Arbitrum Grants Proposal
SECTION 1: APPLICANT INFORMATION
Applicant Name: Siddhanjay
Project Name: Range Protocol
Project Description: Range Protocol provides non-custodial vaults for users to access automated strategies run by professional market makers for managing liquidity on Dexes.
Team Members and Qualifications:
Siddharth Lalwani: CEO and Cofounder
Tony Sun: COO and Cofounder
Siddhanjay: Senior Blockchain developer
Project Links:
Website: https://www.rangeprotocol.com/
Twitter : https://twitter.com/Range_Protocol
Github : Range-Protocol · GitHub
Discord: Range Protocol
Medium: https://rangeprotocol.medium.com/
Docs: Range Protocol - Range Protocol
Contact Information
Twitter: https://twitter.com/Range_Protocol
Email: hello@rangeprotocol.com
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes
SECTION 2: GRANT INFORMATION
Requested Grant Size: 450,000 ARB (Siren Grants)
Grant Matching:
Range does not have a token, making grant matching not possible at this time.
Grant Breakdown:
100% of the requested funds will be directed to liquidity providers on Uniswap v3 (and other integrated AMMs) who deploy liquidity through Range Protocol vaults on Arbitrum. These incentives will be available until January 2024.
New vaults may be deployed on specific liquidity pools as necessary.
All operational costs associated with these new vaults, such as server costs, audits, development and analytical resources, gas costs, etc., will be covered by Range Protocol. No incentives will be allocated to the team.
An exact breakdown of which liquidity pairs will be incentivized, along with the corresponding amounts, will be updated at a later date, before the first bi-weekly update. We list our methodology for pool selection below under “Execution Strategy”
Funding Address: 0x48e0ee6160C7B90ef7a9a74Aa17172FdDF1D99e0
Funding Address Characteristics: Safe{Wallet} – Dashboard
The address is a multisig of 3/6
Contract Address: Range will deploy new contracts for rewards distribution, which will also be available on our GitHub. The contract address will be updated here soon, before the first bi-weekly update.
SECTION 3: GRANT OBJECTIVES AND EXECUTION
Objectives:
We plan to use the grants for incentivizing LPs to provide narrow range liquidity on concentrated liquidity Dexes. This will directly benefit Arbitrum ecosystem in following ways :
- Deeper liquidity depth for AMMs on Arbitrum, improving the trading experience for users by reducing slippage
- Narrow range liquidity enables high levels of capital efficiency as most of the assets can be concentrated within a useful price range and idle liquidity across the AMM curve can be minimised. As a result, total useful liquidity should increase per unit of token invested.
- Our JIT Rebalancing infrastructure can enable 10x more capital efficiency by combining the benefits of Concentrated liquidity AMMs and RFQ. Additional incentives can make retail users feel more confident in investing their idle assets through Range Protocol’s vaults. Active Strategy is explained in this medium post
- Reduced capital requirements for project teams to bootstrap liquidity pools for their tokens and reduced selling pressure of inflationary tokenomics to support liquidity.
Key Performance Indicators (KPIs):
Measurable KPIs as part of this grant will include:
- Reduced slippage for swaps on pools with vaults deployed by Range
- Increase TVL for the protocol
- Increase in TVL on the AMM pools
- Increased capital efficiency on these pools (Volume/TVL)
We will be tracking these KPIs and posting them in our updates here.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
Range protocol provides vaults for liquidity provisioning and most of this liquidity is deployed in narrow ranges for maximal capital efficiency and is very actively managed by automated strategies. The users providing their assets expect to have a positive yield from trading fees. But as with any narrow range liquidity provision, it comes with a risk of higher degree of impermanent loss.
So far, Range has been very selective about which liquidity pools to deploy vaults on with a simple expectation of
Expected Trading fees earned > Expected Impermanent Loss + rebalancing costs
We run backtests on the historical volatility of the trading pair and historical fees generated within particular price ranges to quantify our assumptions. The result is that not all token pairs can have a high confidence of profitability for LPs vs just holding the assets.
This is where the incentives will help. The incentives are primarily to offset Impermanent loss that users would otherwise experience and encourage more LPs to stake their assets in a capital-efficient way with lower risk. This should directly enable better and more efficient liquidity across Arbitrum network.
Justification for the size of the grant:
We aim to maximize our impact on the Arbitrum network liquidity through this grant. Our goal is to attract liquidity from other networks and increase trading volumes directly. To achieve this, providing appropriate incentives is crucial. We believe that the requested grant amount is justified and is within the proposed budget limits.
100% of the grant amount is being directed towards retail users and the team does not benefit from it.
Execution Strategy:
We understand there might be other incentive programs running concurrently making the decision to have rigid criteria for pools selection challenging during the application period. We have Gauntlet incentivising 6 pools on Uniswap and other liquidity managers and AMMs that will be giving out incentives from their budget as a part of this grant program. Having multiple teams incentivize the same pools defeats the purpose of what we are trying to achieve and it would just become a race of the liquidity migrating to whichever team gives out the highest incentives on those pools. For this reason, we request flexibility in deciding which pools to incentivize and providing this decision at a later date, no later than the 1st bi-weekly update. The complete list of contract addresses, pool addresses and amounts used will be updated here.
We list here our methodology for pool selection:
- Prioritize liquidity pairs that have significantly better liquidity and trading volume on chains other than Arbitrum but the token is also integral across Arbitrum Defi ecosystem. ex LDO
- Preference for tokens on Arbitrum that are used as collateral in money markets like Aave or have high volumes on perpetuals like GMX . e.g.: LINK/WETH
- Critical and high volume pairs like ETH-USDC, ETH-USDT, USDC-USDT, wstETH-USDC, ETH-BTC, ARB-ETH
- Avoid pools that are already over-incentivized from other project teams.
- Pairs of tokens native to arbitrum like GMX
The incentives will run on vaults deployed on top of Uniswap v3. After the grant duration has ended, these vaults will continue to run and be actively managed in the absence of external incentives.
Grant Timeline:
- Application, Review and Voting: until October 11, 2023
- KYC Period: Late October 2023
- Pools finalized for incentives and posted here: before 31 October
- Start of Incentive Program: November 1, 2023
- End of Incentive Program: January 31, 2024
- Detailed reports and dashboards published: before February 15, 2024
- Biweekly updates including KPI tracking: 15th and 30th of each month
The grants will be split equally across each month for the entirety of the grant period
| Time | ARB distributed |
|---|---|
| November 2023 | 100,000 |
| December 2023 | 100,000 |
| January 2024 | 250,000 |
| TOTAL | 450,000.00 |
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 stream?
Yes
SECTION 4: PROTOCOL DETAILS
Is the Protocol Native to Arbitrum?
No, Range is deployed across multiple chains. As a relatively new protocol, we aim to establish a strong presence in ecosystems with significant DeFi activity. We consider Arbitrum to be one of the primary Layer 2 solutions for this purpose and are dedicated to bringing more exciting DeFi applications to Arbitrum
On what other networks is the protocol deployed?
Range is live on 6 networks: Ethereum, Arbitrum, Polygon, BSC, Mantle and Base.
What date did you deploy on Arbitrum?:
We deployed on Arbitrum on 08 May 2023 (4.6 months ago) as seen from the Factory contract deployment
Protocol Performance:
Range protocol went live in May 2023 and since then has been growing rapidly. To date, the TVL has grown to $13.2M. The protocol is live on 6 networks, across 5 different AMMs with 41 vault offerings. We are also able to close a funding round in a challenging market.
The capital efficiency of our strategies offered has been phenomenal. Within just 5 months, capital deposited by LPs through range has settled $480M in volume and growing fast. For some of these vaults, Range protocol managed positions have become the biggest % of the active liquidity of the pool. All of this while offering LPs an attractive yield based on only trading fees and 0 external incentives.
Depositors have accumulated $83K in fees so far.
All these strategies are being offered with 0% fee being charged on capital and a 2.5% fee on the trading fees earned which is quite negligible.
Range has 5 vaults live on Arbitrum and more coming within a couple of weeks. The total volume settled by liquidity on Range on Arbitrum is around $43M for last 30 days (extrapolating values here for vaults that have been live < 30 days)
On Ethereum, the wstETH-ETH vault is a good case study showing the capital efficiency of Range and how it can have an impact on the entire ecosystem.
Source: https://dune.com/murathan/lst-wars
Range deployed its wstETH vaults in May ‘23, starting with the 5bps fee pool and migrating to 1bps fee pool. This is currently the 5th highest volume pool on uniswap. Since then, Uniswap v3 has been consistently growing in market share for wstETH. Being among the largest active positions in this pool, range has had a significant impact on the migration and increase in the trading volumes. This vault currently has $2M in TVL but has settled $325M in volumes within the last 3 months.
Not only does this improve liquidity for the tokens, but the LPs are also able to enjoy an attractive return from trading fees, on top of what they already earn from validator yields.
Uniswap v3 consistently ranks among the most efficient AMM for wstETH pool for a good reason. The trading volume naturally migrates to the AMM with the best liquidity depth around the current price and this growth has been completely organic without incentives until recently.
We aim to have a similar impact on the Arbitrum ecosystem and the grants would significantly help to boost the trading volumes and migrate liquidity and volumes to efficient venues.
Protocol Roadmap:
Range protocol’s future roadmap is to grow in the Active Liquidity Management space but not be limited by it. We have a few new products lined up
- Liquidity bootstrapping vaults for pegged assets, starting with GHO stablecoin. The team has also secured a grant from the Aave team to build this. This is currently in beta-testing phase and undergoing final audit with Veridise.
https://x.com/AaveGrants/status/1699485564662342021?s=20
This will be going live on mainnet soon and on Arbitrum when GHO becomes multichain on Arbitrum. - Apart from supporting multiple strategies over Uniswap v3, we will be soon adding support for Camelot and Trader Joe.
- Cross-chain liquidity management vaults
- The team is partnering up with a popular cross-chain protocol to manage liquidity across multiple L2s for multichain assets in an efficient way. This will be hugely beneficial to Arbitrum in solving the problem of fragmented liquidity. The implementation is currently in a proof of concept phase.
Apart from this, the team is continuously integrating with more AMMs and partnering with projects to launch new vaults. Our unique Just-in-Time rebalancing infrastructure provides efficiency of RFQs which enables us to scale up the vault TVL without being limited by low liquidity pools where rebalancing gets difficult.
Audit History:
Range Protocol’s ALM vaults have undergone 2 audits from Halborn and Certik with no major findings and are ongoing follow-up audits with Veridise and Salusec.
Audit reports are available here
SECTION 5: Data and Reporting
Is your team prepared to create Dune Dashboards for your incentive program?
Yes, our team will be creating public Dune dashboards with detailed metrics including daily TVL, transactions, volumes and unique interactions for our vaults.
We plan to publish this before December and will update the link here.
Alongside this, we are also looking to publish a comparative analysis of liquidity across different AMM pools on Arbitrum vs Mainnet, how those change when incentivized and how providing liquidity in a capital efficient way on concentrated liquidity Dexes can naturally drive volume away from less captial efficient AMMs.
For some of the project token pools that we may incentivize, we will publish a customized liquidity analysis for their token.
Attaching a sample case study here
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
Yes, we will be active in the forums and keep everyone updated on the progress. The updates will include TVL and liquidity changes that we observed along with updates on incentive distribution.
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?
Yes, we acknowledge this
