[RAMSES] [FINAL] [STIP - Round 1]

Archive Incentive Framework (Round 1)
107

we introduced variable fees around the 20th, we were dropping fees on the stable pairs to see tangible influx of arbitrage/trading volume + working with aggregators such as odos and paraswap to ensure the swap routes were not affected. We introduced another change to how the fee tier is mapped in our contract and that has caused all aggregators outside of odos to not route our currentFees but only the initialFee tier at initialization, hence we did not see a reason to keep the fees low if the aggregators were not accounting for it for the time-being.

Our system can do any fees from 0.0001% to 10.0000% on any pairs. There is significant arbitrage opportunities to be made by trading between the dexes on Arbi who have deep usdc-usdc.e liquidity fwiw.

Re: the dashboard-- it is ā€˜accurateā€™ but only to a certain extent. Itā€™s subgraph based, so it is limited to the original subgraph schema that was used. So it calculates the current days fees based on the current fee tier, regardless of if it changed every block, or every other hour, etc. So it is kind of hard to properly display (at this very moment). We are looking into ways to support more accurate info in our analytics page with our bandwidth.

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108

I see, that makes sense. It would also explain other recent occurrences I was taking a look at:

  • sep 24, 570k volume for $42 of fees
  • sep 25, 1.75m volume for $39 of fees
  • sep 26, 1.94m volume for $22 of fees

What is the reasoning behind those continuous fee cuts? As it stands, your LPs and ve earn less even though the AMM has a much higher volume.

Itā€™s an important point to raise as the tvl/volume ratio has been constantly highlighted.

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109

Whats even your point? You can completely ignore those days, check ramses volume and fees for last 3 months and see itā€™s still top5 fee/volume DEX on Arbitrum if you bothered to check analytics for more than 5 minutes that volume spike has no impact whatsoever.

Thereā€™s a lot of stableswap strategies going on in Arbitrum right now with Lighter DEX (0% fees), TraderJoe, Camelot and Ramses+Gamma exploring different fee ranges for performance.

If you graph Ramses for fee generation, you can see it has been pretty constant through the whole time. Same with TVL:volume efficency ratios.

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Would appreciate if you stick to discussing the grant proposal instead of bringing random poorly researched random facts where it seems your only purpose is to keep derailing the thread. Or even better, let others voice their opinion about the grant instead of going back and forth with your criticism over and over.

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110

Iā€™m no expert but logically if you have a choice between catching a small amount of fees or none at all because the fees are too high, wouldnā€™t you choose the first option?
Low fees are good for Arbitrum chain, unless you think itā€™s a bad thing, then please explain.

And LP + Ve holder earnings are not the topic of this thread, I believe.

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111

Iā€™ve been talking about the proposal from the very start, explained in details why multiple points were extremely problematic, and backed up every one of them with data and demonstrations. Most of my questions have been left unanswered.

I donā€™t know if youā€™re a member of the team or from the community, but you have been the one repeatedly saying that the main selling point for Ramses to justify such a large grant was the volume/tvl ratio efficiency.

So it seems legitimate to ask why fees have been continuously cut since approximately one week, greatly increasing the AMM volume while hurting the protocol and LPs earnings. This can be seen as a very odd timing with the grant applications going live. I believe itā€™s in everyoneā€™s interest to clarify this.

If you use cumulative fees, the amount will constantly increase, thatā€™s the idea. This would be the correct data to show:

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It actually doesnā€™t even look bad, but itā€™s less biased.

Itā€™s nothing personal, but Iā€™m a very stubborn man, and I believe there are enough hacks, predatory and dishonest behaviors in this space to not keep quiet if I find out something potentially problematic or harmful, whether itā€™s on purpose or not.

You can ignore me if you think those questions arenā€™t legitimate and donā€™t need to be addressed.
I also guess this forum is moderated. So mods can let me know if I am breaking a rule or they believe I am being irrelevant.

Absolutely. And if lowering your fees would make you have more volume but earn less overall, would you do it? Thatā€™s my point.

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112

Iā€™m not from team at all, just to clarify. And idk man DOG literally replied to you why the volume increased and you didnā€™t even read anything he said and replied same thing. Sure you are a stubborn man.

There is a new DEX called LighterDEX that has 0% fee for stableswaps and basically gets 100% of all swaps routed, so this has changed the landscape of stableswap ā€œwarsā€ in Arbitrum. Ramses has been exploring strategies with Gamma to adapt to this and DEXes like Camelot and TraderJoe have also been lowering their fees to accomodate to this. In fact, those days where volume spiked Ramses did more fees on that stable pair than it usually does, so its funny you bring this up constantly.

Anyway, I will refuse to reply to any of your posts anymore for the health of this, just stop demanding random fact clarifications with your newly found conspiracy theory and let the proposal take place. Everyone already knows you dont support Ramses. It is redundant. This is Perlā€™s blog at this point.

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113

It appears Ramses often adjusts pool parameters to attract liquidity and find an optimal balance of utility. I demand Ramses explain why they cannot use a time machine to travel into the future to see the effect beforehand rather than make small changes and monitor the outcome.

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114

No, because it doesnā€™t make any sense. Youā€™re assuming foul play, and Iā€™ve been on the internet long enough to know thereā€™s no way to change someoneā€™s beliefs.

You mention that lots of your questions have been left unanswered. I suggest you make a concise and precise list, because scraping through 100+ posts to find out what in your opinion has been left unanswered would take a long time.

Also, you havenā€™t said anything about low fees being good for Arbitrum chain, so Iā€™m assuming we can at least agree on that.

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115

ve3,3 works really well when you are early to a chain and probably the first native dex. Which is not in Ramses case. Most the ve3,3 dexes have failed miserably on arbitrum.

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116

This is true if we look at the monthly fee and revenue chart itā€™s down only not a good sign. The ve3,3 flywheels works well when the fee generation is adequate, constantly cutting fee on pools may break the flywheel hence other incentives are needed for the same.

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117

This is true for sep 20, which was probably a volume ā€œanomalyā€ on the chain, and the team already explained what happened. This is wrong for all the other days Iā€™ve mentioned.

Fees have been lowered on average everyday, increasing the volume while decreasing the earnings. On sep 26, the USDC-USDC pair was configured with an average of 0.0011% swap fees. Thatā€™s very factual, and it artificially increases the volume at the expense of the fees.

Precisely.

I think itā€™s odd, and accordingly ask for clarifications, as some things have been piling up. There is no belief involved.

Iā€™ve suggested the same, but was ignored. Most of my questions were very precise. I will gladly do it if that can help getting answers and recentering the discussion.

We can certainly at least agree that the thread is now very confusing, and it benefits no one.

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118

Hello there,

I am TokenBrice, spreading my passion for DeFi for more than four years in French and English, and also Liquity Protocolā€™s ā€œliquidity engineerā€ (we had to come up with a catchy name to capture all the complexity of what that endeavor entails now).

I just wanted to share the story of Liquity x Ramses, as it will likely help some people in this post better understand the relevancy of such a model. Liquity was one of the launch partners of Ramses and received a veRAM NFT. It enabled Liquity to sustain a respectable amount of liquidity on the LUSD stable pairs. It was also the driving factor in deciding to bridge the LQTY token to Arbitrum, which is the only L2 that is currently officially supported for LQTY.

Weā€™ve been in close contact with the Ramses team since the protocolā€™s inception, and the overall experience has been smooth and professional. I can personally vouch for their seriousness, and I met North IRL this year at EthCC, where my previous impressions were validated.

As some of you might already know, I am deeply involved in liquidity management, helping other projects on the matter on top of Liquity, and even about to launch a structure to deliver that service pro-bono more broadly to high-quality DeFi projects. Iā€™ve also covered the topic extensively on my blog, which still provides one of the most exhaustive explanations of the base veCRV model and other pieces, including one covering the ve(3;3) DEX model in great detail.

Now, Iā€™d like to give two references for the governance to examine:

First, the suggested range seems reasonable regarding the grant amount, even for the highest end. Let me remind the governance that the initial protocol airdrop allocated vastly superior amounts to obviously dubious protocols.

For instance, Vesta Finance received 2,704,175 $ARB tokens worth $3.5 million back then; Ramsesā€™ top ask is 1.5M ARB, 55% of the total ARB amount received by Vesta, and even less in dollars.

Vesta Finance was low-effort and aggressive Liquity-fork, which stablecoin VST had 53x less stable in circulation than Liquity (5M VST vs. 265M LUSD), never expanded any ARB for growth nor reliably participated in the ARB governance, and which is now dissolving and ceasing operations, thus distributing its generous ARB allocation directly to its tokenholders.

Secondly, and more specifically to ve(3;3) DEXes, you can cross-examine Ramses against Chronos, another Arbitrum ve(3;3) DEX launched a few weeks after Ramses. Despite a much more spectacular launch than Ramses (Chronos had >$250M TVL at some point), it failed to retain any traction and is now processing a marginal amount of daily volume (=< ~$500k). The different results stem from a widely different understanding of the DEX landscape of each respective teams, as well as their relative business development effort and overall behavior.

Iā€™ve interacted weekly with both teams, and the difference in behavior and care is palpable. Iā€™ve reported over a dozen issues and bugs to the Chronos team, most of which were barely acknowledged, let alone fixed. Reports included a bug of critical severity affecting the front end that could result in loss of funds, which the team took very lightly. On the other hand, every issue, bug, or even question I shared with the Ramses team is acknowledged within hours and usually solved within days.

We observe a similar pattern on the topic of bribes: Chronos has been constantly pushing for bribes every week, disregarding any care for the effective results obtained. On the other hand, Ramses showed much more understanding and proved immensely more supportive in helping Liquityā€™s achieve its liquidity goals and sustain them long-term.

I hope this post will help governance participants make an informed decision. I remain available if there are more questions regarding my/Liquityā€™s experience with the Ramses DEX and team.

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119

In order for a chain to get users it needs to have something there for them to do. Arbitrum activity has been down only since the airdrop, and I was thrilled to hear for the sake of the roll-upā€™s future there was finally an incentives program. I still think OP incentivizing VELO locking was one of the best decisions they made to jump start activity on the chain. VELO price has held up fairly well in poor market conditions and the dex has a ton of activity and TVL.

I think that the Ramses team should just pursue a similar model for incentives, the same one as VELO. It worked wonders for the VELO and team and the OP roll-up by proxy. Arbitrum should look for an answer to Velodrome. Since it seems this isnā€™t currently an option being presented, I would definitely go with ā€œOPTION Aā€. I believe this option would have a similar effect, but maybe not quite as much direct impact.

I have spent a lot of time following ve 3,3 dexes on Arbitrum and various other chains and RAMSES is one of the best teams out there right now. Always improving the protocol, making changes and adjustments to fine tune the model. Glad to see there are a lot of other people in here vouching for them right now, they deserve it.

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120

I donā€™t really care about the future of one dex in specific (except for Uniswap), including Ramses, since I only use Uni contracts to provide liquidity and dex aggregators to perform swaps.

However, the more competition, the better for the user, so Iā€™m in support of any player who tries to compete and outperform the establishment.

Tbh Ramses metrics donā€™t look any bad considering they are just starting, they were not present yet during the Arbitrum golden days and they didnā€™t get the Arbitrum airdrop.

That said I feel thereā€™s an unfair harassment towards them in this process.
111 replies to their proposal while the average for all the others is less than 20, this says quite a lot. Btw most of the FUD coming from only 2-3 accounts.

@Perl your account was created only 4 days ago, just after Ramses application, and 90% of your posts and efforts are focused to scrutiny and question Ramses. The rest goes to other dexes proposals.
My question for you is: Is there anything personal behind that? Are you invested in some Ramses competitor? Are you in support of some dex in specific? Iā€™m just asking, you donā€™t have to answer that if you donā€™t want to, but it would be nice to know for the rest of the readers and discussion participants since will help to build context and understand some of your argumentation. Also you mentioned and acknowledged you are stubborn. May this become a handicap when it comes to discussions and a barrier for the goal to reach agreements or even accept rebuttals?

The fud went all the way through, shifting every time that it was somehow refuted. It started from complaining about grant request size and distribution, then Ramses team lowered the amount and added an apparently 100% compliant new option of distribution. At that point complaints shifted to questioning the solidly economics model, then the tech efficiency, now accusing the team for manipulating metrics,ā€¦ whatā€™s next? You almost criticized every aspect, it seems like they do EVERYTHING wrong.

You might want to contribute with some concrete solutions to fix the issues.

I donā€™t even agree with the short team inflationary incentive program as a whole as I expressed weeks ago when it was proposed, but now that got voted and accepted, I have to defend anyone rights to get their piece of the cake as long as they comply with the criteria and fulfill the requirements as it seems to be the case for Ramses after their ask update. Otherwise I wouldnā€™t be fair and democrat.

Whether the dex model is good or bad is a subject for another discussion, youā€™ll find people who like it and others that not. It has ups and downs like any other model. I personally stopped being a participant of their game theory after trying it for a while since it wasnā€™t profitable to me but thatā€™s because I probably didnā€™t play the game properly. It is useful and profitable to others and there are ve3,3 dexes launching and operating in many chains and some of them gathering big volumes and TVLs. Some being even the chainā€™s flagship dexes. Facts.

@Matt_StableLab Iā€™d like you to bring some light about this, please, since at this point the discussion is going beyond the simply grant acquisition subject imo. Is the Ramses request fully compliant with the rules? Thank you.

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122

When is criticism claimed as FUD?

I think that if the Ramses team believes in their model, they should be able to provide enough arguments to defend it and be willing to take criticism as a way to improve it.

Have you taken the time to read @Perlā€™s argument and consider his perspective and findings rather than using account lifetime as a way to prove your point?

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123

This has stirred up quite a lot of debate. I think there are credible points on both sides.

My general take
Ramses are showing themselves to run a competent DEX in this space and we, the Arbitrum DAO, should be open and supportive for those showing commitment towards the ecosystem and we should also preserve an open, fair, balanced and competitive ecosystem.

Ramses should be a beneficiary of a grant in this program, if we want to retain the values that we as an Arbitrum Ecosystem uphold.

Comments on Execution
The proposed execution plan B is to direct incentives purely to blue-chip liquidity pairs is not a favourable execution for Arbitrum. Ramses should preserve a core % of the allocation towards builders that they support in the ecosystem.

If Ramses want to spend 100% of the ARB allocated toward blue-chip pairs only, then the grant should be significantly smaller as there are plenty of DEXs that can offer equal or better support for incentives spent on these pairs.

Ramses have built a good network and supported builders, the incentives should be directed that way and option A should be taken.

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124

Yes, I did follow the whole topic and read @Perl 's arguments along the way.

Criticism is not FUD by definition. Although FUD is a consequence of criticism. Thereā€™s constructive and destructive criticism. If criticism is heavy, insistent and made in the way that only points out downsides omitting the upsides creates an unbalanced context and biased narrative. Without bringing concrete solutions that pave way to future improvement and success can become even toxic. If a 3rd party without knowledge of the whole picture gets this inputs could be lead to fear, uncertainty and doubt causing a harm to the subject.

This forum topic is not meant to be the host of a dex working model discussion. Perl and any others interested can discuss this in another forum as much as they please. Itā€™s actually been already widely discussed. You can find comprehensive articles and case studies about it on platforms like medium. Thereā€™s evidences and data that report both, pros and cons, like any other dex model. The perfect model doesnā€™t exist yet.

Iā€™m asking to please keep the process fair and wholesome and stick to the subject of this proposal which is agree whether the applicantā€™s requests align with the goal of the program and comply with the rules. Thanks.

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125

Overall Ramses has two instances of edges in my opinion:

  • Competitive metrics on non-stable volatile pairs even when compared to what we consider as top protocols
  • Leveraging the 3,3 vemodel to minimize value leak, while bootstrapping other Arbitrum projects

Direct liquidity incentives will be effective in testing whether the displayed efficiency of Ramses is a small protocol anomaly or if it could be amplified to be fully competitive, or superior, to top DEXs on the chain.

The voting match rewards will be effective in testing whether Ramses is/can be/will be a good layer to incentivize protocols to participate in building on Arbitrum.

Iā€™m optimistic on the results of both - and hope that there is an opportunity to sufficiently bootstrap this experiment through this short term grant program.

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126

I fully agree with your idea. It would be irresponsible that Arbitrum grant system completely ignores the longest and most successful grant program in the space (Velodrome with OP grants).

Just curious, in what way you think the current proposal isnā€™t similar to what Velodrome did? What parts would you change? I think the core concept is basically the same ā€“ the incentives are vote bribed and matched to encourage a participation marketplace, with the extra that Ramses is more capital efficient codebase because of UniV3/CL implementation, so the result could be quite good.

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127

I agree this thread shouldnā€™t be a debate about the efficiency of the Solidly model.
Iā€™m extremely irritated by the way Solidly forks turn a cool initial idea into easy cash grabs and grant hunters on every chain.
It doesnā€™t mean all the teams behind them are dishonest or are doing a bad job. It doesnā€™t mean they should never have grants. But few realize how this model can be very easily used to mislead people about the real flow of funds, earnings and grants.

Back to Ramses, here is a summary of all the questions I believe need to be addressed by the team. Note that the first 3 points only concern the option with incentives to veRAM.

1. ve incentives
This grant incentivizes veRAM, ā€œindirect participantsā€ to liquidity, no matter how the platform performs. Voters donā€™t need to provide liquidity, and donā€™t increase the emissions, as they simply vote for the way the configured emissions will be distributed.

Thatā€™s why the next points are very important, since it can be an efficient way to divert the grants. As stated in this thread before, 70% of ve is not owned by users:

  1. @Dog and @North hold 5% of veRAM supply. Unless it was all fairly bought on the market, that roughly means they are eligible to receive 5% of the grant they will ask by voting. This can be considered as a way to redirect a part of the grant to them. This could be very easily solved by simply committing to not vote, but this option doesnā€™t seem to be considered. Of course if this ve hasnā€™t been airdropped and is a personal investment, from RAM bought on the market, this point is completely invalid.

  2. Ramses treasury holds a little less than 10% of the total ve supply. Same question as above, is it used to vote for emissions, for instance for core pairs, as itā€™s often the case in Solidly forks? This can be an indirect way of redirecting the grant to the treasury. Can you clarify that you wonā€™t use it to vote either?

  3. The rest was airdropped to protocols and partners. There is no mechanism to prevent them from voting for other gauges incentivized with ARB. Will you rely on trust only for 40+ protocols?

2. Recycling
Recycling bribes is a simple way to keep on reinjecting the same liquidity again and again in ve, to artificially inflate the revenue, while only effectively spending a small portion of it.

You can all find all the related data and illustrations here: [RAMSES] [FINAL] [STIP - Round 1] - #64 by Perl

Even if bribes are ā€œmatchedā€, protocols end up in the positive because they will always hold the majority of the ve voting for their pool. After 3 months, they will own a very large share of the ARB grant allocated to their pool. So my questions are very simple:

  1. Do protocols need to recycle the ARB from n-1 epochs only, or from ALL previous epochs? If from n-1 only, they will recover again a majority of the ARB they have recycled. All of this would then end up in their pocket

  2. In both options, after 3 months, partners have accumulated a lot of recovered ARB from the grant. Whatā€™s next?
    ā€“ Do they keep it?
    ā€“ Do they continue recycling it? Then this grant will be used for far more than 3 months. This would be problematic, and I hope @Matt_StableLab can clarify.
    ā€“ Do they give it back to the DAO? In this case, can you clarify how it will be guaranteed by your team?

  3. Why not simply ask protocols to bribe but not vote, as it would remove the whole recycling issue, and give better returns to users?

3. Bribes efficiency

  1. Could we have a breakdown of the bribes that have been injected by your 40+ partners and distributed over the last few months?

  2. Could we have a breakdown of how much people were bribing, recovering and recycling during the previous epochs?

Epoch #26 had 12k of bribes. Ramses first asked to inject ~160k ARB / epoch on top of it (2m grant). With the high range of the updated proposal (1.5m), that would be 125k ARB / epoch. It doesnā€™t make any sense.

Emissions to LPs are 35k / epoch. A 12k bribe / 35k emissions is a ok 1:3 ratio.
If you inject 125k ARB, you now have 137k bribe / 35k emissions, ie 1:0.25 ratio.
The only way for it to be arguably efficient, ie at least 1:2, is to rely on a 8x price increase of RAM.
To get back to the same 1:3 ratio, you would need to rely on a ~11x price increase.

I believe this is highly predatory, very inefficient, and only benefits Ramses, in particular a small insiders circle.

  1. How would you justify your approach and requested amount considering those numbers?

4. Volume
The recent volume increase and ā€œbest volume/tvl efficiency on the chainā€ has been consistenly highlighted. I canā€™t help but being suspicious that USDC/USDC fees have been cut down to ridiculously low levels to artificially inflates the overall volume. I can totally accept that there might be another explanation.

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