[Prime Protocol] [FINAL] [STIP - Round 1]

[PrimeTyler]

SECTION 1: APPLICANT INFORMATION

Applicant Name: Colton Conley

Project Name: Prime Protocol

Project Description: Prime Protocol is DeFi’s first natively cross-chain prime brokerage that allows users to borrow across chains backed by their entire portfolio of cross chain assets. Prime currently supports 7 unique assets on Arbitrum.

Team Members and Qualifications:
Colton Conley: Founder/CEO

• Colton got his start in crypto in 2016 as an investor and trader. He built arbitrage bots to trade between various centralized exchanges, and became interested in the DeFi space with the advent of decentralized exchanges. He earned a B.S. in Statistics and Data Science and Economics at Yale University, where he was awarded the Tobin Fellowship for economics research, focusing on cryptocurrencies. He has experience working on macro desks at JP Morgan and Citadel, where he was a quantitative trader focused on interest rate volatility. As an avid DeFi user with traditional finance experience, Colton saw the need for Prime Protocol through his own trading activities. He is the Founder and CEO of Prime Protocol Inc., the software development company building Prime Protocol.

Neeraj Kohirkar: Product and Front End

• Graduated from UC Berkeley. Engineering lead at Netflix for 4 years. Advisor for fintech seed-stage startups. Entrepreneur for 10 years. Crypto enthusiast, builder, and investor since 2017.

Marcin Pawel: Head of Ecosystem

• Former member of the Vega Protocol’s community team, Kitefin.xyz co-founder, entrepreneur, and advisor. Crypto enthusiast since 2016, BSc Computing & Business, OU Milton Keynes, England

Noah Bayindirli: Backend Engineering

• Noah is a fullstack engineer and crypto-native developer, with extensive smart contract and decentralized infrastructure experience. After honing his skills at Amazon, Noah shifted all focus to DeFi to join Prime and help develop the next generation of our monetary system.

Francisca Moya: Frontend Engineering

• Francisca is a Data Science and Physics graduate from Wellesley College and an alum of the Bernard M Gordon MIT Engineering Leadership Program. She is a software engineer at Prime Protocol focusing on front end development. Francisca is passionate about building scalable interfaces that adapt to the rapidly changing business needs of DeFi. She believes these platforms should be accessible and easy to use by users with diverse levels of expertise in Web3.

Thomas Baker: Backend Engineering

• Thomas recently graduated from Georgia Tech with a major in Aerospace Engineering and a minor in Computing and Intelligence. While in school he worked on a MEV arbitrage team with students from Blockchain @ GT and helped to plan the Web3 ATL conference, and immediately after graduation he joined Prime as a Blockchain Engineer.

Tyler Galaskas

• Former Digital Content Producer abc27 News, Crypto community organizing, Crypto enthusiast since 2017. Social Media Manager for Prime.

Project Links:
dApp
Website
Demo
Docs
Twitter

Contact Information

TG: Telegram: Contact @coltonconley
Twitter: https://twitter.com/ColtonFConley
Email: colton@primeprotocol.xyz

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: 300,000 ARB

Grant Breakdown: All funds will be used to incentivize deposits and/or borrows on the following markets:

   ASSET      TOTAL $ARB  % OF GRANT  CONTRACT ADDRESS
1. native USDC   135,000     45%      0xA44C28Bd4Fd4fc307f23B2E6e9cC07BC03571798
2. ARB            60,000     20%      0x0C6Be22cb154A36e2D96f9977D47aDbb3ECf13B0
3. ETH            75,000     25%      0x2E9F73aA3F16748C9c1E8243D204d60F87dEC872
4. WBTC           30,000     10%      0x51Ff97d92683992AD091E04470069bB942219D71

Funding Address: 0x75fb824cd7ad7C0cB39A23c6DF22DBa942A67f3E

Funding Address Characteristics: The address above is for a ⅔ gnosis safe. Each private key is held by a different member of the prime protocol team, and has not been shared anywhere. The signer wallets (and private keys) will only be used for managing grants from Arbitrum.

Contract Address: Should we receive the grant funds, we will deploy the contract to distribute grant funds. The contracts have already been used on other chains for distribution of grant funds successfully, and we can deploy ahead of time on Arbitrum if that is necessary.

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Objectives: Grow TVL and DAUs on Arbitrum. Bring new users from Prime users in other ecosystems onto Arbitrum as active users.

Key Performance Indicators (KPIs):

• Arbitrum TVL on incentivized and non-incentivized markets.
• Deposit and borrow rates on incentivized markets
• Arbitrum DAUs

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

1. Introducing New Assets and Liquidity Streams:

Prime Protocol’s cross-chain capabilities allow for the seamless integration of assets from various blockchains. This bridges diverse ecosystems, allowing the Arbitrum community to access a wider pool of assets and liquidity without having to sell or exchange their holdings. Furthermore, attractive yields on Prime can serve as an educational tool, informing the Arbitrum community about the benefits and possibilities of leveraging assets on other chains without divesting their Arbitrum positions.

2. Attracting Users from Various Chains to Explore Yields on Arbitrum:

Prime Protocol’s cross-chain capabilities can bolster participation from users of other blockchains in Arbitrum’s DeFi markets. By leveraging these features, users from different blockchains might find Arbitrum’s ecosystem appealing, especially when they learn about lucrative yield farming opportunities available. Prime’s environment can present such opportunities more transparently to users from other chains, thus driving increased participation.

For example, consider a user who holds BNB tokens on BNB chain. However, they’ve noticed that there are a number of novel protocols on Arbitrum that they would like to use. Prime allows this user to use their BNB as collateral to borrow USDC on Arbitrum, and deploy those tokens into other Arbitrum native protocols. Prime Protocol’s cross-chain capabilities open up exciting possibilities for users of any ecosystem who want to easily access Arbitrum’s DeFi markets, generating greater participation and interoperability within the ecosystem.

3. Sustainable Growth:

Prime Protocol’s cross-chain approach guarantees both rapid and enduring growth of the Arbitrum DeFi ecosystem. Thanks to the protocol’s seamless cross-chain compatibility, individuals from any ecosystem can borrow Arbitrum assets on Prime, instantly gaining access to Arbitrum without any prior chain interaction. This revolutionary onboarding opportunity eliminates the need for users to bridge funds or incur slippage fees in order to access a new ecosystem, thus making user acquisition and growth easier than ever before.

4. Reinforcing Arbitrum’s Role in the DeFi World:

Arbitrum plays a major role in DeFi as the leading Layer 2 blockchain in crypto. This has become especially important with the rise of user interest in L2 solutions, and Arbitrum has cemented itself as one of the powerhouse ecosystems in the space. Prime Protocol will use this grant to help onboard new users to the chain, boost TVL, and increase user engagement on the chain.

Justification for the size of the grant:
This grant size will be enough to sustain approximately 5-6 million for four months.

Execution Strategy:

Rather than deploy the full amount linearly over four months, we will be judicious in ramping up the APR on markets to ensure that we are meeting our objective of bringing in new users to the protocol and Arbitrum. This ensures that we are not giving all the incentives to existing users without achieving our objectives. Each week, we will evaluate whether the higher yields succeeded in bringing in new users. If they did, and yields have come down as a result, we will increase the incentives until they reach a steady state that can be maintained for the timeline of the grant. However, if yields are still high or if few new users enter the protocol, we will adjust our community outreach approach before increasing incentives further. If all tokens are being farmed by existing whales, we will implement a lockup/vest on the incentives to ensure that farmers are long term believers in Arbitrum.

Grant Timeline: 4 months

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?: Prime has been live on Arbitrum since Day 1 of mainnet release. Prime Protocol is cross-chain and now supports 8 blockchains.

On what other networks is the protocol deployed?: Prime currently supports Arbitrum, Avalanche, BASE, BNB Chain, Ethereum, Moonbeam, Optimism, and Polygon.

What date did you deploy on Arbitrum?: Prime Protocol’s mainnet launched on May 9, 2023.

Protocol Performance:
Prime Protocol has received steady support since launching on Mainnet earlier this year, and recently surpassed $6M of TVL and $2.5M of borrows across the protocol. At the time of writing, the protocol TVL is growing at a weekly rate of 22%. You can see the full timeline of Prime’s growth via DeFiLlama here: https://defillama.com/protocol/prime-protocol

Protocol Roadmap:

Currently, the protocol is pursuing development in three main areas: New assets, interoperability, and perpetuals.

New Assets (AAVE aTokens, more liquid staking tokens)

• Prime is working to onboard new interest bearing and liquid staking tokens. The protocol already offers cbETH, wstETH, and rETH. However, we are working with oracle providers to offer support for select AAVE aTokens, more liquid staking tokens, and more niche interest bearing collateral.

Perpetuals. Initial launch on Arbitrum

• Prime is also planning to add a perpetuals platform. This is a longer term project, and it will initially be deployed exclusively to Arbitrum. The platform will be order-book based and allow users the ability to increase their trading exposure.

LayerZero

• Prime is also rolling out support for LayerZero deposits and repays for Arbitrum. We expect this functionality to go live for users early during the grant deployment period (if it is not live already by then).

Audit History:
All of our audits can be viewed here: Prime Protocol Audits

SECTION 5: Data and Reporting
Is your team prepared to create Dune Dashboards for your incentive program?: Yes, we will create Dune Dashboards to monitor the incentive program and show progress.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread? Yes, we will provide bi-weekly updates regarding yields, TVL increases, and user activity levels.

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

[meyaf320219]

Prime seems to be an interesting protocol but i have a couple main hesistations at the moment:

• this proposal doesn’t focus on supporting or growing the ecosystem. just having USDC or ETH pools is not interesting when there are so many great protocols to collaborate on arbitrum - there should be no excuse for not supporting other builders in the ecossytem
• the current tvl of prime is very low on arb, the amount requested is 50% of the current TVL.

The amount should be reduced, but most importantly there should be much more focus on how this works to grow the ecosystem and collaborate with others.

This proposal only includes incentives for USDC, ARB, DAI, and WBTC. The purpose of these grants should be to support ecosystem builders, especially the ARB token.

You should work with people like GMX, Radiant etc.

[PrimeTyler]

Prime seems to be an interesting protocol but i have a couple main hesistations at the moment:

this proposal doesn’t focus on supporting or growing the ecosystem. just having USDC or ETH pools is not interesting when there are so many great protocols to collaborate on arbitrum - there should be no excuse for not supporting other builders in the ecossytem

Thank you for your reply! We are very committed to growing the Arbitrum ecosystem beyond just having ARB, USDC, and ETH pools. It’s evident that Arbitrum is home to many innovative protocols, and our aim is to weave Prime into the ecosystem, rather than just running in parallel. We recently formed a strategic partnership with Trader Joe and are actively looking into forming more partnerships and collaborations with native protocols on Arbitrum (such as GMX and Radiant as you mentioned.) This collaboration, among others we’re pursuing, could translate into creating synergized products through our Prime Strategies portal in the Prime dApp.

the current tvl of prime is very low on arb, the amount requested is 50% of the current TVL.
The amount should be reduced, but most importantly there should be much more focus on how this works to grow the ecosystem and collaborate with others.

Given that the grant constitutes 4% of Prime’s total TVL and 25% of the current Arbitrum TVL, we anticipate it will be a catalyst for many Prime users to start using Arbitrum. The grant’s primary purpose isn’t just to increase our TVL, but to introduce a larger audience to Arbitrum and boost user activity. Additionally, Prime’s multi-chain capabilities allow Prime users from many different ecosystems to instantly have access to Arbitrum, meaning those outside users will be able to seamlessly convert to Arbitrum, growing the chain with new active users that it hadn’t seen before.

[Matt_StableLab]

Hello @PrimeTyler thank you for submitting! Please make the following changes to your proposal to comply with the program rules.

1. The funding address you provided is not a multisig as seen on Arbiscan . Funding addresses must be a multisig per the following program stipulation.

@tnorm

Funding Address Characteristics: [Enter details on the status of the address, eligible address must be a 2/3 multisig with private keys securely stored]

2. Please provide the addresses of the contracts you plan to incentivize and a spending plan for how you will incentivize them as per

@tnorm

• Grantees must outline a spending plan, provide a pro forma, and state the grant’s objective.

@tnorm

Grantees must disclose the contracts being incentivized and denote any external contracts being incentivized as part of the program.

[PrimeTyler]

Hi @Matt_StableLab, thank you for the information. We have updated the proposal above with the necessary info!

[Matt_StableLab]

Thank you for making these changes! Your submission now meets all requirements to be considered for a snapshot vote.

[Matt_StableLab]

Hello @PrimeTyler ,

Now that your application has been marked eligible, please be advised of the remaining steps in the application process to be completed prior to the Review Period Deadline:

@Matt_StableLab

• Review Period Deadline: October 4, 2023 11:59 PM EST

Please complete the following steps required for your application to proceed to Snapshot:

@Matt_StableLab

2. Once feedback is collected, applicants will need to change their application title from [DRAFT] to [FINAL] by the Review Period deadline: October 4, 2023 11:59 PM EST. At that time, all eligible proposals with the following formatted titles will be migrated to Arbitrum Snapshot to vote. The correct format for a proposal ready to move to vote looks like this: [Project Name] [FINAL] [STIP - Round 1].

To change your proposal to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness to proceed from [Draft] to [Final] status.

Once notified, the Arbitrum Foundation Forum Moderator will adjust your title from [Draft] to [Final] status. Once marked as [FInal], your application post will be locked by moderators and you will no longer be able to edit your proposal.

[PrimeTyler]

@eli_defi We’re good to go! Can you please mark this as final?

[Matt_StableLab]

@cliffton.eth Could you please help Prime move to Final?

[cliffton.eth]

Post has been marked FINAL and locked.

[iZUMi_Finance]

Our team supports this proposal.

By targeting Prime users from other ecosystems and encouraging their migration to Arbitrum as active participants, this initiative holds significant promise for bolstering the Arbitrum community and its financial ecosystem.

BR,
IZUMI TEAM

[ITUblockchain]

As ITU Blockchain, we find the offerings of the Prime Protocol STIP Proposal to be acceptable with a reduced budget and have reservations about its direct benefits to the growth of the Arbitrum ecosystem, leading us to cast an ‘abstain’ vote. We appreciate the work and thank them for their presentation. Following pragmatic comparisons, we find it sensible to prioritize other projects at this time.