Now that we have had a few weeks to reflect on the STIP Period wanted to reflect on what worked well and what could be improved.
Let’s first start with the goals outlined in the application.
At peak, we reached 12mm, exceeding the target by 20%. It was a slow grind, too, probably due to some not wanting to be the first-mover you typically see with other newly launched protocol versions. However, post incentive cutoff, we did see the TVL drop to ~3.5-4m where it stands today (75-100% increase from where we began)
Here, you can see the steep dropoff post the incentive period. In a different environment I do believe we could have captured more sticky tvl, but when the cost of capital is 30-40% our vaults which produce real yield ± 25% the opportunity cost is hard to beat.
Options volume was tough for us to crack. We had some foundational investments (Orderbook and RFQ Market Making Participants) that didn’t hit fruition until the end of the incentive period. We were able to 10x our 7d average volume(>1mm), though, and because of those investments, volume continues to trend in a positive direction as the protocol is no longer dependent on the TVL of the vaults.
Regarding options users, we only got 50% of the way there in the allotted time. Below you can see some marketing campaigns were able to draw in some new users, but options being a complex product, we were only able to get ~1500 unique users on the platform. Given that there were only 100 total weekly users across all options platforms in October, it is actually pretty good progress, however short of our goals. Also given that we released a few algorithmic trading tools during the STIP period, those wallets traded on the platform on a regular basis, however from the same account.
Here is some further data showcasing the algorithmic activity, the blue below is the 30d average transaction count compared to other options protocols on Arbitrum,
Premia now is even doing about 50% of all the txns on Arbitrum for the Product Class
And consistently is a top 50 protocol by txn volume
Outside of Arbitrum, Premia is a strong contender in the options space, and since DeFi Llama changed their options volume metrics to be more normalized to Premium Volume across the Sector, Premia continues to make strides and hold its own, even with declining TVL. (Stats from Today 23MAR24)
One last point regarding socials and community, our Discord members actually went down ~1000, however our Twitter followers went up 10k, so gonna call that one a wash.
All in all, my thoughts today are similar to my thoughts at the beginning of the STIP program, however juiced emissions are nice for legitimacy scoring (TVL) and vanity metrics, foundational incentivization of desired behaviour is where we are starting to reap what we sowed. It all plays into the cycle; higher TVL brings more eyes and rapport, and gets you into conversations with participants that can make time and resource investments to make your defi protocol a success, a necessary evil I guess. The ultimate goal we planned on solving with STIP rewards (the cold start problem), I believe we knocked out of the park!
Areas for Improvement:
During the STIP, we decided to repurpose 100k set aside for partnerships to extend out the juiced vaults for another month, we were not able to find a proper set of partners that were capable to deploy options liquidity mining given the time constraints and resource requirement from the receiving team. If we had to do it again, we would get some commitment prior to the STIP period to lock-in the partnerships, however given the amount of new projects moving over with LTIPP, doubtful we will run into that problem again. We were also able to develop some new vault types we have not deployed yet as well as a new algo strategy that a few groups are interested in utilizing that should result in some newer exotic options vaults for tokens that do not have a mature spot market yet, which we are excited to deploy soon. We started the cross protocol initiatives to move over liquidity from other chains (SOL) and soon (OP) and with more to come, however the we kind of stink at doing the cross-protocol marketing and end up releasing piecemeal, we could definitely do a better job coordinating between project teams. So if STIP Bridge does get over the line, the items addressed here is what we would course correct on this time around to continue to develop our relationships with other projects across the ecosystem.
We appreciated the opportunity to participate in STIP, and will continue to remain active in governance to push the ecosystem forward!
Appendix
Reference Transactions:
Initial Allocation: 900,000 ARB
Vault LP Incentives: 600,000
Secondary Market Incentives: 200,000
Partnerships: 100,000
Amendments during STIP Period:
Partnership 100k → Valut LP Incentive Extension
Total Allocated: 1,081,847 ARB
Vault LP Incentives: -924,186 ARB
Secondary Market Incentives: -201,462 ARB
ARB Claimed from Premia Controlled POL +110,801 (0x5ca1ea5549E4e7CB64Ae35225E11865d2572b3F9)
Trading Competition -67,000 PREMIA & -67,000 ARB
Total = 1,081,847
Funded from Premia Operator Treasury 181,847 ARB (1,081,847 - 900,000) & 67,000 PREMIA