SECTION 1: APPLICANT INFORMATION
Applicant Name:
Chef Maroon
Project Name:
PancakeSwap
Project Description:
PancakeSwap is a multi-chain decentralized exchange (DEX), currently live on Arbitrum One, with an expansive product suite (including Prediction and Perpetuals).
Team Members and Roles:
- Maroon (BD Chef)
- More details on wider team: The Kitchen Team | English | PancakeSwap
Project Links:
- Website: https://pancakeswap.finance/
- Github: PancakeSwap · GitHub
- Twitter: https://twitter.com/PancakeSwap
- Telegram: Telegram: Contact @pancakeswap
- Discord: PancakeSwap
- Docs: https://docs.pancakeswap.finance/
Contact Information:
- Point of Contact [forum handle]: chefmaroon
- Point of Contact’s TG handle: Telegram: Contact @ChefMaroon
- Twitter: https://twitter.com/ChefMaroon
- Email: info@pancakeswap.com
Do you acknowledge that your team will be subject to a KYC requirement?:
Yes
SECTION 2a: Team and Product Information
Team experience:
PancakeSwap has been building since September 2020, and is currently the second largest DEX by volume and third largest DEX by TVL across all chains.
Over the years, we have built products and features such as Farms, Syrup Pools, Initial Farm Offering - IFO (token launchpad), Prediction, Lottery, Perpetuals, Gaming Marketplace, veCAKE, Position Manager, and more.
What novelty or innovation does your product bring to Arbitrum?
A concentrated liquidity DEX, coupled with Farms, Syrup Pools, Perpetuals, veTokenomics, and a ready-to-ship token launchpad product (IFO).
We previously launched our Prediction product on Arbitrum with Chainlink’s CCIP, but had to close it a month later due to high infrastructure costs. We plan to relaunch it on Arbitrum before 22 April with a lower cost setup, and will continue to explore how we might use CCIP to bring some of our other side-products to Arbitrum in the future.
Alpha 
: We are working with Stryke (formerly Dopex) to ship a CLAMM options trading product on Arbitrum, utilizing PancakeSwap v3 pools.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes, PancakeSwap allows ERC20 tokens to be traded.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
Uniswap, Camelot, Trader Joe, Ramses, WOOFi, Balancer, Curve, Sushi, and others.
How do you measure and think about retention internally? (metrics, target KPIs)
We measure and analyze trends for the following categories:
- Users - DAU, WAU, MAU, and New Users
- Liquidity - TVL
- Performance - Volume, Fees
Relevant usage metrics - Please refer to the OBL relevant metrics chart 27. For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:
| Category | List of Metrics |
|---|---|
| General | Daily Active Users, Daily User Growth, Daily Transaction Count, Daily Protocol Fee, Daily Transaction Fee, Daily ARB Expenditure and User Claims, and Incentivized User List & Gini |
| DEXs | For each asset/trading pair: TVL, Trading Volume, Market Depth, Price Impact, List of Traders, and List of Liquidity Providers |
| Gambling | TVL, In-Game Betting Volume |
| Options | For each asset/trading pair: TVL, Trading Volume, Open Interest, List of Traders, List of Liquidity Providers, and Fees |
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?:
We are a multi-chain DEX that originated from the BNB Chain, but are rapidly expanding on other chains, with Arbitrum being a key ecosystem.
On what other networks is the protocol deployed?:
BNB Chain, Ethereum, Aptos, zkSync Era, opBNB, Linea, Base, and Polygon zkEVM.
What date did you deploy on Arbitrum mainnet?
Our public launch was on 10 Aug 2023. (We deployed our first smart contract on 14 Jun 2023 for testing purposes.)
Do you have a native token?
Yes, the $CAKE token - information on our tokenomics can be found here.
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
We have been emitting CAKE incentives to liquidity providers of Arbitrum v3 pools since Aug 2023. In that period, we achieved:
- Daily average volume: $3M
- Daily average TVL: $2.5M
- Daily average incentives disbursed: $1729
- Duration: 204 days
- Volume / incentive ratio: 1735x
Current Incentivization: How are you currently incentivizing your protocol?
We provide CAKE incentives to Arbitrum v3 Farms, based on the vote results of veCAKE holders every fortnight. Currently, we are emitting an annualized $3M in CAKE to Arbitrum v3 pools, although this figure changes every epoch (14 days).
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
No
Protocol Performance:
Our protocol performance in terms of users and volume can be found here.
Our weekly trading volume on Arbitrum v3 grew from $2M in Aug 2023 to $28M in Feb 2024, with a peak of $74M in Dec 2023.
Our weekly average DAU grew from 202 in Aug 2023 to 1.4k in Feb 2024.
Protocol Roadmap:
In the coming months, we have the following goals, amidst others:
- March 2024 - Stryke CLAMM Options Trading on Arbitrum
- Before 22 April - Bringing Prediction back to Arbitrum
- DEX Enhancement
- veCAKE Enhancement (bringing its benefits multi-chain, including to Arbitrum)
Audit History & Security Vendors:
Our audits can be found here, and we have an active Bug Bounty program here.
Security Incidents:
Vulnerability 1: LotteryV1
- Date of incident: 22 Feb 2021
- Date of resolution: 23 Feb 2021
- No funds lost
Vulnerability 2: SYRUP Pool
- Date of first incident: 10 Oct 2020
- Date of migration to CAKE-based pools: 3 Nov 2020
- Postmortem
SECTION 3: GRANT INFORMATION
Requested Grant Size:
450,000 ARB
Justification for the size of the grant:
V3 Pools
For v3 pools, we’re currently at ~$6M daily volume (Week of 1 Mar 2024) and ~$4.67M TVL and aim to grow to $15.25M in daily volume and $12.7M in TVL. This maintains a 1.2x volume / TVL ratio, which is similar to our current ratio.
Assuming an average of 22.5% APR across our Farms for an 84-day campaign, we’ll need around 330,000 ARB at the price of $2 per ARB. This works out to an incremental daily volume / incentive ratio of 1177x ($9.25M incremental volume, $7,857 daily ARB incentives). This is slightly lower compared to the result of our existing Arbitrum v3 liquidity mining program. Understandably, we mostly incentivized core pools in that program which have much higher capital efficiency and APR utilization from users.
Our current Farms’ average APR of ~120% is slightly misleading as veCAKE holders are now in charge of allocating CAKE incentives to pairs of their choice. This causes the incentive allocation to not be fully optimized towards volumes and TVL, resulting in lower utilization of the Farms. In contrast, we will carefully adjust the LTIPP incentives fortnightly to make sure we reward the pairs with the highest volumes and TVL, hence we projected an average APR of 22.5%.
Prediction
For Prediction, we’re aiming for $85,000 in daily bet amount. Based on a 60x bet amount / incentive ratio that we calculated from our previous campaign, we’ll need 60,000 ARB at the price of $2 per ARB.
Stryke CLAMM Options
For Stryke CLAMM options, we’re targeting $370,000 in daily volume. Based on a volume / TVL ratio of 0.78 and an average of 110% APR based on Stryke’s historical data, we’ll need around 60,000 ARB at the price of $2 per ARB.
This collaboration with Stryke will utilize PancakeSwap’s v3 concentrated liquidity pools on Arbitrum, extending the success and reach of their market-proven CLAMM options trading product which first started on another DEX. It deepens our partnership with a prominent Arbitrum protocol, while offering a more diversified product experience for option traders on the chain.
Although there may be overlapping incentivized pools between the ‘v3 pools’ and ‘Stryke CLAMM Options’ allocation categories, the method of incentivization differs greatly. Under ‘v3 pools’, we will incentivize tight liquidity to achieve higher capital efficiency, while the focus is on supplying available liquidity for options trading under the ‘Stryke CLAMM Options’ category. Furthermore, only liquidity provided via Stryke will be eligible for ARB rewards in this category and vice versa - we will utilize the whitelist and blacklist function on Merkl to manage this.
Grant Matching:
We will continue to disburse CAKE to our Arbitrum v3 deployment based on how our veCAKE holders vote. Based on the current epoch’s voting behavior, there is ~220k CAKE going towards Arbitrum v3 pools on an 84-day basis, although this figure changes every fortnight.
Grant Breakdown:
| Allocation | ARB amount | Grant % |
|---|---|---|
| Liquidity mining for v3 pools (core pairs) | 165,000 | 36.7% |
| Liquidity mining for v3 pools (non-core pairs) | 165,000 | 36.7% |
| Prediction | 60,000 | 13.3% |
| Stryke (formerly Dopex) CLAMM options | 60,000 | 13.3% |
Core pairs refer to tokens that make up the majority of volumes and liquidity on Arbitrum, including the likes of WETH, ARB, WBTC, USDC, USDT, USDC.e, DAI, etc. Non-core pairs cover everything else, consisting mostly of project tokens and lesser-circulated stablecoins.
Based on our past 30 days’ data, this is the breakdown of v3 pools on Arbitrum PancakeSwap:
- Core pairs: $1.3M avg. daily TVL, $3.9M avg. daily volume → 3x volume / TVL ratio
- Non-core pairs: $4.1M avg. daily TVL, $458k avg. daily volume → 0.11x volume / TVL ratio
Even though core pairs are far superior in terms of volume and efficiency, we are advocating for a 50-50 split for ARB incentives between core and non-core pairs as we recognize the importance of building up liquidity for project tokens, especially Arbitrum-native ones.
Funding Address:
0x5562335F7B2b6A740d49a3EEdE55216E61A1de7B
Funding Address Characteristics:
2/2 multisig - we have clarified with the Arbitrum Compliance Department that a 2/2 multisig qualifies
Treasury Address:
0x91b3927f100Bb6c19E5434bFaBa07D60670b98D6
Contract Address:
- Merkl distribution contract: 0x3Ef3D8bA38EBe18DB133cEc108f4D14CE00Dd9Ae
- Prediction: 0x5562335F7B2b6A740d49a3EEdE55216E61A1de7B (we will distribute incentives to participants from this multisig)
- Stryke CLAMM options: 0x880C3cdCA73254D466f9c716248339dE88e4a97D (3/5 multisig controlled by Stryke, which went through KYC for the STIP)
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives:
Increase TVL, volume, and user base on Arbitrum PancakeSwap
Execution Strategy:
Allocation 1: Liquidity Mining for v3 Pools
Users deposit their liquidity on PancakeSwap v3, and can claim ARB rewards via Merkl’s UI; they do not have to stake their liquidity positions.
- ARB amount:
- 165,000 for core pairs (36.7% of grant)
- 165,000 for non-core pairs (36.7% of grant)
- Total distribution: 55,000 ARB fortnightly
For non-core pairs, we will manually engage projects within and beyond Arbitrum to provide liquidity on Arbitrum PancakeSwap. We aim to attract some of our existing partners to deploy on Arbitrum PancakeSwap, as well as support homegrown projects. As appropriate, we will incentivize ARB-TOKEN pairs.
For both core and non-core pairs, we will explore potential co-incentivization options, such as with position managers, to maximize the efficiency of the grant.
The exact distribution of the rewards will be decided closer to the date of incentivization, taking into account the latest market developments. It will also be subject to change during the incentivization period, with all changes communicated in the fortnightly reports.
Allocation 2: Prediction
We will organize external campaigns to reward users who participate in our Prediction product. An example of a previous campaign we ran can be found here. We will reward high volume participants as well as users who participate beyond a certain threshold.
- ARB amount: 60,000 (13.3% of grant)
- Distribution: 10,000 ARB fortnightly
Allocation 3: Stryke (formerly Dopex) CLAMM Options
Users deposit their liquidity on PancakeSwap v3 pools via Stryke (formerly Dopex), to be utilized for Stryke CLAMM Options trading on PancakeSwap’s UI. PancakeSwap will send the ARB rewards to the Stryke team via their DopexV2 multisig (KYC-ed during the STIP), who will then utilize Merkl to distribute the rewards to liquidity providers.
- ARB amount: 60,000 (13.3% of grant)
- Distribution: 10,000 ARB fortnightly
The following pairs will be incentivized, though this might be subject to change depending on the performance after incentives begin:
- ARB/USDC
- WETH/USDC
- WBTC/USDC
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?
We will continue to emit CAKE based on the veCAKE gauges vote results every fortnight even after the LTIPP. This provides additional yield to incentivize liquidity providers to remain on PancakeSwap, on top of the yield they already receive from swap fees.
We offer a suite of different products to keep users engaged - Swap, Farms, Pools, Perpetuals, Prediction, and Options (both coming soon to Arbitrum). Some of these products, especially Prediction, have gamified elements to enhance user retention even beyond the LTIPP period.
Furthermore, we will continue to onboard projects’ liquidity onto PancakeSwap to provide a holistic trading platform for our users. By having deep liquidity for a wide variety of tokens, users will naturally keep coming back to PancakeSwap to execute their trades.
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.
| Allocation | Current progress | KPI |
|---|---|---|
| Liquidity mining for v3 pools | $6M average daily volume, $4.67M TVL | $15.25M daily volume, $12.7M TVL |
| Prediction | NA - product isn’t live yet | $85,000 daily bet volume |
| Stryke (formerly Dopex) CLAMM options | NA - product isn’t live yet | $370,000 daily volume, $475,000 TVL |
We’ll track the KPIs via a dedicated Dune Dashboard that will be updated regularly during the 12-week program.
Grant Timeline and Milestones:
PancakeSwap will distribute the grant linearly across 12 weeks.
Milestones (for the v3 pools allocation):
- Month 1: $8M daily volume, $6.67M TVL
- Month 2: $11M daily volume, $9.16M TVL
- Month 3 (end of campaign): $15.25M daily volume, $12.7M TVL
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
- Increase TVL for Arbitrum through increased liquidity on Arbitrum PancakeSwap
- Increase volume, transactions, and fees for Arbitrum through increased volume on Arbitrum PancakeSwap
- Introduce innovative product offerings to Arbitrum via Prediction and Stryke CLAMM options
- Increase user engagement for Arbitrum by cross-pollinating our large user base on the BNB Chain with Arbitrum PancakeSwap
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 27. 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, no special requests/considerations.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Yes, we will use Dune.
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
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