Thanks Scotty
Apologies, has been a bit of a rush getting several of these out.
I have edited the response, to make the recommendations more concise. The ‘Minor Concerns’ are more for the DAO to be aware of in terms of the product and the grant program moving forward.
Hi everyone, thanks a lot for sharing your feedback and insights regarding the MUX Protocol STIP proposal. After learning community opinions and considering the total grant cap, the proposed grant size is lowered by 33%, from 9,000,000 to 6,000,000 ARB.
MUX contributors still plan to utilize 55% of the grant to lower the trading fees to 0% for all integrated protocols (GMX V1, GMX V2, Gains, MUX native pool) as a perps trading aggregator and wish to efficiently utilize the strategy to onboard traders from other ecosystems and even the broader domain (explained here.) The other 45% will be used to incentivize the MUX native pool LPs. The ratio is tentative and can be adjusted along the way based on user demands. If trading demand increases more compared to LP demands, more incentives will be shifted to the trading side (for all integrated protocols.)
Regarding the grant size, since MUX is planning to utilize the grant to benefit all integrated protocols as an aggregator, the size is still calculated based on the trading fees that MUX has helped to generate for all integrated protocols in the past four months (over $4M.) The total aggregated liquidity on MUX is over $450M on Aribtrum. Considering the total trading demand the aggregated liquidity can support if trading volume surges during the campaign, the proposed amount might not last for 4 months. If so, the campaign will end early.
Regarding concerns surrounding trade-to-earn or double rebates, although the original proposal has indicated MUX’s plan to prevent related activities, I just wanted to post them here again for clarity:
“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. 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.”
Thanks a lot for the feedback and for recognizing MUX’s effort to build the perp dex aggregator as well as the contributions that MUX has made to the ecosystem!
Regarding the grant size, the original size was calculated based on the organic volume and fees that MUX has contributed to all integrated protocols in the past four months. Since MUX Aggregator wants to help all integrated protocols cross the trading fee barrier for user adoption, we still believe it’s appropriate to keep the current strategy as an aggregator. The total aggregated liquidity on MUX is over $450M, while around $400M is from GMX V1 and V2. If the trading demand increases during the campaign, a notable amount of volume will likely be directed to GMX because of the liquidity depth; meanwhile, during the entire process, all earned fees still go to GMX; MUX won’t apply any additional cost or take any cut. Based on this context and metrics from the past four months, the original 9M grant size was proposed. However, after learning community opinions and considering the total grant cap, the proposal is now lowered by 33%, from 9M to 6M. The proposed usage won’t change, so if the grant is fully utilized before 4 months, the campaign will end early.
Considering that 55% of MUX’s proposed grant usage will be applied to all integrated protocols, evaluating the grant size purely based on the MUX native pool’s size is a bit misleading. Regarding the volume, as one of the protocols that don’t incentivize trading activities (like GMX, Gains, MUX), MUX aggregator volume has been relatively prominent in the sector. For example, when the trading demand was organically high in July due to market volatility, MUX’s daily volume was constantly similar to or even higher than GMX’s volume. Meanwhile, a significant amount of volume (like 50% or higher) was directed to integrated protocols like GMX and Gains. Therefore, the comments surrounding “Grant size seems disproportionate compared to their TVL and volume” or “their primary strength seems to lie in their native liquidity, which is the major driver of their trading volume” seem to be a bit unjustified. When volume increases, a notable amount will go to GMX because of the liquidity depth.
Regarding the “potential for redundancy in incentives due to overlap with underlying perp dex grants,” although the original proposal has covered this point, I’ll quote related info here again for clarity:
“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. 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.”
Hi @stonecoldpat @cliffton.eth @eli_defi, the MUX Protocol STIP proposal is now final and ready for the voting period, thanks a lot!
Post has been marked FINAL and locked.
Awesome, thanks a lot!
Hi Dumbird,
Let me try and explain some of our thinking.
We really like the fine-tuning of fee discounts, that is great to understand
We still believe 6M is far too much allocation considering the 50M budget and question whether anywhere near this will be used to discount trading if your downstream venues are also giving discounts
We agree that solely relying on native TVL is not the best fit for an aggregator product, but we had to use the metrics we had in a very short time period
The comment re: native liquidity use vs. aggregator liquidity use was based on 30d data, thank you for showing a longer timeframe picture
Our comments are not only based on TVL but also on our governing principles:
Along with whether the grant focuses internally or externally (MUX = external)
Due to these factors, we believe a lower grant than the requested 6M is appropriate.
I hope this clears up our thought process, we have MUX as the joint 3rd highest recipient of a grant based on our internal recommendations, but it is much lower than 6M.
Hi,
Again, the calculated size is based on the organic trading volume and fees MUX generated for integrated protocols, including GMX V1 & V2, Gains, and MUX native pool in the past four months; it was over $4M fees generated for all integrated protocols in the past four months. The grant is proposed to reduce trading fees to 0% for all integrated protocols so that the estimated usage led to the conclusion of applying for a previously 9M, now 6M ARB grant (adjusted after learning community opinions).
The “far too much” comment sounds a bit contradictory when compared to your standpoint regarding the GMX proposal that requires 14M ARB. Based on my understanding, 12M of the proposed grant will be solely utilized to incentivize GMX V2 trading and liquidity, which currently has $37.9 TVL on Arbitrum and $1.3B organic volume since Aug. 1st.
GMX’s proposed grant usage for 12M ARB is to incentivize GMX V2 only, while MUX’s proposed grant usage for 6M ARB is to incentivize GMX V1 & V2, Gains, and MUX native pool.
Based on these contexts, I wish you could have a more detailed explanation on why MUX’s proposal is “far too much” and GMX’s proposal is appropriate, given your comments on both proposals.
Thanks for recognizing the inappropriate metric in your previous comment
The latest 30-60d volume is naturally low due to low market volatility across perps trading platforms that don’t incentivize trading activities. When the trading demand is low, the majority of volume may not be directed to all integrated protocols, but as soon as the volume climbs up, the notable volume will go to all integrated protocols because of liquidity aggregation.
Blockworks Research supports this proposal and deems the updated request of 6M ARB justified based on, among other things, the anticipated sustainable impact on, and goodwill to, the ecosystem, metrics such as TVL / volume / fees on Arbitrum and overall, a comparative analysis of all submitted STIP proposals, the distribution of incentives across verticals, as well as, to a certain extent, the recommendations made by the Arbitrum Working Group through the four grant categories.
Thanks a lot for the support and kind words! MUX wishes to effectively use the grant to onboard more users to the Arbitrum ecosystem 
Thanks a lot for the in-depth feedback, and sorry for the delayed reply as I just noticed the previously reserved spot is now updated into full comments.
The latest integration that MUX has completed is actually GMX V2, and this happened in August 2023. Given that GMX V2 uses a completely new set of contracts, the integration complexity was relatively high; however, MUX still managed to be the first protocol that integrated with GMX V2. Aside from integrating more protocols on the aggregator, MUX also continuously released more beneficial features for all integrated protocols, like TP/SL orders, Aggregated Positon (covers open, position display, and close; this allows a consolidated one-stop aggregator experience; GMX V1 & V2, Gains, and MUX native pool are all supported in this feature), auto-pool selection and dozens of other improvements. For more context, this thread covers what MUX has delivered and accomplished during the 1-year run time. Given the fact that GMX, Gains, and MUX currently offer the top 3 deepest perps trading liquidity on Aribtrum, MUX integrated with them first the ensure the best possible liquidity for traders. Meanwhile, trading experience optimization is also very crucial. After the latest updates that are in process are released, MUX will continue to integrate with more innovative protocols on Arbitrum.
Since MUX is an aggregator, we do believe the proposed grant should be utilized to lower the trading fees for all integrated protocols in an aggregator’s fashion. Regarding the concerns surrounding incentives overlapping, as indicated in the proposal and previous comments, 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. 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.
MUX is one of the few protocols that are actually eligible to apply for a Pinnacle Grant (> 2M ARB), since 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. 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. Based on these reasons and context, your 750K comment is a bit out of context.
We are thrilled at the prospect of this project coming to fruition and would like to formally extend our support for your proposal. We look forward to the possibility of further collaboration with MUX team in the future!
BR,
iZUMi Team
MUX: @realdumbird
From @Seedgov led by the @cattin delegation, we want to convey our support to this proposal. The reasons why we agree are as follows:
We want to clarify that this is not the final vote, since as we clarify in this release, the final vote is defined by our community. We also want to invite you to attend our Governance Call that will be held tomorrow in our discord.
I m pump up in Mux .
Michigan Blockchain supports this proposal with the requested amount being justified given the sustainable benefits to the Arbitrum ecosystem and having conducted an in-depth reviewal process of all submitted STIP proposals. We appreciate MUX’s effort in delivering a promising proposal and working with the community throughout the process.
MUX Protocol’s Pinnacle Grant proposal is a significant initiative focused on increasing trading volume and user engagement. Security measures, collaboration with other protocols, and community interaction form the strengths of the project, and we believe that the anticipated impact justifies this generous grant request. MUX’s innovative approach and sustainable growth plans will solidify its position in the Arbitrum ecosystem.
For these reasons, we at ITU Blockchain cast our vote ‘for.’
