SECTION 1: APPLICANT INFORMATION
Applicant Name: @0xSlatty / @christian_defi
Project Name: re.al
Project Description:
re.al is the first permissionless Layer 2 dedicated to tokenized real world assets (RWAs), built with Arbiturm Orbit. re.al leverages the power of tokenization to bring RWA on-chain, and provide a unique DeFi ecosystem tailored to this growing category.
Team Members and Roles:
- Jag Singh (CEO & Co-founder): Founder of Tangible, one of the first RWA platforms to bring property on chain, former CEO of Vid and co-founder of Singh Capital, showcasing a track record of innovative leadership in blockchain and finance.
- Michael Slatkin (CMO): Brand visionary with tenure on Apple and Carvana, brought transformative marketing strategies as CMO at Tangible, demonstrating a deep understanding of brand building in tech and crypto spaces.
- James Kouzinas (Operations/Finance): 6+ years in crypto, COO at Tangible, Co-Founder of Clutch and 14+ years finance experience.
- Jaron Abbott (Risk): A quant research expert and former CRO at Cryptic Capital Management and CRO at Tangible, bringing rigorous risk analysis and quantitative strategies to the forefront of blockchain investments.
- Daniel Kuppitz (VP of Engineering): VP engineering at Tangible, previous lead developer of Vid and a major contributor to industry standard query language Gremlin.
- Chase Brown (Smart contract developer): A blockchain innovator with over 4 years of experience in web3 applications, co-founder of Elevate, enhancing re.al’s smart contract development with industry-leading practices.
Project Links:
- Website: https://re.al/
- Github: re-al-Foundation · GitHub
- Docs: https://docs.re.al/
- Twitter: https://twitter.com/real_rwa
- Mirror: re.al
Point of Contact:
Forum handle: @0xSlatty @christian_defi
Point of Contact’s TG handle: @0xSlatty, @christian_defi
Twitter: @0xSlatty, @christian_defi
Email: mike@tangible.store, christian@tangible.store
Do you acknowledge that your team will be subject to a KYC requirement?: Yes
SECTION 2a: Team and Product Information
Team experience:
The re.al team has previously developed the Tangible protocol, which provides access to tokenized, yield-generating real estate. Tangible has consistently ranked in the top 10 of the RWA DeFiLlama category since early 2023. Currently, Tangible has amassed $42M in TVL, while it achieved an ATH TVL of $80M.
The re.al team has also contributed to the incubation of Pearl, a ve(3,3) DEX on Polygon. Pearl was one of the leading DEXs on Polygon throughout the 2023, reaching a TVL of $82M. Unfortunately, the protocol was affected by the $USDR de-peg back in October 2023 (more on this in the Section 2b under “Past Incentivization”). Pearl has used the last 5 months to completely rebuild the DEX along and launch a new borrow/leverage protocol called Stack. With Pearl’s new products and features, and we believe it will be one of the leading protocols on the re.al L2 this year.
What novelty or innovation does your product bring to Arbitrum?
re.al is the first permissionless L2 dedicated exclusively to tokenized Real World Assets. By supporting the development of a robust ecosystem to build deep liquidity for RWAs, we seek to be the primary destination for builders and investors who are looking to participate in this growing category.
As you’ll see in this proposal, we’ve built a highly-performant flywheel that leverages off-chain yields for liquidity incentives, using this consistent, reliable source of funds to make massive leaps in growth in a short period of time. With re.al, we’ll take those learnings and apply them on a chain level, a massive liquidity flywheel, powered by yield-bearing RWAs with opportunities to benefit any protocol that’s integrated into the chain.
We believe that while general-purpose L2s like Arbitrum help in scaling the Ethereum blockchain, the future is multichain. There will be several L2 chains, each dedicated to a specific use case. Other ecosystems like Optimism with OP Stack chains (Base, Blast, Mode), and Polygon with its CDK chains (Manta), have already shown the potential of this vision.
Arbitrum has in Orbit the best tech stack to build a L2, but it’s clearly falling behind in the growth and adoption race. There are very few Orbit chains deployed, and none of them have achieved a recognizable success like other ecosystems L2s had.
We also view the L2 space as ones with winners in both the generalized space i.e. Arbitrum, OP and Base and also winners in a group of specialized chains focused on specific verticals like gaming, AI and RWAs. We believe we’re best positioned to establish ourselves as the preeminent chain for tokenized RWAs, capturing the majority of TVL and transaction volume within this category, while also solidifying Arbitrum as a leader in RWAs through our integration within the Arbitrum ecosystem.
re.al aims to be a case of success for the Arbitrum ecosystem showing the potential of Orbit chains attracting new developers and users to Arbitrum and beyond. We are not looking for a short term boost, but we are shooting for the long-term. The importance of Orbit chains will only grow in the future, and re.al can stand as a pioneer on this route.
Launch of multiple protocols on re.al on day 1:
To provide a positive experience for our users and an optimal launch experience, re.al will deploy with a genesis ecosystem of protocols providing multiple yield opportunities:
- Tangible: Tokenization protocol providing on-chain access to tokenized real world assets and T-Bill products:
- Tangible Marketplace: A protocol where users can buy and sell tokenized Real World Assets such as real estate, watches, wines, and gold bars
- Baskets: An ERC-20 representing vaults of real estate NFTs that distributes the rental yield collected through daily rebases
- USTB: Stablecoin providing native yield through T-bills backing (this is a wrapped version of Mountain’s USDM)
- PearlFi: Concentrated liquidity DEX for tokenized RWAs with a ve(3,3) incentive system
- Caviar: A liquid wrapper for vePEARL that generate returns while removing the complexity and commitment of managing vePEARL positions
- Stack: CDP protocol with built-in leverage mechanisms for RWAs
Is your project composable with other projects on Arbitrum? If so, please explain:
As an Orbit L2, re.al offers new protocol teams the same EVM+ equivalence as they might find when considering Arbitrum One. The key difference is our ability to also integrate them into the liquidity flywheel at the center of the chain, powered by yield-generating RWAs.
We’ve already had conversations with RWA teams currently deployed to Arbitrum One who have great products, but could benefit from incremental liquidity strategies, something we believe we can help fix. As well as other teams who are still building and planning Arbitrum One deployments, who we can support with build/liquidity incentives once we’ve got our flywheel spinning. U3O8, a tokenized uranium protocol currently deployed on Arbitrum, and Mansa Finance, a lending protocol for emerging markets RWAs, are both examples of the above.
We also plan for liquidity to flow the other way, with multichain tokens that originate on re.al moving back into the larger Arbitrum One ecosystem and DeFi protocols on that chain, bringing RWAs and TVL into the larger Arbitrum economy. Tangible Baskets (yield-generating real estate tokens) and USTB are examples of RWAs tokens we plan to bring from re.al to Arbitrum One.
Another example of our efforts is Stack, a CDP protocol launching on re.al since day 1. Stack allows users to deposit collateral assets to borrow MORE, an over-collateralized stablecoin backed by tokenized RWAs. MORE is planned to live across multiple chains, and of course, it will be deployed also on Arbitrum to integrate the re.al ecosystem with existing DeFi protocols on the leading L2.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
We recognize that other blockchains provide dedicated features for RWAs. Although, to our knowledge, re.al will be first to market as the only permissionless L2 dedicated to RWAs, and the only chain-based ecosystem for RWA liquidity.
How do you measure and think about retention internally?
We’ve learned how to leverage off-chain yields from tokenized RWAs as a consistent, sustainable source of on-chain liquidity incentives, helping to build deep liquidity for this asset class in a non-zero-sum approach that benefits the crypto economy as a whole.
To that point, we’re not interested in running incentives campaigns to reward mercenary capital and users that don’t want to be exposed to RWAs DeFi. Our goal is to build the leading liquidity source for RWAs to attract developers and users in a sustainable way.
Metrics and KPIs we are measuring:
- Net bridged value: amount bridged in - amount bridged out
- TVL: Total value locked in protocols deployed on re.al
- Daily, Weekly, Monthly Active Users: the daily/weekly/monthly count of unique addresses interacting with contracts deployed on re.al
- Daily User Growth: the daily growth in addresses interacting with contracts deployed on re.al
- Daily Transaction Count: the daily number of transactions interacting with contracts deployed on re.al
- Wallet-specific analysis: Percentage of users interacting with 2+, 3+ protocols on the chain, and which ones, so we can help to effectively cross-market products between protocol communities and maximize user returns
Relevant usage metrics:
Given re.al chain is being launched on the 17th March, we cannot share any current usage metrics. Listed below are the usage metrics for Tangible and PearlFi, which have relevant historical data, and are the main protocols launching on re.al.
Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan:
Yes, we affirm our commitment to transparency by excluding team-controlled wallets from all milestone metrics and incentive plans, ensuring an accurate representation of genuine user engagement and protocol growth.
Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal? If so, please disclose the details of that arrangement here, including conflicts of interest:
No, this proposal was developed internally by the re.al team without the engagement of external grants consultants or third-party services, ensuring that our submission reflects our genuine vision and strategic objectives for re.al within the Arbitrum ecosystem.
SECTION 2b: PROTOCOL DETAILS
Is the protocol native to Arbitrum?:
Yes, re.al is deployed as an Arbitrum Orbit L2.
On what other networks is the protocol deployed?:
Some protocols/products deployed to re.al will be exclusive to our chain, while others will be multichain, with a focus to expand within the Arbitrum and Aribitrum Orbit ecosystems.
What date did you deploy on Arbitrum mainnet?:
re.al mainnet was deployed on 17th March
- Tx for the deployment of the bridge/chain: Ethereum Transaction Hash (Txhash) Details | Etherscan
- We can update this proposal with RPC details once DRPC is set.
Do you have a native token?:
Yes, RWA is the native governance token of re.al.
Tokenomics docs: Overview | re.al docs
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
Our past incentivization efforts include liquidity mining programs to grow USDR pools across multiple DEXs on different chains. USDR was a rebasing, yield-bearing stablecoin overcollateralized by yield-generating, tokenized real estate from the Tangible protocol.
Our strategy to grow USDR liquidity involved incentivizing USDR pools on ve(3,3) DEXs like Velodrome and Thena. We were able to grow the wUSDR/USDC pool TVL on Velodrome to $19,190,000 with a bribe of $50,220 (deployed on September 12, 2023), generating $382.12 of liquidity for each dollar bribed (becoming the top pool by TVL on Optimism at that time). Similarly, on Thena, the wUSDR/USDC pool TVL grew to $4,050,000 with a bribe of $25,056 (deployed on September 26, 2023), generating $161.64 of liquidity for each $ bribed.
On average, these liquidity mining programs across Velodrome and Thena generated $308.73 in TVL for every dollar bribed.
- Velodrome wUSDR/USDC pool dashboard
- Velodrome bribe tx id
- Thena wUSDR/USDC pool dashboard
- Thena bribe tx id
Chronos (Arbitrum), Curve (Polygon) and Aerodrome (Base) were used in similar ways.
Pearl (Polygon) also leveraged ve(3,3) economics to incentivize liquidity, however we implemented an “autobribes” feature where incoming off-chain yields from real estate were skimmed from liquidity pools and used to bribe them, thus linking DEX TVL with liquidity incentives in a sustainable way. More details on this in Section 4 of this proposal.
In October 2023 USDR depegged. We have since conducted a thorough investigation into the incident, recognizing that while there was some suspicious on-chain behavior leading up to the depeg, ultimately it was primarily due to the limited on-chain liquidity of the stablecoin’s primary backing, tokenized real estate, which wasn’t sufficiently liquid to meet redemption demands in a very short timeframe. We learned a hard lesson and have grown from the experience, acknowledging that a stablecoin should be backed by fully-liquid assets to eventually fulfill high amounts of redemptions. We are committed to redeeming each USDR for $1 in value. The plan to refund users has already started with the goal to be completed in the next few months.
Current Incentivization: How are you currently incentivizing your protocol?
We have developed multiple incentivization strategies that will support the ARB incentives. Each initiative is explained in further detail below.
Airdrop (Points Program)
An airdrop program allocating 10% of RWA supply will be used to reward/incentivize chain users and developers across multiple seasons. This sybil-resistant program will reward liquidity providers, protocol users and builders proportionate to their on-chain activities and value, with rewards schemes designed to maximize behaviors we believe will accelerate chain growth.
Below is a breakdown of the program. 20% of the airdrop allocation has been specifically earmarked for new builders on the chain. The other 80% is fully allocated for users. This program operates independent of the ARB token incentives, however those funds will surely help accelerate adoption.
Developer incentives
Teams interested in building on the chain will be delegated veRWA grants. 100% of transaction profits (after fees and 10% distribution to Arbtirum) accrue to veRWA holders, along with a percentage of revenue share from the protocols building on the chain. Through delegation of protocol-owned veRWA, we can sustainably fund the build initiatives of new teams through the daily yield accrued from the activity on the chain.
See comment below for developer incentives flywheel
The genesis ecosystem of protocols deployed to re.al aim to provide a positive experience for users/builders incentivized to use the chain, supported by multiple yield-earning opportunities:
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
No
Protocol Performance:
As already stated in the Section 2a under “Relevant usage metrics”: the re.al chain will be launched by March 17th, as such there are no current chain metrics to share. We can however focus on leveraging Tangible and Pearl’s historical data to benchmark our expected performance. This approach allows us to set realistic goals and KPIs, ensuring re.al’s ecosystem is primed for success and scalability within the Arbitrum network
Protocol Roadmap:
The end goal is for re.al to become the primary permissionless chain for RWA. We aim to achieve this by:
- March 17th: Chain launch
- March 21st: Deploy initial ecosystem of protocols
- March 21st: Airdrop campaign across multiple seasons to build liquidity and reward protocol utilization (four “seasons” of two months each, for eight months of incentives)
Ongoing:
- Build new protocols tailored for RWA and DeFi needs
- We expect future protocol-developed products to be ready for deployment within the next months
- Partner with existing protocols to deploy their products and apps to re.al
- Shortly after launch
- Developer incentive program to attract new developers building innovative RWA protocols only on re.al
- Work with off-chain organizations, institutions and funds to tokenize and on-ramp their RWAs into a thriving ecosystem with deep liquidity
- Establishing DAO for decentralized governance
After the chain launches, initiatives like building new protocols, partnering with existing protocols to deploy their app to re.al, onboarding institutions and funds’ RWAs, and the developer incentive program, are supposed to be long lasting efforts to continuously provide new products and better experiences on re.al. These activities will be our focus at least until the end of 2024. Towards Q3 - Q4, we plan to establish the DAO for decentralized governance.
Audit History & Security Vendors: [Provide historic audits and audit results. Do you have a bug bounty program? Please provide details around your security implementation including any advisors and vendors.]
Our commitment to security is paramount, as such all of re.al’s contracts are being audited with Omniscia.
Tangible, Pearl and Stack protocol contracts will also have all audits complete and available to the public by the time they launch.
Completed Audits:
(See comment below for links)
Tangible:
- USTB:
- Baskets:
- Cross-chain rebase:
- TNFT:
re.al:
- Bridge audit:
- https://
Audits Under Final Review (completed by March 21):
re.al:
- RWA token
Pearl:
- PEARL token
- CLAMM contacts (swaps, liquidity pools, CL implementation, etc.)
- ve(3,) contracts (vePEARL, gauges, rewards distributor, etc.)
- CAVIAR (liquid wrapper for vePEARL)
Stack:
- Protocol contracts (isolated lending markets, leverage, CDP)
- AMO
Once contracts are fully audited we’ll work with a reputable partner to launch a bug-bounty.
Security Incidents:
No
SECTION 3: GRANT INFORMATION
Requested Grant Size: 300,000 ARB
Justification for the size of the grant:
As we have just launched re.al, we need to jumpstart the flywheel through an injection of stimulus that will build liquidity on the chain and within protocols, thus attracting new users and developers. We know our flywheel works, the grant will allow us to overcome the cold-start problem of being a new Orbit chain. While we will bridge ~$40M of Tangible TVL to re.al (as explained in the note below), incentivizing utilization of this liquidity through an initial ecosystem of protocols designed to provide ample yield opportunities, we believe that the grant will allow us to deepen liquidity on the chain.
NOTE: Migration of Tangible TVL on Polygon to re.al (~$40M)
Most of Tangible’s ~$46M TVL will migrate to re.al on launch. About $40M of tokenized real estate held in the USDR treasury will be bridged from Polygon to re.al. This $40M represents a majority of the backing of USDR (a rebasing stablecoin backed by tokenized yield-generating real estate from the Tangible protocol). USDR holders have beneficial ownership over that tokenized real estate, which will be bridged to re.al and liquidated into stablecoins that will be distributed back to users as part of the plan to decommission USDR. These real estate assets were grown from scratch by user demand, fulfilled by a protocol that’s never raised and bootstrapped success to date. Beneficial ownership of the real estate is currently distributed amongst thousands of current USDR holders who remain active in the community.
This is immediate TVL accrual for the chain. These assets will be used to mint Baskets tokens, and deployed into incentivized pools on Pearl, kicking off liquidity distribution through ecosystem protocols. We believe that the thousands of users redeeming back their stablecoins will have many reasons and incentives to keep their assets on re.al and engage with the ecosystem products that have been built for the chain. The ARB grant can help jumpstart this process beyond the native-yield incentives accruing to Baskets.
Grant funds, in combination with the initial deployment of ~$40M of tokenized RWAs, the airdrop program, and the launch of an existing ecosystem of protocols to provide yield opportunities from day 1, will ensure there will be many reasons for users to bridge over to re.al and utilize chain protocols.
Grant Funds
Before getting into the numbers of how we got to the requested 300k ARB, we want to make clear that we believe that the re.al proposal is unique in that we’ve built an ecosystem of protocols on our Orbit chain, and not just a single protocol on Arbitrum One. For us, it’s not just about incentivizing a protocol, but it’s about jump-starting the ecosystem of protocols that already exist and are ready for deployment. In the spirit of collaboration and respect amongst ecosystem and DAO participants, we have reduced our initial grant ask from 990k to 300k ARB. Please consider that this grant covers the success of three distinct protocols within an ecosystem as well as the L2 success itself. We understand it’s not an insignificant amount, however the impact is far-reaching in Arbitrum’s ability to carve out an important foothold in both RWAs and the L2 ecosystem space.
As detailed in Section 2b under “Past Incentivization,” we were able to grow substantially the liquidity for the USDR pools, even becoming the top pool by TVL on Optimism. We intend to use our knowledge of ve(3,3) DEXs mechanisms, and proven results, to incentivize liquidity throughout the chain, using PearlFi, the ve(3,3) DEX deployed on re.al as the engine.
ve(3,3) DEXs like Pearl, Velodrome, and Thena, work as normal DEXs for users that intend to swap tokens, but they introduce gauge and bribes mechanisms that allow protocols to build deep liquidity in a capital-efficient manner by directing token emissions to their pools.
Below is outlined the process of how we obtained the requested grant size of 300,000 ARB.
- The 300k ARB incentive is aimed to generate about $30M of incremental TVL on re.al, through a combination of protocol (grant matching) and ARB incentives over 12 weeks. (This contributes to our business goal of attracting $100M of TVL by the end of the LTIPP program).
- Assume we will be able to generate $308.73 in TVL for each $ bribed (based on the average of past liquidity mining programs results on Velodrome and Thena)
- We would then need a weekly bribe of $100,000
- As we will be matching 100% of the ARB grant, the $100,000 is split in half between ARB and re.al supplied tokens
- Assuming the value of ARB at $2, we will have a weekly amount of 25k ARB, which would allow us to run the incentives for 12 weeks
The incentives are intended to run for 12 weeks. In this timeframe, we expect several protocols to launch on re.al, while attracting additional liquidity to provide new yield opportunities for all the users.
While this incentive amount is not enough to hit our $100M business goal on its own, combined with the ~$40M in bridged assets from Polygon, TVL that will move to re.al on launch, the airdrop program, and the multiple DeFi yield opportunities that will be available, we remain optimistic that we can hit our target by the end of the program.
Grant Matching:
We will be matching 100% of the grant in non-emissions tokens.
Grant Breakdown:
100% of the grant will be allocated to incentivize the APR of selected pools on Pearl on re.al.
The Pearl pools that will receive the ARB incentives, matched by our tokens, are:
- USTB / UKRE
- USTB / USRE
- USTB / MORE
- USTB / reETH
- USTB / RWA
- USTB / DAI
Descriptions of the tokens:
- USTB: RWA stablecoin providing native yield through T-bill backing (this is a wrapped version of Mountain’s USDM)
- UKRE: ERC-20 representing vault of tokenized UK Real Estate assets managed by Tangible
- USRE: ERC-20 representing vault of tokenized US Real Estate assets managed by Tangible
- MORE: a CDP over-collateralized stablecoin backed by tokenized RWAs, from the Stack protocol
- reETH: stands for “re.al ETH”, the native-yield gas token of re.al, accruing yield from ETH staking
- RWA: the governance token of re.al that accrues value from different sources, which share profits to RWA holders.
- DAI: DAI on re.al is natively yield-accruing, rebasing daily to account for staking yield of DAI in the bridge
These are the primary tokens of the re.al ecosystem, and as such, it’s fundamental to attract enough liquidity on these pools.
The specific percentages of ARB incentives assigned to each pool are yet to be determined since the chain has been live for a short period of time (launched on 17 March). We will monitor liquidity in these Pearl pools after the initial launch period, assigning the ARB incentives carefully depending on the current state of the liquidity across each pool and on their individual importance to the growth of the ecosystem.
We’ll also monitor the impact of the Airdrop Program on pool liquidity to determine the most efficient allocations of ARB funds to the pools most in need of additional stimulus.
Funding Address: 0xE19848f158EFd31d45A6975320365251c92040c1
Funding Address Characteristics: 2/3 Multisig
Treasury Address: 0x100fCC635acf0c22dCdceF49DD93cA94E55F0c71
Contract Address: (to distribute grant funds to users)
The final contract address to distribute the grant funds to users “Rewards Distributor” is yet to be deployed. This will happen during the week of the 18th March when Pearl DEX deploys to re.al mainnet.
In the meantime, please refer to the Rewards Distributor on testnet:
RewardsDistributor: 0xadC4F0B623fD85Ed3173675E28F77ee97707f864
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives: [Clearly state the primary objectives of the grant and what you intend to achieve]
Main objective
Attract $30M of incremental TVL on re.al (beyond initially bridged $40M assets) by the end of the 12-week incentive period.
Supportive objectives (based on the grant objective of $30M in incremental TVL)
- Incremental $6M of Baskets in the liquidity pools on Pearl
- Incremental $18M in Pearl TVL
- Incremental $9M in USTB TVL distributed across Pearl, Stack and user wallets
- Incremental $6M in MORE TVL with $9M in collateral held in Stack
The primary objective of the grant is to attract liquidity to re.al to in the critical, initial phase of launch. As we intend to build deep liquidity for RWAs across the ecosystem, onboarding users to the protocols deployed on re.al, the grant will contribute to overall chain growth, which is fundamental in the early lifecycle of a new chain, especially with current competition amongst L2s.
Achieving our objectives will be a great success for the Arbitrum community, demonstrating the power of Orbit chains in attracting new capital and projects to the Arbitrum ecosystem. And in the case of re.al, the flexibility of Arbiturm Orbit to underpin tailored chain experiences—in this case RWA focused—with clear product-market fit.
As an Orbit chain, re.al will distribute 10% of re.al sequencer revenue back to Arbitrum. The success of re.al has clear financial benefits to Arbrium and the DAO’s ability to provide incentives for the next generation of ecosystem builders.
Execution Strategy:
The incentives will be deployed to voters who control emissions flow to the pools on Pearl, the primary DEX on re.al. The selected pools are outlined in Section 3, under “Grant Breakdown”. The specific percentages for each pool are yet to be determined as the chain just launched. We will monitor liquidity in these pools during the launch phase, ultimately defining the ARB allocations depending on the current state of each liquidity pool and on their individual importance to the growth of the ecosystem.
The grant will be rolled out over a 12-week program. As Pearl is a ve(3,3) DEX, the ARB incentives will be deployed as weekly bribes on selected pools. The ARB bribes will be 100% matched by re.al. Every week a total of 25,000 ARB will be distributed in incentives. The corresponding USD value at the time of the bribing will be 100% matched by the chain.
vePEARL voters, who determine the flow of emissions on ve(3,3) DEXs like Pearl, will vote for the pools with the highest incentives. This results in those pools receiving the most PEARL emissions, thus providing the highest yield to liquidity providers, driving new liquidity to the chain in the tokens we believe are most valuable for the long term sustainability of the ecosystem. The PEARL emissions that flow to those pools can be locked by farmers to earn a share of the following week’s incentives. This consistent flow of incentives to vePEARL voters is the mechanism that provides demand for the PEARL emission token, the hallmark of ve(3,3).
CAVIAR (CVR) a liquid wrapper for vePEARL, brings the same incentives to users in a fully-liquid, unlocked format, giving PEARL even more utility and demand, ensuring Pearl emissions remain valuable. Starting with the launch of CVR, we saw increasing demand for PEARL, an emissions token, as a result of a well-designed flywheel with correctly allocated incentives.
Pearl utilizes a concentrated liquidity model to enhance the capital efficiency of the liquidity provided, like on Uniswap v3. This requires users’ LP positions to be in the active trading range in order to receive PEARL emissions on the incentivized pools. Liquidity provided above or below the current trading range will not receive fees nor emissions. This is how we incentivize the deepest liquidity at all times, even as prices move, making sure to distribute the rewards to the right liquidity providers.
Users have the option to manage their concentrated liquidity positions manually or use the Trident Active Liquidity Manager (ALM) developed by Pearl.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?
Utilizing the grant in a ve(3,3) DEX makes sure to leverage the stickiness of the ve(3,3) model itself. This is a proven model that other projects use to successfully incentivize and retain liquidity. The DeFiLlama Solidly Forks dashboard clearly shows the ability of ve(3,3) DEXs to attract and retain liquidity through a sustainable flywheel.
Specifically for Pearl, the flywheel has been designed to run in reverse, with voter incentives driving the ecosystem forward. As mentioned earlier, autobries aka “Dynamic Incentives” ensure that with the right yield-generating tokens in pools on Pearl, incentives are guaranteed to increase as TVL increases. These incentives are consistent and reliable because they are sourced from the off-chain yields accrued to rebasing tokens in the re.al ecosystem, either rental income or T-Bill yields.
It is a requirement for all pairs with gauges on Pearl to pair with USTB or Baskets. In both, the native APY is skimmed by Pearl and used to dynamically incentivize the pool from which it is sourced, leading to a sustainable, self regenerating flywheel. This is how it works:
- Liquidity pool voters receive dynamic incentives (yield skimming from Tangible products)
- Increasing value of sticky incentives drive demand for vePearl to receive dynamic incentives and pool fees
- This drives up demand for participation on Pearl
- Pearl emissions are now more valuable
- TVL increases as users provide liquidity to gain free access to Pearl
- Dynamic incentives expand as TVL expands
See comment below for Pearl Flywheel
This is just part one of how we believe to retain the attracted liquidity. On the other side, during the 12-week ARB incentive, we will release new protocols on re.al as we partner with other projects currently deployed to other chains to deploy their products on re.al.
We believe protocols will choose re.al because:
- The incentive flywheel we can point towards their protocol tokens
- veRWA grants/delegation we’ll provide to new builders on the chain
100% of all transaction fee revenue accrues to veRWA, along with a portion of revenue share from the protocols building on the chain. By delegating protocol-owned veRWA to builders, they can collect daily yield from the activity on the chain, funding their build initiatives in a sustainable manner.
Along with other programs like the airdrop which will be a multi-seasons effort, and the developer incentives, we believe that when the grant is exhausted, users will have many reasons and yield opportunities to keep the capital on our chain.
Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy.
The goal of this grant is to attract more users and liquidity to the re.al chain, therefore we will look at the following KPIs to monitor chain growth:
- Net bridged value: To measure the amount of liquidity moved to re.al
- TVL: To measure activity in DeFi protocols on re.al
- DAU, WAU, MAU & Daily User Growth: To measure the growth in addresses interacting with contracts deployed on re.al
- Daily Transaction Count: To measure the daily number of transactions interacting with contracts deployed on re.al
As the grant is employed 100% through bribes on Pearl, we will track also relevant DEX KPIs:
- TVL for each incentivized pool
- Trading volume for each incentivized pool
- List of traders for each incentivized pool + volume of their trades executed
- List of Liquidity Providers for each incentivized pool + their current liquidity in USD, time-weighted liquidity in USD, and the duration of liquidity provision
Grant Timeline and Milestones:
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
According to DeFiLlama, the Real World Assets category accounts for $4.3b of TVL across all the chains tracked. Only $200k, or 0.0044%, sits in protocols deployed on Arbitrum.
At the current time, RWAs don’t belong to Arbitrum. re.al aims to change this by onboarding tens of millions of liquidity to our permissionless Arbitrum Orbit L2 from the very early days.
The tokenization of illiquid RWAs is a growing market with significant potential. Non-stablecoin RWAs grew in on-chain value by $1.05bn in 2023 alone (Galaxy report), while the Boston Consulting Group has estimated the tokenization of global illiquid assets to be a $16T market by 2030.
This grant allows re.al to boost its initial growth attracting liquidity that translates into more users and more developers, potentially positioning re.al as the go-to chain for RWAs. Arbitrum itself would benefit from this outcome by being the blockchain on which re.al is built, as well as showing the potential of Orbit chains to attract more builders.
Lastly, as an Orbit chain, re.al will distribute 10% of re.al sequencer revenue back to Arbitrum. The success of re.al has clear financial benefits to Arbrium and the DAO’s ability to provide incentives for the next generation of ecosystem builders.
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 5: Data and Reporting
Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered?
Yes
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Yes, we will create dedicated Dune dashboards to track the effectiveness of the grant program.
*First Offense: In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.
Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.
Third Offense: Funding is halted permanently
Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program?
Yes
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
