OpenOcean STIP Addendum

1. Can you provide a link to your previous STIP proposal (round 1 or backfund)?
OpenOcean STIP link

2. How much, in the previous STIP proposal, did you request in ARB?

500,000 ARB

3. What date did you start the incentive program and what date did it end?

STIP incentive started 22th of November 2023, ended 29th of March 2024

4. Could you provide the links to the bi-weekly STIP performance reports and Openblocks Dashboard?

Bi-weekly STIP report: OpenOcean Bi-Weekly Update Threads

Final report: OpenOcean STIP Final Recap

Openblocks Dashboard:

5. Could you provide the KPI(s) that you deem relevant for your protocol, both in absolute terms and percentage change, month over month, for the first of each month starting from October 2023 until April 2024, including the extremes? If you don’t know what KPI might be relevant for you or how to properly define them, please refer to the following document:[[Arbitrum DAO] OpenBlock Labs Incentive Onboarding Spec]([Arbitrum DAO] OpenBlock Labs Incentive Onboarding Spec - Google Docs)

Throughout the STIP, our program exhibited remarkable growth. The monthly trading volume soared to 105 million, marking a 262% increase from the initial volume, and exceeding the 200% target by 62.5%. By the end of the STIP, active user addresses had surpassed 125,000. For cross-chain swaps, we tripled growth, achieving an increase approximately 2.28 times beyond the initial goal.

While gas fee rebates have contributed to a great increase in the user base, the incentives per user have been relatively small, leading most users to claim their rewards by the end of March. To address this, we launched a swap-related campaign in February, collaborating with other protocols to further incentivize user engagement and boost participation on Arbitrum. The chart below demonstrates the resulting spike in growth during February and March.

As a DEX aggregator, we bring more diversity to grants distribution by directing traffic to DEXs, wallets, and other projects utilizing our swap API. This allows us to experiment with different incentives, benefiting the entire Arbitrum ecosystem. Unlike most DEXs that focus on incentivizing and increasing only their pools’ TVL, we aggregate and collaborate with all major projects within the Arbitrum ecosystem. This approach significantly boosts overall ecosystem activity.

Monthly Active Users :

The monthly active users has a fourfold increase during the STIP from 14k to 53k.

Month/Year Monthly Active Users Change %
Before STIP 11/2023 14,175 N/A
During STIP 12/2023 22,157 36.02%
During STIP 01/2024 18,683 -18.59%
During STIP 02/2024 28,817 35.17%
During STIP 03/2024 53,299 45.93%

Monthly Trading Volume:

The monthly trading volume in both Dec 2023 and Feb 2024 had a more than 30% spike compared to previous month, tripling the monthly volume from 32m to 105m.

Month/Year Monthly Trading Volume Change %
Before STIP 11/2023 $ 32,600,129.24 N/A
During STIP 12/2023 $ 49,210,135.97 33.75%
During STIP 01/2024 $ 56,727,930.20 13.25%
During STIP 02/2024 $ 93,228,737.29 39.15%
During STIP 03/2024 $ 105,168,795.28 11.35%

Monthly Swaps:

The monthly swaps have jumped from 23k to 96k with a 315% growth.

Month/Year Monthly Swaps Change %
Before STIP 11/2023 23,265 0
During STIP 12/2023 37,093 37.28%
During STIP 01/2024 29,435 -26.02%
During STIP 02/2024 51,298 42.62%
During STIP 03/2024 96,626 46.91%

Monthly Cross-chain:

The cross-chain trading volume has soared to 7 times from 30k to 212k, successfully bringing more volumes to the Arbitrum ecosystem.

Month/Year Monthly Trading Volume Change %
Before STIP 11/2023 $ 30,125.45 0
During STIP 12/2023 $ 40,751.20 26.07%
During STIP 01/2024 $ 51,732.22 21.23%
During STIP 02/2024 $ 177,017.81 70.78%
During STIP 03/2024 $ 212,277.09 16.61%

6. [Optional] Any lessons learned from the previous STIP round?

During the STIP, we separated the contracts to reward users, resulting in a deficit by the end of March and fund users in swaps gas refund, swap campaign rewards and referral program from our Dao treasury. To better manage rewards distribution moving forward, we will consolidate the rewards into one contract to monitor the distribution more efficiently and in a timely manner.

Though the gas fee rebate has motivated a growth of the user base, the gas fee rebate incentives accumulated per user are relatively small. Most users tend to claim the rewards by the end of March, or even forget to claim timely, leading us to airdrop their rewards before the deadline. Hence, in February, we launched a swap related campaign, and collaborated with other protocols to more effectively encourage user engagement and incentivize active participation on Arbitrum. The chart below can prove that the campaign has brought a spike in growth in Feb & March.

New Plans for STIP Bridge

7. How much are you requesting for this STIP Bridge proposal?

250,000 ARB

8. Do you plan to use the incentives in the same ways as highlighted in Section 3 of the STIP proposal? [Y/N]

No, with slight adjustments from our previous STIP events experiences.

9. [Only if answered “no” to the previous question] How will the incentive distribution change in terms of mechanisms and products?

Swap trading cost rebates will adjust to swap activities on OpenOcean, and the incentives allocation will increase from 35% to 45%. We had previously used gas rebates to incentivize users during STIP, but following the Cancun updates, gas refunds are too small to distribute as rewards. We will instead organize campaigns to reward new users based on various metrics, including gas fees used, swaps performed with OpenOcean, and trading volumes.

Inbound cross-chain swap incentives have been reduced from 20% to 10% because cross-chain activities are more expensive than swaps. With half the funding from the last STIP, we’re prioritizing better-performing initiatives, such as swap activities, which are more effective for attracting new users and increasing trading volume. We’ve already accumulated over 125k users, up from 75k in the last STIP round. In this round, our focus will be on continuing to work on user growth and boosting activity through increased trading volume on Arbitrum

Referral program incentive emissions remain unchanged at 20%.

The partnership co-incentive program for traders remains at 25%. During the STIP, our partnership was focused on DeFi protocols. This round we can expand our reach to a much wider audience, including essential crypto infra like wallets, GameFi and information applications with trading needs. We expect to onboard 5 to 10 new dedicated partners integrating OpenOcean for swaps. We will incentivize partners based on their integration process and performance, including daily users and trading volumes, to allocate rewards.

10. Could you provide the addresses involved in the STIP Bridge initiative (multisig to receive funds, contracts for distribution, and any other relevant contract involved), and highlight if they changed compared to the previous STIP proposal?

Multisig to receive funds - 0x3CA3570F06ee8AeDBC0A395D5aD633e786310E73

Contracts for distribution - 0x6d9e6bdfd17955b8b8a3fe0e02375e65e3f20d0a

11. Could you share any feedback or suggestions on what could be improved in future incentive programs, what were the pain points and what was your general evaluation of the experience?

Thank you for the opportunity to let us be part of the incentive program.

We found the experience to be enriching and beneficial. However, we believe that additional marketing support from Arbitrum could enhance the impact and reach of participants’ projects. We suggest that future programs could include some official marketing resources for projects.

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Hello @OpenOcean ,

Thank you for your application! Your advisor will be Castle Capital @CastleCapital @Atomist.

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

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Following the ARDC recommendation, we believe that this proposed addendum requires further review by the DAO. Therefore, we challenge its optimistic approval so that the delegates can form an opinion on the merit of renewing the incentives received during the STIP.

We are publishing the review conducted by Blockworks for greater visibility and advice to the applicant to provide an explanation for the concerns raised.

“Exact incentive distribution mechanisms from original STIP somewhat unclear. Most of the growth during the first program seems to have come through the launch of their trading quests campaign, but activity has since died down. 45% of Bridge funds would be allocated to new campaigns. The distribution method for the partnership co-incentive program (25% Bridge allocation) still unclear. Overall, difficult to judge the program’s effectiveness”

Dear @cattin and DAO Members, thank you for your thoughtful feedback. Please find our response below:

Original STIP incentive distribution mechanism:

See below our distribution mechanism from different sectors:

  • Gas fee rebates: we rewarded gas rebates to all users who interacted with OpenOcean during the STIP and further airdropped tokens to those who haven’t claimed during the process.
  • Referral program: The referrer earned commissions from the transaction gas fees of their referrals and claimed the rewards on campaign websites.
  • Trading campaign (including swaps/limit orders/cross-chain swaps) : participants are allocated rewards after they complete the trading quests on Arbitrum on a weekly basis. The rules were published for each epoch on twitter. The unclaimed rewards are distributed to winners via airdrop at the end of STIP.
  • Partnership: we negotiated with each partner with rewards covering the cost of the integration and their users’ swaps. Our STIP Bridge program implements the partnership rewards by introducing clear rules to reward partners who bring more users and higher volume to Arbitrum ecosystem.

Reward details are shown in bi-weekly reports and final report.

Growth impact on OpenOcean:

It’s true that most STIP projects have experienced volume and user number decreases without providing continual incentives. However, our daily average users, and swaps have significantly increased compared to pre-STIP levels (see attached chart) and maintained that level of activity. In the two months following the STIP, we have been undertaking a major API upgrade to increase the API response times by a factor of five to become the fastest, most flexible and robust aggregator API on Arbitrum and now the wider market.

At the moment our API services to major partners such as defillama on Arbitrum are temporarily suspended to prevent potential issues during the upgrade process, resulted in a temporary decrease in trading volume. Once the vital upgrades are fully implemented and our top Arbitrum API users are reinstated, we expect our volume to rise back to an even higher level as we will have one of the most competitive Arbitrum order flows in the ecosystem.

Sustained grants are helpful to cultivate the most cutting edge swap environments. Our next STIP Bridge plan will focus on these new initiatives, as mentioned in the last question, to boost retention and engagement of the whole ecosystem.

Metric One Month Before STIP Began One Month After STIP Ended % Increase
Avg. Daily Active Users 367.06 771.23 110.11
Avg. Daily Swaps 636 1,860 192
  • Avg. Daily Active Users increased by 110.11%
  • Avg. Daily Swaps increased by 192.44%

Source: OpenBlock Labs

Distribution Mechanism of Partnership in STIP-Bridge Fund:

As a leading DEX aggregator, we actively drive traffic through our extensive API users to the Arbitrum ecosystem and enhance the diversity of grant distribution. To clarify the distribution in partnership, please see the breakdown of the 25% (62,500 ARB) Bridge fund below.

We plan to divide the funds into two portions. The 25,000 ARB will be distributed as rewards to partners under 3 levels (see attached chart below) based on metrics including the integration process (50% downpayment, 50% upon completion), initial DAU & volume in the past two weeks, and community engagement. The remaining 37,500 ARB will be used to reward partners’ users through joint campaigns.

DAU Daily Volume Rewards
LEVEL 1 100 - 500 500k-5m 1,000
LEVEL 2 500 -1,000 5m-10m 3,000
LEVEL 3 1,000+ 10m+ 5,000

I voted abstain on this STIP addendum. It does appear that the first round of STIP yielded positive results, but I have some concerns about sustainability and about the transparency of operational methods used to distribute incentives (retro airdrops, partnerships).

Hi Frisson, thank you for your time and feedback : ) We achieved great sustainable results after STIP, with a 2x increase in active users and 3x in swaps. More detailed data can be found in our last response. For retro airdrops, we shared the methods on our Twitter and distribution data on OpenBlock. We conducted retro airdrops because some reward recipients were users of our API partners, who might not have received timely notifications about claiming their rewards before April. Regarding partnerships, we negotiated amounts to incentivize API integration during the last STIP session. However, this is not the most efficient way. In the new STIP Bridge, we will incentivize partners based on DAU and volume contributions to ensure transparency & higher efficiency as we mentioned in the last response for ARDC.

On behalf of the Arbitrum community members who delegated their voting power to us, we’re voting Against this proposal.

While OpenOcean achieved impressive growth during the initial 500K ARB STIP, with monthly volume rising 222%, active users increasing 275%, swaps growing 315%, and cross-chain activity jumping 604%, the sustainability of this traction post-incentives is uncertain.

As noted, the gas rebate mechanism drove user acquisition but per-user rewards were small, leading to most claiming by March or forgetting altogether. The February trading quest campaign with partner protocols caused a spike in activity, suggesting one-off initiatives rather than consistent organic growth.

For the 250K bridge round, the redistributed allocation makes sense, with more emphasis on cost-effective swap rebates (45%) over expensive cross-chain activity (10%). Maintaining the referral program at 20% and partner co-marketing at 25%, with a goal of 5-10 new integrations, also seems reasonable.

However, absent clear evidence that the initial grant created lasting protocol adoption, halving the funding to 250K still feels generous. The vague details on how the 25% partner incentive pool would be deployed and measured give us pause. And while consolidating to a single distribution contract should help with monitoring, this doesn’t address the core concern around long-term impact.

We concur with the Blockworks review that the exact incentive structures and resulting sustainability are difficult to judge given the information provided. More specifics on how the trading quest and partner programs will be improved to drive retention would help build confidence.

OpenOcean’s role as an aggregator in distributing rewards across the Arbitrum DeFi ecosystem is valuable. But as stewards of the community’s resources, we believe more compelling evidence of persistent benefits is needed to justify additional funding at this level.

We would encourage OpenOcean to allow more time for their STIP cohort to mature on Arbitrum and focus on optimizing their core product experience. Demonstrating an ability to maintain momentum post-incentives is key. In the meantime, exploring co-marketing opportunities with the Arbitrum team, as suggested, could be a low-cost way to amplify awareness.

If OpenOcean can come back with data showing that a smaller follow-on grant would efficiently boost sustainable traction, we would gladly reassess. But for now, we believe the responsible vote is to oppose this proposal until the lasting value of the STIP investments is proven.

We appreciate OpenOcean’s efforts to date and look forward to seeing their continued contributions to the Arbitrum DeFi landscape.

Hi @mcfly , Thank you very much for your thoughtful feedback.

Regarding lasting protocol adoption, we have actually achieved significant sustainable growth post-STIP, with a 2X increase in active users and 3X in swaps after STIP session. Here’s the data and our detailed response to Blockworks:

Growth impact on OpenOcean:

It’s true that most STIP projects have experienced volume and user number decreases without providing continual incentives. However, our daily average users, and swaps have significantly increased compared to pre-STIP levels (see attached chart) and maintained that level of activity. In the two months following the STIP, we have been undertaking a major API upgrade to increase the API response times by a factor of five to become the fastest, most flexible and robust aggregator API on Arbitrum and now the wider market.

At the moment our API services to major partners such as defillama on Arbitrum are temporarily suspended to prevent potential issues during the upgrade process, resulted in a temporary decrease in trading volume. Once the vital upgrades are fully implemented and our top Arbitrum API users are reinstated, we expect our volume to rise back to an even higher level as we will have one of the most competitive Arbitrum order flows in the ecosystem.

Sustained grants are helpful to cultivate the most cutting edge swap environments. Our next STIP Bridge plan will focus on these new initiatives, as mentioned in the last question, to boost retention and engagement of the whole ecosystem.

Metric One Month Before STIP One Month After STIP % Increase
Avg. Daily Active Users 367.06 771.23 110.11
Avg. Daily Swaps 636 1,860 192
  • Avg. Daily Active Users increased by 110.11%
  • Avg. Daily Swaps increased by 192.44%

Source: OpenBlock Labs

Additionally, for the partner plan, here’s our detailed distribution mechanism as mentioned in our response to Blockworks:

Distribution Mechanism of Partnership in STIP-Bridge Fund:

As a leading DEX aggregator, we actively drive traffic through our extensive API users to the Arbitrum ecosystem and enhance the diversity of grant distribution. To clarify the distribution in partnership, please see the breakdown of the 25% (62,500 ARB) Bridge fund below.

We plan to divide the funds into two portions. The 25,000 ARB will be distributed as rewards to partners under 3 levels (see attached chart below) based on metrics including the integration process (50% downpayment, 50% upon completion), initial DAU & volume in the past two weeks, and community engagement. The remaining 37,500 ARB will be used to reward partners’ users through joint campaigns.

DAU Daily Volume Rewards
LEVEL 1 100 - 500 500k-5m 1,000
LEVEL 2 500 -1,000 5m-10m 3,000
LEVEL 3 1,000+ 10m+ 5,000

We hope you might reconsider your review based on this information. We are always here to answer any further questions.