SECTION 1: APPLICANT INFORMATION
Applicant Name: Jose Ramon Diaz Serrano (aka Pepe Diaz)
Project Name: mucho.finance
Project Description: Development of an ecosystem of applications that allows users with no prior experience in DeFi to enter the web3 world, aiming to grow their wealth through exposure to asset prices such as USDC, WBTC, and WETH while generating passive income without impermanent loss.
Team Members and Roles:
Pepe Diaz - Co-founder and responsible for all sales related stuff (content generation, investment strategies generation, customer growth, …)
Alfredo Fernández - Co-founder and responsible for all tech-related stuff (smart contract development, IT infrastructure, …)
Project Links:
website: https://mucho.finance/
Github:
GitHub - polimenu/MuchoVault22: Hardhat based MuchoVault (current version, 100% live and operational)
Contact Information
Point of Contact (note: this should be an individual’s name, not the name of the protocol): Pepe Diaz (@muchofinance) Profile - muchofinance - Arbitrum
Point of Contact’s TG handle: @soypepediaz
Twitter: @soypepediaz
Email: pepe@mucho.finance
Do you acknowledge that your team will be subject to a KYC requirement?: Yes.
SECTION 2a: Team and Product Information
In April 2021, we launched an educational community focused on decentralized finance (DeFi). Our mission was to empower community members with knowledge about DeFi and provide them with firsthand experience of true economic freedom. Through our platform, individuals could grasp how DeFi enables anyone to take full control of their financial future.
As our community grew, we discovered additional needs beyond simply learning new investment strategies. Let me highlight some of the most intriguing initiatives within our community:
- DAO Creation for Collaborative Governance:
We established a decentralized autonomous organization (DAO) to experiment with collaborative governance.
Leveraging the xDAO protocol, our DAO (Contract Address 0x43f28246c142f55f093abc39d6980ab646c4a25c | Arbiscan ) became one of the most active on xDAO Arbitrum, boasting over 100 token holders and with a volume close to 1M USD traded.
Through this experiment, we gained valuable insights into DAO functionality and refined our investment strategies.
Our focus primarily revolved around investing in Arbitrum protocols, particularly allocating funds to GLP in the GMX protocol and concentrated liquidity positions on Uniswap v3.
- Our First Protocol Deployment: Forking GMD:
Following the DAO experiment, we decided to deploy our inaugural protocol.
We forked GMD, creating our v1 protocol (GitHub - polimenu/MuchoVaults ), currently deprecated, which provided decentralized exposure to crypto assets without requiring permission to enter or exit various vaults.
- V2 Protocol Launch with Internal Development and NFT Incentives:
In mid-September 2023, we unveiled our v2 protocol, developed entirely in-house.
We introduced several enhancements to our protocol. Notably, we enabled connections to various protocols within our vaults and introduced NFT-based incentives.
Any user could now deposit into our vaults, but community members holding our exclusive NFTs received additional rewards.
This innovative strategy fosters growth by collaborating with other communities, all while maintaining unique NFT incentives.
What novelty or innovation does your product bring to Arbitrum?
Users looking for a single asset exposure without impermanent loss plus passive income while connecting different key protocols in Arbitrum such as GMX v1, GMX v2, MUX Protocol, etc …
We also have developed our own onramp solution connecting with banking partners that allows us to do onramp from FIAT to Arbitrum directly with low fees and in less than 1 minute (almost 75% of our onramps settled in Arbitrum stablecoins (mostly USDC native) in less than 5 minutes since the moment the user transfer euros to his personal virtual IBAN bank account).
Is your project composable with other projects on Arbitrum?
Yes. In fact it was developed with composability on its DNA, as it has direct integration with protocols such as GMX, MUX Protocol and others which are being integrated.
Apart from that, our vault recipe tokens (tokens those who deposit on our vaults receive) are ERC20 tokens that can be integrated in the future with some other protocols such as lending protocols, yield optimization protocols, etc …
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
Our v1 was a fork of GMD though the v2 has been developed from scratch and it is more powerful and allows for further development of improvements.
How do you measure and think about retention internally?
- Number of NFT holders (those are the most loyal users of our protocol and receive extra yield and other privileges by issuing their exclusive NFT).
- Number of depositors in the different vaults
- TVL per depositor
- Length of deposits without withdrawing
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
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.
On what other networks is the protocol deployed?: None.
What date did you deploy on Arbitrum mainnet?: v2 Vaults (current 100% live and operation was deployed on September 17th 2023 (Arbitrum Transaction Hash (Txhash) Details | Arbiscan )
Do you have a native token?: No. We issue NFTs (ERC1155, MuchoBadgeManager | Address 0xc439d29ee3c7fa237da928ad3a3d6aeca9aa0717 | Arbiscan ). This is like a membership NFT that expires on a specific date.” Typically, our NFTs have a fixed expiration period, often lasting one year from their issuance. However, the validity can vary depending on the specific NFT.
Past Incentivization:
We share a % of the yield accrued from the vaults to our NFT holders. That gives them an extra yield on the vaults (currently around 7% APR extra yield) and that incentivizes them to increase their exposure to our vaults and to renew their NFT once expired.
Current Incentivization:
In the same way as explained in the “Past incentivization” question.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program? No.
Protocol Performance:
Protocol Roadmap:
Deployment of MuchoIndex, an index protocol build upon our MuchoVaults. Users will be able to DCA from FIAT to this MuchoIndex vault.
Development of DCA module to allow users to send FIAT and receive MuchoVaults tokens on their wallets, just with a single bank transfer to his private virtual IBAN bank account.
Audit History & Security Vendors: No audits done.
Security Incidents: No security incidents.
SECTION 3: GRANT INFORMATION
Requested Grant Size: 300K ARB tokens, to be delivered during a 2 year period.
This is 12500 ARB tokens per month, during 24 months, for a total of 300K ARB tokens.
Right now we are delivering as incentives to NFT holders, 20% of protocol´s revenue in a monthly basis. Protocol´s revenue comes from NFT selling to become a member of our learning community (users have to pay a membership of 1000 USD per year to get the NFT and be able to get NFT incentives) and from the protocols fee from the yield generated by Mucho Vaults.
Grant Matching:
Right now we have around 200 members per year and with this incentive plan we are willing to scale that number to 1000 members. That will be 1M USD revenue for NFT memberships per year, 20% of that will be delivered as incentives for users depositing in protocol´s vaults.
With almost 2 million TVL in the Mucho Vaults, and a median APR of around 15%, 20% protocol´s fee is around 3% of TVL, which equals to 60K USD of revenue from yield sharing.
This way we are willing to match the grant received from the Arbitrum foundation to the incentives delivered to depositors of Mucho Vaults.
Grant Breakdown:
12500 ARB tokens per month, distributed as follows:
- 10000 ARB tokens to Mucho Vault depositors.
- 30% exclusively to NFT holders
- 70% to all depositors, including NFT holders
- 2500 ARB tokens to incentivize DCA into Mucho Vaults from FIAT using our onramp integration (from FIAT to Arbitrum in less than 1 minute, to invest in our Mucho Vaults)
Tokens will be delivered proportionally to the amount and time in the vault, in order to incentivize user fidelity and avoid grant farming.
Funding Address: 0xfC75AE495792c3716eb3A1dD41bccA61934A09F2
Funding Address Characteristics: Safe Multisig 2/4
Treasury Address:
- MuchoVaults: 0x66C9269d75AB52941E325D9c1E3b156A325e8a90
- MuchoIndex: 0x10CD005d4c2D965B55CE9009d9dCCAD7f3909bBf
Contract Address: 0x96D395d088C8e053f759F97695Efac4D4b45407A
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: Increase number of depositors on Mucho Vaults. Increase TVL. Increase number of monthly recurring depositors (users who deposits every month due to the DCA strategy).
Execution Strategy: As described in “Grant Breakdown”.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric? To be
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.
KPIs:
Number of users/wallets with deposits in Mucho Vaults: The extra APR received from the ARB tokens to be delivered during a 24 month period will attract loyal users that are not seeking short term yields but are focused on long term yield
Deposited amount (in USD) per user/wallet: That will increase TVL, which will increase protocol revenue, which will increase extra yield to be delivered to loyal users (those with our NFT in its wallet).
Inflow of funds (in USD) per user/wallet: new money from FIAT to Mucho Vaults. This is new money entering web3 ecosystem directly to Arbitrum.
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.]
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]
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? Yes.
Are there any special requests/considerations that should be considered? None.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? Yes.
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? Yes.
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?: Yes.