SECTION 1: APPLICANT INFORMATION
Applicant Name:Chef Maroon
Project DescriptionPancakeSwap is a multi-chain decentralized exchange (DEX), currently live on Arbitrum One, with an expansive product suite (including launchpads and perpetuals).
Team Members and Qualifications:
Maroon (BD Chef)
Mochi (Head Chef)
Icy (BD Chef)
More details on wider team: https://docs.pancakeswap.finance/team/the-kitchen-team
Github: PancakeSwap · GitHub
Telegram: Telegram: Contact @pancakeswap
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?:Yes
SECTION 2: GRANT INFORMATION
Requested Grant Size:
200,000 ARB (adjusted from original 500,000 ARB ask, with more details here)
Beacon Grants (<= 200K ARB)
Live on Arbitrum for at least 2 months
Meets one of the following criteria:
$2M 30D cumulative volume
PancakeSwap would be live on Arbitrum for >2 months by end of voting period - Beacon
PancakeSwap has $2.9M in TVL - Beacon
PancakeSwap has $61M in 30d cumulative volume - Beacon
156,000 CAKE (100% of grant value based on current prices)
Over the next year, PancakeSwap is committed to match the grant with at least 156,000 CAKE (~100% of grant’s value based on current prices). This is distributed via our yield farms, and has been ongoing since we deployed on Arbitrum.
EDIT: There was an oversubscription rate of 2.5x after the application deadline closed, hence we proportionally reduced our grant request amount to 200k ARB. This small, but meaningful decision was also made after noticing many homegrown projects applying for the grant.
- 80k ARB (40%) will be used to incentivize liquidity for core pairs, such as USDC-ETH, USDT-ETH, USDC-USDT, and ARB-ETH – this is essential for other DeFi legos (especially lending / borrowing protocols) to operate smoothly
- 120k ARB (60%) will be used to incentivize liquidity for non-core pairs, and to increase traction for high-impact products that we intend to port over to Arbitrum. Where appropriate, we will incentivize liquidity for ARB-TOKEN pairs.
EDIT: We changed to a 40-60 allocation split after listening to community feedback. This way, a larger proportion of the grant tokens will go towards incentivizing native projects’ liquidity, as well as attracting newer projects to deploy on Arbitrum
As our PancakeSwap users are significantly sticky to our DEX, we will use the 40% allocation to build up an adequate amount of liquidity for core tokens (e.g. ARB/ETH/USDC/USDT).
For non-core pairs, we will prioritize pairs that will attract high volumes and TVL; we will employ a manual process to identify and incentivize key pairs on Arbitrum, reviewing and adjusting our distribution allocation weekly. We commit to communicating these distributions and rationale to the Arbitrum community every two weeks. Where appropriate, we will do ARB-TOKEN pairs.
For high-impact products, we will look to port over both (i) battle-tested products which have demonstrated a track record of traction and usage (e.g. our Prediction product), and (ii) newer (and more experimental) products which may have the potential to meaningfully benefit the Arbitrum ecosystem and community (e.g. Position Manager Marketplace). Once these products are ported over and start receiving grant tokens, we will communicate their performance to the Arbitrum community every two weeks.
If at the end of the grant period, there are any tokens remaining, they will be returned to the Arbitrum DAO.
Funding Address Characteristics:3/6 multisig
For incentivizing high-impact products, the method of fund distribution will vary - we will publish the relevant smart contracts in our bi-weekly status updates.
SECTION 3: GRANT OBJECTIVES AND EXECUTION
- Increase TVL for Arbitrum through increased liquidity on Arbitrum PancakeSwap
- Increase volume, transactions, and sequencer fees for Arbitrum through increased volume on Arbitrum PancakeSwap
- Increase user engagement for Arbitrum by cross-pollinating our large user base on the BNB Chain with Arbitrum PancakeSwap
Key Performance Indicators (KPIs):
- TVL - to maintain a 30D average of $20M TVL on 1 Mar 2024 (~8x growth)
- Volume - to target Top 5 DEX by daily volumes (30D average) on 1 Mar 2024 (~4x growth based on today’s rankings)
- Daily active users (DAU) - to maintain DAU (30D average) of 4,000 on 1 Mar 2024 (~5x growth)
- Volume / TVL Ratio will be benchmarked with other DEXes, to ensure that grant incentives are distributed efficiently
UPDATE: Despite reducing our grant request, we are keeping the KPIs unchanged. We will continue working towards these targets by the stipulated deadline, although we recognize it will be a more challenging task given our lowered grant request amount.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
It enables us to jumpstart liquidity on Arbitrum, using our battle-tested DEX platform that is already the second largest DEX in total chain volumes. We have started incentivizing liquidity on Arbitrum with CAKE tokens, but this grant would allow us to increase the size and velocity of our incentivization program.
With the grant, we will call on our existing partners on other chains to deploy their protocol and token on Arbitrum, helping them incentivize their token liquidity for a smoother onboarding process. We will also incentivize token pairs of both existing partners and homegrown projects on Arbitrum to help them boost token liquidity and volumes. Where appropriate, we will incentivize ARB-TOKEN pairs.
While we acknowledge that capital is very liquid in this market environment, we are confident that users will continue to use PancakeSwap beyond the incentive period for several empirical reasons: our capital efficient v3 DEX; sizable community reach; wide range of products, and our ability for further incentivization via CAKE in the long-term. We have seen strong evidence for this outcome of sustained protocol (and chain) usage on our various chain deployments.
Once we have garnered a decent user base on Arbitrum, we will look towards bringing over some of our products from the BNB Chain (Lottery, Pottery, Prediction, etc.), depending on the community’s needs. Our Perpetuals product is already live on Arbitrum here, while our launchpad product (IFO) is ready for launch - we are in the process of lining up suitable launch projects.
Justification for the size of the grant:
Based on @tnorm’s recommendation, we qualify under the ‘Beacon Grant’ category as our 30D trading volume exceeds $2M, our TVL exceeds $1.5M, and we would have deployed on Arbitrum for >2 months by the end of the voting period.
|As of posting, the Week of 24th September has not been concluded, and therefore the volume data for the last bar is incomplete|
To meaningfully demonstrate our commitment to Arbitrum’s growth, we are intending to match at least 100% of the grant’s dollar value with CAKE over the next year, ensuring that the growth we anticipate during the grant period will be sustained in the long run.
- The funds will first be sent to our multisig address 0xeCc90d54B10ADd1ab746ABE7E83abe178B72aa9E
- Over a period of 16 weeks, we will manually inject ARB incentives on a weekly basis into the respective smart contracts on Merkl, based on the allocation: 40% to core pairs (e.g. USDC-ETH, USDT-ETH, USDC-USDT, ARB-ETH), and up to 60% to non-core pairs that bring high volumes and TVL. ARB incentives for high-impact products will be handled separately.
- Within the core pairs allocation, we will aim to distribute the grant incentive effectively. Our priority is to achieve high volumes and TVL for both PancakeSwap and Arbitrum, and will review and adjust the allocation weekly based on the token pairs’ performance, reporting bi-weekly to the Arbitrum community.
- Within the non-core pairs/high-impact products allocation, for non-core pairs, we will similarly aim to distribute the grant incentive effectively. As part of the process, we will manually engage with projects (those within and beyond Arbitrum) and their communities to provide liquidity on Arbitrum PancakeSwap. We aim to attract many of our existing partners on other chains to deploy on Arbitrum PancakeSwap. We will also aim to support homegrown projects. As appropriate, we will incentivize ARB-TOKEN pairs
- Within the non-core pairs/high-impact products allocation, for high-impact products, we will distribute the grant incentive to further increase product traction. We are aware that badly-designed products may hide behind extravagant incentives, and will transparently communicate metrics, such as DAU and product activity output, on a bi-weekly basis to the Arbitrum community. For instance, for a product such as Prediction, we may use the grant incentive to augment the payout, to build up a critical mass of users that will be able to sustain more Prediction pairs (e.g. ARB, BTC, ETH, LINK), eventually leading to a growing user base.
- Ultimately, for both core and non-core pairs, we will strive to optimize our incentive structure to achieve the highest TVL and volume possible with our given grant size, similar to what we have been doing with our native CAKE emission thus far. The allocation will be reviewed and adjusted weekly based on performance. For benchmarking, as of writing, our Volume/TVL ratio on Arbitrum is roughly 100%, which is fairly efficient.
- ARB incentives will be injected with the following parameters on Merkl: 80% fees, 10% Token0, 10% Token1. This is to ensure we encourage liquidity providers to seed tight liquidity in the respective pools, hence optimizing capital efficiency.
- We will continue to invite liquidity managers and yield farming protocols to build on top of us to deepen our TVL and improve our user experience. Currently, we are integrated with DeFiEdge on Arbitrum and will be integrated with Gamma shortly. If a liquidity manager has received a grant and is keen on incentivizing the same pair, it will enhance the incentive efficiency of that pair.
- 200k ARB = 12,500 ARB weekly for 16 weeks
- 40% to core pairs = 5,000 ARB weekly for 16 weeks
- 60% to non-core pairs and high-impact products = 7,500 ARB weekly for 16 weeks
- ~100% CAKE matching will be distributed via our yield farms over the next year
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 4: PROTOCOL DETAILS
Is the Protocol Native to Arbitrum?:We are a multi-chain DEX that originated from the BNB Chain, but we are rapidly expanding on other chains, with Arbitrum being a key focus. We are keen to cross-pollinate our >100k DAU from the BNB Chain to Arbitrum PancakeSwap.
On what other networks is the protocol deployed?:BNB Chain, Ethereum, Aptos, zkSync Era, Base, Linea, and Polygon zkEVM.
What date did you deploy on Arbitrum?:10 Aug 2023
Our protocol performance can be found here and on DeFiLlama. Summary of key metrics:
- $1.3B TVL ($2.9M on Arbitrum)
- $7.3B volume in Aug 2023 ($61M cumulative 30D volume on Arbitrum)
- 0.95x daily volume (7D average) / TVL ratio on Arbitrum
- 108k DAU (7D average) on 15 Sep 2023 (878 on Arbitrum)
Our public roadmap can be found here. The key updates are our v3 Position Manager Marketplace, where users can have their v3 liquidity managed seamlessly for them, and our vCAKE gauge update that will increase efficiency of project teams’ incentivization on PancakeSwap.
Our extensive list of audits can be found here.
SECTION 5: Data and Reporting
Is your team prepared to create Dune Dashboards for your incentive program?:
Yes, we already have a comprehensive list of Dune Dashboards here. Creating one to track the results of our incentive program would not be a problem.