 16.66K ARB 7 out of 12 weeks 30K ARB 9 out of 12 weeks 41.66K ARB
KPI 4 ; Inflows per $ of incentives $10 6.66k ARB $20 16.66K ARB $30 30K ARB $40 41.66K ARB
Season 2 KPIs Threshold 1 Threshold 1 bonus Threshold 2 Threshold 2 bonus Threshold 3 Threshold 3 bonus Threshold 4 Threshold 4 bonus
KPI 1 ; Increase in TVS $100M 6.66k ARB $200M 16.66K ARB $300M 30K ARB $400M 41.66K ARB
KPI 2 ; Increase in DeFi TVL $100M 6.66k ARB $200M 16.66K ARB $300M 30K ARB $400M 41.66K ARB
KPI 3 ; Trade efficiency 3 out of 12 weeks 6.66k ARB 5 out of 12 weeks 16.66K ARB 7 out of 12 weeks 30K ARB 9 out of 12 weeks 41.66K ARB
KPI 4 ; Inflows per $ of incentives $10 6.66k ARB $20 16.66K ARB $30 30K ARB $40 41.66K ARB
Season 3 KPIs Threshold 1 Threshold 1 bonus Threshold 2 Threshold 2 bonus Threshold 3 Threshold 3 bonus Threshold 4 Threshold 4 bonus
KPI 1; Increase in TVS (3M post campaign) $100M 10k ARB $200M 20K ARB $300M 35K ARB $400M 50K ARB
KPI 2 ; Increase in DeFi TVL (3M post campaign) $100M 10k ARB $200M 20K ARB $300M 35K ARB $400M 50K ARB
KPI 3 ; Trade efficiency 3 out of 12 weeks 3.33k ARB 5 out of 12 weeks 13.33K ARB 7 out of 12 weeks 25K ARB 9 out of 12 weeks 33.33K ARB
KPI 4 ; Inflows per $ of incentives $10 3.33k ARB $20 13.33k ARB $30 25K ARB $40 33.33K ARB

The core objective of the program is to optimize each two-week cycle, ensuring that protocol allocations are as efficient as possible based on the KPIs outlined in the proposal.

The initial distribution across verticals is informed by insights from past initiatives, particularly the zkSync Ignite program. Allocations will be prioritized based on TVL inflow efficiency relative to rewards distributed:

  • Lending & Borrowing Protocols – Majority allocation
  • DEXs – Secondary allocation
  • Perpetual Protocols – Remaining allocation

This structure ensures that incentives are directed where they drive the highest impact, maximizing capital efficiency across the ecosystem.

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(https://dune.com/jumper_exchange/zksync-ignite)

Predicting post-campaign liquidity and user retention is challenging, as outcomes heavily depend on market conditions at the time and post campaign.

However, based on internal data from past campaigns with Mode and Sei, we observed that around 50-60% of the liquidity and ~60% of the users were retained in the following 4-12 weeks following the campaigns.

Although this is what our data shows, these figures should be interpreted cautiously, as:

  • Mode and Sei are not comparable to Arbitrum in terms of DeFi depth and opportunities
  • These were much smaller and shorter ecosystem campaigns with less user behaviour changes
  • No loyalty mechanisms were implemented in those campaigns

Given Arbitrum’s larger ecosystem and enhanced retention strategies, we expect much higher stickiness in the MAGA campaign.

The Optimism Superfest was a successful campaign, attracting $98M in TVL into incentivized pools. However the incentive budget of 1.5M OP was not suitable to drive long term strategic liquidity orchestration and would not be suitable for the MAGA campaign. The goal of the Optimism Superfest was to showcase the Optimism Superchain ecosystem across 35+ protocols and four chains. While APRs remained above market rates, deep liquidity pools were not established, limiting long-term trading efficiency and preventing users from adopting a “home chain.”

The MAGA campaign has a clear goal: re-establishing Arbitrum as the most efficient hub for traders, lenders, borrowers, and liquidity providers. To achieve this goal we believe a maximum allocation of 60M ARB will provide us enough incentive firepower to attract the required institutional and retail liquidity that will be required to achieve this goal. Liquidity providers, especially large ones, tend to be sticky and reluctant to move for short-term APR fluctuations and in order to convert them to Arbitrum loyal users we must consistently offer above-market rates in the initial phases of the campaign. Over time, as user behaviour shifts, we can transition to a more sustainable incentive model, using each two-week iteration cycle to optimize allocations across pools, assets, and protocols.

The 20M ARB budget represents the maximum allocation available for the MAGA campaign per season. Although it will be budgeted for, spending the full 20M ARB per season is not the objective—As it is impossible to accurately forecast liquidity flows, we will adjust incentives per epoch based on liquidity flows and organic APR growth to ensure the most effective use of the incentive budget. We expect the incentives required to attract liquidity to actually be front loaded, with a reduction of incentives possible as organic APRs rise, lowering the overall costs for the DAO while maintaining ecosystem efficiency.

Campaign success has been outlined via two different sets of KPIs:

KPIs on a pool/protocol basis:

Goal 1 - Improved trading efficiency on stable and bluechip volatile asset pairs

  • Arbitrum to achieve the highest trading efficiency for trades over $100k on USDC-USDT, ETH-USDC, and WBTC-USDC pairs compared to all major L2s, as measured through major DEX aggregators (Odos, 1inch, Kyberswap) and verifiable through Dune’s dex_aggregator table.

Goal 2 - Increase in overall TVL

  • Ensure more than $10 of TVL per $1 of incentives into incentivised pools
  • Maintain over 50% utilisation rate incentivised pools on money markets (Aave, Fluid, Silo, Dolomite)

Goal 3 - Increase trading volumes across spot and perp DEXs

  • Arbitrum to achieve the highest overall chain volume compared to all major chains (excluding Ethereum Mainnet and Solana) as measured by DeFi Llama
  • Arbitrum to be the top EVM chain in terms of perp volume as measured by DeFi Llama (excluding Hyperliquid)

KPI bonus section:

  • Arbitrum total TVS - verifiable through L2Beat API
    • $100M = pass
    • $200M - $300M = moderate success
    • $400M+ = huge success
  • Arbitrum Productive or DeFi TVL increase - verifiable through DeFiLlama API
    • $100M = pass
    • $200M - $300M = moderate success
    • $400M+ = huge success
  • Total Amount of inflows in incentivised pools per $1 of incentives - verifiable through Merkl API
    • $10 = pass
    • $20 - $30 = moderate success
    • $40 = huge success
  • Trade efficiency of large trades - (>$100k trades) amongst key trading pairs (ETH-USDC, ETH-WBTC, USDC-USDT) on large DEXes aggregators (Odos, 1inch, Kyberswap)
    • Median highest trade efficiency should be higher than Base, zkSync, Optimism on the above pairs.
      • 3/12 weeks = pass
      • 5-7/12 weeks = moderate success
      • 9/12 weeks = huge success

The success of the campaign will be measured using a combination of absolute and relative metrics, ensuring a comprehensive evaluation across all market conditions. This approach provides the Arbitrum DAO with the most accurate assessment of the campaign’s impact, regardless of external factors.

Yes - The fixed fee is to cover the initial costs associated with the design, integrations, coordination and project management of the MAGA campaign. This includes but is not limited to:

  • Post proposal phase contract creation with the DAO
  • Project management
  • Review and approval of all protocols
  • UI design, hosting and protocol integration
  • Integration of zapping and/or other UX features into the UI
  • Creation of data dashboards
  • Community management
  • Initial marketing design
  • Loyalty system design and engineering
  • Many engineering tasks associated with reward calculations and indexing

Overall the fixed fee is designed to cover some the initial MAGA campaign setup costs for both Jumper and Merkl, with the KPIs being the primary way that we will turn a profit off this campaign.

There will be a 4-week break between each season (added to the change log), during which we will analyze data from the previous season and reassess progress toward each KPI.

However, we believe a longer break (such as 3 months) would negatively impact retention and hinder the behavioral shifts we aim to achieve. Additionally, since initial incentives are front-loaded to attract liquidity, an extended break could undo this progress, requiring a higher incentive spend at the start of the next season just to recover lost momentum.

By keeping seasons relatively close together, we can effectively implement one of the key components of the MAGA campaign: the loyalty system. This system is designed to reward sticky liquidity, encouraging it to remain on Arbitrum between seasons. The multi-season structure reinforces retention and ensures long-term liquidity sustainability.

We believe the opposite approach is necessary. A strong initial incentive push is required to kickstart the flywheel effect, using ARB incentives to attract both professional LPs (potentially through private deals) and retail LPs via above-market APRs. As on-chain activity grows and Arbitrum establishes itself as the most efficient DeFi hub, reliance on ARB incentives will naturally decline, reducing the need for incentives in Season 2 and Season 3. However, since liquidity flows and market conditions are unpredictable, we have budgeted 20M ARB per season to ensure we have the flexibility needed to sustain the campaign’s momentum and success.

Yes the MAGA success committee will be involved in approving the custom frontend design, branding, marketing plan and KOL involvement. These materials will also be made public to the DAO and participating protocols following the design and approval process to facilitate coordinated co-marketing.

Incentive adjustments throughout the campaign are possible via a DAO vote, though we don’t anticipate this being necessary. As previously stated, the ARB incentive budget represents the maximum possible allocation per season, but spending the full amount is not the objective.

Jumper and Merkl will continuously monitor liquidity flows and analyze data from each epoch to forecast future trends. This data will be presented to the MAGA success committee, which will review and approve the incentive budget for each upcoming epoch.

This approach ensures that incentive distribution remains dynamic, adapting to factors such as:

  • ARB price fluctuations
  • TVL growth across incentivized pools
  • Progress toward campaign KPIs

Final approval for each epoch’s incentive budget rests with the MAGA Success Committee, ensuring strategic alignment with the campaign’s overarching goals.

Noted. Thanks CastleCapital. We are aware of the current exercise the DAO is undertaking. However, we want to continue to flesh out the details of the MAGA campaign so that once the SOS is established, we are ready to go ahead with the campaign.

We have excluded Solana from this comparison because our primary focus is to establish Arbitrum as the leading EVM DeFi hub in the short to medium term. Jumper’s unique position in the market allows us to analyze liquidity flows across both EVM and Solana ecosystems. Our data shows that liquidity tends to be sticky within its respective execution environment, with large LPs rarely moving capital between EVM and Solana chains frequently.

Additionally we have observed Solana’s volume differs greatly from EVM chains’ volume structure:

  • The majority of Jupiters transaction volumes fall into the <$10k transactions (55%), while >$100K transactions represents <10% of the volume

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  • On EVM chains we observe the opposite of this: 55-60% for >$100K transactions, while <15% for <$10k transactions

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  • We also observed that Jupiter has more than 10x the amount of transactions than EVM aggregators which have facilitated triple the amount of volume.

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The small data set provided above gives you an idea of the different user base and transaction type we see between Solana and EVM chains. While we acknowledge that Arbitrum competes with Solana in the long run, the MAGA campaign is specifically designed to strengthen Arbitrum’s dominance within the EVM ecosystem. As a result, we have excluded Solana from direct comparisons for this initiative.

Currently, there are no additional incentives specifically for Arbitrum-native protocols within the program. Each protocol will be evaluated based on its individual performance, with top-performing protocols receiving increased incentives, while underperforming ones will see reductions or removals.

That said, we anticipate that Arbitrum-native protocols will have a natural advantage due to:

  • Stronger community engagement → More organic participation and marketing reach
  • Deeper integration within the Arbitrum ecosystem → Increased support from the broader community

This positioning puts Arbitrum-native protocols in a strong position to stand out as top performers throughout the program.

We plan to work with and take guidance from each protocol with how to get the best results from the program and their protocol. We will work with yourselves at GMX and other perp protocols to understand how you would incentivise with the goal of increasing perp volumes and then input this into our models. Ultimately each protocol knows its users and product best so we will be leveraging this knowledge during the design phases.

The DeFi landscape is highly competitive, with numerous L1s and L2s competing for liquidity, users, and attention via incentive programs (Ignite), points programs (Sonic/Scroll), and novel primitives (Berachain). The MAGA campaign is designed to position Arbitrum as the preferred “home chain”, where users conduct the majority of their DeFi activity on trusted, familiar protocols developed throughout the campaign.

Beyond attracting liquidity, MAGA aims to send a clear signal that Arbitrum prioritizes DeFi, its builders, and loyal users. This narrative shift is crucial for:

  • Retaining sticky users who actively engage with the ecosystem
  • Attracting top-tier builders to develop new innovations
  • Re-establishing Arbitrum as the leading DeFi hub

If the strategy proves ineffective, we have built-in safeguards to ensure the DAO does not continue funding an underperforming initiative. Unlike the STIP and LTIPP programs, the MAGA campaign allows for iterative adjustments, providing multiple opportunities to course-correct or phase out the program while minimizing unnecessary costs.

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