Greetings Arbitrum Community,
I am ilia.eth, CEO @ 0xPlasma Labs and the Plasma.Finance platform, a comprehensive DeFi infrastructure that encompasses a diverse range of DeFi tools designed for the Arbitrum chain. I am grateful for this chance to share my thoughts and suggestions for the enhancement of the Arbitrum ecosystem.
Objective:
The essence of this program lies in discovering innovative incentive strategies to bolster user engagement, volume, transactions, and liquidity within the Arbitrum ecosystem. Let’s commence with a brief insight into the present stage of Arbitrum’s ecosystem.
Risk Awareness:
The Arbitrum DAO’s intended distribution of 50M ARB over three months stands as a substantial token influx. It is essential for DAO/delegates to coordinate this grant program seamlessly with the currently active incentive campaigns on the Arbitrum chain from various protocols and airdropped ARB tokens. For instance, Uniswap is presently conducting incentive campaigns for its pools.
Additionally, considering the existing on-chain DEX liquidity supporting the ARB price, a 50M ARB distribution in three months could potentially exert tremendous sell pressure, potentially plummeting the asset price in a continued bear market scenario.
Current Scenario:
With an aggregate ARB “Buy-side” TVL in all pools less than $10M, introducing nearly $50M of ARB sans buying pressure or liquidity support could drastically lower the price to around $0.2.
Market Share:
Arbitrum commands a market share exceeding 50% in terms of TVL. A pivotal question here is the choice between incentivizing TVL or exploring alternative methods to stimulate liquidity retention.
Personal Insight:
In my opinion, the current significant TVL in Arbitrum does not necessitate further incentivization to attract more from the mainnet or other platforms. An exception might be the TVL of new vital assets for the chain, such as staked ETH (LSDs), where fund allocation by Arbitrum DAO would be beneficial.
The DeFi Landscape:
Arbitrum boasts a mature DeFi ecosystem, housing major players across diverse DeFi market segments. It is imperative to ensure the allocation of incentives to effective and efficient protocols and asset pools, avoiding capital wastage and market inefficiency enhancement.
Proposed Strategies for Positive Ecosystem Impact:
- Construct ARB DEX liquidity: Shield it from a potential price dump from the Grant Program by compensating LPs to provide “buy-side liquidity” for ARB pools.
- Encourage “Freezing” Liquidity: Protect Arbitrum from the varying incentive campaigns on other L2 chains.
- Incentivize Traders: Offer gas refunds on trades, benefiting not only LPs but traders as well.
- Implement Marketing Campaigns: Collaborate with native protocols to stimulate on-chain user activities.
- Retain the Majority of the Grant’s ARB within the Network: Ensure the majority is circulated back into the network rather than the order book.
Неre is my proposal which brings these conclusions together:
Quadrat Application
Applicant Name: Ilia.eth
Project Name: Quadrat
Project Description:
Quadrat stands as a permissionless multi-chain protocol, offering unfettered access to progressive liquidity management tools. It seamlessly integrates automatic rebalancing tools, liquidity staking, and enhanced DEX analytics to streamline your DeFi experiences. Quadrat actively implements various on-chain strategies, focusing on amplifying liquidity concentration and augmenting LPs’ APY within renowned DEXes. Our target audience encompasses professional liquidity managers, individual liquidity providers, and diverse DeFi protocols, ensuring optimized and efficient liquidity management solutions for all.
Team Members and Qualifications:
Ilia.eth - CEO of 0xPlasma Labs (https://twitter.com/ILIA_0x)
Team 0xPlasma Labs is a dedicated group of 15 expert developers, focused on creating practical solutions for real Web3 and DeFi user needs. They have extensive knowledge in blockchain and DeFi, and have proven their commitment to innovation through their work on the Plasma Finance dApp. Their expertise, combined with their adaptability and proven success in the DeFi space, make them perfectly equipped to execute the project outlined in this proposal.
Project Links: [Enter Any Relevant Project Links (website, demo, github, twitter, etc.]
Website: Quadrat Active Asset Management Protocol Uniswap v3
Quadrat Dashboard: Plasma Finance – Multi-chain DeFi & NFT Metaverse. Powered by 0xPlasma
Twitter 0xQuadrat: https://twitter.com/0xQuadrat
Twitter 0xPlasma: https://twitter.com/0xPlasma
DeFiLlama https://defillama.com/protocol/quadrat
Whitepaper: https://quadrat.plasma.finance/
Contact Information:
ILIA.eth (Founder)
TG: Telegram: Contact @ilia_0x
Twitter: https://twitter.com/ILIA_0x
Email: im@plasma.finance
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: [TBD]
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: [Enter Amount of ARB Requested]
1,000,000 ARB
Grant Matching: [Enter Amount of Matching Funds Provided - If Relevant]
Quadrat Protocol does not have token or VCs. Protocol development is funded by the 0xPlasma Labs team.
Grant Breakdown: [Please provide a high-level overview and pro forma of the budget breakdown and planned use of funds]
The breakdown of incentivizing activities:
| Campaign | Total ARB | Allocation % |
|---|---|---|
| Quadrat Booster: Incentivization of 3-6 months lockup of concentrated liquidity in strategic Uniswap v3 pools | 600,000 | 60% |
| Quadrat Floor Protection ETH/ARB token lockup incentives | 300,000 | 30% |
| HyperDEX gas refunds campaign | 50,000 | 5% |
| 0xPlasma Quest Campaign on Arbitrum Rewards | 50,000 | 5% |
The breakdown of incentives by Pools
To enhance the utility of the ARB token within the Arbitrum ecosystem, we’re taking steps to establish it as a primary routing asset for swaps. Our strategy involves the development and incentivization of new pools that pair ARB token with major blue-chip assets. Beyond merely incentivizing liquidity, we’re also offering incentives for a 6-month liquidity lockup. This is aimed at boosting the ARB token’s trading volume and providing a safeguard for its price floor.
Major Assets / ARB Liquidity incentive and lockup:
ETH/ARB (0.01%) - TVL $6K
wBTC/ARB (0.01%) - Pool does not exist
[Allocation for 3 months: 300.000 ARB]
Create New Uniswap v3 Pools and attract liquidity via incentives for LSD Assets:
wstETH/ARB (0.05%) - Pool does not exist
sfrxETH/ARB (0.05%) - Pool does not exist
cbETH/ARB (0.05%) - Pool does not exist
[Allocation for 3 months: 150.000 ARB]
Stable Pairs:
ARB/DAI (0.01%) - Pool does not exist
ARB / USDC (0.01%) - TVL $100
ARB / USDT (0.05%) - TVL $42K
[Allocation for 3 months: 150.000 ARB]
Incentive Distribution By Time:
| Time | ARB per Period | Cumulative ARB |
|---|---|---|
| November 2023 | 334,000 | 334,000 |
| December 2023 | 333,000 | 667,000 |
| January 2024 | 333,000 | 1,000,000 |
Funding Address: [Enter the specific address where funds will be sent for grant recipients]
0xD6D92014E8DbC6ecbF3e1655aF3Dc826AEcAB319
Funding Address Characteristics: [Enter details on the status of the address, eligible address must be a 2/3 multisig with private keys securely stored]
2/3 SAFE (Team multisig)
Distribution Contract Address: [Enter any specific address that will be used to disburse funds for grant recipients]
For Distributing funds to LP users, we will use our Booster Contract. Booster is a liquidity lockup contract with a set of customizations. Here is a booster factory contract: TransparentUpgradeableProxy | Address 0x50D80625d63257b7849c4b86E2E611A4B67565d0 | Arbiscan
Booster Documentation
Incentivized Contract Addresses: [Enter any specific contract addresses that will be incentivized in your program (Pool addresses, contracts, etc.)]
We will incentivize the LPs who provide their liquidity to the chosen Uniswap v3 pools via Quadrat Vaults. Quadrat Vault Factory contract: EIP173Proxy | Address 0xb8d498f025c45a8a7a63277cb1cca36c2599bbd7 | Arbiscan
The final vault contracts will be provided as the vaults are deployed for chosen pools on Uniswap v3.
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: [Clearly state the primary objectives of the grant and what you intend to achieve]
Quadrat Protocol is poised to be a catalyst in advancing liquidity and fortifying the ecosystem within the Arbitrum blockchain. We present our objectives to utilize the Arbitrum Grant in orchestrating a comprehensive enhancement of the liquidity landscape, making trading more efficient, and reinforcing the overall Arbitrum ecosystem.
1. Enhance Liquidity in Popular DEXes:
- Aim: Employ the grant to substantially boost liquidity on prominent DEXes within the Arbitrum network.
- Execution: Implement innovative on-chain strategies to refine liquidity concentration and amplify LPs’ APY.
- Impact: Ensure Arbitrum stands as the most liquid chain, mitigating price impact and facilitating smoother transactions.
2. Augment Liquidity Efficiency:
- Aim: Foster superior liquidity efficiency in the Arbitrum ecosystem through Quadrat’s seamless integration and collaboration with key DEXs and Protocols.
- Execution: Utilize advanced analytics and automatic rebalancing tools to optimize liquidity distribution and management.
- Impact: Enable more efficient and cost-effective trading experiences for all users within the ecosystem.
3. Stimulate Sustainable On-Chain Activity:
- Aim: Attract and onboard new users to spur consistent on-chain activity and robust TVL growth.
- Execution: Offer enticing incentives and enhanced trading experiences to draw a wider user base.
- Impact: Boost the overall activity, ensuring a thriving and resilient Arbitrum ecosystem.
4. Encourage Arbitrum Ecosystem Growth:
- Aim: Propel the evolution and expansion of the Arbitrum ecosystem.
- Execution: Target professional liquidity managers and protocols, promoting the build its liquidity positions on the Quadrat protocol.
- Impact: Foster a conducive environment for innovation and development within the Arbitrum network.
5. Solidify Position in the DeFi Space:
- Aim: Establish Quadrat as a pivotal player in the DeFi arena within Arbitrum.
- Execution: Introduce enhanced features, such as improved liquidity management tools and reduced slippage for traders.
- Impact: Offer an unparalleled trading and liquidity management experience, affirming Quadrat’s standing in the ecosystem.
6. Construct Buy-Side Liquidity for ARB:
- Aim: Generate robust buy-side liquidity for ARB, shielding it from potential price dumps.
- Execution: Engage in strategic liquidity staking and utilization of rebalancing tools.
- Impact: Stabilize and reinforce the ARB’s position, ensuring enduring asset value and market confidence.
Key Performance Indicators (KPIs): [Specify the KPIs that will be used to measure success in achieving the grant objectives]
Our main KPIs for this Grant Campaign: Vault Liquidity Growth (TVL), Vault Performance (% APY) and User Onboarding and Acquisition (LPs and Traders). These metrics will be significantly expanded when preparing a ARB dashboard for Quadrat.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?: [Provide details]
Quadrat, in its early development stages, stands at a pivotal juncture where the reception of this grant will substantially fuel its adoption and momentum within the Arbitrum chain. Our protocol brings to the table a suite of pioneering features including, but not limited to, staking, liquidity lockup, and farming tools. These elements are crafted to aid any native protocol in seamlessly amplifying its on-chain liquidity and capital efficiency, fostering a robust DeFi environment on the Arbitrum chain. The infusion of grant support will undeniably act as a catalyst, propelling both Quadrat and the Arbitrum ecosystem towards sustained growth and innovation.
Justification for the size of the grant: [Enter explanation]
The grant amount we seek is meticulously calculated, grounded in the potential to harness it for maximizing the impact on both growth and retention of liquidity within Arbitrum. Given that the Quadrat protocol predominantly relies on Uniswap liquidity, the ability to utilize any acquired funding is constrained solely by the comprehensive capacity of the Uniswap DEX, ensuring efficient and targeted use of the grant for substantial growth and stability.
Requested Grant Size:
1,000,000 ARB
Execution Strategy: [Describe the plan for executing including resources, products, use of funds, and risk management. This includes allocations for specific pools, eligible assets, products, etc.]
Upon the fortunate receipt of the ARB grant, the allocation will be systematically segmented for various types of incentive campaigns to ensure the most efficient and impactful utilization.
For Liquidity Farming:
The funds will be channeled towards the deployment of vaults for strategic liquidity pools on Uniswap v3. Our selection of pools for incentives will be meticulously aligned with the current Uniswap farming campaign to ensure seamless integration and avoidance of overlap. A significant number of the chosen pools will prominently feature ARB on one side, fostering enhanced liquidity provision and buy pressure for the ARB token. Prominent candidates include blue-chip assets and LSD. Subject to the grant approval, the Quadrat team stands committed to presenting exhaustive research on the Arbitrum liquidity market, including selected pools for liquidity lockup and incentives. A defining advantage of the Quadrat protocol lies in its capacity to encourage the lockup of liquidity funds, thereby substantially boosting liquidity retention.
For Gas Refund:
A dedicated contract will be established, enabling users to claim ARB tokens in relation to gas expenditures in HyperDEX routing throughout the three-month campaign. To safeguard against potential Sybil attacks, a stringent limit per account will be enforced alongside the blacklisting of bots.
For Buy-Side Protection for ARB Pool:
A vault will be inaugurated, positioned within the ETH/ARB pool, alongside incentives for ETH liquidity lockup spanning 3 to 6 months, corresponding with the entire grant program duration. This strategy aims to solidify sufficient liquidity within the pool to shield ARB from any prospective price depreciation. With a total incentive allocation of 200K ARB, the objective is to attract and lock up $2M of liquidity on the buy side, ensuring robust protection against potential sell pressure.
For Marketing and Outreach:
Commencing immediately, diverse marketing campaigns will be launched, featuring quests to spur user activities and enhance educational outreach. Bi-weekly reports will be disseminated, offering transparent insights into the ongoing campaigns and metrics related to new user acquisition for the Arbitrum chain.
Collaboration and Partnership:
In the spirit of collective growth and innovation, we extend an open invitation for partnership and collaboration to other protocols aspiring to incentivize their liquidity and pools on Arbitrum. Quadrat stands prepared to offer an array of professional tools and protocols, adept at executing a myriad of farming, market-making, and incentive strategies with varying complexity levels. Here are a few protocols that we are welcome to start working together on the grant program:
- Lido - [Lido] [FINAL] [STIP - Round 1] - #26 by medocons
- FRAX - [Frax Finance] [FINAL] [STIP - Round 1]
- AAVE - [AAVE] [DRAFT] [STIP - Round 1] - #2 by ArbDefender
- Ramses - [RAMSES] [FINAL] [STIP - Round 1]
- Pancakeswap - [PancakeSwap] [FINAL] [STIP - Round 1] - #2 by meyaf320219
- Gains - [PancakeSwap] [FINAL] [STIP - Round 1] - #2 by meyaf320219
- tBTC - [tBTC] [FINAL] [STIP - Round 1]
- Camelot - [Camelot] [FINAL] [STIP - Round 1] - #39 by Matt_StableLab
In conclusion, our strategy is comprehensively structured, prioritizing optimal fund allocation for maximum impact on liquidity growth, retention, and overall enhancement of the Arbitrum ecosystem. Your support in granting these funds will undeniably be a cornerstone for not only the growth of Quadrat but also the enduring advancement of the entire Arbitrum network.
Grant Timeline: [Describe the timeline for the grant]
Upon receipt of the grant, we are poised to initiate our strategic execution immediately. This will encompass the deployment of vaults and the kickoff of our comprehensive marketing campaign. The grant funds will be judiciously utilized over a span of three months from the commencement of the campaign, ensuring each phase is adequately financed for optimal impact and success.
Fund Streaming: [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 streamed at their discretion at any time?]
Yes, the grant will be streamed linear during the whole period and can be halted by multisig at any time.
SECTION 4: PROTOCOL DETAILS
Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.
Is the Protocol Native to Arbitrum?: [Yes/No, and provide explanation]
Not native. Quadrat and Plasma Finance are supporting 9 chains.
On what other networks is the protocol deployed?: [Yes/No, and provide chains]
Quadrat: Ethereum, Polygon, Optimism, BNB, Avalanche, Base
What date did you deploy on Arbitrum?: [Date of deployment]
Nov-01-2022
Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]
The current performance of the Quadrat Protocol, while in its early stage, holds a promising outlook. As it stands, the total multi-chain TVL for Quadrat is at $380K USD, presenting an average Vault’s APY ranging between 30-50%. Though Quadrat is still gaining traction on the Arbitrum chain, these figures signify a solid foundation upon which the protocol can flourish.
The Quadrat Protocol is a beacon of innovation in the DeFi space, imbued with unique features and tools aimed at enhancing on-chain liquidity and fostering a thriving DeFi environment within the Arbitrum chain. Receiving the grant would provide a significant impetus to the protocol’s development, fast-tracking its growth, and solidifying its position in the ecosystem.
Despite its early-stage status, the dedication to innovation and a clear, robust strategy underscores Quadrat’s commitment to emerging as a formidable force in the DeFi landscape. The grant support will undeniably amplify the protocol’s capabilities, ensuring its exponential growth and contribution to bolstering the Arbitrum network’s DeFi ecosystem.
Quadrat Dashboard: Plasma Finance – Multi-chain DeFi & NFT Metaverse. Powered by 0xPlasma
DeFiLlama: https://defillama.com/protocol/quadrat
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application.]
The team is working now on the second version of the protocol on the road to the multi-protocol advanced asset management platform.
Audit History: [Provide historic audits and audit results]
SECTION 5: Data and Reporting
Provide details on how your team is equipped to provide data and reporting on grant distribution.
Is your team prepared to create Dune Spells and/or Dashboards for your incentive program?: [Please describe your answer]
Yes, sure, we will build a Dune dashboard to measure the target metrics.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?: [Please describe your strategy and capabilities for data/reporting]
Yes, sure.
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?: [Y/N]
Yes. Looking forward.
We are also open for collaborations and to help other protocols to create their liquidity farming and staking strategies on Uniswap v3, Camelot, Pancakeswap or Sushi v3.