Hi everyone, I want to apply for Pinnacle Grants (> 2M ARB) on behalf of MUX Protocol.
MUX Protocol has been live on Arbitrum for over 13 months, the current TVL on Arbitrum is over $40M, and the latest 30d organic volume (without offering any trading incentives) is over $1B.
dumbird - MUX
Decentralized perps trading aggregator
MUX offers the first widely adopted decentralized perps trading aggregator. The MUX aggregator is currently native to Arbitrum, and has integrated with GMX V1, GMX V2, Gains and MUX native pool on the trading side. MUX aggregator automatically routes traders’ positions (one whole or split positions) to the most suited liquidity source/sources based on market, position size, available liquidity, composite trading cost and user preferences. In addition, MUX also offers various unique features for integrated protocols, like liquidation price optimization, leverage boosting, TP/SL orders, auto-pool selection, aggregated position & display and more, without applying additional costs. The goal is to offer the best possible trading cost and experience and onboard more users to the decentralized trading world.
In less than 13 months, MUX has generated over $15.2B organic volume for integrated protocols.
In addition, MUX also has the 3rd highest TVL in the entire on-chain perps sector.
- Jean - growth contributor
- dumbird - growth contributor
- 24lu - dev contributor
- mus - dev contributor
- rex - dev contributor
- DC - community contributor
(The original size was 9,000,000 ARB, and after learning community opinions, the requested grant size is lowered by 33%.)
- MUX will use the in-house budget to launch multiple promotional campaigns and onboard more users to the ecosystem.
MUX plans to use the grant to onboard more organic users to the Arbitrum ecosystem and increase user engagement, trading volume, TVL and transactions.
Tentatively, 55% of the grant will be utilized to reduce trading fees for GMX V1, GMX V2, Gains, and MUX native pool positions opened through the MUX aggregator.
Please note, for the proposed rebates, the rebate rate will be based on the users’ actual fees spent; if the integrated protocols also offer additional rebates/rewards separately, MUX will ensure the final total rebates won’t exceed the fees paid. There will be no trade-to-earn opportunities during this campaign. In addition, MUX contributors will closely monitor and prevent wash trading and Sybil-attack-related activities from this campaign to ensure proper grant usage; addresses involving wash trading or Sybil-attack-related activities will be published and excluded from receiving the rebates.
- Fee rebates
- ARB tokens will be distributed as fee rebates to traders weekly on Thursdays UTC based on the fees they spend during the week.
- The fee reduction will be applied to all integrated protocols without discrimination.
- This covers all markets offered by GMX V1, GMX V2, Gains and MUX native pool.
- The rebates that traders can receive won’t exceed the fees they spend on trading. There will be no room for trade-to-earn activities.
- The rebate rate will be based on the users’ actual fees spent; if the integrated protocols also offer additional rebates separately, MUX will ensure the final total rebates won’t exceed the fees paid.
- The grant spending pacing will depend on organic trading activities during each week.
- MUX contributors will closely monitor and prevent wash trading and Sybil-attack-related activities from this campaign.
- Addresses involving wash trading or Sybil-attack-related activities will be published and excluded from receiving the rebates. MUX contributors reserve the right to identify any Sybil-attack-related addresses and exclude them from the incentive program.
- The anti-wash-trading & anti-Sybil-attack rules will remain unrevealed. Otherwise, the rules can be abused with planned strategies. Just like before a network or protocol launches the airdrop, they announce the Anti-Sybil rules afterward instead of beforehand. This is intentional to ensure the proper grant usage with no wash-trading or Sybil attacks.
- Integrated protocol trading fee rates before and after reduction
- GMX V1: 0.1% → 0%
- GMX V2: 0.05% / 0.07% → 0%
- Gains: Crypto 0.08% → 0%; Forex 0.012% / 0.016% / 0.02% → 0%; Commodities 0.05% / 0.08% → 0%
- MUX Native Pool: 0.06% → 0%
- If more perps trading protocols in the Arbitrum ecosystem are integrated into MUX during the campaign, the fee deduction will be applied to them as well.
- Trading competitions & other forms of promotional trading events
- Aside from the trading fee rebates, MUX can potentially launch promotional trading events, not limited to trading competitions, based on market sediments and volatility.
- The objective is to boost user adoption and trading demand, referencing organic market trends.
Tentatively, 45% of the grant will be utilized to increase yield for the MUX native pools on Arbitrum.
- The MUX native pool currently has the 3rd highest TVL in the on-chain perps trading sector. Over 80% of the MUX native pool TVL is on Arbitrum.
- In addition, the aggregator has also integrated with the GLP pool, GM pools and gDAI vault to offer the currently deepest aggregated liquidity in the on-chain perps sector for traders.
- However, when trading demand surges, the open interest caps can still be reached across all integrated protocols, limiting traders to opening more needed positions.
- MUXLP stakers currently earn #RealYield in the form of $ETH tokens weekly from protocol income. By offering additional $ARB token incentives for LPs, the pool size can increase to support more trading demand and initiate a flywheel effect with the trading incentives.
The grant allocation ratio for trading and liquidity incentives is tentative and can be adjusted based on performance.
- If the trading demand and trading fees surge more than expected, more incentives will be allocated toward the trading side to ensure 0% trading fees for all integrated protocols.
- If the liquidity cannot support enough trading demand and guarantee optimized trading experiences, more incentives will be allocated toward the liquidity side.
- The incentive mechanism can be adjusted accordingly to ensure the most efficient usage and results for accelerating user adoption.
- Accelerate user adoption for the Arbitrum ecosystem.
- Increase organic transactions and sequencer fees for Arbitrum.
- Increase trading volume & protocol income for all integrated protocols, and further onboard more LPs to all integrated liquidity sources and the Arbitrum ecosystem.
- Strengthen the Arbitrum ecosystem as the on-chain derivatives trading hub.
- Trading Volume
- Daily Active Users(DAU)
- TVL(Product and Protocol side)
- Sequencer fees
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
MUX has integrated with three leading perps protocols regarding TVL and organic trading volume in the Arbitrum ecosystem: GMX (V1 & V2), Gains and MUX native pool. Users can freely choose preferred protocols for opening needed positions, or the aggregator can automatically select the most suited liquidity source based on market, available liquidity, and trading cost. As a result, MUX has onboarded a community of web3 native traders to Arbitrum and contributed a notable amount of organic volume to integrated protocols in the ecosystem.
Currently, DEX to CEX futures trading volume is between 1% - 2% daily The trading cost is the one key factor constraining trader acquisition for perpetual DEXes, as the typical fee rate range on CEXes is 0.02% - 0.05%, while the standard fee rate range on DEXes is 0.05% - 0.1%. As the trading experiences and features on perp DEXes advance, the higher trading cost is still a barrier for more traders to onboard.
Arbitrum is the epicenter of perp DEX innovations; 5 of the top 6 perp dexes in TVL are currently deployed on Arbitrum. If the trading cost barrier can be crossed for a decent amount of time, the Arbitrum ecosystem can accelerate user adoption and onboard more traders from other web3 and web2 ecosystems.
In addition, a notable number of yield farming protocols have integrated with GLP, GM, gDAI and MUXLP. Boosting trading volume for the integrated protocols on the MUX aggregator will help increase the yield for related pools and can potentially onboard more LPs.
The MUX native pool currently has the 3rd highest TVL in the on-chain perps trading sector. Over 80% of the MUX native pool TVL is on Arbitrum. In addition, the aggregator has also integrated with the GLP pool, GM pools and gDAI vault to offer the currently deepest aggregated liquidity in the on-chain perps sector for traders. However, when trading demand surges, the open interest caps can still be reached across all integrated protocols, limiting traders to opening more needed positions. By offering additional $ARB token incentives for LPs, the pool size can increase to support more trading demand and initiate a flywheel effect with the trading incentives.
The campaign duration is estimated to be 4 months.
For the trading incentive: MUX plans to use the grant to directly rebate trading fees for traders, the contributors estimated the grant size based on the organic trading fees that the MUX aggregator generated for all integrated protocols in the past 4 months.
Between June 21 and September 21, the total organic trading volume on MUX was $5.63B, and the trading fees generated for integrated protocols were over $4M. The volume and income were generated without offering any forms of trading incentives, proving MUX aggregator’s proper product-market-fit and organic user base. If the fees can be further lowered through rebates, we can reasonably expect the aggregator to onboard more traders from other ecosystems. MUX contributors used the metrics as a reference and wished to reduce the trading fees with the grant to accelerate trader adoption.
Regarding liquidity incentives, the MUX native pool currently offers a significant portion of protocol income through $ETH tokens and additional $MUX token incentives for LPs. The APR has been between 15% - 50% in the past four months. The MUX native pool TVL reached over $60M at its peak because of the high yield. Through offering additional $ARB token incentives for LPs, the pool size can increase to support more trading demand and initiate a flywheel effect with the trading incentives.
- MUX contributors will add a trading fee rebate distribution setup to the Dapp.
- All trading fees that traders spend on any integrated protocols (currently GMX V1, GMX V2, Gains and MUX native pool) during the campaign will be tracked.
- MUX aggregator will distribute trade fee rebates to traders weekly on Thursdays in the form of $ARB tokens.
- Upon distribution, the number of ARB tokens rebated is calculated based on traders’ weekly trading fees and the real-time ARB token price.
- MUX contributors will closely monitor and prevent wash trading and Sybil-attack-related activities from this campaign and ensure the proper usage of funds.
- Addresses involving wash trading or Sybil-attack-related activities will be published and excluded from receiving the rebates.
- Distributed rebates will be entirely based on the organic trading fees that traders spent during the week.
- The grant spending pacing will depend on organic trading activities during each week.
- If all approved grants are spent before January 31, 2023, the campaign will end early.
- If the approved grants are not fully spent before January 31, 2023, the remaining grant will be returned to the Arbitrum DAO.
- If MUX does launch additional promotional trading events during the campaign, MUX dev contributors will develop needed setups for the events.
- For liquidity incentives, $ARB incentives will be added to the rewards composition.
- MUX contributors will launch multiple marketing campaigns using the in-house marketing budget to promote this campaign and accelerate trader adoption for the Arbitrum ecosystem.
October 14th, 2023 - January 31, 2024
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?
The MUX aggregator is native to Arbitrum and has only integrated with protocols on Arbitrum.
The MUX native pool is multi-chain native, while 80% + of the TVL is on Arbitrum and leveraging Arbitrum as the base chain to handle all staking activities.
- BNB Chain
Aug. 1st, 2022
By September 21, 2023, the following MUX metrics are
- Cumulative trading volume on Arbitrum: $14,290,826,513
- Arbitrum TVL: $41,161,410
- Historical total users: 18,014
- Arbitrum transactions: 671,693
Q3 & Q4 2023
- Launch a new trading setup to support more markets
- Launch a new liquidity setup to support long-tail markets
- Launch a new MUXLP liquidity setup to meet diverse risk exposure preferences
- Allow collateral token swap
- Allow updating placed orders
- Aggregate more innovative perps trading protocols
- Continuously onboarding organic traders
- Further lowering trading costs for traders
Yes, MUX contributors will create a Dune dashboard to track the grant usage and all KPI metrics.
Yes, MUX contributors will provide bi-weekly program updates along with needed metrics 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?: