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

[mfer]

Regarding the monopolization of the grant for incentives:

I genuinely wonder what the other DEXs in Arbitrum have to say, specially the native ones. Not only about the proposal itself and the consequences of it for them, but also about Camelot approach on this “war”.

Camelot is repetitively and publicly putting them down, over and over.

I still didn’t hear them. Aren’t they aware? or they just don’t care? If they keep silent I’d assume they’re agree so who are we to defend the fair play if they don’t care?

If I was them I would publicly ask for my allocation. Because later you now… No asked, no complain.

[North]

Good decisions come from good alternatives. This is the first significant proposal from a dex on Arbitrum and of course, it won’t be the last. Hard to imagine that effective use of foundation funds will be evaluated in a vacuum, rather, in context of all the alternatives.

As a founder who is making significant investment to deliver a sustainable and scalable liquidity hub for this ecosystem, I’m watching very closely how the community and foundation are responding to this particular proposal. Precedent matters.

Reacting to this specific proposal, I think the initiative of the team and their willingness to put something out there to get discussion going despite the risk of significant pushback and criticism is noteworthy. It’s a brand new governance process and we’re all learning as a result.

Coming from the viewpoint of a builder who will also benefit from grants, I’m thinking this proposal and naturally comparing it to mine. Particularly, I’m thinking about how heavily the community and foundation will factor technology infrastructure as a key component to providing a sustainable and scalable liquidity hub for Arbitrum. Partnerships with long-term contributors to the ecosystem is key (Ramses has 40+), but you also need the tech. Even if we just look at the last week, on key ARB pairs (ARB/WETH and ARB/USDC), Ramses did 8x the vol on 3% of the liquidity compared to Camelot. ARB/WETH 24hr average - Camelot: ($100k vol/$6M liq) vs RAMSES ($800k vol/$200K liq).

Historical performance of efficient support of ARB base pairs is just one example of the types of points we’ll be highlighting in our proposal requests to pour incentives into proven technology. As mentioned, this is the first big proposal from a dex, but it won’t be the last. Alternatives and debate are a healthy component I hope we continue to develop as a community working together (even in competition at times) to build a thriving ecosystem we can all contribute to and enjoy for many years to come.

[Dog]

I believe most of us are simply watching, as I know I was. Genuine opinion and constructive criticism can be misconstrued depending on the underlying biases of the messenger. In this case any DEX, such as ourselves, has 2 paths of moving forward in regards to this proposal:

• Disagree and provide alternatives
• Agree with the understanding that we would get the same level of support as this sets a gigantic precedent.

In my personal opinion it was pretty unbecoming to front-run a proper DAO/governance grants program with haste. Especially from such a well-funded team. Grants should be to spark innovation and support builders, not further incentivize ‘successful’ projects. Pool 2 rewards as ARB token is quite possibly the least effective method to distribute these funds, as it naturally leaks into endless ARB selling through auto-compounders. ARB is not a token that should be thrown out of the window for self-gain and increasing APRs for mercenary LP. ARB should be given to ecosystem participants and protocols, such as through matching programs incentivizing Arbitrum projects, a-la bribe-matches.

[akiyahyeah]

Dog and north you are both representing Ramses, right?

I am surprised to see u say:

@Dog

Pool 2 rewards as ARB token is quite possibly the least effective method to distribute these funds, as it naturally leaks into endless ARB selling through auto-compounders. ARB is not a token that should be thrown out of the window for self-gain and increasing APRs for mercenary LP.

unless i am not getting something, bribes are really just a way to decide where to place pool2 rewards. in the end it is the exact same, liquidity incentives. your statement seems contradictory. you use bribes to decide where to place pool2 incentives.

is there any data to suggest bribes are an effective way to distribute incentives? i have seen a lot of solidly forks die, and not many ever build long-term liquidity from bribes. a bribe model is often even less efficient and very dilutive, as shown by the charts for solidly DEXs.

Ramses earns less than $3000 in fees a day and i can see that excluding the standard pools like ARB and ETH, it does very low volume on ecosystem liquidity. Ramses TVL was 80m only a few months ago and is now lower than 20m, is this an effect of the sustainable bribes? The $RAM token is also over 90% down in 4 months. Sorry i am not trying to be rude, but you are not in a position to be talking about “mercenary LPs”.

Would you say ur comments were made in good faith? @North @Dog

[Dog]

@akiyahyeah Bribes are not for directing Pool 2 rewards. They direct emissions. Bribes have plenty of data pointing to success, if you read the proposal in this post-- they even directly drew a parallel to Velodrome. Velodrome does their distribution through bribes. This is better as it ONLY goes towards voters-- and majority of voters are large ecosystem protocols who were gifted veNFTs to bootstrap their pools. Your latter half of the paragraph is just ad hominem and does not actually provide any valuable feedback. Camelot IS a solidly fork, and so was Excalibur on fantom. They just removed the bribe/voting part. If you want to discuss our DEX I’m more than happy to tell you about the many custom-coded innovations we did in record speed with a tiny un-funded team

[anon_imos]

I rather have a proper grant program setup and having the 40+ ecosystem partners make individual applications and giving a grant on merit basis helping the arbitrum ecosystem as a whole rather than just delegating this work onto Camelot and having them distribute ARB around as they please.

[Copana76]

Ramses are the team that took user funds and then rebranded.

I can remember several solidly forks from the same team members that didn’t work out. You’re also behind another protocol already - Gravita.

Not a good look.

[North]

@akiyahyeah

Of course this is in good faith. We’re talking about pouring fuel into a machine, it’s important to know how much of that fuel will be wasted versus used to make the machine hum. The efficiency of the existing machine is a fair challenge when talking about optimizing the allocation of limited Foundation funds for the overall benefit of the ecosystem.

For the earnest governance participant who doesn’t have the time to research the latest innovations and performance data for dexes across defi, without knowledgeable voices speaking up and sharing information, they may be mislead by outdated vanity metrics like TVL.

DeFi is shifting to a graduated understanding that TVL is better considered in context with its utilization. What’s the usefulness of that capital? What’s the ROI on that TVL?

The claimed benefits of this proposal are about allocating funding toward the growth and future of Arbitrum, so the current unit economics and their potential to efficiently scale matters.

And since with this proposal we’re talking about dex’s and capital efficiency, vol/tvl as a ratio is a more useful metric than TVL alone. It’s a more direct answer for the community to the question “if we pour more fuel into the existing machine, what output can we expect?”

These grants are investments in the future, not rewards for the past.

[yashcrypto21]

@Woo_woo

Ask yourself if this is a sustainable model for a dex.

Everyone knows it isn’t sustainable. It’s just bags are heavy & its free money.

[Gerhart]

Now we have had a good amount of dialogue and the second draft of the proposal with some very worthy additions. It is much easier to weigh it all up objectively and with reason.

There are really two main undertones in the arguments against, first is the amount of ARB is too much and second is why Camelot and not my project!

The first argument, the amount is too much, is clearly debunked with just a few simple calculations and an early post on the matter did exactly that and even used the original 12M not the current 9M in the example.

Ac212 posted - For those pointing out 12M ARB over 6 months seems like a lot, keep in mind 42.78% of ARB supply is allocated to the treasury, or 4.278 BILL ARB tokens. Assuming a 10-year runway for the treasury, 2 MILL ARB tokens represents 0.47% of Arbitrum’s yearly spend. 12M ARB tokens represents 2.8% of the treasury’s yearly spend for ecosystem building…that is quite reasonable for the largest native DEX with Camelot’s volumes so far and allows ample room for a large-scale DeFi program benefiting other projects.

So we can clearly see 12M (now 9M) ARB over a 10 year runway is a mere 2.8% of the yearly budget. Clearly not a large amount and well within reason.

The second argument against, why Camelot and not my project, the answer is just as clear if one can be objective.

Camelot’s Nitro pools are the best infrastructure we have on Arbitrum, to distribute the incentives directly to LPs. To utilise that and distribute incentives directly to LPs is a win for the ecosystem and that is exactly what these grants should be about. Fostering innovation on Arbitrum and incentivising LPs for deeper liquidity is a killer combo and something we should be embracing as an ecosystem.

I think it is important to see where the comments are coming from, seeing what other protocols and real Arbitrum KOLs think of the proposal has been quite illuminating.
Few examples -

SmallCalScientist - Camelot has been one of the most impressive teams I’ve worked with during my time in DeFi.
They have consistently proven that they put sustainability and the Arbitrum ecosystem as their top priorities. I can’t think of a more deserving project.

bp_gamma - We certainly support the % allocations going to the different partners and pairs.

Lodestar - In accordance with our governance procedures and after an on-chain DAO vote, the Lodestar Finance community has voted in favour of supporting Camelot’s grant proposal

In the updated proposal there is an emphasis on transparency, incentives going to pools that adopt ARB as a base asset, a 25% reduction from 12 - 9M and greater parameters in place to help assign the incentives to the right LPs.

It really now boils down to a simple question, do you want 9M ARB tokens to be used to directly incentivise LPs on Arbitrum. In a very transparent and direct way, using permissionless infrastructure built by our own Arbitrum native DEX?

Taking a closer look at some of the arguments against is also very revealing, let’s look at Dog from Ramses, after all transparency is good. This tweet from Solidly Labs is pretty revealing -

Solidly Labs

Another great point about this proposal is that Camelot is not asking to be trusted, their own 2M ARB allocation will be locked in a multisig and will indeed be larger than the ARB allocation for incentives that Camelot will have at any one time. No need to trust, it will be verified.

This is a very well thought out proposal, incredibly transparent, with any risk being mitigated by Camelot’s own ARB allocation being used to verify that trust. Using native Arbitrum infrastructure to directly incentivise LPs and concentrate much of those incentives towards pools that adopt ARB as a base asset.

This is exactly the sort of proposal that the Arbitrum ecosystem should be getting behind

[cryptobyrde]

absolute joke

If Camelot really want to take the grant and make ecosystem fabulous, it must start at the lower amount. As Camelot mentioned at the post, Velodrome started with 3M OP, which was about 1.5M USD at the moment of grant proposal. At least Velodrome proved the effectiveness of the grant, then requested more grant

However, Camelot is requesting 9M ARB, which is more than 10M USD at the moment of proposal. How can the rational personnel think this proposal is proper allocation?

Strongly against this proposal

[cryptobyrde]

Also, as many people said, the 2M ARB airdropped by the Foundation initially would be very good to prove the effectiveness of the grant requested by Camelot.

Use your 2M ARB first, and show us the proof that this framework of grant works.

Then request the grant with more reasonable number.

I mean, even the Velodrome, you guys mentioned, requested only 3M-4M. Idk the logic behind this 9M ARB request.

Nonsense

[Copana76]

I am honestly a bit surprised Ramses and you specifically are publicly criticising another protocol on it’s own proposal.

The team behind Ramses has a known history of rugging solidly forks.

Unfortunately things are forgotten fast, but as a user that was effected I will always remember.

Ramses were the team from Monolith, and several other shady protocols on Fantom. A lot of things have been deleted, but there is stilly plenty of things on twitter that prove it.

[rogerdoger]

Camelot has an absurd buyback and burn mechanism outlined in their documentation. How do we know the Arb grants won’t go to help sustain that? Arb grants are granted to assist the ecosystem – not raise prices for protocol tokens.

Grail’s tokenomics outlines a 20% core contributor fund cut in addition to 2.5% to the Development Fund AND 10% to POL. Added up, that is a huge 35.5% that is directly controlled by the Camelot team.

Arb grants should be to benefit the entire ecosystem. Camelot has done great work for Arbitrum but they don’t have the receipts for capital efficiency to back it up. Blindly distributing Arb as secondary incentives through Nitro Pools will only add Arb sell pressure and not benefit Arbitrum – but rather Camelot, because of their xGRAIL emissions.

[North]

The tweet? What exactly does this ‘reveal’? You clearly didn’t do your research on this one but still posted it publicly anyway, which is unfortunate. (Also posting their follow up tweet with a statement of clarification would be a good idea to maintain some credibility)

You and I haven’t been able to interact yet (at least that I know of) but if we had, I’m confident you wouldn’t throw shade even if we disagreed on various topics. You’re forgetting that we’ve been operating within this ecosystem for months, formed many friendships and relationships of trust, proven long-term partnership loyalty through support and flexibility with 40+ partners including some of the most respected names in defi, and interacted openly and honestly with everyone.

Instead of reducing your credibility with name calling and fake news to slander another team, I’d suggest addressing some of the material concerns being expressed by this community.

My personal motivation for weighing into this discussion representing a somewhat competing dex is not to say “why not us?”, instead, it’s to highlight that proposals, especially in the early precedent setting phase of governance, should be considered in context with the alternatives.

What’s the best ROI for foundation funds with respect to injecting incentives into the ecosystem via a dex? I’d like to hear substantive responses about the technology infrastructure and tokenomics that can produce a future vol/tvl ratio that’s investable. Something that can, considering the alternatives, justifiably ingest the fuel of millions of ARB monthly and effectively produce ecosystem growth with measurable results.

[Dog]

I’m sorry but this is flat out libel, lol. We have never rugged anyone-- in fact many prominent community members can attest to us helping out when there have been incidents with other projects. I can go into much more detail if need be, but this is really a low-blow that is unfounded. I would prefer to keep this thread based on facts rather than emotionally charged rhetoric.

[Copana76]

Defi is smaller than you think, and you @Dog @North tried to use this forum post opportunistically, and it has backfired.

I have encountered the Ramses team personally many times from before you were on Arb. You’ve been lucky to get away with what you did, but plenty of people remember. You’ve hijacked this discussion enough, people can do their own research to find the facts.

Anyway, can’t wait to see the Ramses proposal that you’re going to share, since you’re so confident in providing an alternative.

Good luck.

[Myrddin]

From a pure developer perspective, just wanted to clarify for people here that are not too familiar with Camelot.

Camelot is not and has never been a solidly fork. The only common point would be that we use the same curve as Solidly for our v2 stable swap maths, which represents ~20 lines of code.
The AMM features added on top of the original UniV2 codebase, but also the contracts behind spNFTs, Nitro pools, GRAIL/xGRAIL, plugins, etc… and the tokenomics model are our own original implementation.

Please don’t take this as a comment against solidly or the work that was done to originally build it, but as a group of contributors who spent months building, auditing and enhancing a codebase built from the ground up and based on feedback from our partner protocols, we don’t really appreciate being called a solidly fork.

Thanks

[wavebender]

I am drafting a much simpler version of this proposal right now that will simply give a grant to whomever votes “yes” for the proposal. Anyone who votes “no” or abstains gets nothing. I believe we can pass this repeatedly as it will be an unbeatable format.

[mfer]

new model: proposals (3,3) with bribes LOL