SECTION 1: APPLICANT INFORMATION
Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.
Applicant Name: Rubio Kishigami (0xkohaku)
Project Name: Orange Finance
Project Description:
Orange Finance is an automated liquidity management protocol at the forefront of LPDfi innovation in the DeFi space. Our mission is to simplify liquidity provision and enhance profitability within LPDfi protocols. We’re actively developing liquidity management vaults on top of LPDfi protocols, such as Stryke (Formerly Dopex), making LPDfi more accessible and user-friendly. Orange Finance stands as a pivotal gate connecting users and LPDfi protocols, contributing to the growth and stability of DeFi liquidity.
Team Members and Roles:
Motoki Takahashi (Co-founder / CEO-BizDev)
Shun Oikawa (Co-Founder / COO-PdM)
Rubio Kishigami (Co-founder / Biz)
Ryota Yamaguchi (CTO- Technical)
Atsushi Uchida (FE developer)
Project Links:
Website: https://www.orangefinance.io/
Gitbook: Orange Finance: The LPDfi Gate | Orange Finance
Twitter: https://twitter.com/0xOrangeFinance
Discord: Orange Finance
Github: Orange Finance · GitHub
Contact Information
Point of Contact (note: this should be an individual’s name, not the name of the protocol): 0xkohaku
Point of Contact’s TG handle: @orangekohaku
Twitter: @0xkohaku
Email: orangerangefinance@gmail.com
Do you acknowledge that your team will be subject to a KYC requirement?: Yes
SECTION 2a: Team and Product Information
Provide details on your team’s past and current experience. Any details relating to past projects, recent achievements and any past experience utilizing incentives. Additionally, please provide further details on the state of your product, audience segments, and how you expect incentives to impact the product’s long-term growth and sustainability.
Team experience (Any relevant experience that may be useful in evaluating ability to ship, or execution with grant incentives. Please provide references knowledgeable about past work, where relevant. If you wish to do so privately, indicate that. [Optional, but recommended]):
Motoki Takahashi (Co-founder / CEO-BizDev) - Majored in Law at Tokyo Metropolitan University. He worked at a blockchain gaming company, Venture capital fund “gumi Cryptos” for new technology, and DeFi Insurance protocol “InsureDAO”.
https://www.linkedin.com/in/motoki-takahashi-778225203/
Shun Oikawa (Co-Founder / COO-PdM) - Majored in Aerospace Engineering at Green River College. Previously, He founded the NFT marketplace in Japan “Los Dorados”, and worked as SC dev for DeFi Insurance protocol “InsureDAO”.
https://www.linkedin.com/in/shun-oikawa-bb81a1132/
Rubio Kishigami (Co-founder / Biz) - Majored in Hispanic studies at Sophia University, and graduated from MSc Finance at SOAS, University of London. He founded the NFT marketplace in Japan “Los Dorados”, and worked for DeFi Insurance protocol “InsureDAO”.
https://www.linkedin.com/in/rubio-kishigami-31b029160/
Ryota Yamaguchi (CTO- Technical) - Previously, He worked as SC dev for DeFi Insurance protocol “InsureDAO”.
Atsushi Uchida (FE developer) - Previously worked as the CTO for a Web2 company, and has been working as a DeFi application developer for 2 years.
What novelty or innovation does your product bring to Arbitrum?
Orange Finance is now providing the first and only auto liquidity management (ALM) vault for LPDfi protocols to simplify users’ LP experience and maximize their return, live on Arbitrum.
LPDfi represents a fresh approach where protocols leverage LP positions on DEXes to craft innovative products such as options and perps. This innovation transforms the traditional LP experience, which has long been characterized as high-risk, high-reward, and complex, into an avenue where liquidity providers can tap into diverse revenue streams beyond conventional swap fees.
Especially for LPDfi protocols, users can expect higher yields. Cause Fragmenting and separately managing liquidity allows current tick liquidity to earn swap fees in AMMs, while unused liquidity can be lent as options or perpetual for premium earnings, enhancing capital efficiency.
We’re actively developing liquidity management vaults on top of LPDfi protocols, making LPDfi more accessible and user-friendly. We aim to stand as a pivotal gate connecting users and LPDfi protocols, contributing to the growth and stability of DeFi liquidity.
By simplifying LP on LPDfi protocols, the Arbitrum ecosystem can attract more liquidity to the Arbitrum chain, more specifically to DEXes, resulting in more smooth trading activities, minimising slippage, and enhancing user experience.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes, all of our LP tokens are ERC-20 tokens, which can be widely used in the DeFi space. Additionally, we already developed automated liquidity management vaults on top of AMMs and LPDfi protocols as follows:
- Uniswap
- Camelot
- Stryke (Formerly Dopex)
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
As for similar projects, Logarithm has a plan to launch the LPDfi vault but not live yet. While there are some similar protocols as ALM like Gamma strategies, there is no other similar protocol as ALM for LPDfi in any ecosystem.
How do you measure and think about retention internally? (metrics, target KPIs)
Relevant usage metrics - Please refer to the OBL relevant metrics chart 29 1. For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:
General 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
Specific Metrics for Orange
- TVL
- List of Depositors
- Retention
- Monthly Active Users
- The percentage of users retaining deposits beyond 6 months
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? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant): 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?: [Date + transaction ID. If not yet live on mainnet, explain why.]
- Our first vault on Arbitrum mainnet: Apr 24, 2023
- The Stryke vault on Arbitrum mainnet: Feb 27, 2024
Do you have a native token?: Not yet
Past Incentivization: None
Current Incentivization: How are you currently incentivizing your protocol?
We’ve just started an incentivized program “The Spaceship”
The Spaceship unfolds over a thrilling 4-week period, commencing with the launch of the Stryke Vault. Users will be ranked based on their deposits and time into the Stryke Vault, intensifying the competition on our leaderboard.
The event overview
- Duration: 4 weeks since the Stryke Vault launch
- Top 50 Depositors: Share 25,000 ARB equally (500ARB per top depositor)
- TVL Requirement: Rewards unlock when the Stryke Vault TVL reaches $2 million at the end of the campaign
- Additional Reward: If TVL surpasses $3 million at the end of the campaign, all participants share an extra 12,500 ARB proportionally to their deposit
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program? [yes/no, please provide any details around how the funds were allocated and any relevant results/learnings(Note: this does NOT disqualify an applicant)]
No, we haven’t. (We received the Arbitrum airdrop through the team’s other Defi protocol “InsureDAO” but have not received any additional funding through grants.)
Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]
Daily Active Users: 18
Daily User Growth: 1%
Daily Transaction Count: 27
Daily Protocol Fee: $59
Daily Transaction Fee: $27
TVL: $1.32M
List of Depositors: 170
The most updated performances are available on our Dune Dashboard, we are currently working on the update.
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application. Include tangible milestones over the next 12 months.]
Launch other vaults on other CLAMM pools (e.g. ARB-USDC, WBTC-USDC) on Stryke (Contracts are audited already)
Launch further partnership integration with LPDfi protocols: InfinityPools, Limitless, and more…
Launch LPDfi aggregating vault “STEM” (March)
- 2024 Q3
Launch a governance token launch
Extend the strategy module
Extend the hedging module
- 2024 Q4/2025 Q1
TBD
Audit History & Security Vendors: [Provide historic audits and audit results. Do you have a bug bounty program? Please provide details around your security implementation including any advisors and vendors.]
Orange Finance has completed 3 audits by WatchPug, Zokyo, and yAudit.
Besides the audit, Orange also works with Watchpug, Code4rena’s top auditor, as our security adviser and receives security consultations.
Security Incidents: [Has your protocol ever been exploited?
No
SECTION 3: GRANT INFORMATION
Detail the requested grant size, provide an overview of the budget breakdown, specify the funding and contract addresses, and describe any matching funds if relevant.
Requested Grant Size: [Enter Amount of ARB Requested]
150,000 ARB ARB
Justification for the size of the grant 33: [Enter explanation. More details are better, including how you arrived at the required funding for individual categories of expenses covered by your grant plan]
To determine the target TVL, we use the WETH-USDC vault on Gamma Strategies as our benchmark. Gamma Strategies’ vault and Orange Finance’s vault are in the same category, Liquidity Management, and have similar risk/return structures, though each product focuses different area (Gamma focuses on Normal CLAMM like Uniswap v3, while Orange focuses on LPDfi protocols).
As explained in the “novelty/innovation” section, LP can expect higher yields from LPDfi protocols. LPDfi protocol utilises CLAMM such as Uniswap v3 as underlying liquidity, and liquidity providers can earn swap fees from the current tick liquidity, while unused liquidity can be lent as options or perpetual for premium earnings, enhancing capital efficiency. Therefore, we expect our vault on LPDfi protocols can accumulate more liquidity with higher fee APR and lower reward APR.
Considering Liquidity providers may incur losses due to price fluctuation of deposited assets on AMM, users demand higher compensation when they deposit liquidity into pools like WETH-USDC compared to stable yield opportunities or pegged pairs.
Gamma has 3.77M TVL now with APR APR (average fee APR+current reward APR): 122.4%(69.8%+52.6%). We get an average fee APR on Gamma from DeFiLlama (Get the average fee APR, as this APR fluctuates a lot day by day compared to the reward APR).
Gamma’s TVL/APR ratio: 3.77M/120% = 3083333.333333333333333
WETH-USDC on Gamma Strategies.numbers
As we aim to reach $4M TVL, our target APR is $4M/3083333.333333333333333 = 129.7%
We plan to incentivize liquidity providers with a 129.7% APR (fee APR + Reward APR ) for the 12-week program.
The current avg. fee APR on the Stryke is about 97.28% fee APR (59.18k fee in 2 weeks * 24/ $1.45M TVL) on WETH-USDC CLAMM. Given that the utilization rate of liquidity for the option purchase stays mostly 99% with the growing TVL and that Stryke is now discounting option premiums during the STIP reward period, we estimate the average. fee APR remains the same or higher at the level of $4M TVL.
Therefore, we aim to distribute 32.4% APR (=129.7% - 97.3%) by ARB LTIPP grant.
$4M * 32.4%APR = $1,296,000 (annual)
In 12 weeks,
$1,296,000/ 52weeks *12weeks = about $300,000, equivalent to 150,000 ARB ($2 per ARB)
Grant Matching: [Enter Amount of Matching Funds Provided - If Relevant]
We don’t have a native token yet.
Grant Breakdown: [Please provide a high-level overview of the budget breakdown and planned use of funds]
The grant will be distributed through our point program “Orange LockDrop” as follows:
- Users earn points by locking ETH/WBTC/ARB for more than 6 months and referring friends.
- The funds locked will be managed through the Orange ALM vault on the Stryke CLAMM pools.
- At the TGE, our native tokens will be distributed proportionally according to the amount of points earned.
- For the first 3 months, the LTIPP grant will be distributed proportionally to participants according to the amount of points earned.
- That means we don’t determine the allocation for each pool but allocate based on points
- Target Vault: the vaults on the Stryke CLAMM pool of WETH- USDC, ARB-USDC, and WBTC-USDC.
- We may list additional target vaults on our partnered LPDfi protocols (Smilee, InfinityPools, Limitless, and Marginzero) once the smart contract gets audited and deployed respectively.
- Milestone for grant: Grant will not be distributed if TVL does not exceed the predetermined milestone threshold. Non-distributed grants will be sent back to the Arbitrum Foundation.
We are open to disclosing more detailed information privately to the Council.
Funding Address: [Enter the specific address where funds will be sent for grant recipients]
0xd076397eC36F1C92939bd8cdA9F9F7734F308C4b
Funding Address Characteristics: [Enter details on the status of the address; the eligible address must be a 2/3, 3/5 or similar setup multisig with unique signers and private keys securely stored (or an equivalent custody setup that is clearly stated). The multisig must be able to accept and interact with ERC-721s in order to accept the funding stream.
The above address is 2 out of 3 Gnosis Multisig
Treasury Address: [Please list out ALL DAO wallets that hold ANY DAO funds]
- 0xec177d69971eeeb3654a347acbfff4435ed42e41(Mainnet Multisig)
- 0x29c8942c7fdde7fcfb46eb6d0fe62f9ded75361c (Optimism Multisig)
- 0xd076397ec36f1c92939bd8cda9f9f7734f308c4b (Arbitrum Multisig)
- 0xa6fa7130c671d3cf00f47d58d4c8a6fa87b3aedd (Polygon Multisig)
Contract Address: [Enter any specific address that will be used to disburse funds for grant recipients]
N/A yet
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: [Clearly state the primary objectives of the grant and what you intend to achieve]
We aim to host an incentivized point program “Orange LockDrop” collaborating with Stryke and other LPDfi protocols to scale liquidity for the long run in both Orange and other LPDfi protocols in the Arbitrum ecosystem. The object is to bootstrap participation in this program by incentivizing users with the grant of 150,000 ARB as rewards for the first 12 weeks and to achieve TVL 4M.
We expect Stryke would get more than $5M TVL, $4M from Orange’s ALM vault (80% share), and this amount of TVL facilitates more than $3.6M average daily trading volume.
Execution Strategy: [Describe the plan for executing including token distribution method (e.g. farming, staking, bonds, referral program, etc), what you are incentivizing, resources, products, use of funds, and risk management. This includes allocations for specific pools, eligible assets, products, etc.]
The grant will be distributed through our point program “Orange LockDrop”:
- For the first 3 months, the LTIPP grant will be distributed proportionally to participants according to the amount of points earned.
- That means we don’t determine the allocation for each pool but allocate based on points
- Target Vault: the vaults on the Stryke CLAMM pool of WETH- USDC, ARB-USDC, and WBTC-USDC.
- Milestone for grant: Grant will not be distributed if TVL does not exceed the predetermined milestone threshold. Non-distributed grants will be sent back to the Arbitrum Foundation.
Product development/ Risk management:
- We may list additional target vaults on our partnered LPDfi protocols (Smilee, InfinityPools, Limitless, and Marginzero) once the smart contract gets audited and deployed respectively.
- Only audited contracts will be used for the grant distribution.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric? [Provide relevant design and implementation details]
We will introduce the point program “Orange LockDrop”, described in the Grant Breakdown section. This system asks users to lock their funds in our ALM vault for more than 6 months, incentivising them with our future native token rewards.
As the user’s liquidity will be locked for more than 6 months, incentivised by not only the ARB grant but also our future native token rewards, this makes liquidity sticky to LPDfi protocols through the Orange ALM vault.
Besides, our automated liquidity management strategy delivers sustainable yield opportunities from swap fees, option premiums, and funding rates from AMM/LPDfi protocols.
Especially for LPDfi protocols, users can expect higher yields. Fragmenting and separately managing liquidity allows current tick liquidity to earn swap fees in AMMs, while unused liquidity can be lent as options or perpetual for premium earnings, enhancing capital efficiency.
With this proposal, we aim to reach more DeFi users, attracting more liquidity to the LPDfi space through Orange Finance, where fees alone can be sustainable and real yield for users, thereby liquidity becomes anchored on Orange Finance and LPDfi protocols even after the end of ARB rewards.
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. [Please also justify why these specific KPIs will indicate that the grant has met its objective. Distribution of the grant itself should not be one of the KPIs.]
-
TVL: 4M (Source of Truth: Orange dApp, Dune)
Since the launch, Our vault on the Stryke WETH-USDC CLAMM pool has swiftly surpassed $1M in TVL within just one week, accounting for approximately 80% of the WETH-USDC CLAMM TVL, and comprising half of Stryke’s overall TVL. We expect that more liquidity would be deposited into the Stryke CLAMM pools, once we deploy the ALM vault on the ARB-USDC and the WBTC-USDC pools.
According to the Dopex Bi-Weekly Update (2024-03-08), the latest stats are as follows:
Average daily volumes: ~1.8MAverage TVL: 2.5M
Dopex Bi-Weekly Update (March 08, 2024)
We expect Stryke would get more than $5M TVL, $4M from Orange’s ALM vault (80% share), and this amount of TVL facilitates
$5M TVL * ($1.8 daily volume / $2.5M TVL) = $3.6M average daily trading volume.
The utilisation rate still stays around 99% level in the ticks near the spot price. Therefore, it is clear that there is a huge demand for more TVL for trading options and daily trading volume on Stryke would grow significantly by accumulating more liquidity through Orange FInance’s ALM vault, which deposits/manages liquidity into ticks around the spot price, incentivized by the “Orange Lockdrop” campaign with ARB incentives.
-
The percentage of users retaining deposits beyond 6 months: 50% (Dune)
Our main objective through the grant is to scale liquidity for the long run by incentivizing the campaign “Orange Lockdrop”, where users need to lock ETH/WBTC/ARB for more than 6 months. This KPI indicates how many percent of users participate in the campaign.
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.]
Milestone 1: Allocated 50% of the grant (75,000 ARB) to achieve TVL $2M, otherwise the grant will not be distributed and we will send them back to the Arbitrum Foundation.
Milestone 2: Allocated another 50% of the grant (75,000 ARB) to achieve TVL $4M, otherwise the grant will not be distributed and we will send them back to the Arbitrum Foundation.
| Milestone | Target | Grant Allocation | Deadline | In case of failure |
|---|---|---|---|---|
| Milestone 1 | $2M TVL through the Campaign “Orange LockDrop” | 75,000 ARB | 12 weeks | The grant will not be distributed and we will send them back to the Arbitrum Foundation. |
| Milestone 2 | $4M TVL through the Campaign “Orange LockDrop” | 75,000 ARB | 12 weeks | The grant will not be distributed and we will send them back to the Arbitrum Foundation. |
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]
In the dynamic realm of DeFi, liquidity reigns supreme – it is the lifeblood that fuels the ecosystem. Deep liquidity is essential for DEXes to facilitate smooth trading activities, minimize slippage, and enhance user experience. However, the DeFi landscape is still grappling with the challenges of insufficient liquidity on DEXes, largely due to the complex user interfaces and the risk-reward imbalance inherent in the Automated Market Maker (AMM) model for Liquidity Providers (LPs).
LPDfi is emerging as a pivotal narrative, signifying a major shift towards more innovative and efficient liquidity solutions as explained in the “stickiness” question above. However, LPDfi requires liquidity providers for further complex and active liquidity management with advanced financial knowledge.
It can be said that this complexity has hindered LPDfi protocols attracting liquidity, despite yields being more capital-efficient and higher compared to normal AMM. Indeed, the utilization rates of liquidity on Stryke are nearly 100% (which means demand for option is much larger than supplied liquidity) at the moment.
By simplifying the LP UI/UX, the ALM for LPDfi can be the solution to this issue, helping LPDfi protocols to attract more liquidity which goes to AMMs on the Arbitrum ecosystem. We are confident that Orange Finance, LPDfi protocols and AMMs on the Arbitrum ecosystem can attract more liquidity by reaching more DeFi users through the program.
By offering an ALM vault, we simplify the UI/UX for LPDfi protocols, effectively addressing the liquidity challenges they face. Through LPDfi protocols, this also facilitates a significant increase in liquidity flow towards Automated Market Makers (AMMs) within the Arbitrum ecosystem. Through this program, Orange Finance, LPDfi protocols, and AMMs on the Arbitrum ecosystem are ready to attract more liquidity by reaching a wider DeFi user base.
Indeed, Since the launch, Our vault has swiftly surpassed $1M in TVL within just one week, accounting for approximately 80% of the WETH-USDC CLAMM TVL (1.24M /1.51M), and comprising half of Stryke’s overall TVL (1.24M / 2.64M).
The utilisation rate still stays around 99% level in the ticks near the spot price. Therefore, daily trading volume on Stryke should grow significantly by accumulating more liquidity through Orange FInance’s ALM vault, which deposits/manages liquidity into ticks around the spot price, incentivized by the “Orange Lockdrop” campaign with ARB incentives.
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
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 28. Along with this list, please answer the following:
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, We are prepared to accept and provide the data requirements.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? [Please describe your strategy and capabilities for data/reporting]
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
Yes, we will create a Dune dashboard to provide bi-weekly program updates
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
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