# SECTION 1: APPLICANT INFORMATION
Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.
Applicant Name: KESTER WU
Project Name: KTX.Finance
Project Description: KTX.Finance is a pioneering gamified perpetuals trading protocol offering traders the opportunity to trade major cryptocurrency pairs without counterparty risk. KTX makes trading fun and creates friendly environment for new Web 3.0 users.
Team Members and Roles: [List team members and their roles/responsibilities]
| Name | Roles | Responsibility |
|---|---|---|
| Kester Wu | CEO | Strategy, Operations, Product |
| Zheng Nai Jia | Core BE | Smart Contracts |
| Liu Ren Sheng | Core BE | Smart Contracts |
| Chen Lili | Core FE | FE |
| Jonathan Phang | Growth & BD | BD, Community, Marketing |
| Derek Low | Growth & BD | BD, Community, Marketing |
Project Links:
- Website: app.ktx.finance
- Github: GitHub - KTX-finance/KTX-core
- Twitter: https://twitter.com/KTX_finance
Contact Information
Point of Contact:
@KTX.Finance
Point of Contact’s TG handle:
@kesterwu
Twitter:
@picklewillie
Email:
kester@bytetradelab.io
Do you acknowledge that your team will be subject to a KYC requirement?
Yes
# SECTION 2a: Team and Product Information
Provide details on your team’s past and current experience. Any details relating to past projects, recent achievements and any past experience utilizing incentives. Additionally, please provide further details on the state of your product, audience segments, and how you expect incentives to impact the product’s long-term growth and sustainability.
Team experience (Any relevant experience that may be useful in evaluating ability to ship, or execution with grant incentives. Please provide references knowledgeable about past work, where relevant. If you wish to do so privately, indicate that. [Optional, but recommended]):
| Name | Qualifications & Experience |
|---|---|
| Kester Wu | Notable buy and sell-side experience with top-tier financial institutions – Susquehanna International Group, Allianz, Koru Partners. In-depth deal analysis experience ranging from equity and debt structuring, financial modelling and fundraising. Involved in multiple high-profile IPOs. BBA, Bachelors of Business Administration (Finance), NUS |
| Naijia Zheng | 8 years experience in software engineering – Tech Lead of Google Search & Assistant. Google Tech Impact Award winner. Founding Engineer of Igloo, a billion dollar valuation Fintech company. Software Engineer of SEA Group. BEng, Computer Engineering, NUS |
| Rensheng Liu | 8 years experience in software engineering – SEA Group, Igloo. Co-founded LoLo, a social discovery app for hidden-gem experiences. Developed Fission Chain, a 10,000 TPS POS network. BEng, Computer Engineering, NUS |
| Chen Lili | 6 years experience in software engineering – Mozat, Igloo, Shopee. Masters, Management of Technology, NUS. BEng, Computer Engineering, Sun Yat-sen University |
| Jonathan Phang | Decade-long project management experience in Oil & Gas. Angel / Advisor to several Web 2.0 businesses ranging from healthcare, financial services and health & fitness. Passionate about DeFi & Trading. Founded a GameFi guild building connections with communities across SEA. BEng, Bachelors of Mechanical Engineering, NUS |
| Derek Low | Extensive experience with SEA sell-side & buy-side advisory in elite boutique investment banks such as Evercore Asia and DNB Asia. Also involved in numerous late-stage fundraising for SEA unicorns. BBA, Bachelors of Business Administration (Finance), NUS |
KTX.Finance is also incubated by ByteTrade Lab.
ByteTrade Lab, headquartered in Singapore, raised 50 million USD Series A financing in June 2022 from investors such as Susquehanna International Group (SIG) Asia Venture Capital Fund, INCE Capital, BAI Capital, Sky9 Capital, BlueRun, and PCG. They are committed to creating a decentralized Internet that gives individuals ownership and control over their financial and daily Internet data.
What novelty or innovation does your product bring to Arbitrum?
KTX aims to lead as the premier gaming platform on the Arbitrum Network, distinguishing itself with a gamified trading approach. Users earn Arcade Points by actively engaging in the protocol, including trading, staking KTC, and depositing in KLP. These points grant access to thrilling blind boxes and lottery events, with more games in the pipeline. Our innovative gaming features drive superior user engagement compared to traditional perpetual exchanges.
Our commitment to innovation means we’re continually introducing fresh, unprecedented games to captivate our audience. By transforming trading into an enjoyable experience, we’re poised to attract and retain the next wave of Web 3.0 users.
Moreover, our strategic location in Southeast Asia positions us to seize the emerging market of Web 3.0 users in the region. Countries like Vietnam, Indonesia, and the Philippines have witnessed substantial cryptocurrency growth over the past five years, particularly for practical use cases such as remittance. With centralized entities like Binance exiting certain markets, KTX is primed to capture and convert these users to decentralized applications, catalyzing growth for the entire space.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes. Similar to many other perp dexs, KTX is highly composable and is easily integrable with other projects on the Arbitrum network.
Just three weeks after launch, KTX has successfully integrated with 2 other protocols namely, Vaultka & ZkBridge. The integration with Vaultka created more than USD 200k in TVL. You can view the statistics on the Vaultka vault here.
With the help of the Offchain Labs partnership team, we are already in contact with project teams in multiple sectors including but not limited to: Money Markets, Aggregators, DEXs, DAOs and Vaults.
We expect to integrate with at least 2 more projects in 2Q2024.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
GMX, HMX, Vela
How do you measure and think about retention internally? (metrics, target KPIs)
Retention can be broken down into multiple categories for KTX. Majority of data are available for public viewing on our statistics page. We recently published a Dune Dashboard with several CT influencers for public querying.
- User Breakdowns
- New Users = First Contract Interaction on KTX (Trading, KLP, Staking KTC)
- Daily Active Users = New Users + Existing Users
- Unique Users = Traders + LPs
- Trading Activity
- Daily/Weekly Average/Monthly Average Trading Volume
- Daily/Weekly Average/Monthly Average Open Interest
- Daily/Weekly Average/Monthly Average Protocol Fees
- Liquidity
- AUM or Total Value Locked (TVL)
- AUM Daily Usage
On a weekly basis, we tally these data points to provide us with a holistic view of the protocol and help us assess the efficacy of marketing campaigns and new protocol features. At the same time, we gather feedback from users on Discord to better understand how we can improve the protocol and tailor the product roadmap accordingly.
Relevant usage metrics - Please refer to the OBL relevant metrics chart . For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:
| Category | Relevant Metrics |
|---|---|
| General | All general metrics in the OBL relevant metrics chart are relevant. These metrics include: Daily Active Users, Daily User Growth, Daily Transaction Count, Daily Protocol Fee, Daily Transaction Fees, Daily ARB expenditure & User Claims and Incetivised User List & Gini Coefficient. |
| Perpetuals | Most metrics for perpetuals are relevant to KTX. These metrics include: TVL, Trading Volume, Open Interest, List of Traders, List of Liquidity Providers, Trader Net P&L and Liquidations. |
| Gambling (in the future) | Most metrics for gambling could be relevant to KTX in the near future. These metrics include: TVL and In-game betting volume. |
We are still in the midst of building out our data pipeline for some of the data points, however, majority are covered in our statistics page and more comprehensive view of our data can be viewed at our Dune Dashboard. Some of these data points like Daily ARB expenditure & User Claims and Incetivised User List & Gini Coefficient will be retrospective and collected as we start distributing the incentives.
Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan: [Yes/No]
Yes
Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant):
No
# SECTION 2b: PROTOCOL DETAILS
Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.
Is the protocol native to Arbitrum?: [Yes/No, and provide explanation]
No
On what other networks is the protocol deployed?: [Yes/No, and provide chains]
- BNB Chain
- Mantle Network
What date did you deploy on Arbitrum mainnet?: [Date + transaction ID. If not yet live on mainnet, explain why.]
Date: 15 Jan 2024
Vault: Arbitrum Transaction Hash (Txhash) Details | Arbiscan
KTX: Arbitrum Transaction Hash (Txhash) Details | Arbiscan
KLP: Arbitrum Transaction Hash (Txhash) Details | Arbiscan
Do you have a native token?: [Yes/No/Planned, link tokenomics docs]
Yes. KTC - KTX.Finance
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
KTX conducted a Trade & Earn campaign on Mantle Network lasting a month from 23rd Nov to 21st Dec 2023. Relevant data points can be found on our statistics page.
However, summarizing the results in this post, we noticed the number of weekly active users grew from ~900 to 2,000 and weekly trading volume grew from ~53mn to ~105mn in the first two weeks of the competition.
In the third week of the competition, the number of weekly active users grew to ~2,400 with a weekly trading volume of ~59mn. Finally, in the last week of the competition, the number of weekly active users fell to ~1,600 with a weekly trading volume of ~128mn.
Aside from our Trade & Earn event on Mantle, some other campaigns we organized include:
(1) “Mantle Moonshot Airdrop” to reward new and existing users on Mantle
(2) “Genesis Airdrop” to reward our earliest users and supporters on BNB Chain
(3) 3 Trading Competitions on BNB Chain to reward our loyal traders shortly after our inception
Lessons learnt were that trading competitions typically hold traction for a maximum of 2 weeks and significant marketing efforts need to be spent in order to maintain volumes.
Current Incentivization: How are you currently incentivizing your protocol?
Apart from regular campaigns/trading competitions, KTX users are incentivised to use the protocol via several means:
- Mini Games on Rewards Page
- KTC Staking Fee Rebates (exclusively on Arbitrum for now)
- esKTC Emissions
These incentivization schemes are arranged from short term to long term. In the short term, traders are incentivised daily to interact with KTX to accumulate Arcade Points. These points grant access to thrilling blind boxes and lottery events, with more games in the pipeline.
On the other hand, KTC staking fee rebates are weekly trading volume rebates given to KTC stakers. Lastly, esKTC emissions tend to align users long term interests with the protocol by allowing them to accumulate for KTC tokens over time.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program? [yes/no, please provide any details around how the funds were allocated and any relevant results/learnings(Note: this does NOT disqualify an applicant)]
No
Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]
Hatched in the aftermath of FTX in 2022, KTX concluded its seed round financing in May 2023, with Hashed leading the investment round. Seven months later, KTX has made significant strides, boasting a total trading volume nearing USD 3 billion and a Total Value Locked (TVL) approaching USD 10 million.
On a deeper level, we are observing ~200 daily active users on the protocol and accumulated more than USD 2.6mn in fees. For the sake of convenience we will be attaching screenshots of the statistics here. All of these statistics can be viewed on our statistics page / Dune Dashboard. If you prefer to view the data in a table format, you can view them here.
The inaugural introduction of our mini games began with the KTX Blindbox. To date, our Blindbox has garnered widespread popularity across multiple networks, with users on the Mantle network opening over 165,000 blindboxes and KTX distributing more than USD 166,000 in prizes. We have successfully launched this mini game on Arbitrum, witnessing promising traction with over 3,000 blindboxes opened and more than USD 5,000 distributed in prizes.
As of 26 Feb 2024:
- 30D Average Daily Active Users: 150
- 30D Average Daily New Users: 50
- 30D Daily Average Protocol Fees: 18k
- TVL: USD 9.5mn
- 30D Average Daily Trading Volume (Arbitrum Only): USD 5mn
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application. Include tangible milestones over the next 12 months.]
For the remainder of 1Q2024, our protocol’s focus is on expanding our user base on the Arbitrum network through a series of targeted campaigns. Additionally, we aim to foster community engagement by initiating community-exclusive special campaigns and exploring the creation of our own NFT series.
Moving into 2Q2024, our focus shifts to enhancing the gamified trading experience on KTX. We plan to introduce a minimum of two additional games during the quarter, enriching the platform’s entertainment offerings. Furthermore, we intend to upgrade the trading experience by implementing two key features. Firstly, we aim to enhance our TradingView interface, enabling traders to monitor and adjust their positions directly on the chart. Secondly, we plan to integrate Price Alert Bots, allowing users to receive real-time position updates via Telegram or email, enhancing their trading efficiency and convenience.
In 3Q2024, our focus remains on expanding our mini games repertoire by introducing a minimum of two additional games throughout the quarter. Additionally, we will continue to enhance the trading experience by integrating with account abstraction wallets, enabling users to execute multiple transactions without the need to individually sign each one.
Looking ahead to 4Q2024 and 1Q2025, we are considering significant upgrades to our trading engine. Specifically, we are exploring the possibility of transitioning to a hybrid model that combines elements of both physical settlement and cash settlement. This upgrade aims to accommodate a wider range of trading pairs and enhance the capital efficiency of liquidity providers (LPs), ensuring the continued growth and development of our platform.
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.]
Security Audit Link. As of now, we do not have a bug bounty available. However, we are planning to work with protocols like Secure3 for a community bug bounty program.
No changes to the contracts have been made since the last audit.
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: [Enter Amount of ARB Requested]
500,000 ARB
Justification for the size of the grant : [Enter explanation. More details are better, including how you arrived at the required funding for individual categories of expenses covered by your grant plan]
-
Increase the total trading volume on KTX
Achieving a daily trading volume of 5 million with 500 transactions per day, we are aiming for a substantial increase to 30 million in daily trading volume and 3,000 daily transactions. To realize this objective, we intend to introduce fee rebates for our users. These rebates will effectively reduce trading costs, thereby incentivizing new users to commence trading while encouraging existing users to boost their trading activity. This strategy is expected to fuel the growth of our platform and contribute to the attainment of our ambitious targets.
Currently, we are applying a fixed fee of 0.05% of transaction volume to each trade. We are aiming to reduce trading fees to 0.02% of transaction volume with the LTIPP incentives. To achieve this at a target of 30mn daily volume we would require:USD Equivalent = (30mn * 0.02%) * 365 * 12/52 = 505K
ARB Equivalent = 505K / 2 = 252.5KAchieving this level of volume and transactions on the platform should also serve to greatly increase users. These newly acquired users, if retained, are likely to continue pushing volume and driving fees on the platform for LPs.
Since 70% of fees will be allocated to LPs of the KLP pool, the KLP pool will experience an increase in APR as such:
KLP APR Increase = Increase in Fees * 0.70 / KLP Supply = 505K * 0.70 / 5 mn = 7.0%
-
Enhanced Incentives for KLP Depositors
At 3mn TVL, KLP on Arbitrum currently has a baseline WETH yield of 8%. With the expected increase in TVL to USD 5mn, we expect baseline WETH yield to fall to 5.5%. With the aforementioned increase in APR of 7.0% across these 12 weeks, our team plans to increase KLP APR for depositors to 40%.KLP Targeted APR = 40% = 5.5% Baseline + 7% Increase Fees + 23% KLP Incentive
USD Equivalent of KLP Incentives = 27.5% * 5mn * 12/52 = 310K
ARB Equivalent of KLP Incentives = 310K / 2 = 155K -
Enhanced Mini Game Rewards
As users earn Arcade Points through active engagement in the protocol, such as trading, staking KTC, and depositing in KLP, increasing the expected value of each Arcade Point in our mini game series will enhance trader and LP retention on Arbitrum. Currently each Arcade Point is worth 0.12 USD, we plan to add 5,500 ARB tokens per week as rewards in the mini games to increase the expected value of each Arcade Point to 0.20 USD. -
Builder Incentives
As KTX becomes more mature in the Arbitrum ecosystem, we would like to encourage more protocols to build atop of the protocol. Protocols like money markets, leveraged yield vaults can apply for the grants with the team and final applications will be put up for vote on Snapshot. We allocated 25,000 ARB (5%) for builder incentives as we expect more of the incentives to be forked out by the team in the form of KTC / USDT.
Grant Matching: [Enter Amount of Matching Funds Provided - If Relevant]
We will be counting users’ participation in LTIPP as part of our Airdrop and the Arbitrum Airdrop will be approximately 250K - 500K KTC tokens. Equivalent to USD 250K - USD 500k. At the same time, we will also be increasing esKTC emissions during the LTIPP period.
Grant Breakdown: [Please provide a high-level overview of the budget breakdown and planned use of funds]
Prior to giving a full breakdown of the grants, i would like to add that all grants will be retrospective and users will only be able to claim their ARB rewards after verifying their identity on Discord, effectively helping to curb sybil attacks. In accordance to OBL Sybil Analysis, we will also work closely with their team and support them with the required data points.
-
Fee Reductions: 50% OR 250,000 ARB Tokens. Our first strategy involves reducing trading fees, aiming to decrease average fees from 0.05% of trading volume to 0.02%. By offering lower and subsidized fees, we aim to incentivize new and existing users from other networks to transition to Arbitrum for their trading activities.
-
Enhanced Incentives for KLP Depositors: 31.25% OR 156,250 ARB Tokens. The liquidity provided by KLP is vital to the functionality of our protocol. To accommodate the anticipated increase in trading volume, we will enhance incentives for KLP depositors. This will ensure that the Total Value Locked (TVL) of KLP grows proportionally to meet the escalating demand for liquidity.
-
Enhanced Mini Game Rewards: 13.75% OR 68,750 ARB Tokens. The focus for the Enhanced Mini Game Rewards would be on retention. This involves boosting the expected value of KTX Mini Game Rewards utilizing ARB tokens. As users earn Arcade Points through other interactions in the protocol, such as Referrals, Staking KTC, and Open Interest, increasing the expected value of each Arcade Point in our mini game series will enhance trader and LP retention on Arbitrum. As witnessed from the fact that we have distributed more than 165,000 blindboxes, many users come back to engage in our mini games. We believe that this would greatly aid with retention and provide users with a gamified experience.
-
Builder Incentives: 5% of 25,000 ARB Tokens. Our second retention strategy focuses on incentivizing new builders to integrate with KTX and encourage them to build atop our platform through the LTIPP program. By supporting other protocols and integrations, such as wallets, on/off ramps, and money markets, we aim to strengthen the ecosystem and enhance composability. For example, protocols like Vaultka that have built atop KTX will be able to apply for the builder incentives and distribute ARB to their users. Protocols that successfully integrate with KTX will make an initial application to the KTX team. Existing integrations can apply on the condition that rewards are used to incentivse users. However, new protocol integrations will be prioritized. Upon finalization of the application, the proposal will be made public to the KTX community and voted upon on Snapshot.
Funding Address: [Enter the specific address where funds will be sent for grant recipients]
0xeade63541de4a271f47bbd398e018009e85dbbff, MPCWallet - using MPCVault
Funding Address Characteristics: [Enter details on the status of the address; the eligible address must be a 2/3, 3/5 or similar setup multisig with unique signers and private keys securely stored (or an equivalent custody setup that is clearly stated). The multisig must be able to accept and interact with ERC-721s in order to accept the funding stream.
- MPC Wallet
- 3 signers
Treasury Address: [Please list out ALL DAO wallets that hold ANY DAO funds]
| Wallet Address | Description |
|---|---|
| 0x91FfBA7E6E40faf640a8F3Ab611B40ee6BFa95A4 | Mantle/Arbitrum Multi-sig |
| 0x3f3857615b5c588a5e5dd3f789026dd3612b0fda | BNB Chain Multi-Sig |
| 0x8f47a4d442b3c896c534ef3ad04ce975b23e980c | KTX Foundation Multi-Sig 1 |
| 0xb9ac6932362d746b6c8b7aab5334adbeb6445848 | KTX Foundation Multi-Sig 2 |
| 0x1b1800acef2e7dd1d7082c4fbfbe6c294e0dd3df | KTX Foundation Multi-Sig 3 |
| 0xe502594e997e7f0621bd7bcac0fbbb44ad946cc6 | KTX Foundation Multi-Sig 4 |
| 0x925ae8ae6342ed0a9cfea171b5cbce431b778ffd | KTX Foundation Multi-Sig 5 |
| 0x4adb418dbc1a24320a128f331cd7521fabf731c3 | KTX Foundation Multi-Sig 6 |
Contract Address: [Enter any specific address that will be used to disburse funds for grant recipients]
Contract Addresses for grant recipients will be updated alongside the execution timeline.
# 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]
KTX will have a total of 4 primary objectives as a participant of the LTIPP:
-
Boosting user metrics:
- Within a month of launching on Arbitrum, KTX.Finance has attracted over 2,800 total users, with 150 new users joining daily and 200 daily active users. Considering the early stage of development, KTX.Finance aims to further accelerate user acquisition and engagement through the implementation of LTIPP. Notably, other perpetual DEXs experienced a ~31% and ~411% increase in daily active users from similar incentive programs (STIP and STIP backfund).
- KTX is setting an ambitious goals of increasing daily new users to 300 and daily active users to 600, indicative of a 200% growth trajectory for both categories.
-
Attract new liquidity and retain them:
- Within a month of launching on Arbitrum, KTX.Finance has garnered USD 3 million in Total Value Locked (TVL). Considering the early stage of development, KTX.Finance aims to further amplify TVL through the implementation of LTIPP. We noted that other perpetual DEXs experienced a ~15% and ~54% increase in TVL from similar incentive programs (STIP and STIP backfund).
- We are setting an ambitious goal of increasing TVL to USD 5 million, indicative of a 67% growth trajectory.
-
Attract new traders and retain trading volume:
- Within a month of launching on Arbitrum, KTX.Finance has achieved USD 120 million in trading volume with daily volumes of approximately USD 5 million. Considering the early stage of development, KTX.Finance aims to further amplify trading volume through the implementation of LTIPP. We noted that other perpetual DEXs experienced a ~70% and ~161% increase in TVL from similar incentive programs (STIP and STIP backfund).
- We are setting an ambitious goal of increasing 30-day average daily trading volume to USD 15 million, indicative of a 300% growth trajectory.
-
Encourage cross-chain activity:
- After seven months of operation, KTX.Finance has established its presence across three blockchain networks, including Arbitrum. The team emphasizes that chain usage is not mutually exclusive but complementary, leveraging the unique strengths of each chain.
- In line with this multi-chain strategy, KTX.Finance aims to incentivize its extensive user base of over 24,000 users to actively participate in exclusive campaigns hosted 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.]
KTX’s execution strategy encompasses four key categories, with a focus on both user acquisition and retention:
User Acquisition Strategies:
- Fee Reduction: Our first strategy involves reducing trading fees, aiming to decrease average fees from 0.05% of trading volume to 0.02%. By offering lower and subsidized fees, we aim to incentivize KTX users from other networks to transition to Arbitrum for their trading activities.
- Enhanced Incentives for KLP Depositors: The liquidity provided by KLP is vital to the functionality of our protocol. To accommodate the anticipated increase in trading volume, we will enhance incentives for KLP depositors. This will ensure that the Total Value Locked (TVL) of KLP grows proportionally to meet the escalating demand for liquidity.
User Retention Strategies:
- Enhanced KTX Mini Game Rewards: Our first retention strategy involves boosting the expected value of KTX Mini Game Rewards utilizing ARB tokens. As users earn Arcade Points through active engagement in the protocol, such as trading, staking KTC, and depositing in KLP, increasing the expected value of each Arcade Point in our mini game series will enhance trader and LP retention on Arbitrum.
- LTIPP Program for Builder Incentives: Our second retention strategy focuses on incentivizing new builders to integrate with KTX and encourage them to build atop our platform through the LTIPP program. By supporting other protocols and integrations, such as wallets, on/off ramps, and money markets, we aim to strengthen the ecosystem and enhance composability.
Expected Flywheel:
The expected flywheel for the execution strategy is as such:
- Incentivize fee rebates when traders reach a certain trading volume threshold (X volume). This encourages higher cumulative trading volume per user, leading to an overall increase in trading volume.
- Incentivize higher Annual Percentage Rate (APR) for KLP depositors. This attracts new liquidity providers (LPs), resulting in an increase in Total Value Locked (TVL). As TVL grows, liquidity increases until it reaches an equilibrium point based on the previous TVL/APR ratio.
- Encourage greater user interaction with KTX, leads to the accumulation of more Arcade points. These points can then be used to participate in a wider array of KTX Arcade games. By enhancing the expected value of KTX mini games, user retention is boosted, resulting in higher retention rates over time.
- Incentivizing projects to integrate with KTX fosters greater composability, enriching the user experience and promoting the flourishing of the entire ecosystem.
A summary of our execution strategy can be found here:
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]
- Enhanced KTX Mini Game Rewards: Our first retention strategy involves boosting the expected value of KTX Mini Game Rewards utilizing ARB tokens. As users earn Arcade Points through active engagement in the protocol, such as trading, staking KTC, and depositing in KLP, increasing the expected value of each Arcade Point in our mini game series will enhance trader and LP retention on Arbitrum.
- LTIPP Program for Builder Incentives: Our second retention strategy focuses on incentivizing new builders to integrate with KTX and encourage them to build atop our platform through the LTIPP program. By supporting other protocols and integrations, such as wallets, on/off ramps, and money markets, we aim to strengthen the ecosystem and enhance composability.
- Retention Flywheel: Apart from incentives from the LTIPP, KTX is constantly innovating with the objectives to provide traders with a better trading experience through UIUX upgrades and the inclusion of more games to improve retention. With improved trader retention, KLP APR remains elevated which promotes the retention of LPs.
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.]
The KPIs used to measure success in achieving the grant objectives are designed to be specific, measurable and relevant to the LTIPP. We split our KPIs into 4 different categories as shown below:
- User Metrics
- TVL Metrics
- Trading Volume Metrics
- Other Metrics
| User Metrics | Objective | Definition | Calculation |
|---|---|---|---|
| New users from other networks | Acquisition | Existing users of KTX from other blockchains interacting with KTX on Arbitrum. | Users that previously interacted with KTX on Mantle OR BSC & interacted with KTX on Arbitrum / Total KTX Users |
| New KTX Users from Arbitrum | Acquisition | New interaction with KTX (deposit KLP / margin trade / spot swap / stake KTC) that have previously interacted with other Arbitrum protocols (GMX, GNS, MUX etc…) | COUNTIFS( New KTX Interaction & other protocol interactions) |
| Retained new users from other networks | Retention | Existing users of KTX from other blockchains continue interacting with KTX and other protocols on Arbitrum 30 days after incentive period ends | Retained new users from other networks / New users from other networks |
| TVL Metrics | Objective | Definition | Calculation |
| New KLP Liquidity | Acquisition | Increase in TVL on KTX during the incentive period | Week on Week TVL % increase |
| Retained KLP Liquidity | Retention | Increase in TVL on KTX 90 days after the incentive period | (TVL 90 days after incentive period / TVL before incentive period) -1 |
| Trading Volume Metrics | Objective | Definition | Calculation |
| Increase in daily trading volume | Acquisition | New trading volume added to the Arbitrum ecosystem during the incentive period | Weekly Trading Volume |
| Retention in daily trading volume | Retention | 30-day average daily trading volume added to arbitrum ecosystem after the incentive period | 30 day average trading volume |
| Other Metrics | Objective | Definition | Calculation |
| New Sequencer Fees from KTX | Acquisition | Additional sequencer fees generated from KTX contracts during the incentive period | Weekly Sequencer Fees during incentive period - Weekly Sequencer Fees before incentive period |
| Increase in Sequencer Fees | Retention | Additional sequencer fees generated from KTX contracts 90 days after the incentive period | Weekly Sequencer Fees 90 days after the incentive period - Weekly Sequencer Fees before incentive period |
| % of ARB grant restaked into KLP | Retention | $ARB added to KLP during and after the incentive period | Snapshot of $ARB weekly balances in KLP |
Grant Timeline and Milestones: [Describe the timeline for the grant, including ideal milestones with respective KPIs. Include at least one milestone that shows progress en route to a final outcome. Please justify the feasibility of these milestones.]
The ARB grant will start being distributed within 7 days of the receipt of the first payment. The program will continue during the 12-week incentive period. The multisig used at the funding address mentioned above is operational and can act quickly.
The allocated grant will be equally divided into 12 epochs (an epoch lasts one week starting and ending on Monday 0000H GMT+8). Grants will be distributed at the end of every epoch and available for claiming till the second epoch. Necessary steps will be taken to remind stakeholders to claim their ARB rewards to prevent gaps in emissions. Grant categories will include:
1. Trading Fee Rebates (50%)
2. KLP Liquidity Incentives (31.25%)
3. KTX Campaigns (13.75%)
4. KTX Builder Incentives (5%)
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem? [Clearly explain how the inputs of your program justify the expected benefits to the DAO. Be very clear and tangible, and you must back up your claims with data]
In just a month since its launch on Arbitrum, KTX.Finance has shown remarkable growth, attracting over 2,800 users, achieving USD 3 million in Total Value Locked (TVL), and reaching a trading volume of USD 120 million. With ambitious targets aiming for a 200% increase in users, TVL, and trading volume, we are poised to significantly contribute to ecosystem growth. Implementing the LTIPP incentive program, we aim not only to attract new users and liquidity but also to foster engagement and retention, drawing inspiration from successful strategies observed in similar projects. Additionally, we emphasize the importance of cross-chain activity, promoting multi-chain usage to leverage the strengths of different networks and incentivizing our extensive user base to actively participate in exclusive campaigns on Arbitrum, thereby further enhancing ecosystem development and expansion.
Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream? [Yes/No]
Yes
# SECTION 5: Data and Reporting
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL . Along with this list, please answer the following:
Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered?
Yes
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. We recently released a Dune Dashboard in collaboration with several CT KOLs. However, the KTX team will fork a version under the team account. Subsequently, data points in regards to KPIs will be submitted via the KTX.Finance Arbitrum Forum Account.
*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.)
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