Thanks for your feedback @meyaf320219
Regarding the queries raised at your end
How is it possible to have negative APR on a stable LSD vault?
The yield for LPing in a Uniswap v3 pool is a function of three components - Trading fees, Impermanent loss and Rebalancing Cost. Liquidity in soft pegged pair like USDC.e USDT is managed in a narrower range so the liquidity is a lot more efficient in earning trading fees with a tradeoff of higher impermanent loss. We as a protocol are transparent in displaying the real APY which includes impermanent loss also.
The overall requested amount should be reduced drastically. The project is not native and the current TVL and vault performance is underwhelming.
We put huge emphasis on asset security and currently a lot of planned items are stalled by rigorous backtesting on the strategy side and smart contract audits. The amount requested is based on our roadmap of the products we plan to deploy over the next few months till January 2024. Considering your and some other Arbitrum community member’s feedback, we are slashing down our requested grant amount to 450K ARB and backloading the distribution to garner more confidence from Arbitrum community over time. Arbitrum DAO will have the full control to follow up on the progress and contribution from Range Protocol team and control the incentives through Hedgey.
Regarding your comment regarding the vault performance, you may be confused into thinking that as our merkl integration has not been completed and the frontend is not displaying the incentives APY. The performance of our vaults is one of the most superior across all LPs. Our current focus has been for LSD vaults and most of our traction has been for these vaults.
There are active incentives ongoing for wstETH ETH and rETH ETH vaults (by Uniswap Foundation and Gauntlet) and the vault manager “Tokka Labs” has been trying to optimize the liquidity position range to maximize the trading fees earned and earn as much incentives as possible for the LPs of our vault.
Over the past 6 days since the LSD vaults went live,
WETH RETH Vault
Incentive APY = 7.32% APY (827 ARB tokens earned)
Pool APY = 2.42% APY
Real APY = 9.74% APY
WETH wSTETH Vault
Incentive APY = 5.98% (758.3 ARB tokens earned)
Pool APY = -1.12%
Real APY = 4.86%
Merkl Integration will be done in the next few days and then you can verify everything yourself.
You should focus on vault performance before additional incentives, otherwise this is not a long-term solution. Users will leave as soon as incentives stop if the performance remains the same.
Range Protocol’s vision has been around generating organic yield with active management instead of inflationary tokenomics. Our wstETH ETH mainnet vault performance over time has been a case study for the same. Even after the incentives went away, the organic yield is pretty high and that vault TVL keeps growing. The following incentive program that Arbitrum is running is just to bootstrap network activity and our vision is aligned to structure the incentives for that and become a lego in making Arbitrum defi more efficient.
Uniswap as the only DEX is somewhat limiting. Arbitrum protocols should work together, I would like to see at least one native or other DEX you work on.
I have addressed this in prior comment regarding asset security. We have been actively engaging with other Arbitrum AMMs like Camelot, Sushiswap and TraderJoe over time and vaults with them will go live over the next week once our final audit and security checks are completed.
We have been also working with other Arbitrum active defi players like Pendle, Squid Router and you will soon seen the following partnership going live soon over the next few weeks.
Current actively traded pairs on Arbitrum are ETH stablecoin , ARB ETH and Stablecoin Stablecoin combinations.
We will soon be rolling out vaults for a lot of arbitrum native tokens which can actually improve its liquidity depth through our active rebalancing strategies and JIT rebalancing framework.