[Perpy] [DRAFT] [STIP - Round 2]

SECTION 1: APPLICANT INFORMATION

Applicant Name: Kharn

Project Name: Perpy

Project Description:

Perpy is the ultimate Social Fi & Asset Management Hub. With Perpetual, Spot, and Options supported within a streamlined UI, Perpy is the all-in-one dApp for traders to execute their most complex strategies seamlessly.

Traders attract investor funds into their vaults, trade on their behalf, and earn a transparent commission on any profits generated. Experience an unmatched trading journal and comprehensive trade statistics.

Investors seeking portfolio growth without the hassle of trading will find a wide range of skilled vault managers to invest in while maintaining full custody of their funds at all times.

Team Members and Qualifications:

  • Erasme: CEO & Co-Founder (core team)
  • Montaigne: Lead Dev & Co-Founder (core team)
  • Baal: Front-end Dev
  • Amospi: Community Manager
  • Kharn: CMO
  • Four freelance developers

Project Links:

Contact Information

  • TG: @KharnHash
  • Twitter: @KharnHash
  • Email: kharn@perpy.finance

Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes

SECTION 2: 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: 195,000 $ARB

Grant Matching: N/A

Grant Breakdown:

  • 120,000 ARB for “Direct PnL” incentives - Distribution based on the Trading PnL leaderboard each week and distributed amongst all traders showing a positive PnL. The PnL leaderboard will be reset every week to ensure fairness for new traders coming to the platform.

  • 60,000 ARB “Collateral” incentives - Every two weeks, the most profitable traders will have a portion of the ARB grant seeded to their vault to be used as extra collateral. This incentive allows traders to trade with bigger sizes and make more profits.

  • 15,000 ARB - “Outsider” incentives - Every month, one “Outsider” trader with a vault TVL <$5K (TBC) who showed sustainable performance will have a portion of the ARB grant deposited in his vault to have more collateral to trade with. This is to promote and help small but skilled traders to develop their brand and community.

Funding Address: 0x40810b6dd67e4ccb032E955c41D56821F59d2Fd2

Funding Address Characteristics:
2/3 multisig with securely stored private keys distributed across the Perpy core team.

Contract Address: N/A (each week, trading incentives will be sent directly from our multi-sig to eligible users using a multi-send tool).

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Clearly outline the primary objectives of the project and the Key Performance Indicators (KPIs) used to measure success. This helps reviewers understand what the project aims to achieve and how progress will be assessed.

Objectives:

Perpy’s primary goal with this requested grant is to attract and retain skilled traders (vault managers) to the platform and develop the Social Fi vertical on Arbitrum. Arbitrum is the forefront chain to trade perpetual and derivatives, and the Round 1 distribution amongst major Perpetual, Spot and Options protocols will attract more volume and cement this statement.

With a diverse offer of profitable vault managers, investors seeking to get exposed to a trading revenue without trading will, consequently, be attracted to Arbitrum and Perpy, seeing a new influx of TVL for Arbitrum from non-trader users.

In the meantime, vault managers will discover why Perpy is the all-in-one dApp for traders with the support of Perps, Spot & Optıons, enhanced UI & trading tools and trading journal & statistics.

Key Performance Indicators (KPIs):

These are the metrics we will track and provide a report on a bi-weekly basis:

  • Total Value Locked

    • Total Value Locked (AUM) before, during and after the grant period
    • TVL behaviour of incentivised vaults (“Collateral” and “Outsider” incentives)
  • Users

    • Total number of new users
    • Total number of new vaults created
    • Active unique users
  • Performance

    • Total Trading Volume
    • Profitability of Traders on the platform

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:

The rationale here is, on one hand, to leverage the vibrant Perpetual and DEX ecosystem on Arbitrum to attract traders from other layers and, on the other hand, organically attract new users who don’t trade, both personas contributing to Arbitrum TVL, Trading volume, transaction fees and overall success of the chain.

This grant is divided into three incentive categories as presented in Section 2:

  1. “Direct PnL” incentives
  2. “Collateral” incentives
  3. “Outsider” incentives

The aim behind these categories is to incentivise traders by getting direct incentives and additional collateral to trade with more size based on their profitability and not just the volume, as we want to avoid any form of wash trading or incentives farming.

On top of the “Direct PnL” incentives, the intent for Collateral and Outsider PnL incentives is to give profitable traders a boost of their collateral to get higher commissions on their successful trades. As these ARB incentives are deposited in the traders’ vaults, they can be recycled after the grant period ends as long as traders are profitable and don’t lose these incentives during trading.

Justification for the size of the grant:

As per the Arbitrum Incentives Working Group recommendation for STIP Round 1, we followed the Grant categories cap as there are no other guidelines for the moment.

We’ve been live on Arbitrum since Nov. 2022 with Perpy V1, our previous MVP: old Perpy. This first iteration had real traction between March 2023 and June 2023, seeing a rough $50M trading volume before the overall market volume was drastically reduced.

Then we launched Perpy V2 closed beta in September 2023, which we started to build from scratch since March 2023. Perpy Spectra is set to go public on November 24th, and we expect, worst-case scenario, to reach at least the same trading volume for the first quarter, i.e. $10M/month without any incentive program.

So we’re applying under the Beacon Grant category.

With a weekly 10,000 $ARB incentive, we expect an exponential growth of trading volume generating drastically more fees for Arbitrum.

Execution Strategy:

Perpy plans to distribute the granted funds through the following process:

“Direct PnL” incentive

  • 120,000 $ARB will be split into weekly 10,000 $ARB incentives over 12 weeks
  • Distribution will be based on a 7D Trading PnL leaderboard, resetting every Sunday or Monday (TBC) to ensure fairness for new traders coming to the platform
  • At the end of each week, the weekly incentive will be distributed as follows:
    • (Sum of the Weekly Trader PnL / Trader PnL) * 10,000 $ARB
  • If the Total Weekly PnL doesn’t exceed in notional value 10,000 $ARB, only a portion will be distributed to ensure that incentives are spent wisely (meaning that $ARB distributed will never exceed the Total Weekly PnL)
  • Incentives will be airdropped directly to vault manager wallets to avoid any extra security risks in developing an emission module
  • The Perpy team will monitor the weekly distribution and report useful metrics for the bi-weekly STIP report

“Collateral” incentive

  • 60,000 $ARB will be split into bi-weekly 10,000 $ARB incentives over 12 weeks
  • Every two weeks, 2,000 $ARB will be deposited in the five most profitable vaults (eligibilty based on the last 30D PNL) to be used as additional collateral by the vault managers
  • Perpy Team will create a User on Perpy called “Arbitrum Grant” who will be the recipient of the bi-weekly incentives from the multi-sig wallet, so users can track which vaults are incentivised
  • To deposit the $ARB grants in these eligible vaults, $ARB will be swapped to USDC as vault deposits only support USDC
  • A badge will be displayed on the vaults explorer UI to show that which one hold a grant
  • Vault managers can stack bi-weekly grants if they keep being profitable and in the five most profitable shortlist, bolstering the incentives
  • If a trader drops out of the shortlist, the grant (or the value that remains in this vault) will be withdrawn and swapped back to ARB to be distributed equally to the new five most profitable traders

“Outsider” incentive

  • 15,000 $ARB will be split into monthly 5,000 $ARB incentives over 12 weeks
  • Every month, traders with a vault TVL <$5K (TBC) can apply for this incentive
  • The Perpy team will review the applications and will propose to the Perpy community a list of eligible traders based on performance, implication with the community, communication on his trades, and other criteria to be defined with the community
  • Then, Perpy xPRY holders (staked $PRY) will elect the trader of their choice
  • The elected trader will have a 5,000 $ARB deposit as collateral, like the Collateral incentive
  • This is to promote and help small but skilled traders to develop their brand and community
  • The $ARB grants for this eligible trader will be swapped to USDC as the vault deposits only support USDC

Grant Timeline:

To stay aligned with Round 1, we request that the grant be streamed over three months.

  • Month 1: 65,000 $ARB
  • Month 2: 65,000 $ARB
  • Month 3: 65,000 $ARB

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?: Yes
We launched Perpy V1 (old Perpy, website deprecated) in December 2022 on Arbitrum with the native support of GMX V1.

On what other networks is the protocol deployed?:
We added Perpy Spectra (our latest protocol update) on BNB chain in September 2023 as Level Finance supported both BNB and Arbitrum chains. Still, our focus has been on Arbitrum.

What date did you deploy on Arbitrum?: 15th December 2022
Perpy Hello World

Protocol Performance & Key Milestones:

As introduced in Section 3, in the grant size justification paragraph, we’ve been live on Arbitrum since December 2022 and here are the key dates:

  • Dec. 2022: Launch of Perpy V1 (MVP) with GMX V1 support
  • March 2023: Public sale on Camelot launchpad to seed the V2 development
  • Sept 2023: Perpy V2 (Spectra Update) closed beta launch
  • Nov 24th 2023: Perpy V2 public launch

Here are the metrics of the Perpy V1 before the launch of Spectra Update in September 2023:

  • Vaults created: 1884
  • Total Trading Volume: $50,662,708
  • Peak Users on the dApp: 2972
  • Average active users: 320

During the closed beta, we kept the number of beta testers relatively small. Here are the metrics:

  • Vaults created: 80
  • Trading Volume: $698,433
  • Whitelisted Users:167

These statistics will be the starting point for the public launch, and we will update them when the proposal will pass in the [FINAL] statut.

Perpy has made partnerships with the best trading venues available on Arbitrum (Gains, Vertex, MUX, Camelot, …), and the most significant achievement in 2023 was the complete revamp of the Perpy V2:

  • New vault architecture to support trading of a wide range of assets on multiple Perps DEX platforms in one single vault, improving the trader experience not having to switch between different dApp (laid the foundation to support Spot and Options in the future in the same UI)
  • New trading engine with the minimum trading features (Market/Limit Order, Take Profit, Stop Loss)
  • Completely new dApp design with the introduction of User Profile, On-chain trading journal, an extensive list of vault metrics, …

It is worth noting that Perpy was not a recipient of the ArbitrumDAO airdrop.

Protocol Roadmap:

Perpy will adapt its roadmap in an agile way, taking into account community and traders feedback as we always did to shape a product that users actually want to use.

The priorities for the next 12-months (not in a particular order):

  • Vault - GMX V2 support
  • Vault - Spot Trading support (1inch)
  • Vault - Options support (Lyra)
  • Vault - Gains Network gTrade V7 and MUX support
  • Trading Engine - Drag&Drop Take Profit/Stop Loss
  • Trading Engine - One-click Trading
  • Trading Engine - Bot SDK support
  • UI - Account Abstraction and On-ramp solution
  • UI - dApp Notifications (trade open/close, vault deposit/withdraw…)
  • UI - Metavaults

Audit History:

Audit done by Peckshield for Perpy Spectra Closed Beta release (Aug. 2023)
Peckshield Audit

SECTION 5: Data and Reporting

Is your team prepared to create Dune Dashboards for your incentive program?:
Yes, we will provide a Dune Dashboard to track the incentive program with the metrics presented in Section 3 to demonstrate progress and follow the KPIs. We could also integrate the incentive program KPIs in a section of our upcoming Statistics page.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
Yes, we will provide bi-weekly updates on the Arbitrum Forum with the support of our Dune Dashboard/Statistics page, and we would be more than happy to get the feedback of the Arbitrum Delegate and community on those.

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

6 Likes

I strongly support this grants to Perpy, a unique product that the Arbitrum ecosystem was missing and enriches the ecosystem.

Perpy was launched in Camelot launchpad +6 months ago with a working product that even being a PoC has moved +50M volume meanwhile have been redoing the whole dApp and to build a full fledged management fund supporting spots, perps, options and maybe NFT perps in the future with the best UX.

Perpy is built on top of other Arbitrum protocols like GMX, Lyra, Level or 1inch which receives the majority of the TVL and volume made on Perpy, so users from Perpy are essentially improving TVL and volumen of arbitrum protocols creating a symbiotic relationship.

Finally, during the whole bear market Perpy has relentlessly built a great product listening also their comunity, now it is time for Perpy to shine and grow, this grant would help and is totally deserved.

3 Likes

Highly recommend. Perpy is really taking DeFi innovation within the arbitrum ecosystem and whole of DeFI in general to the next level by bringing on chain socialfi to the users. The team is very dedicated and have been shipping updates regularly. IMHO, it is projects like this (with no VC funding) that can benefit the most from Arbitrum DAO’s support. This grant will go a long way in supporting the grand vision that the founders have for this project.

On a different note, would be nice to use a part of the grant for fee rebates to the traders? This can bring good traders from the underlying perp DEXs to Perpy as they get a a fee rebate to trade on Perpy with same setup that they are comfortable with elsewhere. This will increase the adoption among traders and accelerate establishment of good vaults on Perpy.

All in all, very impressed by what Perpy is building. Let’s support it!

p.s. I am an investor, user and early community member in Perpy Finance.

3 Likes

PERPY FINANCE is a one of a kind project. It was built and coded from scratch. It is not a fork of any other project.

The team has worked for months to provide something unique and never seen before in DEFI.

The public release was only 10 days ago and there is an interesting competition based primarily on PNL performance for users who would like to create a vault and test their trading skills.

There is no doubt the project is a unique addition for the Arbitrum ecosystem.

1 Like

The Pepry team has managed to launch a highly innovative product that is supposed to become a hub for traders, asset managers, and last but not least investors.
The platform allows traders to perp/spot/options trading, proving their skills and as a result, attracting investing capital into their hedge fund.
Investors on the other hand get an opportunity to invest their capital into the best asset managers and make a profit passively.

At the early stage of the product, we need to incentivize asset managers to use the platform and prove their skills so that future investors have a line-up to choose from to invest. This grant is supposed to play a significant role in starting the flywheel.

I’d just suggest increasing the asked grant up to 250k $ARB to spend an additional 55k $ARB on the “Collateral” incentive which is the most sustainable in the long term.

p.s. I am an early investor, user and active discord member

2 Likes