Proposal: Accelerating Arbitrum - leveraging Camelot as an ecosystem hub to support native builders

Proposals
68

My biggest issue with this proposal is how it’s asking for at least 3x as much as any CFMM (that have been live on arbitrum for 2-4x as long as Camelot has existed) got in the DAO allocation. It’s such an extraordinary ask that compromises the ecosystem by enshrining a dex that is 7-8 months old and introduces nothing new other than forcing lp’s to lock their tokens, which is inherently less efficient from a $/tvl standpoint.

It’s really easy to introduce a new dex and dominate competition while you are really early in your emissions schedule. This has the effect of making any other dex non competitive as there’s no way to compete with a fresh emissions schedule and 3-10x higher ARB allocation. It actually stifles innovation. 6 months will go by, that 12m arb will be mostly dumped by professional farmers, and camelot will be in the exact same position they are in now, having internalized the revenue and leaving ARB holders with 12m additional sell pressure.

Additional reminder that this proposal front runs the creation of an actual grants committee from the Arbitrum DAO, meaning they get to forgo all the additional DD and oversight that should be built into a proper grants program. They also get to make a grant free of any competition since it was well understood amongst ecosystem projects that they would have to wait for the grants committee to be established prior to applying for a grant.

edit: also reminder that the current grants proposal allocates ~4m ARB, which is 3x less than what this proposal is asking for

4 Likes
69

I’m public about my positions…

I’ve been a massive public supporter of both Camelot and Arbitrum. I also have supported plenty of projects that partner with Camelot.

I tweet about the entire ecosystem, including other DEXs. Don’t believe me, have a look for yourself…

Arbitrum - https://twitter.com/search?q=Smallcapscience%20arbitrum&src=typed_query
Vela - https://twitter.com/search?q=Smallcapscience%20vela&src=typed_query&f=top
GMX - https://twitter.com/search?q=Smallcapscience%20%24gmx&src=typed_query&f=top
Pendle - https://twitter.com/search?q=Smallcapscience%20pendle&src=typed_query&f=top
Jones - https://twitter.com/search?q=Smallcapscience%20jones&src=typed_query&f=top
Plutus - https://twitter.com/search?q=Smallcapscience%20plutus&src=typed_query&f=top
Aura - https://twitter.com/search?q=Smallcapscience%20aura&src=typed_query&f=top
GND - https://twitter.com/search?q=Smallcapscience%20gnd&src=typed_query&f=top
Ghast - https://twitter.com/search?q=Smallcapscience%20gha&src=typed_query&f=top
Umami - https://twitter.com/search?q=umami%20smallcapscience&src=typed_query&f=top
Sperax - https://twitter.com/search?q=SmallCapScience%20SPA&src=typed_query&f=top
Relay - https://twitter.com/search?q=Smallcapscience%20relay&src=typed_query&f=top
Penpie - https://twitter.com/search?q=Smallcapscience%20pnp&src=typed_query&f=top
Equilibria - https://twitter.com/search?q=Smallcapscience%20eqb&src=typed_query&f=top

Other DEXs…
Trader Joe - https://twitter.com/search?q=Smallcapscience%20plutus&src=typed_query&f=top
Balancer - https://twitter.com/search?q=Smallcapscience%20bal&src=typed_query&f=top
Chronos - https://twitter.com/search?q=Smallcapscience%20chr&src=typed_query&f=top
Sushi - https://twitter.com/search?q=smallcapscience%20sushi&src=typed_query
MMF - https://twitter.com/search?q=smallcapscience%20mmf&src=typed_query&f=top

I’ve been one of the biggest proponents of Arbitrum on Twitter consistently for a very long time. Do I hold positions in some of these projects, yes I discuss it openly and currently own 4 of the 5 Dexs above. I’ll support them and their grants too if I believe their proposals make sense.

You on the other hand, who are you? You’re hiding behind an anon account that is painting me as biased and doing zero disclosures of your own.

I like to think I know the ecosystem pretty well and I think this proposal benefits liquidity across all of Arbitrum. I’m in favor and everyone is entitled to their own opinions, even anons.

4 Likes
70

This isn’t really an investment, it’s more throwing $12m at a dex to benefit them. It’s also a precedent. What happens when a native nft marketplace asks for $12m to give to those who list on their marketplace, or really any other native project. It’d look really bad if the DAO said yes to this and then no to all the others that will likely do this.

It’s not like they’re asking for a grant to work on some groundbreaking innovation. They’re literally asking for money to give them an advantage over competitors wrt incentive.

3 Likes
72

This is an obscene ask and hopefully is revisited.

4 Likes
73

Not saying to keep them for ever, but I envision a more gradual, lower scale, more decentralized, more efficient and even more fair way to do it.
I’ve seen grants programs out there wasting the money in ways that took my sleep away for days. Unbelievable nonsenses. Should be considered crimes against humanity.

Batches of 4M a year for example sounds more conservative and cautious. Also a decentralized committee assessing the projects one by one meeting criteria like (doxxed team, propper roadmap ahead, ecosystem contribution, plan to use the grant, etc.) sounds more professional as well.
Even the requirement of having the project’s governance fully decentralized or at least the treasury governance before sending the tokens in it, that would give me so much confidence, since again, I’ve experienced many devs using decentralized money to pay holidays, cars and even bored apes. When it comes from VCs they are a lot more cautions because they know there’s responsibilities and liabilities, why this part should be different here?

The other thing to comment is “THE NEED to save Arbitrum from vanishing and fade into the darkness”… C’mon everyone that freak out, are you serious? Don’t be so dramatic. Are you aware of the context?

Arbitrum is one of the most well performing chains by far. Most of the metrics out perform the rest of the chains: Development activity, user activity, TVL, innovation, average IQ, adoption,…

If things are more quiet than wanted is because we know how this works: Bull run = All good , Bear market = All sucks.

There is a limit right now on the users, devs and TVL you can capture. The same limit for all the chains: the crazy chads and degens who still have persistence to stay here after a long tough winter. The metrics will 10x when the bull run kicks in, for Arbitrum and for many others, as someone once said: this is the circle of life. The 12M ARB won’t ignite the bull run; The halving, the FED and the institutional money will.

4 Likes
74

Hello all,

I think it’s important to set some boundaries for grants, from the off. A fact: this is a huge ask in USD terms compared to any other grant in any other ecosystem, for a team that, may I remind you, did conduct a private raise. That said, is not to say the ask is unrealistic or unjustifiable, but there are a few things that we, as arbiters of the ARB, should consider:

  • A smaller grant (possibly 2m ARB over 3 months) should be initially approved to gather data. The issue with a comparison to Velodrome is that it appears that after a TVL/volume point there are diminishing returns from additional incentives.

  • The grant should be split into tranches. Success in the trial period would mean the funds are ‘earmarked’ for Camelot.

  • The team should provide data and analysis from the trial period for governance to consider before approving the next tranche of the grant. This should be a requirement for any grant, but is not so for other ecosystems. We should hold ourselves to a higher standard.

  • KPIs should be set post-trial. Camelot have not provided any actual projections or data on what this grant will achieve. This analysis should have been done prior to application, but at worst this should be set post-trial and subsequent grant tranches blocked if KPIs aren’t met (this could be an ‘optimistic’ process, where grant tranches continue until governance votes to stop).

People should be aware of posters intentions when reading posts signalling either way on a proposal. I am but a lowly ARB holder, and not against the grant itself, but think we need some more robust processes in place in order to ensure good behaviour and effective use of resources. You can always give more ARB, but you can’t take it back.

papaya

6 Likes
75

This is such a bold lie lmao. Most of these projects have large majority of their liquidity and volume on Uniswap. A simple search on Dexscreen can prove it.

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Sadly, some Uniswap pools have less liquidity and do more volume than Camelot pools, proving how users don’t like Camelot UI/UX and prefer a really innovative dex such as Uniswap.
This proposal is a sad attempt to a quick cash grab to try and save a failing DEX which hasn’t been able to really prove their worth even with crazy token emissions.
I hope ARB holders and projects with ARB allocations realize that if this proposal passed, innovation on Arbitrum would be greatly hurt, as Camelot wouldn’t be incentivized to innovate since they would acquire a de-facto monopoly position while other dexes would be greatly demoralized by such a favoritism towards a mediocre (at best) project.

4 Likes
76

Final note for now:

Camelot actually has ~2.2m ARB in their multisig right now that they could put to use literally right now to prove this model viable. DeBank | The Web3 Messenger & Best Web3 Portfolio Tracker

4 Likes
77

Also I’d like to highlight how between all major dexes on Arbitrum, the biggest liquidity pool on Camelot is ranked #24, with Uniswap, Trader Joe and Zyberswap having bigger pools. Again, simple search on Dexscreener:

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3 Likes
78

Amen! I couldn’t present it better. This is a proper smart plan. With reasonable proposals like this we could start talking. I could be in favor of something like that. Also Dexes other than Camelot should get benefited, otherwise would be bias.

3 Likes
79

If camelot is requesting for a grant from the DAO I think is a fair one. first off I believe+ the stats are out there that Camelot have been a crucial and important piece in the growth of the Arbitrum ecosystem as a whole, when you talk about incentives and profit sharing i do not see any DEX in the Arbitrum ecosystem that matches this, when you talk about support for newly launch and OG project in the arbitrum ecosystem camelot is always giving their support i remember during a course of a space with jones DAO the team mentioned camelot have helped them a lot with their token emission (i.e they spend less on incentives when they ported their liquidity over to camelot) this and many more shows how much impact the DEX have made during this short period of their existence.

In addition to that to show their commitment to the Ecosystem the team decided to use all their received DAO ARB allocation for governance while also incentivizing the ARB/ETH pair with about $1m worth of incentives.

I believe if there is any time to scale and go all out for the growth of the Ecosystem this is the perfect and right time and as the Native DEX i believe they have all what it takes to foster it growth.

80

Sharing some early thoughts

Lack of transparency around planned allocation
This is a large amount of incentives being requested, up-front, with nothing more than a planned allocation split across a number of projects for liquidity mining and spent over a relatively short period of time. There is no mention of how this currently planned allocation will also factor in new projects that the proposal states will also have a share of the grant. The size and scale proposed needs far more quantitative details.

Concerns over liquidity mining
It may also be argued that this large grant allocation would be an inefficient use of ARB, given that the ARB would be spread among a large variety of projects and their LPs and serve nothing more than additional reward emissions for LPers. Such a one-track use raises questions about the ROI over a sustained period of time. There are reasonable suggestions above to have this broken down into tranches with close tracking of selected KPIs. Ultimately the best way to grow the ecosystem is to bring developers to the eco in a more bottoms up approach.

Concerns for competition
The DAO should fairly consider a precedent set with this grant and the potential dominance it could serve Camelot over the short term, if awarded. Healthy competition can lead to better offerings for users, as projects prioritize product development to innovate, rather than sit on a comfortable mountain of liquidity mining incentives. This grant would cut the feet out from under many of the existing ecosystem participants, and would likely lead to a stall in DEX competition. Prioritizing the use of a large amount of incentives that is entirely concentrated to one platform, would be a net-negative to the ecosystem at this early stage.

5 Likes
81

Horrible money grab, 12M tokens for 6 months? You don’t need that much. 100K tokens would be a better idea.

1 Like
82

12 million in 6 Months, thats absurd. It shows the true colors of camelot.

2 Likes
83

I think this is a great proposal, well thought-out with good rationale & justifications, and it kickstarts a good discussion. However, zooming out objectively, it needs to answer a few key questions in order to pass:

  1. Is liquidity incentivization a key concern for Arbitrum ecosystem at this point in time?
    I think yes.

  2. Is giving out ARB as LP incentives the best way to go about it?
    Maybe, but it has to be fair to the entire ecosystem rather than a particular dapp.

  3. If so, is Camelot best positioned to provide the best bang for buck against X amount in grant?
    I am inclined to agree. Camelot has been great so far, and it seems their approach works. And being a native DEX / launch platform for many protocols as well as their partnerships ecosystem, I think they are a great candidate for this.

  4. How will it affect other DEXs? What are the cons of selecting Camelot and enshrining it as the default liquidity hub for Arbitrum ecosystem?
    Probably not great for other DEXs. It does give Camelot an unfair advantage directly (incentives) as well as indirectly (Arbitrum-endorsed DEX). Furthermore, with a lot of innovation happening in the DEX / LP space (Uni v4, TJ, Maverick, just to name a few) it does beg the question if Arbitrum should back Camelot in this way & size. I think this will be the biggest discussion point going forward, and will have far-reaching impact on Arbitrum ecosystem so its critical that we consider this point very very carefully before moving forward.

  5. What precedent are we setting if this proposal is to be approved? What criteria are taken into account when deciding the grant size (DAO side as well as recipient side)?
    Again, very critical. A 12m ARB grant effectively doubles GRAIL mcap by 2x’ing the rewards / halving the emissions for same incentives paid. Perhaps the amount needs to be reconsidered? Perhaps a bigger amount should be approved and distributed across ALL DEXs rather than just Camelot? After all, the goal is to attract liquidity to Arbitrum, not just Camelot.

  6. Is this a sustainable measure? What happens once the incentives run out?
    I think we need to look at a longer time horizon impact of LP incentives in other ecosystems (Velodrome / OP) as well as within Arbitrum where ARB token is being used as LP incentive (e.g., Radiant). I am personally not a huge proponent of short-term incentives as no matter how you slice it, eventually it ends up with the farmers.

I believe some of these questions are already under consideration in the upcoming Grants Framework, so maybe it makes sense to wait for that and then put up a proposal that fits within it.

Someone before me also proposed a tranche-based grant awarding mechanic where the next chunk of grant tokens get unlocked based on previous one’s performance. I think this is a great suggestion. In fact, since Camelot already has more than 2m ARB, they can perhaps do a trial run by incentivizing with a certain amount for a month and share data of before/during/after the incentivization program?

In short, I do think its a valid proposal that certainly seems to work out great for Arbitrum & Camelot. I’m just concerned how it will affect other DEXs, and whether it plays out as a net-positive over a longer time horizon.

10 Likes
84

The proposal from this team doesn’t surprise me in the slightest. It’s not the first time they’ve drawn attention with questionable actions.

The concept of a “Real Yield” DEX, incentivizing Liquidity Providers at the expense of the ecosystem and ARB holders, does not make sense to me.

Despite the Camelot team’s claims of prioritizing long-term sustainability, they seem to be contradicting themselves by attempting to artificially inflate the TVL on their DEX over a six-month period by drawing in mercenary farmers.

Arbitrum has the potential for organic growth and there’s no need to dispense 12 million ARB within just half a year. Instead, grants should be allocated to individual projects that bring innovation to the Arbitrum ecosystem, rather than padding the pockets of GRAIL holders and this team.

4 Likes
85

@Woo_woo @ArbitrumTheParbitrum Did you read the proposal? This goes to all you one line fudders on a governance forum:

The $ARB isn’t going to $GRAIL holders or the Camelot team. It’s going to liquidity providers to a basket containing tons of Arbitrum protocols, mostly native Arbitrum projects.

That said, I am a $GRAIL holder, daily Arbitrum user and I do support this proposal.

I think it makes sense for the DAO to start grants and liquidity incentives soon as we approach the bull market and also other big L2 releases such as zkSync and Linea. It’s possible the grant framework may be out by then, but I don’t see the issue with doing an early grant. I do think the size and time could be revised based on community feedback.

Overall, thumbs up from me

zlemz
(grail/arb holder & daily arb user)

1 Like
86

Such a behemoth of a platform that rose from the ashes out of nowhere and effortlessly smashed every milestone since its inception will always generate some controversy, don’t you think ser?

It’s not really artificial inflation. You seem to perceive it as solely benefiting Camelot and their team. However, there is no mention of any part of the grant going to Camelot or the team. Instead, it is intended for the protocols, as you mentioned, albeit not on an individual basis

They have contributed more to the ecosystem than any other DEX out there and this grant is a natural extension of their vision to build the ecosystem together with Arbitrum. I’m not sure why it’s so difficult to see that it would greatly benefit the entire ecosystem. Of course, it still benefits Camelot, but as the ones initiating it, they deserve it

1 Like
87

It’s not as if the grant is going into their own pockets. Can you imagine how successful it would be in encouraging new folks to join the chain by incentivizing liquidity for over 30 protocols with just 100k ARB? lol. It doesn’t make any sense ser

1 Like
88

Here’s another idea:

Set up a nomination vote where ARB holders can nominate protocols (not just DEXs) that should be incentivized by Arbitrum DAO for 3 months. Protocols can self-nominate, as well as users can suggest their fav protocol. Protocols can also acquire ARB and vote on it if they so need to.

Most voted protocol gets X percentage of DAO annual budget for incentivization, and we attract a particular KIND of liquidity & users (lending, DEX LP, bridging, LSDs, etc). It allows the DAO to be fair & nimble with their grants, while incentivizing a well-balanced ecosystem that’s voted on by ARB holders.

While I do think using ARB for liquidity incentivization is useful, I don’t think focusing on just one protocol is a good idea. It should be an ecosystem-wide initiative rather than encouraging every protocol to start spamming the forums with RFCs.

9 Likes