Firstly, thank you for presenting this well-considered proposal and your enthusiasm for the Arbitrum ecosystem.
Introduction and Rationale
The proposal aims to enrich Arbitrum’s liquidity through a range of partnerships and incentives. Specifically, you’re asking for a grant between 750K and 1.5M ARB, which is 1.5-3% of the 50M ARB available. The technology, which is a solid fork native to Arbitrum, has shown a fivefold improvement in volume to TVL ratio, making it capital efficient. Despite its recent deployment in March 2023 and a modest number of weekly users, the protocol has a respectable TVL of $7.4M and has generated substantial revenue. We appreciate the innovative matching requirements for partners and believe this proposal has the potential to positively impact Arbitrum’s ecosystem by onboard new partner protocols and increasing liquidity.
Major Concerns
Efficacy and Scope
Limited TVL, Volume, and users raise questions about the scale of impact
Less-than-optimal incentives for partners to engage meaningfully
Our recommendation for change: We suggest opting for Option B to focus on capturing more retail liquidity providers rather than partner protocols.
Funding Request
The amount requested seems disproportionally high given RAM’s market cap of 261K and FDV of 4M
Our recommendation for change: We suggest reducing the incentive amount, possibly to around 250k ARB.
Minor Concerns
The risk of voting weight skewing toward partners rather than core pools under Option A
Our recommendation for change: Again, we suggest opting for Option B to maintain balanced voting weights.
Summary
Castle Capital appreciates the innovative approach of your proposal and the potential it holds for increasing liquidity and partnering with native protocols. However, in its current form, we do not fully support the proposal moving forward. We believe the concerns regarding the efficacy and the high funding request need to be addressed.
Our recommendations can be summarized as follows:
Opt for Option B to better capture retail liquidity
Consider reducing the requested ARB grant to a more proportionate amount, such as 250k ARB
We hope our feedback is seen as constructive and helpful for fine-tuning your proposal for the benefit of the broader Arbitrum ecosystem.
The main justification for this grant is explained by the metrics included, such as “Cumulative Volume (all-time): $490M”, “30-day Cumulative Volume: $95M”, and “Averaging over $3.5M in daily transaction volume”.
However, it is becoming concerning that their appears to be wash-trading going on right now for several Ramses pairs. The screenshot shows 1 wallet buying/selling every few minutes on Ramses to increase the volume. This is clearly not natural behaviour and is publicly visible by looking onchain. The timing is clearly a coincidence, given that voting is about to begin.
Please could the team clarify if this activity affects the data in the proposal? Would this be a concern for the legitimacy of the data going forward, especially to measure the grants efficacy?
It’s not fair to comment on how efficient the ram is, but because mktcap is low it only gets 250k arb.
Of the protocols that exist on arb today, only a few are actually in use,
That is shown through tvl, transaction volume.
The main liquidity still comes from retail which they will operate mainly via dex,
ram and camelot are the only two native dexes still trading to date.
RAM volume is regularly over 50m monthly
TVL 11m
Ranked 5th dex on arbitrum and 2nd native dex.
Capital efficiency is even better than Camelot
I’ve never heard of or used some of the subsidy receiving protocols. It’s funny how your argument lacks parameters. You should at least cite the numbers, don’t just talk about your feelings.
There is already considerable discussion in the 150 posts prior to that announcement. We are not* silencing, simply helping keep the discourse focused on the proposal.
To keep this strictly focused on the proposal, I am asking the team if they could clarify the data used in the proposal itself as well as the future data that will be used for the proposal KPIs, given the mentioned info that is affecting Ramses current volume.
To add to my first message, please see below several more examples of bots that are generating abnormal volume on Ramses. I am not suggesting or implying that these are being run by the team, this is a conclusion that requires more information. But, from the onchain public data, it is clear that they are (1) not arb bots (2) losing money to generate volume (3) starting to generate significant volumes when voting is about to begin.
This is clearly referencing the proposal itself and is clearly relevant for the forum to review.
Thank you, I posted similar analysis which was removed by the forum for being “off topic”.
The fact that the majority of Ramses’ volume is generated by bots that are not profitable and appear only to be inflating volumes is directly relevant to the proposal above.
Will the team please clarify whether the transactions from the accounts above are currently included in the metrics and will be part of the KPIs?
I use this technique often on discord, I will throw out an accusation and then wait for other people to tell me if it is true or not. But in this particular case it is so easy to tell that these are arb bots that I might as well just answer you myself. Let me make this as easy as possible for you. Go to dexscreener and click on Camelot, go into the WETH/USDC pair, and then in the bottom panel paste the very first address you listed above in the “Maker” column. 0x12FB84baE502AD01eEAea43bBA2398A64A3f08B1. Then you can see all the transactions. The problem with your little conspiracy theory is that these addresses are well known arb bots and they are swapping across all the dexs on arbitrum. The other problem with your theory is that Ramses is racking up several thousand dollars in fees a day so this would make them the worst wash traders in history.
Also, the increase in volume on stable pairs in the last 24 hrs happened because yesterday 1inch finally fixed routing for those same stable pairs on ramses. It was not working before. So this is more proof that Ramses is NOT wash trading and they are indeed spanking Camelot and every other dex on Arbitrum and are now firmly #2 in volume behind Uniswap.
Let’s try it backwards, what if you come back when you have hard evidence that these obvious arbitrage bots are linked to Ramses team instead of wasting everyone’s time?
No one owes you an explanation of why you don’t understand how basic things work.
The above is hard evidence - please be polite and keep this on topic. I specifically mentioned that I am not implying or suggesting it is the team operating these bots. The evidence that it is happening is clear, regardless of who is performing it.
You are choosing to ignore the two links I shared above that clearly show evidence of abnormal activity that affects this proposal.
It’s impossible to tell what the other side of those trades are but I don’t see anything that looks out of the ordinary. The point of wash trading is to fake volume without incurring the cost to do so. Wash trading that incurs a cost and is unprofitable isn’t called wash trading, it’s called bad trading.
“Bad trading” could have very lucrative returns if it helped secure something like a grant, do you not think? The appearance of very high volume would have obvious implications for how people view this proposal and their likelihood to support it - this is a direct reference to all the data and KPIs mentioned in the proposal.
This activity is directly coincidental with the timing of the grant, which is why we are discussing it now. This is an important topic to discuss and is directly relevant to the proposal itself.
I appreciate that you are invested in this, but I would prefer the team respond directly so that we can be sure of the information provided. Thank you
Hey everyone. I just wanted to address the recent back and forth about “wash-trading.” I’m genuinely unsure where this accusation is coming from, but I will try and be very clear and present only the facts in this response:
There is zero wash trading, almost all the large transactions are 1inch aggregation router (it means it is regular swaps through an aggregator)
In all the screenshots above, (which amount to over $1m in trading volume in the past few hours) you can see there is ZERO wash-trading or bots. It is only users using aggregators or projects. This is extremely easy to identify-- there is no wash-trading. The accusations are unfounded and frankly hold zero factual evidence. Please refrain from hit-pieces or slander towards us, when we really are trying our best to simply build a good protocol. Thanks.
Given that all parties had an opportunity to chat on about the trading volume, I’d like to avoid a back and forth. Again, all information is available to delegates. Let’s keep discussion concise and focused.
