SECTION 1: APPLICANT INFORMATION
Applicant Name:
Savvy IBC
Project Name:
Savvy DeFi
Project Description:
Savvy is a decentralized credit protocol on Arbitrum that provides its users an advance on the future yield of their crypto through 0% interest, autorepaying, and non-liquidating credit lines. With Savvy, users can borrow up to 50% of their deposits’ value through svTokens (svBTC, svETH, and svUSD). Borrow without boundaries on Arbitrum with Savvy.
Team Members and Qualifications:
Roman Giler (Project Lead): Former JPMorgan Private Banker, 3x crypto founder with successful exit. Educator in DeFi, NFTs, & tokenomics.
Akshay Gupta (Tech Lead): Computer Science at Yale, Particle Physics at CERN. Oversees a tech consultancy with $10m+ annual revenue.
Ramsey Khadder (Product Lead): Builds magical DeFi & GameFi experiences. Former Stripe, EliseAI, & Xbox/Microsoft.
Alex Lumley (Product Developer): Experience across p2p lending, insurance, cloud storage, AI, car shopping, and more. Multiple startup exits.
IDM: Social psychology PhD & data scientist. Specializes in social contagion, network science, & computational models of crowds.
Baran Ozmen: Lawyer and entrepreneur. Lectures on web3 & blockchain.
Jiayu: DAO Community member and Content
Project Links:
Website: https://savvydefi.io/
Documentation: https://docs.savvydefi.io/
Discord: Savvy
Telegram: Telegram: Contact @SavvyDeFiEvents
Github: Savvy DeFi · GitHub
Twitter: https://www.twitter.com/SavvyDeFi
Medium: https://savvydefi.medium.com/
DeBank: DeBank | The Web3 Messenger & Best Web3 Portfolio Tracker
Pitch video: https://youtu.be/DmaWdshfyJA
Grant deck: DocSend
Contact Information:
TG: Telegram: Contact @RomanG86
Twitter: https://twitter.com/gilerroman
Email: roman@savvydefi.io
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?:
Yes.
SECTION 2: GRANT INFORMATION
Requested Grant Size:
200,000 ARB
Grant Matching:
Up to 180,000 SVY will be committed from the Liquidity Mining Incentives and Savvy Booster allocation by Savvy.
Grant Breakdown:
The high-level breakdown of the grant is provided below. Please note that the numbers are averages, and actual disbursement will follow the ratios under the ‘Emission Schedule’. More details can be found under the ‘Execution Strategy’ section of this application.
| Section | Total ARB | % | Weekly Average |
|---|---|---|---|
| Liquidity Mining Emissions | 90,000 | 45% | 5,625 ARB |
| Boosted Yields | 110,000 | 55% | 6,875 ARB |
Funding Address:
0x4f54Cab19B61138e3c622a0bD671C687481eC030 - Arbitrum Multisig
Funding Address Characteristics:
3/7 Safe Multisig Wallet
Contract Address:
0x4f54Cab19B61138e3c622a0bD671C687481eC030 - Arbitrum Multisig
SECTION 3: GRANT OBJECTIVES AND EXECUTION
Objectives:
As a CDP protocol, Savvy focuses on increasing bottom-line metrics like user deposits and loan origination. The primary objectives of the grant are to increase incentives across the Savvy products to enhance adoption and to increase liquidity depth across pools to strengthen project health.
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Boost yields to capture users from competing EVM chains.
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Increase Liquidity Mining Emissions in ARB to increase stable swap pool health.
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Increase trust and legitimacy by being part of the Arbitrum Grant Ecosystem.
Key Performance Indicators (KPIs):
Savvy will measure the direct metrics of the above Objectives to assess performance.
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Increase in deposits to the Savvy protocol.
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Increase in borrowing from the Savvy protocol.
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Increase in TVL of stable swap pools of the Savvy protocol.
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Increase in the overall volume across the Savvy protocol.
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Number of unique users interacting with the Savvy protocol.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
1) Grow Arbitrum User Base
Although Arbitrum has $2.7bn of TVL, most are in perpetual, cross-collateral lending and dexes. These verticals are a huge part of DeFi. However, they also leave out a large subset of users in DeFi.
Savvy protocol focuses on simplicity, safety, and risk aversion to bring in the masses to unlock their capital and lower their opportunity cost. Savvy is paramount to this, and all strategies available on the protocol are heavily researched before implementation.
Having the grant from the Arbitrum Foundation will allow Savvy to boost yields higher compared to competing projects in other EVM chains. Higher yields will create a natural onboarding funnel for all customer segments, driving more retail adoption and increased transaction and wallet activity.
Furthermore, Savvy recently deployed into Bunni and currently represents over 50% of their TVL on Arbitrum. Liquis has stated that they will be willing to expand to Arbitrum when Bunni reaches $2m in TVL. In this regard, Savvy will also foster growth in the available projects in the Arbitrum ecosystem.
2) Increase Capital Efficiency within Arbitrum
What’s unique about Savvy is its collaborative approach with the existing DeFi protocols on Arbitrum; Savvy vaults can be built over almost everything. Instead of competing with other protocols, Savvy complements them by depositing funds into them, thus enhancing their TVL without detracting from other projects. By providing additional yield on Arbitrum protocols such as GMD and JonesDAO, Savvy unlocks the dormant value in their yield tokens such as gmdUSD and jUSDC.
3) Increase Value Proposition of Savvy Ecosystem
Increasing the TVL across Savvy will allow Savvy to open new vault options, deepening Savvy’s integrations with the rest of the Arbitrum DeFi ecosystem. Furthermore, being the only project to offer BTC-denominated loans, Savvy will drive BTC holdings to Arbitrum.
Justification for the size of the grant:
Savvy is a protocol launched with less than 2% pre-sale with no VC funding and acts as a community-owned DAO. Since our liquidity bootstrapping event in mid-August, Savvy DAO has already voted on two proposals.
Our primary challenge is secondary market liquidity, and increasing yields is an essential component of the collaborative ecosystem approach that strengthens the overall Arbitrum DeFi landscape. The grant we seek is not merely a transaction; it is an investment in the future of decentralized finance on Arbitrum.
The distribution in the schedule above, on top of the current protocol rewards, will create an approximately 120% increase in Liquidity Mining Emissions and a 7x increase in Savvy Booster yields over 16 weeks. As Savvy Booster yields are directly related to protocol debt, a case table is provided under the Execution Strategy below. These ratios and amounts are a healthy mix to scale both sides of the system.
Execution Strategy:
100% of the grant will be used for protocol participation in three ways. Incentives will be distributed weekly from 14 October 2023 through 27 January 2024 for 16 weeks.
1) Liquidity Mining Emissions
As a CDP protocol, Savvy relies on its stable swap pools for healthy protocol performance by design. Under the SVY tokenomics, 39% of the total supply is allocated for this over six years. Currently, Savvy keeps pools and runs Market Making Campaigns on two key DEXs: Trader Joe and Uniswap.
Trader Joe LP rewards are calculated using our in-house subgraphs and are claimable on the Savvy app. Uniswap LP rewards are claimable by staking through Timeless Finance’s Bunni liquidity engine. Due to the structure of both systems, rewards in the form of ARB can easily be included in addition to the current SVY rewards.
Funds allocated for Liquidity Mining Emissions will be divided and distributed with the weekly ‘Emission Schedule’. The list of pools is subject to change with a Savvy DAO proposal. Still, it will always include SVY or a svToken synthetic as one of the pairs.
Treasury-controlled wallets will be excluded from the ARB incentives.
Below are the average weekly allocations for the available pools:
| Pool | Platform | Weekly Average |
|---|---|---|
| svUSD-USDC | Trader Joe | 675 ARB |
| svETH-ETH | Trader Joe | 675 ARB |
| svBTC-WBTC | Trader Joe | 387 ARB |
| SVY-WETH | Trader Joe | 756 ARB |
| svUSD-FRAX | Uniswap (Bunni) | 956 ARB |
| svETH-frxETH | Uniswap (Bunni) | 956 ARB |
| SVY-WETH | Uniswap (Bunni) | 1,087 ARB |
2) Boosted Protocol Yields
Savvy uses a novel mechanism called the Savvy Booster to incentivize healthy protocol use through long-term staking of the SVY token. 7% of the total SVY supply has been allocated for this. Users who deposit into Savvy and have an open credit line earn additional yield based on their veSVY amount accrued by staking their SVY.
Funds allocated for boosting protocol yields will be distributed to eligible users as ARB alongside SVY rewards. More information on the Savvy Booster can be found here.
The table below shows the effective boost increase per $ of debt in the Savvy protocol. Please note that this calculation does not factor in SVY or ARB price changes.
| Protocol Debt Amount | Boost Increase |
|---|---|
| $220,000 | 1 x (current) |
| $220,000 | 12.50 x |
| $500,000 | 5.50 x |
| $1,000,000 | 2.75 x |
| $1,500,000 | 1.83 x |
| $2,000,000 | 1.37 x |
| $2,500,000 | 1.1 x |
To protect against unrealistic increases in yields, Savvy reserves the right to decrease the amounts where appropriate.
Grant Timeline:
The distribution is planned to be concluded by 27 January 2024.
Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and does the multi sig holds the power to halt your stream?:
Yes.
SECTION 4: PROTOCOL DETAILS
Is the Protocol Native to Arbitrum?:
Yes.
On what other networks is the protocol deployed?:
Arbitrum only.
What date did you deploy on Arbitrum?:
06/12/2023
Protocol Performance:
After our soft launch of Savvy in June, our Market Making Campaign produced over $1.6m of pool liquidity across our three synthetic pools within three weeks. This resulted in over $400k of immediate Protocol Owned Liquidity.
Our Liquidity Bootstrapping Pool in early August generated 321 ETH from over 350 participants, and more than 35% of our non-team controlled float is deposited in our staking contract.
Currently, Savvy has $695k TVL in Strategies provided by AAVE, Jones DAO, and GMD.
Savvy’s total volume is approximately $2.2m USD at current-day spot prices for ETH and BTC for the past 30 days. Performing this calculation using TWAP instead, the volume will likely exceed the recommended $2m USD criterion.
Protocol Roadmap:
The Mid-term roadmap of Savvy includes turning on fiat ramps, gauge voting for Savvy pools, and starting protocol redemptions in addition to the constant addition of strategies, collateral types, and use cases.
Audit History:
Halborn has audited Savvy, and no Critical or High-importance issues have been detected. The report can be found here.
SECTION 5: Data and Reporting
Is your team prepared to create Dune Dashboards for your incentive program?:
Yes. Our team is capable of creating the requested dashboard by the Arbitrum Foundation.
Our team has been building internal dashboards and tools on multiple platforms such as Savvy Retool and Savvy Netlify since day one.
We have also built the first subgraph for Trader Joe Liquidity Book to track metrics and distribute rewards.
We have already built a Savvy Dune Dashboard to calculate the total protocol volume, as reported in Section 4.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?:
Our team agrees to provide bi-weekly program updates on the KPIs listed in this grant application.
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.