In the grand theater of blockchain innovation, Pendle stands center stage, ready to seize the spotlight of the 2M ARB grant bestowed by the Arbitrum DAO. This audacious protocol has embarked on a remarkable journey, a dance of tokens where yield splits gracefully into principal and earnings. Pendle’s emergence on the scene earlier this year has been nothing short of meteoric, and it now finds itself harmoniously intertwined with the very fabric of Arbitrum.
The numbers, my dear friends, speak volumes: a staggering $46M Total Value Locked, an average monthly trading volume of $13M, and a vibrant community of 6,000 monthly active users. But Pendle’s brilliance isn’t confined to its own orbit; rather, it entwines itself seamlessly with fellow protocols on Arbitrum. Lido, GMX, Gains Network, RocketPool, Camelot, HMX, Stargate, Penpie, and more all find themselves partners in this intricate dance. Pendle acts as the choreographer, enriching their liquidity and unearthing the hidden potential within these assets by creating vibrant yield markets.
But it’s not all pomp and circumstance; Pendle waltzes forward with a clear and meticulously crafted plan, a symphony of growth and innovation set to resonate within the Arbitrum ecosystem. With wisdom and purpose, Pendle intends to channel the grant’s power for the betterment of the Arbitrum community and the broader DeFi realm. Thus, it is my humble belief that this deserving maestro, Pendle, should indeed receive the grant, ensuring a virtuoso performance that will echo through the annals of blockchain history.
Pendle’s been innovating a new space with their product and It will be a whole chain reaction that boosts liquidity for a bunch of projects on arbitrum.
Pendle deserves this grant.
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Firstly, thank you for your proposal and for showing enthusiasm about the Arbitrum ecosystem.
Introduction and Rationale
Pendle’s proposal aims to deepen liquidity and increase both volume and active users in the Arbitrum network. A grant of 2,000,000 ARB, making up 4% of the total program availability, has been requested for this purpose. Since launching on Arbitrum in March 2023, Pendle has shown impressive growth, particularly in total value locked (TVL), which currently stands at $45 million. The protocol, which allows permissionless tokenization and trading of yield, aligns well with Arbitrum’s focus on yield-bearing assets. With a range of strategies for both high and low-risk users, Pendle seems poised to add value to Arbitrum. We find the proposal largely positive, with potential to significantly contribute to Arbitrum’s ecosystem.
Major Concerns
Concern Regarding KPI Effectiveness
No data provided to validate the chosen KPIs
No milestones or plan to measure the effectiveness of the grant
Our recommendation for change: We suggest implementing a milestone progression for your KPIs, with the grant size scaling accordingly when certain thresholds are reached.
Minor Concerns
Uncertainty over how the 55% allocation for incentivizing pools via vePENDLE will interact with other protocols
Our recommendation for change: A breakdown or case study demonstrating successful integration with other protocols could offer more clarity.
Summary
Castle Capital appreciates the efforts put forth by Pendle and the innovative opportunities they offer within the Arbitrum DeFi ecosystem. Distributing most of the grant through governance token holders aligns well with our ethos, and the focus on growing TVL benefits the broader ecosystem. Whilst we support this proposal, we believe the proposal could be improved by providing a detailed plan to measure the effectiveness of the grant against the chosen KPIs.
We hope that our comments are constructive and contribute to the further development of this promising proposal for the benefit of the broader ecosystem.
As for the milestone progression, as the program lasts for a short period (starting sometime mid-October when grant is received to end of January 2024), it would make sense for the milestones to be measured in 2 tranches, one after ~2 months from receipt from grant and the target milestone at the end of the program. As funds are streamed biweekly, we will deploy the funds based on our Grant Timeline specified on our proposal.
With regards to the Minor Concerns, as we’re incentivizing the Pendle pools, LPing into Pendle requires you to interact with the underlying protocol to acquire the yield-bearing asset. Our pools are comprised of the underlying against the Principal Token. In the case of the Pendle PT-Stargate-USDT pool, it would be Stargate-USDT/PT-Stargate-USDT. Therefore, when deposting into the Pendle pool using USDT, you’d need to interact with the Stargate USDT to first add liquidity into the Stargate USDT pool and then stake that LP into their farm.
With the launch of different Pendle pools on Arbitrum, we’ve helped deepen the underlying protocol’s liquidity as Pendle tokenizes either the yield-bearing asset or the yield-bearing position. Over time, we have managed to own a majority of the liquidity from the underlying protocol. Some of the key contributions include:
Arbitrum’s rETH pool: 35% liquidity owned, grew liquidity by 57% since launch
Camelot’s ARB-GRAIL pool: 51% liquidity owned, grew liquidity by 234% since launch
Camelot’s PENDLE-ETH pool: 70% liquidity owned
Stargate’s USDT Arbitrum pool: 10% liquidity owned
It might be a bit late, but I stand in favor of the proposal! Pendle has been so far net positive for the overall DeFi ecosystem, let’s give them the means to grow sustainably on other chains!
Blockworks Research supports this proposal and finds the requested amount of 2,000,000 ARB to be 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.
From @Seedgov led by the @cattin delegation, we want to convey our support to this proposal. The reasons why we agree are as follows:
Yield optimization, as Pendle is setting it, is innovative as a differentiator, and the potential for cross-compatibility is a significant aspect.
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.
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 Pendle’s effort in delivering a promising proposal and working with the community throughout the process.
We appreciate the clarity and thoroughness of the Pendle project proposal. As indicated in the grant breakdown, the primary focus is to deepen liquidity and increase trading volume on Pendle, while also supporting the growth of the Arbitrum ecosystem. Emphasizing incentives for ARB-focused initiatives within the proposal can further strengthen the Arbitrum ecosystem and attract more participants.Given the meticulous details and transparent planning showcased in the proposal, we are inclined to endorse it.
On behalf of ITU Blockchain, we express our ‘For’ vote for this Pendle project proposal.