[Rodeo Finance] [FINAL] [STIP - Round 1]

SECTION 1: APPLICANT INFORMATION

Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.

Applicant Name: HWxFrank

Project Name: Rodeo Finance

Project Description: Rodeo is a decentralized finance protocol that allows its community to earn yield on a range of managed and passive investment strategies on Arbitrum.

At its core, Rodeo has two sides: passive liquidity providers (lenders) earning high, yet safe APR by providing single assets for use by leverage farmers, and leverage farmers who borrow up to 10x to farm real yield strategies. Thus, the protocol enables users to take undercollateralized borrows to increase their positions in vaults and/or yield farming strategies, resulting in higher returns for both active yield seekers as well as passive lenders.

Rodeo’s vision is to become Arbitrum’s leverage hub for maximizing yield. Enabling users and protocols to become more capital efficient, generate higher yields, and onboard the next generation of DeFi users through a simplified, composable solution

Team Members and Qualifications:

  • Farmer Carlton - CTO / Lead Developer
  • 0xSerg - Senior Developer
  • Jimbo - Operations Lead
  • HWxFrank - Growth and BD
  • 0xyieldlord - Growth / content
  • Jonas - Community
  • Photon - Researcher
  • Artie - Research / Data

Project Links: [Enter Any Relevant Project Links (website, demo, github, twitter, etc.]

Contact Information

TG: Telegram: Contact @HWxFrank
Twitter: https://twitter.com/Rodeo_Finance
Email: partners@rodeofinance.xyz

Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes

SECTION 2: GRANT INFORMATION

Detail the requested grant size, provide an overview of the budget breakdown, specify the funding and contract addresses, and describe any matching funds if relevant.

Requested Grant Size: 250,000 ARB

(with a request for an additional 250,000 ARB if the Rodeo TVL increases by 3x to $9m prior to Jan 31 2024. The extended ARB would be utilized in the same breakdown noted below on a 3month timescale from receipt)

Grant Matching: Rodeo will combine the grant incentives on top of our existing RDO incentive program Rodeo Booster (rbLP) Incentives. How To Boost your Incentive Rewards by… | by Rodeo Finance #getleverage | Sep, 2023 | Medium

Grant Breakdown: The grant’s primary aim is to attract liquidity to Rodeo earn pool and leverage farms. Increasing TVL in Rodeo directly correlates to increased liquidity for underlying Arbitrum protocols on which Rodeo leverage farms are built, while simultaneously generating higher fees for Rodeo’s sustainability and growth. Through the implementation of incentivized yield strategies, we strategically attract users in pursuit of enhanced yield opportunities across various blockchain networks, thereby augmenting the liquidity pool within the Arbitrum ecosystem

The grant will be used for:

  • 30% (75,000 ARB) for Incentivizing Passive Lending: This portion of the grant incentivizes passive lending to bootstrap liquidity for leverage farmers, enabling them to borrow and earn higher yields, ultimately depositing funds into Arbitrum ecosystem protocols.

  • 70% (175,000 ARB) for Leverage Farming and Yield Strategies: Rodeo’s leverage farms allow users to borrow up to 10x their collateral and deposit into yield strategies. The collateral and leveraged funds are swapped for the underlying Arbitrum protocol tokens by Rodeo. By incentivizing leverage farming with a greater weight than the passive lending which is already being incentivized by native RDO, users can access higher yields, protocols can achieve greater TVL through increased liquidity, and Rodeo can generate more fees to continue the mutual flywheel

Funding Address: 0xaB7d6293CE715F12879B9fa7CBaBbFCE3BAc0A5a

Funding Address Characteristics: The funding address provided is the Rodeo Finance team multi-sig with a 2/3 threshold requirement, private keys controlled by hardware wallets

Contract Address:

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Clearly outline the primary objectives of the project and the Key Performance Indicators (KPIs) used to measure success. This helps reviewers understand what the project aims to achieve and how progress will be assessed.

Objectives: The grant’s primary goal is to attract liquidity to high quality projects across the Arbitrum Ecosystem. Boosting these incentives will drive more capital to Arbitrum, and result in deeper liquidity for projects trying to build, and fees created for Rodeo. Users receive better capital efficiency, while protocols receive deeper liquidity, driving a more efficient capital market on Arbitrum.

The core value of Rodeo Finance lies in its ability to seamlessly blend leverage yield farming and passive lending, while maintaining a high level of composability. This combination allows users to optimize their real yields, while driving liquidity (and thus fees) to our partner protocols. By presenting this experience in a simple manner, Rodeo is able to onboard new users from a single UI/UX to participate across multiple Arbitrum protocols

Key Performance Indicators (KPIs): Protocol Metrics

  • The total amount of assets (TVL) secured in our smart contracts.
  • The number of unique users holding Rodeo Positions
  • The number of unique lenders providing USDC on the platform
  • The number of total leverage positions open
  • The total amount of assets (TVL) in the lending pool
  • Lending Utilization rate
  • TVL per underlying Farm strategy

Each metric shall be tracked at minimum

  • Starting value
  • Current value
  • Immediately upon conclusion of incentive program

Rodeo shall track these metrics on a public analytics page via the Rodeo dApp or via a Dune dashboard

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?: We believe that providing grant funding to Rodeo will yield significant benefits for the Arbitrum ecosystem. The grant incentives we offer will attract additional liquidity, which, in turn, will be strategically channeled into the Arbitrum ecosystem through our leverage farms. This infusion of liquidity will have a cascading impact:

  1. Enhanced Yield Opportunities: By directing these incentives into our leverage farms, we aim to create higher yield opportunities for users. These opportunities will be structured to optimize returns while managing risk effectively, thereby benefiting both experienced and novice users within the Arbitrum ecosystem.

  2. Increased Liquidity and Protocol Fees: The influx of liquidity will not only benefit Rodeo but also bolster the liquidity of Arbitrum’s protocols. As a result, Arbitrum protocols will experience greater transaction volume, resulting in increased fees and rewards for protocols and participants.

  3. Sustainable Rodeo Growth: For Rodeo, the grant will play a pivotal role in sustaining and expanding our offerings. It will enable us to continue providing the most competitive yield-earning opportunities on Arbitrum, ensuring that we can continue to expand and innovate our products securely.

As a native Arbitrum protocol, we align ourselves with the core values of the Arbitrum ecosystem. Our vision is to serve as a unified gateway where the next generation of users can seamlessly access protocols and yield-earning opportunities available across Arbitrum. We are committed to simplifying the user experience, making it accessible to a wider audience, and contributing to the growth and maturation of the Arbitrum network.

Justification for the size of the grant: A grant for Rodeo is not just an investment in one protocol; it’s an investment in all integrated partners on Rodeo from the Arbitrum ecosystem. Every additional dollar attracted by the grant incentives gets channeled for use directly into our leverage farm partner protocols. With significant grant support, Rodeo is fully committed to using the full grant incentives for driving expansion in the Arbitrum ecosystem

Additionally, will use the grant to provide incentives for TVL to come from other chains.

We will do this using an innovative new product, whereby users can stake LSDs, such as stETH, and get leverage on it. This allows users to keep their precious LSDs (maintaining exposure to staking yield), while levering up against them and getting additional yield in the Arbitrum ecosystem.

Notably, this new product “Alamo” encourages LSD liquidity and other yield bearing assets to move to Arbitrum from Ethereum and other L2s.

Execution Strategy: Rodeo’s execution strategy focuses on the 2 key areas of the protocol:

  1. Incentivizing Passive Lending (30%): This portion of the grant incentivizes passive lending to bootstrap liquidity for leverage farmers, enabling them to borrow and earn higher yields, ultimately depositing funds into Arbitrum ecosystem protocols.

    Incentives will be proportionally allocated for users who lock liquidity in Rodeos lending pool

  2. Leverage Farming and Yield Strategies (70%): Rodeo’s leverage farms allow users to borrow up to 10x their collateral and deposit into yield strategies. The collateral and leveraged funds are swapped for the underlying Arbitrum protocol tokens by Rodeo thus providing a positive sum net benefit in the Arbitrum ecosystem.

    Specific focus will be given to the ARB asset leverage farms (ARB/ETH on Camelot and ARB/ETH on Pendle) and farms with highest benefit to the Arbitrum ecosystem.

    Incentives will be proportionally allocated for users who farm in the specific leverage farms boosted by incentives. Each farm will be weighted by TVL for incentive distribution and evaluated along the bi-weekly streaming period

Funds will be held and distributed from the Rodeo ⅔ multisig and Rodeo deployer contract

Grant Timeline: We propose to receive the grant immediately following the conclusion of our full scope Security audit from Paladin (Audit started Sept 25, 2023) and run incentives over a 3 month period from the time of receipt.

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

Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.

Is the Protocol Native to Arbitrum?: Yes, Rodeo is native to Arbitrum and currently resides on Arbitrum only

On what other networks is the protocol deployed?: N/A

What date did you deploy on Arbitrum?: Nov 18, 2022

Protocol Performance: TVL dashboard: Farms | Rodeo

  • Peak TVL: ~4.2M
  • Current TVL: ~2.87m deposited in the lending pool + collateral for farming not accounted for in defillama = ~3.1M tvl total
  • Current Unique User wallets: 807
  • Number of opened positions: 3268

Position On-chain details: Rodeo Position (RP) Token Tracker | Arbiscan

Defillama details:https://defillama.com/protocol/rodeo (note farm positions collateral is not accounted for in TVL at this time on defillama)

For full transparency: Rodeo experienced 2 exploits in the past on unreleased farms as noted on the Defillama dashboard. The exploited funds were not recovered, however Rodeo has been repaying all bad debt from the Rodeo treasury to ensure no user funds are impacted by the events, with full repayment to conclude with Paladin audit completion.

As mitigation to the exploits, Rodeo significantly increased security by working with several well known individuals and security firms to independently review the code base and make any noted mitigations per their suggestions. We have undergone Audit #2 and #3 noted below in the audit history and are currently in the process of another full scope audit (Audit #4) from Paladin before increasing cap limits on farms/lending pool and releasing new farms + leverage products

You can read details on the remediation plan that was put into place here: Rodeo Remediation Plan and Relaunch | by Rodeo Finance #getleverage | Medium

Protocol Roadmap: Rodeo Finance is expanding the yield earning opportunities for users and integrations with underlying Arbitrum Protocols as part of our long term vision and roadmap goals

Q3-Q4 2023:

  • New Farms: By creating a compelling incentive program for liquidity providers, Rodeo finance can attract additional market share to Arbitrum and liquidity to Arbitrum protocols. We’ve identified a number of compelling sectors & protocols we plan to onboard as leverage farms in Q4 of 2023:

    1. GMX V2 GM Pools
    2. Umami Finance Deconstructed GLP Vaults
    3. Aura Finance Pools
    4. Vela (VLP) / HMX (HLP)
    5. Uniswap/Camelot V3 Concentrated LP
  • Yield bearing Token Leverage Product V1: Rodeo has recognized a substantial opportunity within the DeFi space, with the total value locked (TVL) in liquid staking tokens exceeding $19 billion and Yield bearing tokens representing another large market share. We will be introducing a product that allows users to maintain exposure to LSTs / yield bearing tokens (examples could be wstETH, jUSDC, GLP, etc) while simultaneously harnessing the yield opportunities offered by Arbitrum’s Layer 2 scaling solution. This integration represents the convergence of two critical pillars of the DeFi ecosystem.

    V1 of this product will be released upon conclusion of the on-going Paladin Audit expected ~3-4th week of October.

  • Tokenomics and Liquidity: oRDO token incentives will be introduced in October as part of our sustainable, on-going incentive program for passive liquidity providers. This is based on the Bond Protocol options tokens (oToken) model

    RDO/ETH LP pool on Camelot Dex will be incentivized with GRAIL/xGRAIL as well as a Rodeo Nitro Pool

  • Scaling: With additional incentives for lenders on Rodeo, our lending pool will continue to expand, allowing increased capacity for existing farming strategies. Our most popular farms have already been maxed out, and sidelined capital is awaiting future capacity raises to deploy. These self imposed caps are largely the constraint for driving more liquidity to our partner protocols, and will be increased following the Paladin Audit .

Q1 2024:

  • Yield Bearing Token Leverage Product V2: We acknowledge that the current LST market is largely liquidity on Ethereum mainnet, as such we aim to launch a Chainlink CCIP powered update which will allow users to bring liquidity from cross chain to utilize on Arbitrum, deepening the liquidity available for use in the Arbitrum ecosystem

  • Vaults: The first Rodeo vault product will be a USDC based vault with a “set and forget” strategy where users can deposit USDC stable assets and Rodeo will automatically allocate to the highest yield earning opportunities on Arbitrum

    • the vault will also utilize Rodeo leverage in limited scope dictated by specific risk parameters to increase the yields
    • the goal is to build the USDC vault on Rodeo into the coziest place to park USDC and earn transparent amplified yield (making use of the existing opportunities on Arbitrum)

Misc:
Security: An overarching theme in our short term roadmap is a continuous focus on security improvements. Through regular audits, and a white hat bounty program, we will continue to bolster the security of the platform and build user trust

Farms: We remain committed to providing the best yield earning opportunities for our users, a such we are continuously looking to partner and integrate with the best protocols across Arbitrum

Audit History:

  • Audit 1: Kalos (Jan 31 2023) - Full Scope
  • Audit 2: Kalos (July 26, 2023) - Full Scope
  • Audit 3: code4rena warden rvierdiiev (Aug 11-15, 2023) - Specific to Jones, Camelot and Pendle strategies
  • Audit 4: Paladin (On going: Starting Sept 25, 2023) - Full Scope

SECTION 5: Data and Reporting

Provide details on how your team is equipped to provide data and reporting on grant distribution.

Is your team prepared to create Dune Dashboards for your incentive program?: Our team is prepared to create a Dune dashboard or analytic page on our dApp

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread? Our team is committed to full transparency of the grant program and the KPI metrics utilized to measure effectiveness and success. We agree to bi-weekly updated on the forum thread utilizing our reporting dashboard and additional protocol inputs

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

9 Likes

I think the Rodeo team, more than anyone else deserves this small grant. They built and launched the protocol with their own money. And only after that did they release their own token.
Their goals are fully aligned with those of the DeFi ecosystem in Arbitrum.

Let the Arbitrum be great. Ave Arbitrum.

4 Likes

Fully agree with this sentiment. They’ve had to endure some problems but they have handled them with transparency and professionalism. Grant this grant!

3 Likes

Hello @HWxFrank thank you for your application! Your submission meets all requirements to be considered for a snapshot vote.

4 Likes

I totallty completelty and absolutely love the fumo <3

… aside from that everything seems ok

1 Like

Appreciate the long term support Anton

Thanks @Matt_StableLab ,

Is it possible to modify the grant size request prior to the snapshot vote or have the snapshot vote contain 2 sizes of grant for voting?

This is a solid proposal from Rodeo, and it will benefit the Arb ecosystem

1 Like

everybody knows the (unlucky) story of Rodeo so far. Unlucky, because it can happen and has happened to a lot of protocols. Despite everything, team has been able to rebuild the trust and keep user safe. And, their product is very enjoyable from a user standpoint
Full support!

5 Likes

Rodeo defines an Arbitrum native team. These guys are routinely working with other Arbitrum focused teams, supporting users, and building products that both users and other protocols want. They’re always a source of positive vibes, no matter what Arbitrum community you end up in Rodeo deserves a grant more than anyone in my opinion - it takes serious grit to work through what they’ve had to with a smile and continue to ship products people love.

2 Likes

Thanks for the support JoJo from you and our great partners.

2 Likes

I’m fully in favor of supporting Rodeo’s proposal. Rodeo has a great team and this initiative will offer more yield opportunities and liquidity to users. I’m a fan of Rodeo’s leverage farms, and I think they provide a chance for both experienced and new users to optimize their returns while managing risk. The size of the grant is reasonable and will help grow Rodeo and the Arbitrum ecosystem.

2 Likes

There are many deserving protocols on this forum, but Rodeo might be the top. Frank and the entire team are chads and incredibly collaborative. When Revest first launched on Arbitrum they welcomed us with open arms. Their dedication to handling the suffered exploits in an extremely moral manner speak to this the most. Full send.

2 Likes

supporting. nicely put proposal! much love

1 Like

Hello @HWxFrank ,

Now that your application has been marked eligible, please be advised of the remaining steps in the application process to be completed prior to the Review Period Deadline:

Please complete the following steps required for your application to proceed to Snapshot:

Once you change your proposal title to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness.

Once marked as [Final], your application post will be locked by moderators and you will no longer be able to edit your proposal.

1 Like

@HWxFrank Here is the updated process for changing your title.

To change your proposal to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness to proceed from [Draft] to [Final] status.

Once notified, the Arbitrum Foundation Forum Moderator will adjust your title from [Draft] to [Final] status. Once marked as [FInal], your application post will be locked by moderators and you will no longer be able to edit your proposal.

Firstly, thank you for your proposal and for showing a keen interest in the Arbitrum ecosystem.

Introduction and Rationale

Rodeo Finance is requesting a grant of 250k ARB, which is 0.5% of the total 50M ARB available, to attract more liquidity to its earn pool and leverage farms on Arbitrum. The protocol has been on Arbitrum since November 2022, offering a variety of investment strategies including leveraged farming. Despite a past security exploit, the protocol has garnered attention, boasting around 3m TVL and 807 unique user wallets. We’re excited by Rodeo’s efforts to diversify yield farming on Arbitrum, but we have some concerns about the broader impact of this proposal.

Major Concerns

Effectiveness and Risk

  • Question the proposal’s impact on the broader Arbitrum ecosystem
  • Leverage farming comes with significant risk
  • Our recommendation for change: Await the Paladin audit for a more secure approach before moving forward with the grant.

Incentivizing ARB Native Liquidity

  • Proposal mainly focuses on leveraging existing pools
  • If the aim is to boost liquidity for underlying protocols, the focus should be elsewhere
  • Our recommendation for change: Refocus on ARB native liquidity and on protocols that have a higher need for liquidity.

Minor Concerns

  • The allocation of 85% of the funds towards leverage farms
  • Not all users may be interested in or suited for leveraged farming strategies
  • Our recommendation for change: Rebalance the grant allocation towards more passive lending options.

Summary

Castle Capital appreciates the innovation Rodeo Finance brings to yield farming on Arbitrum. However, in its current form, we can’t fully support the proposal. Specifically, we’d like to see more focus on ARB native liquidity and a realignment of incentives towards passive lending pools, especially once the Paladin audit is complete.

We hope our feedback is constructive and contributes to the ongoing development and success of the Rodeo Finance protocol, as well as the broader Arbitrum ecosystem.

2 Likes

Rodeo Finance is committed to their community and the fact that they are chugging along after what befell them is a feather in their cap, Arbitrum needs to support teams with integrity. Frank and the team have the full support of the pond!

3 Likes

Hi @CastleCapital

Thank you for sharing your insights on the Rodeo proposal, and on the STIP as a whole. We value your analytical research in the space.

We would like to bring a few points to attention:

Effectiveness and Risk

  • We have proposed to hold back any grant dispersion until the conclusion of our ongoing Paladin Audit. The audit started Sept 25 and is expected to conclude on the week of Oct 16 or 23 for initial findings, which would be in line with grant dispersion timeframe.
  • At the time of writing our 2 largest pools by TVL are Arbitrum native jUSDC and plvGLP, Rodeo accounts for ~7.6% and ~13.3% of the underlying vault TVL respectively. We believe with the grant we can grow this value and provide the same for other supported yield farms

Incentivizing ARB Native Liquidity

  • To incentivize ARB native liquidity, we will incentivize the ARB pairs more heavily as noted (ARB/ETH Camelot and Pendle farms)
  • Additionally, will use the grant to provide incentives for TVL to come from other capital, including potentially other chain
  • We will do this using an innovative new product, whereby users can stake LSDs and other yield bearing assets, such as stETH, GLP, etc, and use as credit to take leverage on it. This allows users to keep their LSDs/yield bearing assets (and maintaining exposure to staking yield), while levering up against them and getting additional yield in the Arbitrum ecosystem.
  • Notably, this new product “Alamo” encourages LSD liquidity to move to Arbitrum from Ethereum and other L2s. This is covered in the Paladin audit scope

Minor Concerns

  • We agree with rebalancing the distribution between passive lending and leverage farming, the Rodeo team has been discussing this internally aiming to change towards a 30:70 (lending:farms) balance.
  • There is an ongoing incentive program targeted at the lending side incentivized with RDO tokens, we need to balance the system to ensure that yield farmers are rewarded for the higher risk vs attractive passive liquidity providers.

Question

  • Could you share more details on specifically the focus on ARB native liquidity you would like to see

Thank you for sharing the constructive feedback for the Rodeo team

1 Like

@HWxFrank Friendly reminder to complete the following:

1 Like