SECTION 1: APPLICANT INFORMATION
Applicant Name: Masa ‘Senshi’ Kikuchi
Project Name: Secured Finance
Project Description:
Secured Finance build a full on-chain Orderbook-based Rates DeFi Trading Platform to facilitate the lending and borrowing of digital assets so as to construct yield curves in the DeFi space.
We’re all about fixed-rate, fixed-term crypto asset lending and borrowing, made possible through our unique Zero-Coupon Bond instrument.
Team Members and Roles:
| Name | Roles |
|---|---|
| Masa ‘Senshi’ Kikuchi | Founder and CEO |
| Kenji Mitsusada | Head of Markets |
| Akihiro Tanaka | Smart Contract Lead |
| Benjamin Kuah | UI/UX Product Designer |
| Jasper Neo | Markets and Operations Specialist |
| Timo Lee | Community Lead |
| Arpit Singh | Software Engineer |
| Riya Kaushik | Software Engineer |
| Chirayu Garg | Software Engineer |
https://secured.finance/#teams
Project Links:
Website: https://secured.finance/
App: https://app.secured.finance/
Github: Secured Finance · GitHub
Twitter: https://twitter.com/Secured_Fi
Galxe: Join Secured Finance on Galxe
Discord: Secured Finance
Contact Information
Point of Contact
Masa ‘Senshi’ Kikuchi
Point of Contact’s TG handle: [Telegram]
masa_web3
Twitter: [Twitter Handle]
masa_web3
Email: [Email Address]
masa@secured-finance.com
Do you acknowledge that your team will be subject to a KYC requirement?:
Yes
SECTION 2a: Team and Product Information
Team experience:
| Name | Experience |
|---|---|
| Masa ‘Senshi’ Kikuchi | Computer Scientist and Former Head of Derivatives Structuring at HSBC with over 17 years of experience in traditional finance. Member of Trusted Web (Web3) Council in the Cabinet Secretariat of Japan. |
| Kenji Mitsusada | 18 years of interest rate derivatives and macro trading experience. Former Co-Head of G10 FX Forwards and STIR Trading at Goldman Sachs and Hedge Fund Manager at Capula Investment and Management. |
| Akihiro Tanaka | Former lead engineer at Securitize with extensive Web3 skills to build a regulatory compliant STO platform for financial institutions. 9 years as a software engineer/architect at Accenture. A blockchain advocate since 2013. |
| Benjamin Kuah | UI/UX/Product Designer in the Fintech/Web3 space for over 4 years, working at Binance to spearhead product design innovation and growth campaigns for both B2C and B2B consumers. |
| Jasper Neo | Markets expert in operations for 8 years dealing with collateral, equities, bonds, and derivative products. Former settlement analyst at FNZ and SS&C. A budding enthusiast trying to harness wealth’s full potential to grow through the financial revolution in Web3. |
| Timo Lee | Multilingual and multicultural business developer. Contributor to Web3, IPFS, and DeFi. Master of Engineering from TU Berlin in the field of machine learning and transfer learning. |
| Arpit Singh | Full Stack Developer with prior experience in a Quantitative Role. Graduate from IIT-Delhi with expertise in Fintech. |
| Riya Kaushik | Full Stack Developer with expertise in all facets of frontend development, played a vital role in the development of digital escrow and wallet services at Standard Chartered Bank. |
| Chirayu Garg | Grounded in Object-Oriented Programming (OOP) and back-end development, with a rich experience gained at JPMorgan Chase. Fuelled by a passion for pioneering innovation in the fast-paced world of cryptocurrency. |
What novelty or innovation does your product bring to Arbitrum?
Secured Finance introduces a groundbreaking approach to decentralized finance on Arbitrum by offering a fixed-rate, fixed-term project with a full on-chain orderbook system, to complement the pool-based money-market DeFi systems. Our platform uniquely facilitates the trading of yield curves, providing a trading space akin to an inter-bank trading system found in traditional finance. Through our innovative TradFi-friendly zero-coupon bond standardization, users can enjoy the flexibility to choose their borrowing or lending interest-rate levels, filling the gap between crypto and traditional financial ecosystem. This distinct model ensures a transparent, efficient, and composable financial environment for all users.
Our orderbook based interest-rate determination system enables a fair and universal interest-rate oracle that is not possible via a pool’s local utilization ratio. This interest rate oracle will serve as the benchmark rates, which is the bedrock of fixed income interest-rates that enables the massive-scale OTC interest rate derivatives, such as IR swaps and FX forwards that we plan to offer in the next stage. By integrating our protocol to Arbitrum, we aim to establish the leading position of the fixed income DeFi theme, enticing more institutional and traditional capital into the Arbitrum ecosystem.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes, our project is designed with composability in mind, allowing users to seamlessly interact with other protocols within the Arbitrum ecosystem. For instance, users can borrow digital assets from other projects and lend through our platform, enhancing liquidity and financial flexibility. This interoperability not only fosters a more integrated DeFi ecosystem but also opens up arbitrage opportunities, enabling users to capitalize on price discrepancies across different platforms. Our commitment to composability ensures that Secured Finance not only contributes to the Arbitrum ecosystem but also enhances its overall value proposition by encouraging cross-protocol interactions and liquidity flow.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
While there are protocols that offer fixed rates lending for crypto assets, such as Notional Finance, they primarily operate based on their own liquidity pools and utilization ratios. Secured Finance stands apart by leveraging an on-chain orderbook system for a fair, universal, and composable fixed interest rates, allowing for full-fledged fixed income business akin to traditional finance’s inter-bank trading and derivatives structuring capabilities. This unique approach provides a great deal of flexibility not found in pool-based systems, making Secured Finance a pioneering platform in the DeFi space. Although Notional Finance shares some similarities in offering fixed rates, the fundamental rate determination mechanics are distinct and tailored to replicate the global financial market structures.
How do you measure and think about retention internally? (metrics, target KPIs)
We understand retention is a critical metric that reflects the long-term viability and success in the Arbitrum ecosystem. Therefore, measure retention through the following key performance indicators (KPIs): 1) Total Value Locked (TVL) that is the total collateral amount for us, 2) Outstanding Loan Position (OP), and 3) Repeated borrowing/lending Volume (RV) that is handled by our quarterly auto-roll feature. These metrics help us understand user engagement, stickiness, and effectiveness of the financial products. By analysing trends in these KPIs, we can identify areas for improvement, develop strategies to enhance user experience and introduce new features that meet our users’ needs. Our goal is to foster a loyal user base that recognizes the unique value proposition of our platform, contributing to Arbitrum ecosystem growth.
Due to our products’ fixed-term lending nature, our users behavior tends to long-holded, therefore our KPIs do not predominantly feature DAU and MAU. It is more accurate measure of the user engagement and retention by keeping track of TVL, OP, and RV. This approach underscores our commitment to providing a stable lending and borrowing environment, achieving long-term user retentions.
Relevant usage metrics - Please refer to the OBL relevant metrics chart 5. For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:
| Category | Relevant Metrics |
|---|---|
| General Metrics | Daily Active Users (DAU), Daily User Growth, Daily Transaction Count, Daily Transaction Fee, Daily ARB Expenditure, Incentivized User List & Gini Coefficient |
| Lending-Specific Metrics | Total Value Locked (TVL), Withdrawals, Borrowed Amount, Daily Borrowing Volume, Daily Deposits Volume, List of Depositors, List of Borrowers, Utilization Ratio (OP/TVL), Loan Origination Volume (OP: Open Position), Liquidations |
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
Is the protocol native to Arbitrum?:
Yes, we plan to build ARB yield curve. Arbitrum was the first choice on L2 because of the Ethereum compatibility, scalability, community, and ecosystem supports. Currently, the protocol is operating across multi chains.
On what other networks is the protocol deployed?:
- Ethereum mainnet (14th December 2023),
- Arbitrum (9th January 2024),
- Avalanche (16th January 2024),
- Polygon zkEVM (7th February 2024).
What date did you deploy on Arbitrum mainnet?:
9th January 2024.
TransactionID: Arbitrum Transaction Hash (Txhash) Details | Arbiscan
Do you have a native token?:
Planned. Tokenomics details should be coming soon in Q2.
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
We’ve used Galxe’s campaign platform to incentivise user interactions and educations via OAT & NFT.
Current Incentivization: How are you currently incentivizing your protocol?
We use Galxe platform to set incentive goals and keep track of on-chain activities (placing orders) via Subgraph queries to grant OAT.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
No.
Protocol Performance:
Our approach is to strategically position our platform by emphasizing secure, fixed-rate, long-term lending and borrowing, and less volatile zero-coupon bond price trading, appealing to a broad audience seeking stability in cryptoassets. Our Dune dashboard (https://dune.com/securedfinance/secured-finance-dashboard) shows real-time insights into our TVL and user base, underscoring our commitment to transparency and data-driven decision-making. We’ll add more on-chain performance to prepare for LTIPP. Impressively, Arbitrum hosts over half of our total 1624 users, with 822 active participants, showcasing its vital role in our ecosystem’s growth and user engagement. This data not only reflects our current standing but also our potential for scaling within the Arbitrum ecosystem, driven by our innovative financial instruments and user-centric approach.
Protocol Roadmap:
Q2:
-
Tokenization of Zero-Coupon Bonds: We will tokenize our zero-coupon bonds to enhance composability with other projects on Arbitrum. This initiative aims to improve liquidity and facilitate seamless integration across the DeFi ecosystem.
-
Introduction of Leveraged Borrowing and Lending: Our platform will introduce options for leveraged borrowing and lending, providing users with more sophisticated financial tools and flexibility in managing their investment strategies.
-
Launch of the Secured Finance Token (SFT): A significant milestone, the introduction of our native token, SFT, will mark a new era for our platform. The SFT will play a crucial role in governance, incentivization, and accessing advanced features within our ecosystem.
Q3~Q4:
-
Adding more Lending Currencies and Collateral Currencies: Due to the increasing interest from institutions and traditional finance, we will add more stablecoins (USDT, JPYC, etc) and RWA to cater to the wider use to provide flexible ways to liquidate tokenized assets.
-
Expansion to Interest rate Derivative Products: We plan to broaden our product lineup to derivative products such as Yield Spread, FX Forward, Interest Rate Swap, and so on, diversifying our offerings and providing users with more flexible tool to control risks via financial solutions (hedging and structuring) that’s been a great source of profits in traditional finance.
-
Creation of the ARB Token Yield Curve: A pivotal addition to our roadmap, we plan to develop a yield curve for the ARB token. This initiative is aimed at deepening our integration with the Arbitrum ecosystem, offering users advanced tools for risk management for ARB holders, and enhancing overall liquidity of ARB products.
Throughout the Year:
-
Continuous Platform Improvement and Security Enhancements: We commit to ongoing improvements in platform functionality, user experience, and security. This includes regular audits, updates to our bug bounty program, and the implementation of community feedback.
-
Community Engagement and Ecosystem Development: A key focus will be on building a vibrant community around our platform and contributing to the growth of the Arbitrum ecosystem. This will involve hosting AMAs, participating in community events, and forming strategic partnerships.
Audit History & Security Vendors:
December 2023: Quantstamp 2023-12-Quantstamp.pdf
Feburary 2024: Quantstamp (ongoing: to be completed by the end of March)
Security Incidents:
No.
SECTION 3: GRANT INFORMATION
Requested Grant Size:
100,000 ARB
Justification for the size of the grant and Grant Breakdown:
Secured Finance’s lending/borrowing lifecycle goes (1) Collateral Deposit → (2) Place Limit Order → (3) Order Taken → (4) Open Position → (5) Position Maturity → (6) Position Rollover.
The protocol fees are collected at (3) Order Taken and (6) Position Rollover. Therefore the incentive point is (1) Collateral Deposit (TVL) and (4) Open Position (OP). Therefore, we’d like to distribute incentive tokens on these points along with the trade lifecycle to maximize the user engagement, stickiness, and retention.
To determine the appropriate target for our TVL, we used data from our previous campaigns. For instance, in our weekly Test Pilot Program on Galxe, we conducted a 100 USDC raffle (divided into 10 awards of 10 USDC each) for orders of at least 1000 USDC, which attracted roughly 700 participants each week. Given that this was a test-net initiative, it indicates we can consistently attract 600-700 participants weekly without imposing any financial cost on them. In the LTIPP, we’re encouraging participants to deposit a minimum of $500 in collateral to provide interest rates, with the goal of achieving a weekly TVL growth of $300-350K.
-
Collateral Deposit (TVL): Target $4M
a. We aim a linear increase of TVL to $4M in 12 weeks. i.e. $333K per week incremental.
b. We provide avg 23% annual interest on the collateral. i.e. $333K x 23% x 1/52 = $1,470 per week.
c. We provide $1,470 x (1+2+3+…+12) = $1,470 x (13 x 6) = $114,660 in 12 weeks
c. For TVL growth, we need 66,667 ARB (1 ARB = 1.72 USD) -
Open Position (OP): Target $2M (borrow + lend)
a. We aim a half of the TVL contribute to open position. i.e. $167K per week incremental.
b. We provide avg 23% annual interest on the collateral. i.e. $167K x 23% x 1/52 = $735 per week.
c. We provide $735 x (1+2+3+…+12) = $735 x (13 x 6) = $57,330 in 12 weeks
c. For OP growth, we need 33,333 ARB (1 ARB = 1.72 USD)
This 2-step time-incremental incentive boost is designed to encourage both borrowers and lenders for a long time, and more towards borrowers because it takes more steps to place collateral than lending and from our experience, the orderbooks tend to lack liquidity on the borrowing demand side.
For borrowing, we encourage users not only place collateral to earn TVL rewards, but also place borrowing orders to earn OP rewards to think about the proper yield so it can be quickly taken by lenders.
For lending, we encourage users to take a borrowing order so that they can earn regular yields, plus they can earn OP rewards.
We believe this incentive coordination will drastically drive our KPI, and since the rewards accumulates over time, it will create a lasting impact to bootstrap liquidity, and then together with our token launch, we 'll enter into our sustainable growth with Arbitrum ecosystem.
Secured Finance seeks to be a strategic investment in the future of the Arbitrum ecosystem, enhancing liquidity, diversifying user base, and leading financial innovation. With our Japanese core team’s leadership, the integration of JPYC, and strategic ARB utilization, we’re poised to set new DeFi standards, promoting stability and growth in the global financial landscape.
Grant Matching:
NA
Funding Address and Charactaristics:
Fireblocks MPC address: 0x96E7E565F2E465522C320c06f3C845fE17B79EF3
Treasury Address:
Secured Finance Foundation: 0xE452eB7FEB81E939f3D71Ab440Ba7544e20044b9
Contract Address:
LendingMarketController:0x35e9D8e0223A75E51a67aa731127C91Ea0779Fe2
TokenVault:0xB74749b2213916b1dA3b869E41c7c57f1db69393
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives: [Clearly state the primary objectives of the grant and what you intend to achieve]
The primary objective is to enhance platform engagement and retention by driving KPI of 1) Total Value Locked (TVL) that is the total collateral amount for us, 2) Outstanding Loan Position (OP), and 3) Repeated borrowing/lending Volume (RV).
Secured Finance is dedicated to transforming the Arbitrum ecosystem by ushering in a new era of financial innovation that mirrors the sophistication of traditional finance. Our primary objectives, supported by this grant, are to:
-
Attract Institutional Players: By developing a robust yield curve, we aim to make Arbitrum an attractive platform for institutional investors. This initiative is crucial for fostering a deeper, more liquid market that can support a variety of derivative products, thereby broadening the ecosystem’s appeal and functionality.
-
Pioneer Traditional Financial Product Integration: Our mission extends beyond mere competition within the existing DeFi landscape. We are set to lead the charge in integrating traditional financial products into the decentralized finance sector. This endeavor will not only enhance the liquidity of the Arbitrum ecosystem but also introduce credit facilities that are indispensable for comprehensive business operations.
-
Demonstrate Value and Innovate: Through the strategic use of this grant, we intend to showcase the inherent value and untapped potential of fixed-rate, fixed-term products within DeFi. Our goal is to highlight how such financial instruments can provide stability and predictability, qualities that are highly sought after in the volatile world of cryptocurrency.
-
Contribute to Ecosystem Growth: By achieving these goals, Secured Finance will actively contribute to the growth and maturation of the Arbitrum ecosystem. We envision a future where Arbitrum is not only known for its technical innovations but also for its vibrant, diverse financial marketplace that caters to a wide range of investors and users.
-
Expanding Market Reach with Stablecoin/RWA Integration: With Japan’s new law supporting Stablecoins and Real-World Assets (RWA), we see a strategic opportunity to introduce the JPY Coin (JPYC). This initiative is designed to attract institutional investors from Japan and beyond. By leveraging our team’s connections, we aim to actively engage this crucial demographic. In partnership with financial regulators and through fostering innovation with Arbitrum Japan, our goal is to boost liquidity and diversify the offerings within the Arbitrum ecosystem.
This grant represents a pivotal investment in the future of decentralized finance on Arbitrum, promising to enhance liquidity, encourage diversity among users, and pioneer financial innovation. In doing so, Secured Finance aims to redefine the standards of DeFi platforms, fostering stability, growth, and innovation across the global financial landscape.
Execution Strategy:
Secured Finance is committed to a transparent and effective execution strategy for our innovative fixed-rate, fixed-term DeFi lending platform on Arbitrum. Our approach encompasses a meticulously planned token distribution method, incentivization of key platform activities, judicious use of resources, comprehensive product offerings, and robust risk management practices. Below is a detailed outline of our strategy:
Daily Snapshots and Aggregation:
To accurately monitor and reward user participation, daily snapshots will capture user positions in collateral and open positions. These snapshots will be aggregated weekly to ensure a comprehensive understanding of user engagement with our platform. This method ensures fairness and transparency in the distribution of rewards.
Distribution:
-
Initial Boost: To attract early adopters, we’re tilting the boosted APR more towards the start. This strategy is designed to give our incentive program a “rocket start” and grab attention quickly. On average, participants can expect an incentive yield boost of 23% APR.
-
Immediate Distribution: 40% of the aggregated ARB tokens will be directly airdropped to users, acknowledging their immediate contribution to the platform’s TVL.
-
Vested Incentives: The remaining 60% of ARB tokens will be vested. A dedicated webpage will be created for users to claim their vested incentives. These incentives will be claimable at 5% monthly over twelve months after the end of the incentive period. This approach encourages sustained engagement with our platform.
-
Withdrawal Policy (exclude Borrowing Competition): If users reduce their position before all vested tokens are claimed, they will forfeit their remaining incentives based on volume-weighted and time-weighted. The forfeited rewards will be redistributed, on a volume-weighted and time-weighted basis, to users who maintain their collateral on the platform, promoting long-term platform loyalty and stability.
Collateral Deposit (TVL) Rewards Total: 66,667 ARB
| week | Target TVL | Boosted APR | grants size$ | ARB token |
|---|---|---|---|---|
| 1 | 333,333 | 84% | $5,397 | 3,175 |
| 2 | 666,667 | 42% | $5,397 | 3,175 |
| 3 | 1,000,000 | 28% | $5,397 | 3,175 |
| 4 | 1,333,333 | 21% | $5,397 | 3,175 |
| 5 | 1,666,667 | 21% | $6,746 | 3,968 |
| 6 | 2,000,000 | 21% | $8,095 | 4,762 |
| 7 | 2,333,333 | 21% | $9,444 | 5,556 |
| 8 | 2,666,667 | 21% | $10,794 | 6,349 |
| 9 | 3,000,000 | 21% | $12,143 | 7,143 |
| 10 | 3,333,333 | 21% | $13,492 | 7,936 |
| 11 | 3,666,667 | 21% | $14,841 | 8,730 |
| 12 | 4,000,000 | 21% | $16,190 | 9,524 |
Outstanding Loan Position (OP) Rewards Total: 33,333 ARB
| week | Target OP | Boosted APR | grants $ | ARB token |
|---|---|---|---|---|
| 1 | 166,667 | 84% | $2,698 | 1,587 |
| 2 | 333,333 | 42% | $2,698 | 1,587 |
| 3 | 500,000 | 28% | $2,698 | 1,587 |
| 4 | 666,667 | 21% | $2,698 | 1,587 |
| 5 | 833,333 | 21% | $3,373 | 1,984 |
| 6 | 1,000,000 | 21% | $4,048 | 2,381 |
| 7 | 1,166,667 | 21% | $4,722 | 2,778 |
| 8 | 1,333,333 | 21% | $5,397 | 3,175 |
| 9 | 1,500,000 | 21% | $6,071 | 3,571 |
| 10 | 1,666,667 | 21% | $6,746 | 3,968 |
| 11 | 1,833,333 | 21% | $7,421 | 4,365 |
| 12 | 2,000,000 | 21% | $8,095 | 4,762 |
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?
In our strategy to foster “stickiness” among users and liquidity, and to achieve our key performance indicators (KPIs) of Total Value Locked (TVL) and Outstanding loan Position (OP), we have developed a multifaceted approach within our incentive design. This approach not only rewards participation volume but also emphasizes the duration of engagement, ensuring that long-term commitment is rewarded, and loyalty is cultivated. Here’s how we plan to integrate these aspects:
Lifecycle-based Multi Phased Incentives:
The lending transaction has a long lifecycle and many steps, so embedding proper incentives on the potential drop-out points would help users stay within the trade lifecycle loop. In addition, our protocol takes care of automatic rollover on both borrowers and lenders with mid-price, removing the reinvestment risks, so users are incentivized to stay long while the protocol generates auto-roll fees, leading sustainable growth.
(1) Collateral Deposit (TVL rewards) → (2) Place Limit Order → (3) Order Taken → (4) Open Position (OP rewards) → (5) Position Maturity → (6) Position Rollover (Auto-roll benefits).
Duration-Based Incentives: We implement mechanisms that reward users for the volume of their transactions and engagement and for the longevity of their activity on our platform. This is evident in our approach to TVL, where we’ve incorporated vested ARB tokens. Users are incentivized to maintain their collateral with us for up to six months to avoid forfeiture of their vested rewards, directly enhancing TVL stickiness.
Expansion and Retention of User Base: Leveraging incentives during the ARB Grants period, our objective is to significantly grow our user base. We aim to sustain this growth by transitioning to incentives offered through the Secured Finance Token (SFT), with a clear focus on retention strategies post-ARB Grants period.
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.
To measure the success of achieving the grant objectives for Secured Finance, we will focus on Key Performance Indicators (KPIs) that reflect the platform’s earning power, liquidity, and credibility within the DeFi space. These KPIs are critical as they directly correlate with our ability to generate profits and distribute them to contributors to the KPI growth. Here’s a detailed explanation of the chosen KPIs and the source of truth for governance to verify their accuracy:
Selected KPIs:
-
Total Value Locked (TVL): TVL is a pivotal metric for Secured Finance, signifying the platform’s trust and credibility in the DeFi space. An upward trajectory in TVL indicates growing confidence among users to lock their assets with us, demonstrating the platform’s utility and security. By leveraging the ARB grants, we aim to boost our TVL, thereby increasing visibility and trustworthiness. The primary source of truth for this KPI will be our platform’s blockchain data, verifiable through smart contract interactions and asset holdings.
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Outstanding Loan Position (OP): Loan Position Volume is critical to understanding the scale at which our fixed-rate, fixed-term lending services are being utilized. A significant increase in loan volume reflects higher utilization of our lending products, indicating that we are successfully meeting the needs of our target audience. It showcases the platform’s ability to facilitate significant lending activity, aligning with our objective to bootstrap liquidity and engagement. Loan volume data, extracted and verified from our platform’s transaction records, provides a clear, objective measure of this KPI.
Rationale for KPI Selection:
-
Focus on Liquidity and User Trust: At this stage, our primary objective is to establish a solid foundation of liquidity and to build trust within our target audience. TVL and Loan Volume directly measure these aspects, making them the most relevant KPIs.
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Revenue and DAU Relevance: Considering our platform’s setup and the accrual basis of our revenue model, immediate revenue generation is not our current focus. Similarly, given our emphasis on fixed-term and fixed-rate products that encourage users to roll their positions, Daily Active Users (DAU) does not serve as a meaningful indicator of our platform’s success or user engagement.
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Future Profitability: While profitability remains a long-term goal, our current metrics for success are strategically chosen to prioritize growth in service utilization and market presence, setting the stage for sustainable revenue in the future.
The chosen KPIs, TVL and Loan Volume, are thus indicative of our strategic priorities at this stage of development. They provide a clear measure of our success in attracting and retaining users through our unique value propositions in the DeFi space. Governance and external verification of these KPIs can rely on transparent, blockchain-based records, ensuring accuracy and trust in our reported progress.
Source of Truth:
-
Blockchain Data: On-chain metrics such as TVL and Loan Volumes can be transparently verified through blockchain explorers and Subgraph queries, providing an immutable source of truth for governance.
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Platform Analytics: Users and specific engagement metrics can be tracked through our dune analytics dashboard, which aggregates user activity data in real-time.
Justification:
These KPIs are chosen because they collectively represent the platform’s health, growth, and value proposition to both users and stakeholders. An increase in TVL and OP signifies a growing trust and engagement in our platform, while rising protocol revenue and profit distributions confirm our financial viability and commitment to rewarding our community. For a long-term growth, we also want to keep track of RV: Repeated borrowing/lending Volume (RV) that is handled by our quarterly auto-roll feature, which is a direct indicator of our protocol profitability. By focusing on these KPIs, we aim to leverage the ARB grants opportunity to its fullest potential, enhancing our platform’s liquidity and credibility as the first step towards long-term success in the DeFi ecosystem.
Grant Timeline and Milestones:
For the ARB Grants period, which spans 12 weeks, Secured Finance has outlined a strategic timeline and set of milestones focused on achieving significant growth in Total Value Locked (TVL), our primary Key Performance Indicator (KPI). Our objective is to reach or exceed a TVL of at least $4 million by the end of the grant period. Here’s a breakdown of our timeline and milestones, along with the justification for the feasibility of these goals:
Timeline and Milestones:
Week 1-4: Initial Engagement and Awareness Phase
- Objective: Increase platform awareness and initial user engagement.
- KPI: Achieve TVL $1.3M, OP $0.6M.
- Activities: Launch marketing campaigns, community engagement initiatives, and user education programs to attract initial users and liquidity providers.
- Justification: This initial phase focuses on building a strong foundation of users and liquidity, leveraging marketing and community outreach to kickstart growth.
Week 5-8: Growth and Expansion Phase
- Objective: Accelerate user acquisition and platform utilization.
- KPI: Achieve TVL $2.6M, OP $1.3M.
- Activities: Introduce additional incentives for liquidity providers, expand partnerships with other DeFi projects, and continue aggressive marketing efforts.
- Justification: Building on the initial engagement, this phase aims to capitalize on the growing platform awareness and user base to further increase TVL through strategic partnerships and enhanced incentives.
Week 9-12: Consolidation and Retention Phase
- Objective: Solidify user base and liquidity, ensuring long-term platform engagement.
- KPI: Surpass TVL $4M, OP $2M.
- Activities: Implement retention strategies, refine user experience based on feedback, and deploy additional features or products to encourage sustained platform use.
- Justification: The final phase focuses on consolidating the growth achieved in the earlier phases by enhancing user experience and offering new value propositions to ensure users and liquidity providers remain engaged, pushing the TVL towards our target.
Feasibility Justification:
The feasibility of these milestones is grounded in a multi-phased approach that strategically targets different aspects of platform growth, from initial awareness to long-term retention. By setting progressive, achievable targets for our TVL, we allow for incremental growth that builds on the successes of each phase. This approach not only makes the overall goal of achieving a $6 million TVL by the end of the 12-week period realistic but also ensures that we have a clear plan for sustaining and building upon this growth post-grant period.
Our confidence in reaching these milestones is supported by a combination of aggressive marketing, tokenomics disclosure, exchange listing, strategic partnerships, and continuous platform improvements designed to attract and retain users and liquidity. Additionally, the ARB Grants provide a significant opportunity to leverage additional resources to achieve these goals, further enhancing the feasibility of our planned milestones.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem? [Clearly explain how the inputs of your program justify the expected benefits to the DAO. Be very clear and tangible, and you must back up your claims with data]
By receiving the ARB Grants, Secured Finance aims to foster growth and innovation within the Arbitrum ecosystem in the following ways, with the grant period spanning three months during which incentives will be distributed to users:
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Expansion of User Base: We intend to maximize the use of the ARB token grants to offer incentives to both new and existing users. This strategy is designed to increase interest in the Secured Finance platform, introducing DeFi users with a new bond trading experiences, thereby building a broader user base.
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Increase in Total Value Locked (TVL): Through the incentives provided, we aim to encourage the locking up of assets on our platform, thereby increasing the TVL. This serves as a key indicator of trust in the services offered by Secured Finance and the depth of liquidity available.
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Enhancement of Awareness and Credibility: By leveraging the grants for educating users with a new TradFi-friendly trading experience and community engagement, especially from Japan, we aim to enhance the visibility and invite new capital into the Arbitrum ecosystem.
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Improvement of Liquidity and Compatibility: Offering incentives to users will not only enhance the platform’s liquidity but also promote compatibility with other projects within the Arbitrum ecosystem. Additionally, by providing opportunities for arbitrage trading, we aim to improve the overall efficiency and health of the ecosystem.
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Provision of Educational Content: We will provide educational content on real user experiences (UX) and trading strategies, supporting users in maximizing the benefits of the Secured Finance platform. This initiative is intended to deepen user engagement and promote long-term involvement.
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/No]
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?
Yes
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
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?:
Yes
