In order to separate the DAO’s Treasury from the Arbitrum STIP distribution, the following address arb1:0xfA62A3A0722a0aF7739c23a361E2285F5B75ecE7 will be used to receive and distribute the ARB incentives, set as a 3/4 multisig.

The Lodestar team’s KYC process is ongoing and we look forward to seeing this grant program unfold.


Applicant Name: Lodestar Finance DAO (“the DAO”)

Project Name: Lodestar Finance (“the Protocol”)

Project Description: A native Arbitrum-centric money market

Team Members and Qualifications: Appo (Smart-contracts), Quanta (Operations), Coopes (Back-end), Waffle (Growth)

Project Links: lodestarfinance | Link3.to

Contact Information

TG: @waffleapeven

Twitter: https://twitter.com/WaffleApe

Email: dev@lodestarfinance.io (cc: waffle@lodestarfinance.io)

Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes


Requested Grant Size: We are requesting 750,000 $ARB tokens from the Short-Term Incentive Program.

Grant Matching: These incentives will be overlaid on our regular incentive schedule, 300 000 LODE tokens being emitted to the markets every month (200,000 starting december).

Please refer to LODE - Docs for additional information.

Grant Breakdown:

  • 95% of the grant (712 500 ARB) will be distributed among all market participants (the term “market participants” refers to depositors and borrowers in the Lodestar markets and does not include LODE liquidity providers or stakers). Each market participant is entitled to proportional ARB rewards based on the ETH value of their deposits and borrows relative to the ETH value of all deposits and borrows. See “Execution Strategy” in Section 3 for additional information.

  • 5% of the grant (37 500 ARB) will be distributed among all emission gauge participants, proportionally to their voting participation.

In the interest of the protocol’s security, we will distribute ARB incentives weekly as an airdrop as the protocol does not have an innate ability to emit tokens other than LODE.

We are dedicating 100% of this grant to incentives as we have also applied to an Arbitrum Foundation grant to support our operational and security expenses.

UPDATED FUNDING ADDRESS: arb1:0xfA62A3A0722a0aF7739c23a361E2285F5B75ecE7 (separate address from the DAO Treasury)

Previous Funding Address: 0xed093F9720B2507C9B54FC117ecB2618910734dd (CANCELED)

Contract Address: N/A


Objectives: We aim to use the funds from the grant to incentivize depositing and borrowing activity in the Lodestar Markets and the participation to our emission gauge to shape the protocol.

By providing depositors with more attractive yields and borrowers with cheaper borrow interest rates, we expect these incentives to improve the general available liquidity in the lending markets. This will allow users to deploy their assets more efficiently, but also support Protocols that are facilitating leveraged yield-bearing strategies such as looping with wstETH or plvGLP in an even more effective way.

Key Performance Indicators (KPIs):

We believe that the main KPIs to measure the success of the grant are:

Total Value Locked (“TVL”):

  • Growth in the total deposits on the Protocol
  • Growth in the total deposits of yield-bearing assets

User Count:

  • Total number of weekly users
  • Total amount of staked $LODE and vote participation

We also believe that there is value in tracking the utilization rate of Lodestar Finance. Growth in the utilization rate would imply competitive interest rates, trust in the Protocol and desirable assets.

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:

By offering an alternative destination for tokenholders to deploy their native application tokens, we will be able to support applications in:

  • Allowing native yield-bearing assets to be even more competitive with assets in other ecosystems by virtue of the leveraged looping of these assets;
  • Retaining a larger user base and tokenholder population; and
  • Reducing supply-side pressure on their token which supports their Protocol’s growth and adoption.

We also believe that these incentives will introduce users to our unique emission gauge system that empowers users and DAOs to shape the money market.

By lending or borrowing on Lodestar, users receive LODE tokens that they can stake to earn ETH from the protocol’s revenues.

Additionally, every week, those who lock their LODE can vote and direct the next week’s emissions to the market of their choice, on either the borrow or supply side. Since its launch 4 weeks ago, we have witnessed LODE lockers shaping the protocol, enhancing their yield strategies by incentivising either the borrow side to lower the cost of their leveraged strategies or increasing the interest gained on the supply side to increase the yield they are generating.

With the increased liquidity from these incentives and the composability of our markets, we look forward to seeing other developers build on top of the Lodestar markets and participate in the above mechanics to shape the liquidity to their needs.

Justification for the size of the grant:

As per the Forum post, the Arbitrum Working Group has created four grant categories with advisory caps implemented on them. Lodestar Finance currently falls into the Siren Grants category having launched in Apr-2023 (5 months ago) with c.$14m in deposits. We believe we lie at the higher end of this category by virtue of almost being on the threshold for the next categorisation, the Lighthouse Grant. Moreover, we have also spent long periods of time above the TVL threshold to fall into the next category.

We also note that we have reached this scale without having been a recipient of the ArbitrumDAO airdrop demonstrating our ability to compete with other protocols for liquidity.

Execution Strategy:
Lodestar plans to distribute the granted funds through the following process:

  • Market and gauge participants will be compensated directly with $ARB tokens for their participation in the protocol.

  • Eligible rewards are proposed to be calculated in the following manner:

    • The amount of $ARB tokens distributed weekly will be the total amount of $ARB granted divided by the number of weeks until the incentive program stops in January 2024.
    • Two snapshots will be taken each week, one during the first half and one during the second half. The timings of the snapshots will not be publicly disclosed to prevent users from gaming the rewards system.
    • For each protocol user, weekly $ARB distribution is calculated by taking the sum of their total supply and borrow balances (in $ETH) and dividing by the Protocol’s total supply and borrowed balances (in $ETH).
    • The user’s final weekly eligible rewards will be the average of eligible rewards between snapshots.
    • A third snapshot will be taken at the end of the epoch to calculate the users’ voting power and participation
  • The user’s calculated eligible rewards will be airdropped directly to their wallet.

  • The Lodestar team will monitor the distributions each week and create ways to report useful metrics to the public.

Grant Timeline:

We plan to deploy the incentives over a period of 16 epochs until the end of the campaign in January 2024 (4 months):

Week 1 - October 22nd: 46,875 $ARB airdrop

Week 2 - October 29th: 46,875 $ARB airdrop

Week 3 - November 5th: 46,875 $ARB airdrop

Week 4 - November 12th: 46,875 $ARB airdrop

Week 5 - November 19th: 46,875 $ARB airdrop

Week 6 - November 26th: 46,875 $ARB airdrop

Week 7 - December 3rd: 46,875 $ARB airdrop

Week 8 - December 10th: 46,875 $ARB airdrop

Week 9 - December 17th: 46,875 $ARB airdrop

Week 10 - December 25th: 46,875 $ARB airdrop

Week 11 - December 31st: 46,875 $ARB airdrop

Week 12 - january 7th: 46,875 $ARB airdrop

Week 13 - January 14th: 46,875 $ARB airdrop

Week 14 - January 21st: 46,875 $ARB airdrop

Week 15 - January 28th: 46,875 $ARB airdrop

Week 16 - February 4th: 46,875 $ARB airdrop

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


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?: Lodestar Finance is native to Arbitrum and has not expressed any interest in deploying on any other blockchain.

On what other networks is the protocol deployed?: n/a - Lodestar Finance does not have any deployments on any other blockchains

What date did you deploy on Arbitrum?: Lodestar Finance launched on Arbitrum in April 2023.

Protocol Performance:

Lodestar Finance is a money market deployed natively on Arbitrum. The money market aims to provide first-class infrastructure to native Arbitrum assets such as MAGIC and GMX, as well as blue-chip assets in the Ethereum ecosystem. It has also found a niche by facilitating money markets for yield-bearing assets including those native to Arbitrum such as plvGLP and wstETH.

It is governed by the Lodestar DAO and is 100% community owned and funded. With c.$14m in deposits today, Lodestar Finance is still the largest native money market on Arbitrum. At its peak, Lodestar Finance had over $50m in deposits, showcasing the desire for our product within the ecosystem.

Furthermore, the $LODE token has demonstrated positive value accrual with the Protocol earning c.$90k fees since launch. After the launch of the staking module, the Protocol commenced distribution of a portion of market revenue, with approximately 40% of the circulating supply staked, earning an average 35% APR paid in ETH.

The Lodestar Protocol also became one of the first money markets to implement an emissions gauge to direct incentives to deposit and borrow pools, enabling user-driven dynamic market emissions. To date, the emissions gauge is currently in its fifth weekly epoch.

It is also worth noting that the Lodestar DAO was not a recipient of the ArbitrumDAO airdrop as the protocol was offline from December 2022 to April 2023. This meant that the Protocol was competing with other incentivised protocols for liquidity and still maintained positive growth in less than favorable market conditions.

Dune Analytics Dashboard: https://dune.com/shogun/lodestar-finance
Defillama Dashboard: https://defillama.com/protocol/lodestar-finance

Protocol Roadmap:

The introduction of the weekly gauge system to our staking module empowers stakers in shaping the money market. We envision protocols, DAOs and users building vaults and individual strategies on top of Lodestar Finance, stockpiling their $LODE emissions earned to give them more control over the destination of future emissions.

Staking $LODE tokens presents a two-fold advantage for third parties using the protocol. First, they have the potential to earn a real yield from the application’s revenue, denominated in WETH. Second, and equally significant, is their ability to direct emissions. This mechanism has been envisioned to produce a reinforcing cycle: as stakers reap the benefits of yields and have a say in emission directions, it logically follows that they could accumulate a larger quantity of $LODE tokens.

Currently, discussions are underway with several protocols that are leveraging the Lodestar markets and infrastructure to build new and interesting products such as automated strategies or utilizing our yield-bearing assets in novel ways. These protocols can also take part in the emissions voting system to enhance the yields for their own products.

Additionally, development efforts at Lodestar have been focused on building a module and interface for a protocol bribing system. This system aims to provide benefits for all participants in the Lodestar staking and emissions voting systems. LODE stakers will be able to earn a yield on their available voting power and bribers can channel increased amounts of emissions voting power to their preferred strategies.

Audit History :
Lodestar V0 was audited by SourceHat (formerly known Solidity.Finance) and crowd audited in partnership with Hats Finance before our launch in April:

The Lodestar V1 Protocol has been audited in its entirety by Halborn:

SECTION 5: Data and Reporting

Provide details on how your team is equipped to provide data and reporting on grant distribution.

Is your team prepared to create Dune Dashboards for your incentive program?:
We are able to keep track of the data and results of this grant with our Dune Dashboard, we can create a reporting interface in our front end, and store the relevant information in our database and access it via our API.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?


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?:



As users of Lodestar, we believe the protocol serves a greater good to the Arbirtum ecosystem. Currently, there is a lack of representation in Arbitrum native lending protocols and Lodestar has aligned itself with the ecosystem since day 1.

Since the initial launch and setback experienced in 2022, the team’s subsequent upgrades and audits from Halborn show their commitment to not just getting to market quickly but also delivering a safe, battle-tested core product offering to Arbitrum users.

The grant requested is of appropriate size and is proportionally distributed between liquidity incentives and gauge participants. As Arbitrum continues to expand it’s reach into LSD liquidity, we also believe Lodestar is a a great fit for lending markets of such tokens. It was our pleasure going through the proposal and we are excited to see further steps forward for Lodestar.


Hello @LodestarFinanceDAO thank you for your application! Your submission meets all requirements to be considered for a snapshot vote.


I have been a user and supporter of Lodestar since their initial introduction to Arbitrum in 4Q22. This team represents the integrity, work ethic and commitment to its users that all projects should strive to achieve.

The product offers a clear need within Arbitrum: a reliable and battle tested money market with an Arbitrum first mindset, offering competitive APRs with a novel native token staking mechanism design. The protocol’s liquidity has performed relatively well during the recent TVL contraction across all of Arbitrum, showing clear demand for their product.

As a DAO, Lodestar has alway put community input and contribution first. The founders are extremely accessible and responsive, being very active across their socials. As a member of their unique Community Council, I feel empowered to voice my opinion as a community member and have it directly contribute to the strategic direction of the DAO.

Lastly, Lodestar truly puts security first. While the protocol unfortunately experienced an early setback with an exploit of their initial markets, their subsequent relaunch and extensive audits of the full technical stack have been a testament to their long term commitment.

This grant will be a great opportunity to expand Lodestar’s reach within Arbitrum and cement itself as a core piece of the Arbitrum DeFi stack.


thank you @Matt_StableLab, and thank you @MotusCM @mogie for the kind words and trust

We remain available to answer any questions the community would have, we are excited to see this grant program unfold and bring more activity to our ecosystem


I’m in lodestar since the begining. I Come to arbitrum thanks to this team. I suffer from the exploit but i’m still in. This team compensate user and relaunch. The product is usefull to arbitrum ecosytem and give a great exposure for DeFi users.

I Hope that arb fondation will trust and recognize this gem protocol.

In lodestar WE trust :fire:


I’m supportive of native protocols getting their fair chance.

There’s been a large amount of cross-pollination in the L2 ecosystems of the same dApps from Ethereum Mainnet launching their products on these new blockchains.

While they definitely have greater reputational standing, I think it is hard to see these dApps putting the same amount of effort into growing on the smaller ecosystems (relative to Ethereum Mainnet). This is where native dApps can excel.

I see Lodestar excelling by rapidly integrating native yield-bearing assets. This is currently subject to Chainlink integrations (I think they only use Chainlink) of these assets. However, if that was to happen, I would assume that Lodestar would be in pole position in integrating and supporting these assets.


Lodestar is a serious native Arbitrum project within the ecosystem.

They have been building and delivering steadily. They also showed their commitment to the community when they got hacked by doubling their efforts to make a great comeback.

I think this is the kind of project we want to see thrive on the Arbitrum blockchain. They were among the first to launch plvGLP lending/borrowing which shows they understand what kind of products users want. A grant would be a great way to support their work AND boost the ecosystem.

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The Lodestar team is hard working, true to it’s word, and lean.
The protocol offers a very much desired product allowing for lending and borrowing other Arbitrum tokens at competitive rates.
They have very quickly implemented a true value staking incentive for the native token (payout in Eth), and will bring more value to the Arb ecosystem

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I’m heavily in support of this. The Lodestar team is going above and beyond to build out an attractive money market on Arbitrum.

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Well done Lodestar team in bouncing back, with facilitating new yield-bearing assets and future assets like GMX, it shows that the protocol is very aligned with creating a money market on Arbitrum that aligns well with its users and stakers.

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Appreciate the support and kind words @LooserInu @orageux101 @Arbitrooper @nullzero @SecretSaturn

Thank you also @shogun, the Lodestar Dune Dashboard that you are maintaining will help us track the results of this grants :handshake: Great work https://dune.com/shogun/lodestar-finance

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From my knowledge gained over the past 3.5 years in Web3 and the crypto movement, I’ve learnt that it’s about the team, if the team continues to build, and communicate with their community then they are built to win in the end. Lodestar Finance is that team, they’ve come through some down times and continued pushing forward. The community is strong and loyal. It’s got all the hallmarks of becoming a premier money market protocol in the Arbitrum ecosystem. I hope you consider Lodestar for the grants program.

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Arbitrum needs more decentralized lending / borrowing marketplaces, and Lodestar have rightfully proven they will be amongst the top performers in that category.

The team has the initiative to deliver a robust and easy to use platform, as proved by their track record of healthy growth over the past months.

The Jones team is very interested in seeing this proposal pass, and looks forward to seeing jAssets on the Lodestar dApp soon :handshake:


i have been in $LODE since the presale. After the exploit the devs picked up the pieces and decide to fight with the community rallying behind them. They managed to hit more than 50 mil TVL at one point. This team is awesome and very responsive. This product is really needed as you can ply delta nuetral strategies and use gauge to direct emissions to the BTC and ETH deposits thus making it cheaper to borrow… This is protocol will be one of the top protocols in Arbitrum ecosystem in 2024.

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$LODE can be staked with rewards paid out in 50% of all tokens allocated to the reverse will be distributed to $LODE stakers. As a Realyield DeFi protocol,At the same time there is no VC intervention and control of the project, it’s very nice Alpha.

This is different from those Ponzi flywheels. Token economic design is a mainstream trend in the next bull market cycle.

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I am happy to be part of the people who see and feel the development of Lodestar, the money market at Arbitrum was built by a team that is very active and works hard. There are many things they have gone through and they continue to develop, this is very good and has great potential🥰 LFG


Lodestar has remained resilient through challenges and demonstrated commitment to supporting unique markets for the Arbitrum ecosystem.

The team has also been supportive throughout other buildooors journeys and it has been a pleasure being amongst their so-called compatriots.

Warm regards,


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As an Arbitrum native protocol founder and builder, I fully support the Lodestar team’s proposal. In my opinion, their ask is grounded and well thought out. The team is hardworking and has made strides during the bear market—good team good project.

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Hello @LodestarFinanceDAO ,

Now that your application has been marked eligible, please be advised of the remaining steps in the application process to be completed prior to the Review Period Deadline:

Please complete the following steps required for your application to proceed to Snapshot:

To change your proposal to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness to proceed from [Draft] to [Final] status.

Once notified, the Arbitrum Foundation Forum Moderator will adjust your title from [Draft] to [Final] status. Once marked as [FInal], your application post will be locked by moderators and you will no longer be able to edit your proposal.