SECTION 2b: PROTOCOL DETAILS
Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.
Is the protocol native to Arbitrum?: [Yes/No, and provide explanation]
The protocol is native to Ethereum. However, we are have launched native restaking with several partners incl. Connext, Router to implement on Arbitrum.
On what other networks is the protocol deployed?:
The protocol is currently active on Ethereum, Arbitrum, Polygon zkEVM etc.
What date did you deploy on Arbitrum mainnet?: [Date + transaction ID. If not yet live on mainnet, explain why.]
$96Mn+ (26.8K) rsETH on Arbitrum - Token Page
February 6th, 2024: Arbitrum Transaction Hash (Txhash) Details | Arbiscan
First Txn - Link
Do you have a native token?:
No, we don’t have a native token yet, however we will have a TGE soon.
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
- We have previously focused our efforts on Liquidity Pools on mainnet. We’ve incentivized on Uniswap, Balancer and Curve. We have over $15 Mn liquidity on LPs currently on mainnet.
Current Incentivization: How are you currently incentivizing your protocol?
KelpDAO currently incentivises multiple DeFi opportunities for liquid restakers across protocols such as Pendle, Curve, Penpie across Ethereum and Arbitrum. Incentives are primarily either in Kelp miles or stable coins. Partners like Camelot and Ramses have given additional incentives on top of KelpDAO incentives.
1. Current Incentives on Arbitrum
-
DeFi incentives
-
Pendle pool for rsETH
- Bribe - $2K worth stablecoins on Penpie & Equilibria weekly
- TVL achieved - $43 Mn TVL
-
- Only boosting with Kelp miles for now
- TVL achieved - $1.5 Mn TVL in total
-
2. Current DeFi opportunities on Ethereum:
- Pendle - $110 Mn, $1K Bribe on Penpie weekly
- Balancer - $7 Mn
- Curve - $4.5 Mn
- Maverick - $0.5 Mn
- Vaultcraft - $3.3 Mn
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
No
Protocol Performance:
Current TVL : $700 Million+
ETH restaked: 190,224
Current active users: 25,529
Performance so far on Arbitrum:
- Total of 26.8K rsETH TVL on Arbitrum over the last 40 days
- 1.28K rsETH holders on Arbitrum
- 44K transactions including DeFi and wallet-to-wallet over the last 40 days
- 35.6K transactions on Pendle Arbitrum pool - Arbiscanner link
- Over $38Mn worth rsETH deployed in LPs on Arbitrum across Pendle, Ramses and Camelot
- Potential DeFi Partnerships: Poolside, Aave and more DEX and Lending Borrowing protocols
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application. Include tangible milestones over the next 12 months.]
Here’s our plan for 2024 -
Arbitrum specific roadmap for Q1 -
- Native Restaking on Arbitrum while leveraging partnerships with Stake-ease, Connext and Portals (Live now)
- Deep liquidity across major DeXs on Arbitrum
- Lending Market integrations on Arbitrum
- Wallet partnerships across Ledger, Exodus, Imtoken, etc. (Enabling native restaking for users directly across these wallets)
Q1 2024
- DeFi activations for rsETH (Ongoing)
- Launch Native liquid restaking
- Launch withdrawals
Q2 & Q3 2024
- Potential integrations with large lending markets
- Operator and AVS integrations
- Distribution partnerships across wallets, custodians
- Token Launch & Exchange listing (contingent on EigenLayer’s TGE)
Audit History & Security Vendors: [Provide historic audits and audit results. Do you have a bug bounty program? Please provide details around your security implementation including any advisors and vendors.]
Kelp - rsETH has been extensively audited by reputable auditors, including SigmaPrime and Code4rena. The historical audit reports can be found here - Audit reports
Security Incidents: [Has your protocol ever been exploited? If so, please describe what, when and how for ALL incidents as well as the remedies to solve and mitigate for future incidents]
No
SECTION 3: GRANT INFORMATION
Detail the requested grant size, provide an overview of the budget breakdown, specify the funding and contract addresses, and describe any matching funds if relevant.
Requested Grant Size: 250K ARB
Justification for the size of the grant:
The grant will assist in setting up and scaling the restaking opportunities for users in the Arbitrum ecosystem. This will help in developing and incentivising several ecosystem partners (DeXs, CDPs, Lending markets) and help providing sustainable yield sources for restakers on Arbitrum.
Grant Matching:
KelpDAO will initially provide USDC rewards boost and $KELP tokens incentives (upon TGE) for users restaking on Arbitrum. Additional incentives along with the ARB grant will be phased out over 12 weeks.
Grant Breakdown:
| Growth Budget Spending Category | Amount allocated | Expected Incremental $TVL during the Grant timeline | Comments |
|---|---|---|---|
| Bridging Incentives | 20K ARB | $10-$20M rsETH TVL bridged on Arbitrum | Bridging rsETH to Arbitrum is facilitated by offsetting bridging expenses, preferably using batch optimization strategies like Router or Portals, or through direct financial incentives. |
| Incentives for Native restaking | 30K ARB | $20 Mn Native Restaked | Sustainably expanding Native ETH restaking capabilities on Arbitrum. |
| Incentives for DeFi (Growth & Scaling) | 200K ARB | $15M LPs across DeXs & $5M across other Lending Markets | Expanding across DeFi by advancing in liquidity on DeXs, lending markets, Collateralized Debt Positions (CDPs), and Yield Aggregators. |
Funding Address: 0x40FD112387743A6c00D698BeD9014e53db989769
Funding Address Characteristics: Funding address is a ⅔ Multisig with keys held by co-founders - Amitej Gajjala & Dheeraj Borra and Strategy & Finance Team Lead - Aditya Deorukhkar
Treasury Address:
Currently, KelpDAO’s treasury funds are held across the following wallets -
- Kelp 1 - 0xd63b1C354c10577DA97Bf2B62DDE59c7F84941Fa
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Clearly outline the primary objectives of the program and the Key Performance Indicators (KPIs), execution strategy, and milestones used to measure success. This helps reviewers understand what the program aims to achieve and how progress will be assessed.
Objectives: [Clearly state the primary objectives of the grant and what you intend to achieve]
With the grant above, we aim to achieve the following-
- Restaking growth on Arbitrum - With incentives for bridging rsETH from Ethereum and native ETH restaking in Arbitrum, we believe that Arbitrum will be able to sustainably foster growth for restaking in its ecosystem.
- Yield diversification with lower transition cost - Native ETH restaking on Arbitrum will allow users to utilize their canonically bridged ETH to earn incentives from the mainnet + additional incentives on top as $ARB rewards.
- LRT growth across DeFi on Arbitrum - With the added incentives, users will not only be able to earn restaking rewards, they would also be incentivized to deploy their liquidity on DeXs & Lending protocols on Arbitrum.
Execution Strategy: [Describe the plan for executing including token distribution method (e.g. farming, staking, bonds, referral program, etc), what you are incentivizing, resources, products, use of funds, and risk management. This includes allocations for specific pools, eligible assets, products, etc.]
We plan on distributing incentives in a batched manner where they would be set aside weekly for all purposes - bridging, DeFi and restaking. All decisions regarding deployment of incentives is taken by the DAO members and distributed according to TVL, APR and other stats for the respective DeFi opportunity or restaking method.
-
Grant backed Incentives
- Bridging Incentives
- Summary: The Bridging campaign would take place on Galxe / Zealy. It would be helpful in raising information and give incentives to users to deploy their existing rsETH from Ethereum to Arbitrum for higher yields and lower gas costs on Arbitrum
- Funding Mechanism:
- Frequency: We aim at distributing the funds to users to natively restake on Arbitrum on a monthly basis with snapshots and inputs from Galxe/Zealy participation
- Allocation and Criteria: Currently, bridging to Arbitrum from mainnet costs about $100 in fees per transaction. We plan on spending about 20K ARB (~$40K) incentivising about ~400 users at approximately $100 per user. This would incentivise users to bridge their assets without worrying about high gas fees or high chain switching costs, making the decision much easier.
- Bridges incentivised: We would be incentivising users to use KelpDAO’s officially partnered bridges - Stargate Finance and Layer Zero
- Native Restaking Incentives
- Summary: Similar to the Bridging campaign, this will also be done on Galxe / Zealy. It would be helpful in raising information about native restaking in Arbitrum and to reward users to natively restake their ETH during the campaign period
- Funding Mechanism:
- Frequency: We aim at distributing the funds to users to natively restake on Arbitrum on a monthly basis with snapshots and inputs from Galxe/Zealy participation
- Allocation and Criteria: We plan on distributing about 30K ARB (~$60K) as incentives to users to restake their native ETH natively on Arbitrum during the grant timeline.
- Process: Users can native restake their ETH through our Dapp by switching chains to Arbitrum post connection of wallet. We’ll be able to track restakers through our internal data sources + inputs from Galaxe / Zealy
- DeFi incentives
-
LPs-
- Over the course of 12 weeks, we aim at creating an cumulative LP size of at least $15-20 Mn (With half (~$7.5Mn) as rsETH and half filled with another asset) across DeXs
- Keeping about 10% APR to incentivise rsETH liquidity providers, the total cost of incentives estimate about 187.5K ARB ($15M*10%/4)
- This yield would incentivize users to deposit their rsETH, helping establish strong DeFi foundation for rsETH on Arbitrum
- This would be on top of existing incentives of boosted Kelp Miles and EigenLayer points which are accrued by users for participating in restaking.
- Existing and potential DeX partners - Poolside, Ramses and Camelot
- Frequency - Bribes are provided in a weekly, we will be sending rewards out to users weekly (or biweekly as supported by the DeX)
-
Yield Aggregator - Pendle
- We currently bribe about $2K on Pendle through Equilibria and Penpie on Arbitrum
- We hope to incentivise about $1K in ARB additionally on a weekly basis, supporting 30%+ APR for a higher TVL of almost $50+ Mn
- Additional Incentives $1K in ARB weekly would approximately be equal to 6K ARB (~$12K) over the grant timeline
- Frequency - Bribes are provided in a weekly, we will be sending rewards out to users weekly
-
Lending Markets-
- Over the course of the 12 weeks, we aim at establishing lending / borrowing opportunities for rsETH holders. The target size for the Lending pools would be $3-5 Mn
- Potential Lending / Borrowing partnerships insight until Grant timeline begins- Silo, Radiant and Aave
- In order to boost lending & borrowing backed by rsETH, we would provide incentives of about 6.5K ARB (~$13K) to provide an additional 1-2% APR on top of borrowing fees APR and restaking yields.
- Frequency - Bribes are sent to users weekly/biweekly through the lending/borrowing protocols, we will be sending rewards out to users accordingly through the protocol
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric? [Provide relevant design and implementation details]
Kelp aims to stimulate its expansion via collaborations in the DeFi sector, leveraging both conventional methods like Liquidity Pools (LPs) or lending platforms, as well as specialized strategies such as yield trading and the emerging trend of restaking, which has proven to be more enduring and is expected to continue drawing users for a significant time.
By securing lasting yields through strategic alliances with Actively Validated Services (AVSs) and infrastructure providers, Kelp aims to ensure that the capital it attracts remains engaged, thereby contributing to the growth of the Arbitrum ecosystem as well.
Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy. [Please also justify why these specific KPIs will indicate that the grant has met its objective. Distribution of the grant itself should not be one of the KPIs.]
We plan on keeping a tab and posting the following data points on a regular frequency on our public dashboards and forums -
-
TVL: Total Value Locked on KelpDAO by users on Arbitrum. This would show the USD amount and amount of ETH natively restaked and bridged to Arbitrum.
-
Dashboard: We would be building a similar dashboard for tracking TVL inflows and DeFi analytics for rsETH on Arbitrum as the one which is available on mainnet - Dune Dashboard
-
Liquidity Depth: Liquidity Depth for rsETH will be measured by $TVL for rsETH locked across LPs on DeXs.
-
Dashboard: We would build dashboards for rsETH on Dune and provide links to DeX specific dashboards/analytics pages
-
Users: Number of restakers with KelpDAO on Arbitrum and amount of ETH staked respectively
-
Dashboard: We would be building a similar dashboard as the one which is available on mainnet - Dune Dashboard
Grant Timeline and Milestones: [Describe the timeline for the grant, including ideal milestones with respective KPIs.
We aim at achieving the following milestones over the 12 weeks of grant timeline -
- Milestone 1 (End of Week 4): Additional $20M TVL on Arbitrum (including Liquidity on DeFi opportunities + New TVL through Native restaking and Bridging)
- Milestone 2 (End of Week 8): Additional $15M TVL on Arbitrum (including Liquidity on DeFi opportunities + New TVL through Native restaking and Bridging)
- Milestone 3 (End of Week 12): Additional $25M TVL on Arbitrum (including Liquidity on DeFi opportunities + New TVL through Native restaking and Bridging)
Out of the overall $60M mentioned above, $30-40M would be new TVL being bridged or natively restaked and the rest are estimates for liquidity on DeFi opportunities as mentioned in the table above. We believe that by leveraging key partnerships with DeFi protocols and wallets, we are certain that the above mentioned milestones will be achieved while providing sustainable rewards to all users on Arbitrum.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
Restaking represents a pivotal advancement in the crypto landscape, offering substantial value to ecosystem participants. It reduces entry barriers for AVS while enhancing revenue prospects for restakers and node operators. Presently, the ecosystem primarily operates on mainnet, potentially leading to liquidity drainage from Arbitrum to mainnet.
However, mainnet’s high gas costs make it less accessible to retail users. Implementing restaking on Arbitrum signifies significant progress, granting users access to restaking benefits alongside Arbitrum’s advantages like low transaction fees and fast finality.
Kelp aims to pioneer native restaking on Arbitrum, seamlessly integrating with the broader DeFi ecosystem. This initiative incentivizes users to leverage Arbitrum’s benefits and enjoy staking rewards, restaking rewards, and additional perks accruing on the mainnet.
Key DeFi partnerships will be essential in creating a flywheel effect between DeXs, Lending protocols and yield aggregators. Users and the Arbitrum ecosystem would benefit from additional yields, risk diversification, and several DeFi opportunities
Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream? [Yes/No]
Yes
SECTION 5: Data and Reporting
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 26. Along with this list, please answer the following:
Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO?
Yes
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? [Please describe your strategy and capabilities for data/reporting]
Yes
First Offense: In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.
Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.
Third Offense: Funding is halted permanently
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)
Yes
Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?: [Y/N]
Yes