[Limitless] LTIPP Application - FINAL

Archive Long Term Incentives Pilot Program
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SECTION 1: APPLICANT INFORMATION

Applicant Name: Jeong Park

Project Name: Limitless Finance

Project Description: Limitless is a liquidation-free & oracle free margin trading protocol. Traders can permissionlessly create a leverage trading market for any pairs and trade without liquidations. LPs can rehypothecate UniV3 liquidity and earn strictly higher yields by lending out idle out-of-range liquidity.

Team Members and Roles:

Jeong: Lead developer & business dev

Previously data scientist at South Korea’s top 3 payment app

Previously ML engineer at a robotics startup

Zeke: Full stack developer

Previously zk engineer at Harmony Foundation

4cyte: Frontend developer

Laksa: Growth & Strategy

Previously portfolio manager at private equity / venture capital fund

Previously M&A and restructuring at global bulge bracket investment bank

Project Links

Website: https://limitlessfi.xyz

App(private beta): https://limitlessfi.app

Twitter: https://twitter.com/LimitlessFi_

Docs: https://limitless.gitbook.io/limitless/intro/why-limitless

Contact Information

Point of Contact: Jeong

Point of Contact’s TG handle: @jeongwonpark0315,

Do you acknowledge that your team will be subject to a KYC requirement?: Yes

SECTION 2a: Team and Product Information

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.):

Our team has dedicated the past 9 months to creating an innovative DeFi protocol within the Arbitrum ecosystem. This work culminated in a live beta launched around a month ago, demonstrating our rapid development cycle. The proposed protocol is novel and addresses several critical problems of incumbents, reflecting our team’s ability to deliver innovative solutions to problems echoed by many DeFi natives.

During the month-long beta, we have not only addressed bugs swiftly but also incorporated user insights into product iterations, showcasing our commitment to meeting user needs and responsiveness to feedback. The active testing phase and TVL indicate strong user engagement and trust in our project’s potential.

What novelty or innovation does your product bring to Arbitrum?

  1. Liquidation Free: No forced price-based liquidations nor maintenance margin. Traders can HODL levered position under any price action.

  2. Limitless Pairs: Leverage for every possible asset pairs, with permissionless listing

  3. Uni V3 liquidity rehypothecation: LPs ‘restake’ their lp tokens for strictly higher yields from increased capital efficiency.

  4. Covered call yields(perpetual) for any asset on chain.

  5. Oracle free leverage: Free from oracle based attacks, the largest attack vector in DeFi

  6. Unlimited liquidity: Take levered position and trade against the entire chain, not just one protocol, for best execution

  7. Positive sum dynamics: LPs in Limitless are not trading against the trader. The traders trade against the overall chain liquidity in Uniswap. Limitless LPs will earn yield from lending liquidity to the trader, regardless of the trader’s PnL.

  8. Unique use case: Limitless allows users to express their view on any token with existing liquidity in the form of Uniswap LPs, allowing users to long or short any token with leverage, as opposed to only being able to buy/sell spot tokens from/into the LP pools.

Is your project composable with other projects on Arbitrum? If so, please explain:

Yes. Since our LPs ‘restake’ uniswap LP tokens, our TVL growth directly leads to the same TVL growth of Uniswap in arbitrum. This also means Limitless can help other projects increase liquidity for their native tokens, either via strategic partnerships or market demand.

Moreover, all trades are routed through the most liquid exchanges of the given pair. This means increased trading activity on Limitless will increase the volume of other dexes on Arbitrum.

Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?

Our product is comparable to all perp dexes launched on Arbitrum. Despite the competitive landscape of perp dexes on Arbitrum, we think our multiple 0-1 improvements can serve as strong USPs for growth.

How do you measure and think about retention internally? (metrics, target KPIs)

Trading: Weekly Volume, Open Interest, Turnover, Transaction counts, Protocol Fee

LP: TVL, Fees collected by LPs, and Depositors’ profiles.

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]

Yes, it is currently live on arbitrum.

On what other networks is the protocol deployed?: [Yes/No, and provide chains]

None

What date did you deploy on Arbitrum mainnet?: [Date + transaction ID. If not yet live on mainnet, explain why.]

Jan-02

Do you have a native token?: [Yes/No/Planned, link tokenomics docs]

No, but TGE planned Q2 or Q3 2024

Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?

None

Current Incentivization: How are you currently incentivizing your protocol?

We have a native point system https://limitless.gitbook.io/limitless/tokenomics-and-roadmap/lmt which we use to reward early testers

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.]

Over the past month we have gained a TVL of around $300K, with ~$11k fees generated for LPs(including both uniswap and limitless fees). We had ~600 trades executed, from 80 unique testers.

Note that these figures highlight the performance of our invite-only beta, in a gated-only environment.

The protocol currently enables leverage on the following pairs

  • Weth-rdnt

  • Weth-crv

  • Weth-stg

  • Weth-xpet

  • Weth-xai

  • With-magic

  • Weth-arb

  • Weth-pendle

  • Weth-ldo

  • Weth-gns

  • Weth-uni

  • weth-link

  • Weth-gmx

  • Weth-wbtc

  • Weth-usdc

  • Usdc-wbtc

With significantly more to come. Note that for a lot of these pairs Limitless would be the only protocol to users to access leverage natively on chain, or to enter into a net short position.

Protocol Roadmap: [Describe relevant roadmap details for your pr otocol or relevant products to your grant application. Include tangible milestones over the next 12 months.]

We have our second audit ongoing. As soon as that finishes(late March) we plan to open up the beta to all Arbitrum users. If our proposal is approved, we will start incentivization when this phase begins.

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.]

We have finished our first audit with https://twitter.com/Offside_Labs, report: DocSend

and are currently conducting our second audit with ABDK.

Security Incidents: None

SECTION 3: GRANT INFORMATION

Requested Grant Size:

75,000 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]

The objective is to increase Limitless’s visibility and kick-start the TVL<->trading activity flywheel,

So far, Limitless has secured pre-commitments for liquidity amounting to approximately $1M (for the Arbitrum deployment) but aims to attract additional liquidity to reach a $5M target. Achieving this level of liquidity is crucial for initiating the desired momentum, as $5M in liquidity could support a monthly trading volume of $200M. This is due to the protocol’s high leverage feature, resulting in positions with shorter durations and high turnover, potentially leading to a cumulative trading volume of $1B over three months.

Grant Breakdown: [Please provide a high-level overview of the budget breakdown and planned use of funds]

Specifically, the grant funds will be allocated as follows:

  • 75k ARB will incentivize an additional APR of 6~20% for a TVL range of $3M to $10M.

All ARB rewards will be distributed as esARB, requiring liquidity providers (LPs) to vest their rewards for six months, provided they continue to contribute liquidity to Limitless. This approach ensures both healthy ARB emissions and maintains LP engagement beyond the reward period.

Funding Address: 0x25D2345FcE7F992877B308170551A5977cD22F54 2/3 Gnosis Safe Multisig. The private keys are securely stored. It can interact with ERC-721s

Contract Address:

MarginFacility(trading contract): 0x3611CD2B957514222a94C93e1A9a5be66b0b2841

PoolManager(core LP contract): 0x536801AaE40cb214c08f178c6727d7594a7c655b

NonFungiblePositionManager(periphery LP contract): 0x6D73fc6F4C299E369377C0e60CebFef2409f86A0

Treasury Address: 0x6799e4fb8bEc9eaB7496c98B4668DDef146Ef6E0

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]

The primary objective of the grant is to boost TVL and initiate a flywheel.

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.]

ARB tokens will be distributed through a staking contract, rewarding all staked LP NFTs with esARB. The emission rate will be based on the liquidity provider’s time-weighted value added, measured in USD. Incentives will be offered only to pairs demonstrating significant speculative interest, guaranteeing that the farming activity benefits both sides of the market.

Specifically, we will start with incentivizing the pairs below with the following distributions

  • Weth-wbtc 20%

  • Weth-usdc 20%

  • Weth-arb 20%

  • Usdc-wbtc 15%

  • Weth-rdnt 6%

  • Weth-pendle 6%

  • Weth-gns 6%

  • Weth-gmx 7%

Not only will we be able to increase the spot liquidity of these tokens in Uniswap, the following tokens are also from protocols with a high presence in the Arbitrum ecosystem, so our co-marketing campaign with these protocols will aid the distribution.

However, note that the protocol is permissionless when it comes to listing. If, for example, the market seeks leverage for a trending asset(i.e erc404, pendle yt tokens, LRTs, tokenized vaults, etc), we will be able to incentivize these pairs instead.

Also, as a grant matching scheme, we have a unique go-to-market strategy (executed in tandem with the LTIP commencement), where we distribute ‘loot boxes’ that power users of Arbitrum protocols(GMX, Uniswap, Camelot, etc), and where these users have to actively use the platform (by way of trading or providing liquidity) to unlock these boxes for native $LIMIT token. This will be executed over the early life of the project.

For example, we would distribute ‘lootboxes’ to active Uniswap LPs, and they would rehypothecate their liquidity in Limitless to earn extra yields and incentives while unlocking their lootboxes.

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]

All ARB rewards will be issued as semi locked ARB, with a stipulation that liquidity providers must vest their rewards for 3 months after the incentive period, contingent upon their continued participation as LPs in Limitless. This approach aims to achieve a) sustainable ARB distribution and b) consistent engagement from LPs even beyond the reward period. Additionally, we plan to enhance the vesting rewards by integrating them with our proprietary point system for additional benefits.

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.]

5M+ TVL

200M+ Total Volume

500K+ Total Fees Generated(Uniswap and Limitless Combined)

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 DAO can remit the first tranche of funds and the Limitless team will initialize liquidity mining incentives. Once the mining contracts are deployed we will share the verified addresses on Arbiscan in the forum post.

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]

Uniswap V3 LPing is a product that already has strong native demand with active users. Limitless offers a product that enables strictly higher yields than the vanilla v3 LPing. If we can subsidize a ~20% yield on top of a product already adopted by the market, we will be able to rapidly bootstrap the TVL.

Our protocol introduces the ability to create leverage for any on-chain assets, free from the constraints of oracle or liquidation risks. This innovation allows protocols to offer on-chain native leverage and perpetual markets for their tokens without relying on market makers. Additionally, it grants traders and liquidity providers the unprecedented ability to establish leverage markets for any token, opening up a pathway to a more efficient financial market.

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

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 30. 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?

Yes

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.

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?:

Yes

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Hello @jeong-limitless

Thank you for your application! We can confirm your application has been submitted and you will be assigned an advisor shortly.

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Hello @jeong-limitless ,

Thank you for your application! Your advisor will be @JoJo.

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

4

@cliffton.eth GMGM ser would like to make this draft final! Thanks

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Hey there this proposal has been updated to show that it is FINAL. All the best!

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We would like to thank you for the proposal. However, we would have expected Limitless’s application to state more specific KPIs and objectives. Additionally, the requested grant is a bit high for the protocol, but considering the potential of the protocol, we believe that it will be beneficial to the Arbitrum ecosystem. Therefore, as ITU Blockchain, we will vote in favor of this proposal.

1 Like
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Hello, the funding address for the LTIPP grant has been changed to 0x710930527598407A59c81c2168Fc18A6E1f965a8 (2/2 multisig) !

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Updates Regarding Incentivization Scheme/Execution

Dear Arbitrum Foundation and Council Members,

I hope this message finds you well. We are writing this post to update you on the progress of Limitless Finance since our initial grant application. We would also like to express our deepest gratitude to the Arbitrum Foundation and the council members who had reviewed and approved our earlier application.

Since the time of the application, we launched our product on Base and deployed the go-to-market strategy scheme described as a grant matching scheme in the original application, over a period of 6 weeks. Through this, we gleaned several important insights, and have refined our GTM strategy to optimise user engagement and platform sustainability. In line with these insights, we are requesting some changes to the original grant proposal, which we would like to run by the Foundation and the Council members.

Insights from Base Launch:

Our launch on Base provided invaluable insights into user behavior and platform dynamics.

Notably, we attracted approximately 1,400 unique users and facilitated over 6,000 trades during the campaign period. This strong initial engagement highlighted the appeal of our unique value proposition: enabling permissionless leverage trading for micro-cap tokens, newly minted tokens and community and culture tokens (aka memecoins). These assets currently have no leverage markets for them, due to other platforms requiring oracles or market makers to take the other side of traders’ trades. Limitless therefore is able to serve these unserved markets.

One insight we gleaned from the Base campaign was the effectiveness of our gamified approach to incentivization. We ran a blended campaign incentivising both liquidity provision and trading activity, granting users our points (which will be counted towards earning our native token $LIMIT at TGE) for trading and for providing liquidity.

Upon earning points, users could unlock the lootboxes dropped to them. Unlocking the loot boxes granted users $NZT, which is a proxy token that will confer upon holders the eligibility to acquire or receive our native token $LIMIT at TGE. We reached a peak TVL of US$2m on Base (without Base grants), and about 85% of that TVL has stayed on our platform as of the date of writing, even though the incentivisation campaign has ended for about 3 weeks.

Refined Grant Application:

Based on these insights, we have made several strategic refinements to our grant application:

  1. Unified Point Earning Scheme: Drawing from our Base experience, we will implement a transparent, unified point system that rewards users for trading volume, liquidity provision (with potential pool-specific multipliers), and referral engagement. This approach not only incentivizes organic growth but also mitigates the risk of attracting short-term, mercenary TVL. The esARB rewards will be proportional to the amount of points earned.
    Given the novelty of our product’s use case, and the complexity of the product under the hood, we learnt that (1) it is highly unlikely to incentivise users to leverage trade low-cap tokens unless they already wished to do so, or were thinking about doing so, but worried about liquidation. (2) a material portion of users find it difficult to understand how liquidation-free leverage trading works, and (3) the easiest way for users to learn and understand how liquidation-free trading works, and how it can benefit their trading strategy and user experience, is to try out the platform and open a trade themselves.
    We found anecdotally that by allocating the loot boxes towards a unified point program that considered both LP activity and trading activity helped to prevent attracting mercenary TVL, and as a result a large portion of the TVL that is on our platform has remained sticky.

  2. Targeted Distribution Strategy: Instead of dispersing the ARB grant overly widely, we propose allocating the entire grant to the top 500 users based on points earned. This targeted distribution ensures that rewards are meaningful and impactful, fostering sustained engagement and participation amongst the most active users. We found that the top 20% of users on Base traded more than 90% of the volume and/or provided more than 90% of the TVL. These users also had the highest retention rates, continuing to stay on our platform even after the incentivization period ended.
    This fosters a positive flywheel effect, because the more a user uses our platform, the better they understand how a liquidation-free trading design works, and how it complements their trading strategy.

  3. Blended Incentive Program has a better Multiplier / Return on Capital: Our simple ETH vault product on Base generated a realised APR of >40% (in ETH terms) during the 6 week campaign on Base, and as a result, we found that liquidity providers were already handsomely rewarded without further grants, given that they earned (1) our native LMT points, (2) $NZT (our proxy token) (both 1 and 2 are proxies for our native token at TGE), and (3) high yields from trading activity and volumes, without incentivsation from grant programs. As such, we believe the high native APRs that the platform can generate with its capital efficient model would be sufficient to attract the requisite liquidity, and the grant would achieve a better return on capital by also being allocated towards the taker / trader side, instead of just on the LP/maker side.

  4. Vesting Mechanism for Sustainability: Users receiving esARB tokens must demonstrate continued engagement. After the grant period (est ~6-7 weeks) has ended, the user must earn double of the LMT points earned during the grant period to fully unlock the esARB tokens into ARB tokens (pro-rata basis). This works out to providing the same amount of liquidity, or maintaining the same usage for a period of 12-14 weeks (~ 3 months) after the grant earning period has ended.
    This requirement is designed to promote ongoing liquidity provision and platform utilization, thereby enhancing overall ecosystem sustainability, and is designed to be in line with the 3 month vesting period in our earlier proposal.

  5. Co-Incentivized Grant Matching Scheme: In conjunction with the grant distribution, we will introduce a gamified launch program that extends rewards beyond the top 500 users. Participants will earn scratch tickets based on their point rankings, revealing prizes such as esARB (top 500) and $LESS tokens. This inclusive approach ensures broad participation and equitable reward distribution.

  6. Any unvested grant after a period of 6 months would be returned to the Arbitrum Foundation.

Conclusion:

In conclusion, our updated grant application reflects our commitment to refining and optimizing our strategy based on empirical data and user feedback. We are confident that these enhancements will effectively drive user acquisition, promote platform stickiness, and foster a robust ecosystem on Arbitrum.

We appreciate your continued support and look forward to discussing these developments further with the Arbitrum Foundation and Council Members.

Warm regards,

Jeong Park
Lead Developer, Limitless Finance

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