[Rolla] LTIPP Application - FINAL

SECTION 1: APPLICANT INFORMATION

  • Applicant Name: @thetawarp
  • Project Name: Rolla
  • Project Description: Rolla is a DeFi leverage trading protocol designed for retail users, offering a novel way to predict crypto prices for high potential payouts. Launching on Polygon with plans for Arbitrum, it simplifies entry into DeFi for web2 users.

Team Members and Roles:

  • J: CEO and Co-founder, expertise in crypto exchanges and product management.
  • S: CTO and Co-founder, background in software engineering and Solidity development.
  • A: Lead Solidity Developer, experienced in smart contract development and MEV strategies.

Project Links:

Contact Information

  • Point of Contact: [forum handle]
  • TG handle: @PalmEth
  • Twitter: @thetawarp
  • Email: j@rolla.fi
  • Acknowledge KYC: Yes

SECTION 2a: Team and Product Information

Team

Our team, with three years deeply entrenched in the options space, brings a wealth of experience from roles at BitTorrent, American Express, SushiSwap, and MEV research. Specializing in on-chain exotic options and the development of performant on-chain RFQ systems, our expertise is unmatched. This diverse background ensures our platform is at the forefront of DeFi innovation, offering users a secure, user-friendly, and cutting-edge trading experience.

What novelty or innovation does your product bring to Arbitrum?:

Rolla introduces a unique, retail-friendly crypto prediction market via exotic options (both digital options and spread options).

  • First of its kind retail friendly vertical option spreads that give similar user experience as digital options with reduced risk.
  • Ease of Use and Accessibility: Designed for simplicity, ensuring a seamless trading experience across mobile and desktop platforms.
  • Embedded Wallets: Integrates wallets within the app for streamlined transactions and enhanced security. Handled by Zerodev.
  • Gas-Free Transactions: Offers a cost-efficient trading environment by eliminating gas fees for users.
  • Social Account Sign-Up: Enables sign-up via social accounts like Google (through Particle), simplifying access for non-DeFi users.
  • Fiat Deposit Options: Supports fiat onboarding with Arbitrum USDC/USDT via credit card, local payment methods, and Binance P2P, catering especially to our Asian markets.
  • Multi-Language Support: Translated into 17 languages to accommodate a global user base.
  • Web2-Friendly Tutorials: Offers easy-to-understand, Instagram-style tutorials for onboarding web2 users.
  • 24/7 In-App Support Chat: Provides round-the-clock support directly in the app, eliminating the need for external platforms like Discord/Telegram.
  • 1-click trading via Session Keys: Creates a CEX-like trading experience by removing the need for trade confirmations/signatures.
  • Diverse Collateral Types: Supports a wide range of collateral types, enhancing trading flexibility and options for users.
  • End-to-End User Flow: Crafted to accommodate users unfamiliar with DeFi, facilitating an intuitive journey from sign-up to trade execution.

Is your project composable with other projects on Arbitrum? If so, please explain:
Rolla’s protocol is designed for high composability with other Arbitrum DeFi projects, particularly through its innovative use of diverse collateral types. This flexibility allows Rolla to integrate seamlessly with liquidity pools, lending protocols, and other DeFi platforms on Arbitrum, enriching the ecosystem by providing users with broader trading strategies and enhancing overall liquidity. Through strategic partnerships, Rolla aims to utilize a wide range of assets, including stablecoins, and GameFi tokens, as collateral, thus opening up new avenues for DeFi interactions on Arbitrum.

Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?: Rolla offers a distinctive approach to DeFi trading, setting itself apart from platforms like Buffer Finance and Thales through not only its simplicity and compliance but also through the innovative structure of its trading options. While we share the broader market of digital options trading with these platforms, Rolla’s medium trades, utilizing vertical option spreads, present a notable differentiation. These medium trades are designed to offer reduced risk compared to our High trades (digital options) while maintaining similar payoff profiles. This unique blend of risk management and reward potential caters especially to retail users seeking a balance between safety and profitability. Coupled with our web2-friendly user experience and intuitive platform interface, Rolla stands out as a more accessible and appealing option for those new to DeFi leverage trading, without sacrificing the depth and flexibility experienced traders seek. This strategic positioning allows us to capture a broad audience, ranging from DeFi novices to seasoned traders, by offering tailored trading experiences across the risk-reward spectrum.

How do you measure and think about retention internally? (metrics, target KPIs)

Primary:

  • Weekly Volume
  • Number of users

Secondary:

  • Trades per user
  • Average trade size per user
  • Conversion rate from page view to trade

Relevant usage metrics:

  • Volume
  • Number of users
  • Trades per user

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

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 (Note: this does NOT disqualify an applicant): No

SECTION 2b: PROTOCOL DETAILS

Our web app:

Is the protocol native to Arbitrum?: No, we deployed to Polygon but aren’t actively launching there.

On what other networks is the protocol deployed?: Polygon, Arbitrum

What date did you deploy on Arbitrum mainnet?: Contract Address 0x8319F63CAdDe0b51e5f898bC40fa8B0207848fFe | Arbiscan. March 10th but we didnt enable Arbitrum in the webapp until March 16th.

Arbitrum Mainnet Deployment: Already deployed.

Native Token: No.

Past Incentivization: N/A. This will be our first major incentivization initiative.

Current Incentivization:

First we pay for all users’ gas fees making the experience seamless. For broader outreach, we’re targeting web2 users via strategic campaigns on platforms like Twitter and utilizing advertising networks such as A-Ads. We’ve already taken the steps to get a verified crypto Twitter Ads account that uniquely allows us to target DeFi users. In fact, we already tested Twitter ads and have seen promising results that we will carry over during the trading competitions. Additionally, we’re collaborating with influencers and leveraging media buying and PR networks to amplify our message. This comprehensive approach aims to not only deepen community engagement but also attract new users from web2 to Arbitrum, showcasing Rolla as the gateway to the DeFi ecosystem through various high-visibility channels.

Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?: No

Protocol Performance: We have yet to publicly launch, but our beta testing phase with both web2 and web3 users has yielded overwhelmingly positive feedback. Participants have praised the platform for its clean and intuitive interface, noting that it sets a new standard for user experience within the DeFi space. Many web3 users have expressed surprise at the seamless integration and abstraction of blockchain elements, to the extent that some do not immediately recognize Rolla as a DeFi app. This feedback underscores our success in creating a user-friendly platform that bridges the gap between traditional web users and the complexities of decentralized finance, setting a strong foundation for our official launch.

Protocol Roadmap:

H1:

  • Finalize beta testing and refine user interface.
  • Public launch on Arbitrum
  • Launch trade volume rebate competitions
  • Referral system
  • Points system

H2:

  • Initiate weekly trading competitions and marketing campaigns with target niche influencers

  • Enable Arbitrum specific stablecoins as collateral

  • Enable Arbitrum specific protocol, gamefi memecoins as collateral

  • Introduce “Turbos” for expanded trading options.

  • Form strategic partnerships for more collateral options.

  • Offer more fiat onramping for web2 users

Audit History & Security Vendors: We just finished an audit of our protocol. You can view it here: report.pdf - Google Drive. No specific audit for arbitrum, the contracts are the same across all networks and deployed at the same addresses.

Security Incidents: None

SECTION 3: GRANT INFORMATION

Requested Grant Size: 65,000 ARB

For the requested 65k grant, around $130k at the time of writing, we are dedicating the entirety to fund a series of 12 volume rebate competitions on Rolla, aimed at boosting volume, user engagement, attracting new users from the web2 space, and encouraging retention through innovative reward structures. Here’s a detailed breakdown of the utilization and justification for this grant amount:

Our reward system is designed to encourage participation in our DeFi protocol without incentivizing unfair gaming of the system. Before we go over it lets study digital options and fair odds.

Fair Odds and Maximum Rebate

The core of our system revolves around the concept of “fair odds.” With the current payout at 80%, betting on the price movement (up or down) of a crypto asset over the next 10 minutes is essentially a trade with a 10% edge to the protocol (assuming price action is random - it’s not but let’s keep things simple). This is because if you make 2 trades in opposite directions at the same time you will end up with -10% (minus 10%) of your money.

To combat potential abuse, we’ve set a limit on rewards. Each participant can receive a rebate of up to 10% of their trading volume for the week, aligning with the maximum theoretical fair odds. This means there is no value in betting both up and down simultaneously because at best you will get your money back. At worst, you will lose money.

Rebate Pool and Distribution

We plan to distribute 65,000 ARB tokens over 12 weeks, equating to a maximum of 5,416 ARB tokens available for rebates each week. The actual dollar value of the rebate will be calculated at the end of each week.

If the total claimed rebates fall short of this maximum, the remainder will roll over into next week’s pool. Should the total rebate claims exceed the weekly cap, we’ll distribute the available rewards on a pro-rata basis, based on each user’s trading volume.

Each week we total the trade volume across the protocol and work out an ARB per $ volume value. This is calculated by WEEKLY REWARDS / TOTAL VOLUME IN WEEK. For each user we multiply their volume by ARB PER $ volume to calculate their reward for the week.

This is effectively a payout boost of up to 10%. Rewards are proportional to volume meaning it is sybil-proof.

At the end of the 12-week period, any remaining ARB tokens will be returned to the ARB foundation.

Simulation

For example, assume a constant ARB value of $2. Total rewards available is $10,832 ARB per week - at the end of the week.

Weekly Trading Volume Reward per $1 volume Effective payout boost Total ARB distributed Total ARB returned
$10 $0.1 10% $1 (0.5 ARB) 5415.5
$50,000 $0.1 10% $5,000 (2500 ARB) 2916 ARB
$108,320 $0.1 10% $10,832 (5416 ARB) 0
$216,640 $0.05 5% $10,832 (5416 ARB) 0
$433,280 $0.025 2.5% $10,832 (5416 ARB) 0
$1,000,000 $0.010832 ~1% $10,832 (5416 ARB) 0

Here is a chart displaying the above data:

Summary

This approach ensures that the rewards are tied to actual trading activity while maintaining fairness and discouraging system manipulation. It’s designed to benefit active traders whilst including everyone fairly.

It is results based and has a minimum deliverable volume per ARB. If we achieve the expected volume ($108k/week) or higher then the ARB is distributed to users according to volume traded. If our volume is lower than expected, anyone who participates gets a fair reward and extra tokens allocated are returned to the Arbitrum foundation.

Projected Outcomes:

  • With an average CAC of $52, the direct use of these funds for user-facing incentives is expected to onboard 2,500 trading users (based on a $52 CAC), significantly increasing platform volume, engagement and new users to the arb ecosystem. To arrive at this CAC, we have been running Twitter ads over the last few weeks, targeting web2 binary option traders, on mobile devices in our target regions, mainly southeast asia. We calculate this based on the ad spend on a specific campaign (in twitter), track those users via pixel tracking from twitter and see if they make trades. If someone successfully makes a trade, we call that an acquired user from that campaign. This equated to around $52 CAC from our calculations. One thing to note is as we get more data, we can target more precisely on twitter by using lookalike audiences, which mean telling Twitter who made trades on our app (via their pixel), and to find more users like that on twitter to serve ads to. In our initial phase of acquiring users, we effectively used $15 - $20 coupons as a method to attract new traders. This strategy, which involved manual outreach through platforms like Telegram and Discord, can be considered a direct CAC. Subsequently, we expanded our marketing efforts to Twitter, which broadened our reach but increased our CAC to $52. Based on the success of our initial coupon strategy and considering our highest CAC of $52 via Twitter ads, we believe that a similar coupon system, in this case a volume rebate system could effectively serve as a $52 CAC. This approach underpins our strategy to acquire 2,500 users, calculated as (65,000×2)/52, thereby efficiently utilizing a $52 rebate to incentivize users to trade, analogous to our initial coupon system.
  • Assuming an industry average LTV of $100, the return on investment from these new users substantially offsets the initial grant expenditure. This was based on some analysis we have done from a few other similar binary options applications. Luckily, our last ad campaigns have done well, and we’re seeing and average revenue per user over the last few weeks of $68, given we are still pretty new, it’s difficult to calculate a life-time value, but we expect this to be well over the estimated $100 LTV based on the fact that we have only been running these specific campaigns the last few weeks and LTV is calculated over multiple months/years. To be clear, the calculated average revenue of users on our platform is $68, which is already higher than our CAC. The further estimate of LTV takes into account the average revenue per user of $68 as well as a DAU/MAU churn factor that can be seen in Thales, our closest competitor, of 8%. We use a duration of 2 months given we are such a new application and have limited data.

ARPU: $68

Churn Rate: 8%

Period (n): 2 months

LTV = ARPU × (1 - Churn Rate)^n × n

This equates to around $115

Grant Matching: N/A

Grant Breakdown:

The total grant of 65,000 ARB (100% of grant) will be divided equally among 12, one week long volume rebate competitions as stated above.

Funding Address: 0x3FE2ED5308cCC2F197Db1c5C52cD3f66D69269c4

Funding Address Characteristics: ⅔ Multisig.

Treasury Address: 0x3FE2ED5308cCC2F197Db1c5C52cD3f66D69269c4

Contract Address: GnosisSafeProxy | Address 0x3FE2ED5308cCC2F197Db1c5C52cD3f66D69269c4 | Arbiscan

SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES

Objectives:

The primary objectives of this grant are to significantly increase user engagement and trading volume on Rolla by hosting 12 weekly volume rebate competitions, attract new web2 users to the DeFi space, and enhance the overall activity within the Arbitrum ecosystem. We aim to achieve a robust influx of new users, retain existing users through competitive and rewarding experiences, and establish Rolla as a leading platform for DeFi trading on Arbitrum.

Execution Strategy: The grant will be executed through a series of 12 weekly volume rebate trading competitions, with rewards distributed to traders according to the calculations discussed in section 3 of the grant info. Rewards will be given in ARB tokens, leveraging a direct incentive model to boost trading activity. Resources will be allocated towards marketing the competitions, and enhancing the platform’s features to support the influx of new users.

What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric? The rebate system itself already encourages retention, you have to trade to make volume and the grant is distributed over 12 weeks, where each week rewards are available to be given out. The more you trade, the more you can earn (up to the max weekly allocation of ARB). If one week the volume threshold isnt met, the following week would have additional incentives carried over, potentially reactivating users as there’s more rewards to earn that week. Additionally, top performers will gain recognition within the community and be listed on our leaderboard, adding a social incentive to the financial rewards.

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.

  • Daily and Weekly Active Users (DAU/ WAU): To measure user engagement and retention.
  • Weekly Trading Volume: To assess the direct impact of the competitions on platform activity.
  • Number of New Users Acquired: To evaluate the effectiveness of the grant in attracting new users to Rolla and the Arbitrum ecosystem.
  • User Retention Rate Post-Competitions: To understand the long-term impact of the incentive program.

The success of the grant will be measured by a significant increase in these KPIs, with data sourced directly from Rolla’s data analytics on Dune dashboards for accuracy and transparency.

Grant Timeline and Milestones:

  • Pre-Launch (2 weeks prior): Marketing campaigns and platform optimizations.
  • Weeks 1-12: Execution of weekly volume competitions, with monitoring and adjustments as needed.

Milestones include hitting targeted increases in DAU/WAU, achieving specific weekly trading volume targets, and retaining a significant percentage of new users post-competitions. These milestones are feasible based on our beta testing feedback and initial marketing responses.

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem? This grant will drive growth and innovation within the Arbitrum ecosystem by introducing a significant number of web2 users to DeFi through Rolla, increasing the overall activity and liquidity on Arbitrum. We have already tested our app with web2 users who can onboard seamlessly and make trades, all without Metamask or web3 wallets and have never interacted with a chain before. This is evidenced by just trying our app for yourselves at https://rolla.fi and seeing how easy it is to make trades. Moreover, the targeted marketing and competitive incentives are designed to showcase the benefits of the Arbitrum platform, potentially leading to a broader adoption of Arbitrum across the DeFi space. By aligning Rolla’s growth with Arbitrum’s, we ensure mutual benefits and foster a stronger, more vibrant ecosystem.

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?

*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

Yes

Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)

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?: [Y/N]

Yes

1 Like

Hello @watchwater ,

Thank you for your application! Your advisor will be @JoJo.

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

Hey @raam or @cliffton.eth could you edit our title to Final from Draft? I dont have permissions

Hey there I’ve amended the title post to reflect that this proposal is FINAL. All the best!