SECTION 1: APPLICANT INFORMATION
Applicant Name: Ken Tran & Sasha Mai
Project Name: KyberSwap (Kyber Network)
Project Description: KyberSwap is a multi chain DEX aggregator and DEX that empowers users with insights and tools to trade and generate yield without intermediaries.
Team Members and Qualifications:
- Co-Founder/CEO: Victor Tran - Victor Tran - People in crypto | IQ.wiki
- Co-Founder: Loi Luu - Loi Luu - People in crypto | IQ.wiki
- CTO: Mike Le
- Head of Research: Dr. Trong Nguyen
- Head of Product: Prakhar Agarwal
- Head of Engineering: Tu Nguyen
- Head of Business Development: Sasha Mai
- Head of Marketing: Imran Mohamad
- Head of Strategy for DAO & Tokenomics: Shane Hong
- Operations Lead: MR
- Business Development Manager (Arbitrum): Ken Tran
- Associate Business Development Manager (Arbitrum): Arsalan Sartaj
Project Links:
- Website: KyberSwap - Trading Smart
- Github: Kyber Network · GitHub
- Twitter: https://twitter.com/KyberNetwork
- Discord: Kyber Network Official
- Link3: kyberswap | Link3.to
- Docs: https://docs.kyberswap.com/
Contact Information:
- TG: @kenkyber, @sashamai
- Twitter: kentran154, mai_defi
- Email: hung.tran@kyber.network, sasha@kyber.network
- Do You Acknowledge That Your Team WIl Be Subject to a KYC Requirement?: Yes
SECTION 2: GRANT INFORMATION
Requested Grant Size: 1,500,000 ARB
We will be applying for the Lighthouse Grant category. This is the recommended tier according to the following metrics:
- Live on Arbitrum for at least 6 months → KyberSwap has been live on Arbitrum for 9+ months
- Meets one of the following criteria:
- $15M Arbitrum Network TVL: KyberSwap Arbitrum TVL is > $17M
- $100M 30D cumulative Volume: KyberSwap Arbitrum 30D volume is > $120M
Grant Matching: 150,000 KNC
Reasoning: KyberSwap initially received 1,158,932 ARB tokens in the first airdrop. To bootstrap liquidity, we have distributed approximately 1.2M KNC and 450K ARB for liquidity mining incentives to over 20 liquidity pools so far. Additionally, we’ve allocated more KNC to pools with other Arbitrum projects, such as Lido wstETH pools and Axelar axlUSDC, axlETH and axl.wstETH pools. This allocation follows a matching ratio of approximately 75% in KNC and 25% in ARB tokens. Taking into account how much more we allocated in our past and ongoing activities, we anticipate to be able to match a 1.5M ARB STIP grant allocation with up to 150,000 KNC.
Grant Breakdown:
| Activity | Percentage | ARB Amount |
|---|---|---|
| Liquidity Mining Incentives | 100% | 1.5M |
Funding Address:
DAO multisig wallet: 0x91c9d4373b077ef8082f468c7c97f2c499e36f5b
Funding Address Characteristics:
2/3 multisig: KyberDAO Contract Addresses - KyberSwap Docs
Contract Addresses:
Distribution Contract Addresses (i.e Farm contracts):
- KS Elastic Dynamic: 0x7D5ba536ab244aAA1EA42aB88428847F25E3E676
- KS Elastic Static (for general): 0xf2BcDf38baA52F6b0C1Db5B025DfFf01Ae1d6dBd
- KS Elastic Static (for Frax): 0x3D6AfE2fB73fFEd2E3dD00c501A174554e147a43
- KS Classic: KS Classic farm contracts depend on the pool incentivized. Currently, we do not have any farms planned for KyberSwap Classic, but in case it happens, we will update the contracts in the forum comments.
Incentivized Contract Addresses (i.e KS Elastic Pools):
- There is a different contract address for each incentivized pool, which is subject to change based on optimization between farm phases; as updating a fee tier means a new pool, and more pools may be added. Please let us know if you need further clarification.
SECTION 3: GRANT OBJECTIVES AND EXECUTION
Objectives:
The primary objective of liquidity incentives is to bootstrap optimized and sustainable liquidity for the most popular pairs and projects on Arbitrum. Simultaneously, we aim to attract a greater number of liquidity provider users to join the Arbitrum ecosystem. This optimized liquidity also plays an important role in enhancing trading volume, given that trading volume scales with TVL. KyberSwap’s liquidity pools are meticulously designed to maximize such volume via capital efficiency, minimized slippage, and competitive rates. Moreover, KyberSwap’s DEX aggregator provides route customization options, enabling further enhancements to trading volume through not only KyberSwap liquidity, but also through all other major DEXs on Arbitrum. Finally, with these incentives, KyberSwap aims to partner with existing Arbitrum projects as well as onboard new projects to Arbitrum.
Key Performance Indicators (KPIs):
TVL: At least ~2x increase in TVL from $17.7M to $35M in 3 months
Reasoning: Currently, the TVL on KyberSwap Arbitrum is at around $17.7M with around $200K in monthly incentives. The STIP grant would be around $1.23m (1.5M ARB @ ARB = 0.82), which will help to significantly boost liquidity bootstrapping activities. Spread over 3 months, that’s about ~$410K in monthly incentives. Based on this amount, we expect the TVL to grow about 2.3x to ~$41M. With a buffer to account for changing market conditions, we expect to reach at least $35M in TVL. The extra KNC matching would add another $108k (150K KNC @ KNC = 0.72) for the 4th month, or spread evenly on top of the ARB over 3 months.
Volume: At least ~1.5x increase in 7D volume from $28M to $42M in 3 months
Reasoning: Currently, KyberSwap Arbitrum gets about $28M in 7D volume. With the added incentives and creation of new pools, KyberSwap aims to increase this to at least $42M in 7D volume.
Liquidity partnerships: At least 5 liquidity partnerships with other projects over the 3 months from mid October 2023 to mid January 2024.
Reasoning: We aim to allocate a portion of the grant to liquidity mining incentives to establish and optimize liquidity for new and existing Arbitrum projects.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
Aligned with the goals of the STIP program to incentivize the use of existing dApps on Arbitrum through increased volume, transactions, users, and liquidity, the STIP grant would enable us to build more optimized liquidity in terms of rates and slippage as well as diverse pairs and fee tiers. This would give more incentive for liquidity provider users to come to KyberSwap on Arbitrum, as well as more options for both new and existing liquidity providers. KyberSwap also has a strong record for optimizing liquidity for partner projects, such as Lido wstETH pools and Axelar axlUSDC, axlETH and axl.wstETH pools. Part of this grant will be allocated to even more partner pools. This will not only enable us to further support existing Arbitrum projects to optimize their liquidity, but also to onboard new partners to the Arbitrum ecosystem via KyberSwap.
Justification for the size of the grant:
KyberSwap has been supporting innovation and growth in the blockchain space since the beginning; and has built a liquidity and trading product portfolio dedicated to the best user experience, igniting a supportive community of DeFi projects and users, many of which are on Arbitrum. Since our expansion to Arbitrum, KyberSwap has become an important player in the ecosystem, highlighting our commitment to the growth of the ecosystem and to enhancing trading and liquidity experiences for the Arbitrum community. For example, KyberSwap has integrated about 20 major Arbitrum DEXs into our DEX aggregator, including GMX, Camelot and Uniswap.
So far, our KyberSwap Elastic AMM has facilitated over $3.07B in volume with over 7,488 unique addresses that provided liquidity and 334,809 unique addresses that traded. To date, we’ve spent 1,197,800 KNC (~$862,416 @ KNC = 0.72) to bootstrap initial liquidity on Arbitrum via liquidity mining, achieving positive results. This would be scaled up with the help of the STIP grant.
Furthermore, we are continuing to establish new partnerships and growth streams for the Arbitrum ecosystem. Not only do our liquidity pools support intra-chain volume, but also inter-chain volume. For example, we’ve incentivized liquidity to support Ethereum to Arbitrum ETH and wstETH bridging/cross-chain swaps together with Axelar, Squid and Lido. KyberSwap’s custom fee tiers and minimized slippage played a key role in this enablement. The STIP grant would further enable us to establish even more strong partnerships that can contribute to the ecosystem.
Execution Strategy:
We plan to allocate and distribute the incentives similar to the following example distribution.
Note: Incentivized pool pairs, fee tiers and allocations subject to change based on optimization between phases. However, the total amount of ARB per month will remain the same at 500K per month over the 3 month period.
| Current farms ARB distribution | % of total | STIP - Month 1 | STIP - Month 2 | STIP - Month 3 | |
|---|---|---|---|---|---|
| USDT-USDC.e | 6,000 | 5.51% | 5.29% | 5.07% | 4.96% |
| — | — | — | — | — | — |
| DAI-USDC.e | 5,000 | 4.59% | 4.41% | 4.22% | 4.13% |
| WBTC-ETH | 8,800 | 8.08% | 7.76% | 7.43% | 7.27% |
| ETH-ARB 0.25% | 12,800 | 11.75% | 11.28% | 10.81% | 10.58% |
| ETH-ARB 1% | 5,400 | 4.96% | 4.76% | 4.56% | 4.46% |
| ETH-ARB 2% | 5,400 | 4.96% | 4.76% | 4.56% | 4.46% |
| ETH-ARB 5% | 3,000 | 2.75% | 2.64% | 2.53% | 2.48% |
| ETH-USDC.e .04% | 18,720 | 17.19% | 16.50% | 15.81% | 15.47% |
| ETH-USDC.e 2% | 2,000 | 1.84% | 1.76% | 1.69% | 1.65% |
| ETH-USDT 0.25% | 3,200 | 2.94% | 2.82% | 2.70% | 2.64% |
| ETH-USDT 1% | 2,400 | 2.20% | 2.12% | 2.03% | 1.98% |
| ARB-USDC.e | 7,000 | 6.43% | 6.17% | 5.91% | 5.78% |
| ARB-USDT 2% | 7,700 | 7.07% | 6.79% | 6.50% | 6.36% |
| ARB-USDT 5% | 4,800 | 4.41% | 4.23% | 4.05% | 3.97% |
| ARB-KNC | 5,400 | 4.96% | 4.76% | 4.56% | 4.46% |
| ETH-GMX | 2,600 | 2.39% | 2.29% | 2.20% | 2.15% |
| LDO-KNC | 2,100 | 1.93% | 1.85% | 1.77% | 1.74% |
| wstETH-KNC | 2,800 | 2.57% | 2.47% | 2.37% | 2.31% |
| LINK-KNC | 1,800 | 1.65% | 1.59% | 1.52% | 1.49% |
| GRAIL-USDC.e | 2,000 | 1.84% | 1.76% | 1.69% | 1.65% |
| New Partner Pool | n/a | n/a | 2% | 2% | 2% |
| New Partner Pool | n/a | n/a | 2% | 2% | 2% |
| New Partner Pool | n/a | n/a | n/a | 2% | 2% |
| New Partner Pool | n/a | n/a | n/a | 2% | 2% |
| New Partner Pool | n/a | n/a | n/a | n/a | 2% |
Approach to sustainable liquidity growth
KyberSwap focuses on sustainable liquidity, and as such, optimizes liquidity pools constantly in a way that can maximize both volume and LP fees so that, over time, LP fees can make up an increasing part of total APR. For example, one of the ways to measure the sustainability of a protocol is such LP fees since LP fees are organic APR, vs farm APR from incentives. Currently, KyberSwap generates some of the most LP fees per TVL for liquidity providers. In the past 24h, KyberSwap on Arbitrum has generated $10.32K in fees for LPs with $17.8M in liquidity. Comparatively, Camelot has generated about $10.5K in fees for LPs with $56M in liquidity. And in KyberSwap’s case, a significant portion (over 50%) of the LP fees generated were on ARB-paired pools, incentivizing more LPs to hold and supply ARB.
Additionally, another aspect of KyberSwap’s focus on sustainable liquidity via organic volume and LP fees is through custom fee tiers. KyberSwap has particularly high fee tier options such as 2% and 5% for some liquidity pools. While lower fee tier pools support general trading volume, these kinds of fee tiers serve another type of volume which is scalable with price volatility. These high fee tier pools further provide organic APR for liquidity providers while not affecting traders. Together, the lower fee and higher fee tier pools work together to support all types of volume demand, balancing out the interests of liquidity providers for APR and the interests of traders for lower rates.
Grant Timeline:
We plan to allocate and distribute the ARB from the STIP grant over a period of 3 months (estimated from mid October 2023 to mid January 2024, as per the program requirements). The start and end date are dependent on when the grant is finally received. The KNC matching can be allocated in the 4th month for smooth transition, or spread evenly across the same 3 months.
Funding Tranches:
500K ARB per month over a period of 3 months (estimated from mid-October 2023 to mid-January 2024, as per the program requirements).
Month 1: 500K ARB - 33.33%
Month 2: 500K ARB - 33.33%
Month 3: 500K ARB - 33.33%
Milestone Descriptions:
| Period | KPIs | Tranche |
|---|---|---|
| Start | n/a | 500K ARB - 33.33% |
| End of Month 1 | At least 60% of the 3-month TVL KPI + at least 70% of the 3-month Volume KPI + 2 additional liquidity partnerships | 500K ARB - 33.33% |
| End of Month 2 | At least 80% of the 3-month TVL KPI + at least 85% of the 3-month volume KPI + 2 additional liquidity partnerships | 500K ARB - 33.33% |
| End of Month 3 | At least 100% of the 3-month TVL KPI + at least 100% of the 3-month volume KPI + 1 additional liquidity partnership | n/a |
3-month KPIs as mentioned in the Key Performance Indicators (KPIs) section:
- TVL: $35M
- 7D Volume: $42M
- New liquidity partnerships: 5
SECTION 5: PROTOCOL DETAILS
Is the Protocol Native to Arbitrum?
No, we deployed to Arbitrum in January 2023. However, we have been one of the earliest DEX and DEX Aggregators on Arbitrum, consistently ranking as one of the top DEXs.
On what other networks is the protocol deployed? Yes
- Ethereum
- Optimism
- Linea
- Polygon POS
- Polygon zkEVM
- zkSync Era
- Base
- BNB
- Avalanche
- Fantom
- BitTorrent
- Cronos
- Aurora
What date did you deploy on Arbitrum?
3 Jan 2023 (Link)
Protocol Performance:
KyberSwap Arbitrum performance stats:
- Current Arbitrum TVL: $17.7M
- All-time Arbitrum volume: $3.08B
- Total spent on Arbitrum farms so far:
- 1.2M KNC (~$860K @ KNC = 0.72)
- 450K ARB (~$369K @ ARB = 0.82))
- Total unique addresses providing liquidity Arbitrum: 7,488
- Total unique addresses trading on Arbitrum: 334,809
- Total aggregator volume on Arbitrum: $717M
General performance stats:
- 60+ DeFi/GameFi Dapp integrations
- Over $20 Billion+ worth of lifetime trading volume
- 400K web visits (average last 3 months - similarweb)
- 616K cumulative lifetime unique addresses on Ethereum (New + Legacy KyberSwap)
- Current total TVL on all KyberSwap pools: $71M+
- Total TVL from aggregated DEXs: $35B+
Protocol Roadmap:
Kyber launched on Ethereum in February 2018 and is a pioneer in the DeFi space, having developed one of the earliest decentralized exchange protocols (DEX) with Vitalik Buterin as an advisor. Kyber was the most used DeFi protocol in 2019 and also helped launch WBTC (Wrapped Bitcoin) - the most popular ERC20 version of Bitcoin.
Today, our flagship product, KyberSwap, is a leading multi-chain DEX aggregator and liquidity platform that aims to provide the best rates for traders, while enabling liquidity providers to get the best returns through capital efficiency and concentrated liquidity. KyberSwap has been deployed on 14 chains including Ethereum, Arbitrum, Polygon, Polygon zkEVM, Optimism, zkSync and Linea; and has facilitated over $20B in trading volume.
Audit History:
KyberSwap Elastic and Classic pools have been audited by ChainSecurity, while KyberDAO & KNC have been audited by Hacken.
KyberSwap Elastic Audit: KyberSwap Elastic - Chainsecurity Smart Contract Audit
KyberSwap Classic Audit: KyberSwap Classic - Chainsecurity Smart Contract Audit
KyberDAO & KNC Audit: Kyber Network audits by Hacken
SECTION 6: Data and Reporting
Is your team prepared to create Dune Dashboards according to program requirements for your incentive program?
Yes, we intend to. The STIP application requirements include the creation of a dashboard showing daily TVL, transactions, volume, addresses, and network fees covering 30 days before/during/after incentivization. We already have this data in our own program and will convert it: KyberSwap Elastic Analytics
If not, how does your team plan to report grant data?
Note that in unforeseen circumstances, we may have to use another data medium as we currently don’t use Dune Dashboard though we intend to.
Thank you for reading. Please let us know if you have any questions or other feedback.