SECTION 1: APPLICANT INFORMATION
Alias:
Fortesque
Project Name:
Mozaic
Project Description:
Mozaic uses its proprietary AI to optimize and automate the yield farming process for the end user by providing ‘one-click’ vault solutions. The AI, Archimedes has one objective: To save users time and maximize their profitability by removing the hurdles, complexities and indecisions involved with yield farming.
Core Team and Roles:
Calum Roberts: Founder (Core Contributor)
MomentoMori1814: Head of Growth (Core Contributor)
0xFortesque: Community Manager (Core Contributor)
Project Links:
Landing Page: https://mozaic.finance/
Docs: https://docs.mozaic.finance/
dApp: https://app.mozaic.finance
MOZ on Arbitrum: $0.08 | Mozaic Token (MOZ) Token Tracker | Arbiscan
Github: Repositories · GitHub
X/Twitter: https://twitter.com/Mozaic_Fi
Contact Information
Point of Contact: Fortesque
TG handle: Oxfortesque
Twitter: 0xfortesque
Email: 0xfortesque@proton.me
Do you acknowledge that your team will be subject to a KYC requirement?:
Yes
SECTION 2a: Team and Product Information
Team experience:
The team consists of a group of highly experienced ex-proprietary traders from one of the top trading firms in the world in Sydney, Australia: Star Beta.
The team also comprises of some of the top machine learning experts from Silicon Valley and solidity engineers from BNB Smart Chain and OlympusDAO. The team also consists of security experts from the Australian Defence Force who have been integral to establishing and maintaining the infrastructure for Mozaic’s AI technology.
More on us: https://www.youtube.com/watch?v=Ufz8l5n0L3k
What novelty or innovation does your product bring to Arbitrum?
Mozaic has brought its AI-FI technology to the Arbitrum ecosystem through the launch of its Theseus Vault. Mozaic’s AI, Archimedes, responds not only to changes in yield, but to the volatile price changes of the assets across the GMX Market (GM) Pools.
Theseus High-Level Overview
→ The Theseus Vault is a ‘strategy’ that is built atop GMX_IO v2 pools/farms that use Mozaic’s Archimedes AI to optimize yield and price.
→ It operates in two risk modes: Risk ON, focusing on yield farming with volatile GM token pools, and Risk OFF, prioritizing de-risking by yield farming STABLECOINS in GM Pools.
Is your project composable with other projects on Arbitrum? If so, please explain:
All Mozaic vaults and their LP receipt tokens are a composable ERC-20 standard.
Theseus is solely built atop GMX Market pools and the receipt token, MOZ-THE-LP, is compatible with other protocols on Arbitrum. We are currently talking to several Arbitrum ecosystem projects for integrations for the Vault.
However, as an existing example - take our existing stablecoin vault Hercules where users can deposit to this vault on Arbitrum > collateralize on Myso (on Arbitrum only) > take out a loan against the MOZ-HER-LP token.
The MOZ token also exists only on Arbitrum, on CamelotDEX.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
Only in the sense of the term: Vault - Mozaic’s AI technology, its models, development and application are all completely one-of-a-kind.
How do you measure and think about retention internally? (metrics, target KPIs):
Internally, Mozaic analyzes its vault offerings, the market itself and user behavior within the context of TVL, to measure retention. We use this in tandem with a number of weekly metrics:
- Weekly Active Users
- Weekly User Retention
- Weekly Returning Users
Target KPIs change according to monthly strategic goals and our development and security standards.
Relevant usage metrics
- Daily Active Users
- Daily User Growth
- Daily Transaction Count
- Daily Protocol Fee
- Daily Transaction Fee
- Daily ARB Expenditure and User Claims
- Incentivized User List & Gini
- TVL
- List of Depositors
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.
Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal?
No, this proposal was crafted entirely by the Mozaic core contributors.
SECTION 2b: PROTOCOL DETAILS
Is the protocol native to Arbitrum?:
Yes.
The MOZ token trades natively on Arbitrum on CamelotDEX.
The Theseus Vault is native only to Arbitrum built only on GMX Market Pools.
On what other networks is the protocol deployed?:
Mozaic’s genesis AI product, the Hercules Stablecoin vault, is built atop Stargate Finance only and considers yield across seven chains:
- Arbitrum, BNB Smart Chain, Fantom, Avalanche, Polygon, Base, Kava.
What date did you deploy on Arbitrum mainnet?:
The Theseus Vault was deployed on Arbitrum mainnet on Jan 18th:
Do you have a native token?:
Yes.
MOZ exists only on Arbitrum. TGE on September 7th, 2023 after an LBP on Fjord Foundry.
Docs: Distribution - Mozaic
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run?
Mozaic does not run ‘emission based’ or liquidity mining programs for MOZ.
Incentives have been sustainably sourced from LP fees harvested on Camelot’s V3 AMM. Camelot’s dynamic and directional fees have been a big proponent to the growth of the MozaicDAO and has paved the way for the protocol to sustainably conduct incentives.
E.g. Past incentivisation program occurred only for our stablecoin vault Hercules:
- Dec to Feb 2023/24 (since concluded), TVL increased from approximately 100K to just under 1M. 0.05% of the supply was used, which was sustainably sourced from the aforementioned trading fees.
- Incentivisation was conducted through CamelotDEX’s Nitro Pool - users could stake the Hercules LP token and receive incentives.
Current Incentivization: How are you currently incentivizing your protocol?
Mozaic is not currently incentivising its vaults.
xMOZ governance token can be staked for a share of fees across the protocol.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
Yes.
We received a grant from the Arbitrum Foundation. We have received the first part of the grant, which was used as part-payment for the Theseus Vault audit. The second part of the grant will be released for direct incentives for the Theseus Vault to the sum of 7300 ARB.
We will be ready to and are planning to release this ARB in the initial distribution period alongside a successful LTIPP proposal.
Protocol Performance
The vault token (MOZ-THE-LP) performance since inception:
+27% since deployment on Jan 18th.
The APY performance since inception:
Average 45% APY since deployment on January 18th.
The Theseus vault achieved all of its deposit cap thresholds within hours of release to the public.
- 100K: Feb 15th
- 250K: Feb 16th
- 500K: Feb 29th
- 1M: Mar 8th
- 1.65M: March 14th
- Exploit: March 15th
Vault caps exist up to 1M for each vault, due to Mozaic’s ‘security-first’ approach and had limited the damage done to the protocol recently because of this. The protocol takes vault cap deposits & uninterrupted protocol functioning into active consideration for lifting the maximum capacity of its vaults.
Please read on for information about the recent exploit.
Protocol Roadmap:
Theseus Vault Roadmap:
Complete Hypernative Integration:
- complete 6th March
Add GMX Market Pools - AAVE, ATOM, NEAR:
- complete 7th March
Organic TVL growth: 500K > 1M TVL:
- complete 8th March
Expansion: 1M+ TVL:
- Ongoing - TVL @ 1.65M for Theseus Vault as at 14th March
EXPLOIT. 15th March
Theseus Vault Relaunch - Week of April 22nd
This includes:
1/ Full Security Overhaul and Review
2/ Theseus Vault Redeployment
3/ Launch of the Mozaic leaderboard V1: Points Accrual and NFT Multiplier(s)
4/ Relics: ‘Maturity Based Incentives’:
Roadmap Continued
Layer 3 ‘Theseus’ Campaign
- April 2024
Rodeo Integration
- Pending - Q2 2024
ETH Mainnet Deposits: Zaps w/ Portals.fi
- Pending - Q2 2024.
Leaderboard v2: Points & Mini-Game/Rewards
- Q2 - May 2024
Spark.fi Plugin: Allow users to maintain their ETH exposure while in Mozaic Vaults. With automated loan health repayments.
- Q2 2024
dApp Account Abstraction
- Q2/Q3
dApp Fiat on / off ramp
- Q2/Q3
Secondary Audit
- Q3
Additional GM pools
- Ongoing - as they are added to the GMX protocol itself.
- Optimism added 14th March.
Audit History & Security Vendors:
Mozaic employs Trust Security (https://twitter.com/trust__90) as its auditor.
- Vault audits: Vault Audits - Mozaic
The protocol has also integrated Hypernative (https://twitter.com/HypernativeLabs 1) as an additional security partner.
Security Incidents:
The Mozaic protocol was compromised internally by a rogue developer on the 15th of March, 2024 who accessed private information from one of the core contributors.
More than 90% of the stolen funds were sent to the MEXC Exchange.
The protocol is currently in touch with the exchange as they have frozen the assets.
The Mozaic protocol is confident that with the return of these funds, it can continue its growth trajectory as the integrity of its smart contracts, audits and established security remains unaffected.
The protocol is asking for assistance with its recovery from the Arbitrum Foundation through this incentive campaign.
Please see here for the full post mortem: https://x.com/Mozaic_Fi/status/1768754080271196178?s=20
THIS PROPOSAL IS HOWEVER DEPENDENT ON THE SUCCESSFUL RETURN OF FUNDS FROM MEXC.
If funds are not returned by April 22nd (the end of the compliance period), the protocol will forfeit its application and will not request the proposed 75,000 ARB.
SECTION 3: GRANT INFORMATION
Requested Grant Size:
75,000 ARB
Justification for the size of the grant
With the recent exploit we have decided to reduce our initial grant ask to 75,000 ARB to instead help recover from the recent loss and reignite the protocol’s growth trajectory.
The Theseus Vault had provided the backbone for the Mozaic protocol to begin producing revenue and with this in mind, the proposed incentive amount and structure is designed to help the Mozaic protocol return to its projected TVL targets prior to the incident:
1/ Total protocol TVL was approximately 2.2M prior to the exploit.
2/ The Theseus Vault TVL sat at 1.65M.
3/ The Theseus Vault had achieved this TVL acquisition organically without any prior incentives. APY was ~60%, LP token performance: ~25% MoM
4/ The protocol is aiming to achieve 5M in TVL for the Theseus Vault with this proposed incentive campaign. This represents about a ~3x increase from TVL prior to the exploit.
5/ Theseus Vault fees are set to 10% on profits only, implemented as of March 11th. Prior to the exploit and in the two days since turning on fees, the protocol had accrued approximately $8,000 USDC.
The Mozaic protocol has used the below calculation as the justification for the size of its grant. 2.5M represents the median TVL target the protocol wishes to achieve through its proposed incentive campaign.
Targeting an average increase of 20% APY on 2.5M TVL for the ARB Incentives.
USD equivalent = $2.5M * 20% *12/52 = $115,384
ARB amount = $115,384 / $2 = 57,692 ARB at $2
Proposed Theseus Incentive Amount: 75,000 ARB
Also targeting an average increase of 20% APY on 2.5M TVL for the MOZ Incentives.
USD equivalent = $2.5M * 20% *18/52 = $173,076
MOZ amount = $173,076 / $0.09 = 1,923,076 MOZ at $0.09
Grant Matching Theseus Incentive Amount: 2,000,000 MOZ or $180,000
The MOZ incentives will continue for 6 weeks after the proposed ARB incentive period.
Vault Fees will be charged at 20% on profits ONLY.
2.5M * 0.45 (APY) * 0.2 = 225,000
At 2.5M TVL: $225,000 annual vault fees.
At 5M TVL: $450,000 annual vault fees.
Grant Matching:
0.2% (or 2,000,000) of the total supply of MOZ (in xMOZ) will be used as additional incentives alongside the proposed grant of 75,000 ARB.
Grant Breakdown:
75,000 ARB for Theseus Vault Incentives.
Funding Address:
0x26E17aDa97868A75FFbF01bB36DC84dcAC180f83
Funding Address Characteristics:
3/6 multi-sig.
Treasury Address:
0x26E17aDa97868A75FFbF01bB36DC84dcAC180f83
Contract Address:
To be updated with Theseus reliquary contract and xMOZ staking contracts.
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives:
1/ Re-ignite the TVL growth of the already-in-demand Theseus Vault and support the protocol in its recovery, post-exploit
2/ Achieve 5M+ in total TVL
3/ Use the vault fees to buy back MOZ, thereby increasing demand for the token, the MozaicDAO’s revenue and volume on CamelotDEX.
These incentive objectives are specifically designed to aid the Mozaic protocol in its recovery to boost the Mozaic flywheel and ultimately secure its home on Arbitrum.
Execution Strategy:
75% or 75,000 ARB for Theseus vault incentives, released intermittently at TVL milestones.
The below chart indicates the protocol’s targets over the course of the 12 week campaign.
Initial release: 5,000 ARB
2nd Distribution: 10,000 ARB only distributed if 1.5M TVL achieved
3rd Distribution: 15,000 ARB only distributed if 2.5M TVL achieved
4th Distribution: 15,000 ARB only distributed if 3.5M TVL achieved
5th Distribution: 15,000 ARB only distributed if 4.5M TVL achieved
6th Distribution: 15,000 ARB only distributed if 5M TVL achieved
The proposed ARB will be released through Relics: https://www.digit.xyz/ - to promote sticky liquidity from the onset. Relics allow the Mozaic protocol to increasingly scale the release of the incentives in tune with the length of the incentive program itself. I.e. The longer a user holds their Theseus deposit, the more incentives received - up to a cap - where withdrawing forfeits any so-called incentive ‘boost’.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?
The first mechanism (and something we’re excited about) is the integration of ‘Relics’ for each of our vaults - beginning with Theseus. Relics reward vault depositors for their investment longevity i.e. the longer a user holds their position in a vault the more incentives they receive, up to a cap - read more: https://www.digit.xyz/. Once users have waited the allotted time to receive the maximum possible incentives, they will be less likely to forfeit their position in the vault having taken the time to ‘mature’ their deposit. The additional 6 weeks of our Mozaic’s own xMOZ incentive program will promote this additional sticky liquidity.
Alongside this, our Leaderboard is set to be released with the Theseus Vault relaunch. Users will begin receiving points for holding a deposit(s) in any of Mozaic’s vaults, along with performing other interactions within the Mozaic protocol on Arbitrum.
Mozaic’s Hoplite NFTs (tradeable on Sudoswap on Arbiturm only) also provide a discount on vault fees and will incentivize additional vault TVL. This discount will incentivize users to park to continue to park their liquidity in Mozaic vaults, which will have flow-on effects as people build trust in the product as TVL increases.
Lastly, the 2M xMOZ as part of the ‘Grant Matching’ section, will also be used over the course of 18 weeks, or an additional 6 weeks to the LTIPP program.
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.
The protocol’s main KPIs to be measured over the course of the incentive program are to regain the trust of users and rebuild the user base itself, while growing TVL and token holders on Arbitrum:
- Achieve at least 5M+ in TVL for the Theseus Vault
- Attract 700+ unique depositors
A Dune analytics page for the Theseus Vault is currently being finalized.
Grant Timeline and Milestones:
Prior to the beginning of the incentive program, the protocol would have (hopefully) received the ~2M back from MEXC after the exploit. The Mozaic protocol is hopeful that at least 1M of this organically achieved TVL will remain with the protocol which will only continue to grow from there.
1.5M TVL & 150 total users
2.5M TVL & 250 total users
3.5M TVL & 350 total users
4.5M TVL & 450 total users
5M+ TVL & 500+ total users
Justifications:
- Initiation of first Layer3 campaign - exposure to over 300k active users
- Previous vault cap raises have filled out within less than 24 hours with 0 incentives
- Integration of Relics: https://www.digit.xyz/ to incentivise users to stay, once incentives have ended
- Additional xMOZ Incentive Boost alongside the incentives received from Arbitrum, extending past the LTIPP end date to further complement Relics and promote stickiness.
- Additional ARB incentives from previous grant will be distributed alongside a successful LTIPP.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
Mozaic has ingrained itself within the Arbitrum ecosystem.
With Mozaic’s token, vault, staking, NFTs, lending and more all housed on the Arbitrum chain, receiving this grant will only propel the protocol to further cement itself in the ecosystem and provide the stimulation it needs to increase vaut TVL and user adoption - two of the most important components of our ecosystem.
For example: Take the current APY of 45% and the targeted TVL of 5M
- At 5,000,000 x 0.45 = $2,250,000
- 2,250,000 x 0.2 (fee) = $450,000
See below:
These numbers exclude the LP token price performance, currently +27% since vault inception.
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
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, the team is ready to adhere to the data requirements throughout the grant period. No specific requirements necessary.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Yes, we will provide a Dune dashboard for public viewing as well as bi-weekly updates on the Arbitrum Forum.
*First Offense: In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.
Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.
Third Offense: Funding is halted permanently
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)
Yes, the Mozaic team agrees to provide a final closeout report no later than two weeks from the ending date of our program. This report will include all lessons and applicable data insights of performance.
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, agreed.