[ShapeShift] LTIPP Application Draft


Applicant Names: @twells | @Hpayne

Project Name: ShapeShift DAO

Project Description:
Founded in 2014 by Erik Voorhees, ShapeShift decentralized into a DAO in 2021, and we continue to pursue the vision of a borderless financial system built on open protocols. The roadmap for ShapeShift DAO’s product is ultimately driven by the community of FOX Token holders; our dapp has been live for over 2 years at app.shapeshift.com .

In addition to support for leading EVM-based DEX/bridge aggregators, our product is powered by THORChain, which provides users with access to native BTC, ATOM, RUNE, DOGE, and more. Our MetaMask Multichain Snap provides unique functionality by making all of these assets available entirely within Metamask. Users can hodl, and enjoy DeFi opportunities on EVM and non-EVM assets alike. We currently support both Arbitrum networks, and this application proposes a collaboration to leverage our Snap to onboard new users and liquidity to the network.

Team Members and Roles:
@hpayne (Marketing WS Lead)
@twells (Grants Lead)
tyler (Operations Lead)
0xFBL (Product WS Lead)
0xean (Engineering Lead)

Project Links:
Web app
Android app
iPhone app


Contact Information
Point of Contact: @hpayne
TG handle: @hpayne1
Twitter: @hpayne_writer
Email: hpaynemorgan@gmail.com

Do you acknowledge that your team will be subject to a KYC requirement?: Yes

Team Experience
Our team has over 15 years of combined experience building in crypto. We have specific experience with incentive programs, such as this novel campaign we ran with Optimism and Gitcoin Passport last year, which outperformed target KPIs around user onboarding (270% increase) and CAC (65% reduction). We would like to apply our learnings and expertise to help onboard, retain, and grow new users and activity on Arbitrum.

What novelty or innovation does your product bring to Arbitrum?
We bring a unique DeFi UX to Arbitrum through our Multichain Snap, which enables users to do DeFi with BTC, ATOM, DOGE, and more, all within MetaMask on app.shapeshift.com. Further details about our Snap can be read here, and our audit by MetaMask/Conensys can be viewed here.

This proposal aims to incentize Arbitrum-specific economic activity within our app, and promote the adoption of our MetaMask Snap to enable low-friction liquidity migration from non-EVM ecosystems to Arbitrum One and Arbitrum Nova.

Is your project composable with other projects on Arbitrum?
Yes. Our interface could hypothetically integrate a wide variety of high-liquidity projects on Arbitrum One or NOVA.

Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
ShapeShift is one of the few DeFi interfaces that offers a truly multichain experience beyond EVM-based blockchains and assets. In addition to high-TVL chains such as Arbitrum, we offer trading, earning and borrowing on BTC, ATOM, DOGE, and more. Our app also enjoys a highly decentralized backend, beautiful UI, and offer free trades under $1,000.

How do you measure and think about retention internally?

ShapeShift tracks aggregate DeFi signals while preserving the privacy of our users. We are currently targeting $150m monthly volume by June 2024. We look at DAU’s,WAU’s, and MAU’s – currently 30% 20% and 16% retention-- aiming at increasing our WAUs which is currently steady around 1,200. Our OP incentive campaign in 2023 saw a peak of 7,625 WAUs; we are calibrating this proposal to reach ~5,000 WAUs with a higher rate of retention.

Relevant usage metrics can be found here

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? No


Is the protocol native to Arbitrum? We currently support both Arbitrum One and NOVA.

On what other networks is the protocol deployed?
In addition to Arbitrum network(s), our interface supports:
OP Mainnet
Binance Smart Chain

What date did you deploy on Arbitrum mainnet?:
October 30 2023

Do you have a native token?
Yes, $FOX.

Past Incentivization
Over the past two years, ShapeShift DAO’s Treasury Management committee has run $FOX liquidty mining programs on Ethereum Mainnet, Gnosis Chain, and Polygon. We’d also point to our incentive program on OP Mainnet for recent overwhelming success, learnings, and best practices.

Current Incentivization
We are currently running a farming program for FOX/ETH on Ethereum Mainnet accessible though our app.

Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
Yes, we recevied a $13,000 grant from the Arbitrum Dev Tooling Domain Allocator for the integration of Arbitrum One and NOVA, plus open-source, multilingual documentation.

Protocol Performance
ShapeShift DAO prioritizes DeFi volume, and our FOX holder base. Across all DeFi opportunities, we are growing 20% MOM since November, 2023. We track on our public mixpanel pages, and are migrating all stats to be onchain verfied via Flipside.

Protocol Roadmap
The most important 2024 roadmap details for ShapeShift DAO can be found here + here

Audit History & Security Vendors
ShapeShift is in the second year of its bug bounty program on Hackenproof. As mentioned above, our Multichain Snap was audited by Consensys, and our token yield program was audited by Zokyo.

Security Incidents
ShapeShift DAO has not suffered an exploit to date.


Requested Grant Size
175,000 ARB

Justification for the size of the grant
What are we trying to accomplish?
The proposed incentive program is aimed at reaching $80,000,000 in total trading and bridging volume on Arbitrum through a points-based competition on the ShapeShift app.

How will ARB incentives be distributed?
ARB incentives will be distributed to users according to their trading and bridging volume on Arbitrum via the ShapeShift app (details in Section 4).

What grant size does this require?
We propose to distribute 120,000 ARB to reach the target volume total of $80m. At the current ARB price (~$2) this means ~$666 of volume per 1 ARB. If the ARB value increases, the total incentives required to acheive our volume targets will decrease, and vice versa. In addition, we are requesting 55,000 ARB to cover product development and marketing costs incurred by ShapeShift DAO.

What will reaching these KPIs achieve?
Reaching these KPIs will bring increased trading and bridging volume to Arbitrum, and pave the way for program replication.

How will the growth be retained post incentives?
We’re confident that our app offers the best multichain UX due to its seamless integration of EVM and non-EVM chains and assets. In addition, our Multichain Snap provides exclusive functionality that cannot be found elsewhere in DeFi. ARB incentives will help new users discover ShapeShift, and thereby use it as their default interface for transacting in and around Arbitrum.

Grant Matching
ShapeShift DAO does not have a specific matching figure at this time, but is open to discussing it futher with an Arbitrum grant advisor.

Grant Breakdown
Distribution: 120,000 ARB (69%)
Overhead: 55,000 ARB (31%)

Funding Address & Characteristics
The funding address for this grant will be a joint 2/3 multisig controlled by the Marketing & Product Workstreams at ShapeShift DAO. This setup is designed to meet security, efficiency, and KYC expectations, and will be created upon confirmation of interest in the proposed incentive program. This funding address will be added in-thread for visibility.

Treasury Address
ShapeShift DAO multisigs

Contract Address
The proposed incentive program does not require a smart contract.


The objectives of this incentive program are twofold:

  1. Increase trading volume on Arbitrum
  2. Increase bridiging volume to Arbitrum

Execution Strategy
ShapeShift DAO will implement an ARB incentive program using a points-based system scheduled in epochs.

Points System
Every user who bridges or trades $1,000 or more on Arbitrum via the ShapeShift app will score points. Points will be calculated by dividing the protocol fee paid (30 bps) by the current price of ARB. For example, if a user trades $5,000 at 30 bps, they will pay $15 in fees. If the price of ARB is $2.30 at the time of transaction, they will score a total of 6.52 points (15/2.30). Point records for all users will be maintained by ShapeShift DAO, and used to calculate total ARB rewards for distribution at the conlcusion of each epoch.

We propose to run 3 epochs with 40,000 ARB apiece. The duration of each epoch will depend on program participation, and we anticipate epoch duration to decline over time. ShapeShift DAO will track point totals throughout each epoch and use the point system to calculate total ARB distribution. At the conclusion of each epoch, users will be able to claim their ARB in the ShapeShift app. We will provide biweekly reporting as required to Arbitrum.

We intend to build the proposed incentive program into our app as illustrated in the wireframe below:

This implementation is similar to a previous incentive program run by ShapeShift in the past, called Rainfall:

What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?
The limited number of ARB/points available for each epoch is a mechnaism that will create competition. Traders will be incentivized to move as much volume as possible through our app to earn the largest share of rewards. Our product team also intends to launch a leaderboard on app.shapeshift.com to enhance the competitive aspect of the campaign.

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.

Bridging to Arbitrum
Total bridging volume targets (by epoch):

  • Best Case: $30,000,000
  • Success: $25,000,000
  • Worst Case: $10,000,000

Trading on Arbitrum
Total trading volume targets (by epoch):

  • Best Case: $30,000,000
  • Success: $25,000,000
  • Worst Case: $10,000,000

ShapeShift DAO will provide a public Dune dashboard, and access to Mixpanel for the incentive program.

Grant Timeline and Milestones
Milestone 1 Program Launch
Target Date: July 1, 2024
Description: Program launch will include a full scale marketing campaign, ideally in conjunction with Arbitrum. We are targeting July to avoid direct overlap with other incentive programs, and allow sufficient time for development of the program dashboard in our app.

Milestone 2 Epoch 1 Conclusion
Target: July 29, 2024
Description: Epoch 1 conclusion will be announced through our communication channels. Users will be informed of the timeframe in which to claim their rewards, as well as the expected launch date for Epoch 2.

Milestone 3 Epoch 2 Launch
Target: August 5, 2024
Description: Epoch 2 launch will be coincide with the claim window for Epoch 1 rewards, and last for 4 weeks.

Milestone 4 Epoch 2 Conclusion
Target: September 2, 2024
Description: Epoch 2 conclusion will be announced through our communication channels. Users will be informed of the timeframe in which to claim their rewards, as well as the expected launch date for Epoch 3.

Milestone 5 Epoch 3 Launch
Target: September 9, 2024
Description: Epoch 3 launch will be coincide with the claim window for Epoch 2 rewards, and last for 4 weeks.

Milestone 6 Epoch 3 Conclusion
Target: October 7, 2024
Description: Epoch 3 conclusion will be announced through our communication channels. Users will be informed of the timeframe in which to claim their rewards.

Milestone 7 Summative Program Report
Target: October 14, 2024
Description: ShapeShift DAO will submit all relevant data and conclusions to the Arbitrum community.

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
This grant will distribute ARB to power-users who bring bridging and trading volume to the network. In addition, these users will have the opportunity to adopt our Multichain Snap, paving the way for seamless liquidity migration from non-EVM ecosystems.

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?

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, we are prepared to comply with these requirements for the life of the program, and three months following.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Yes, we have complete confidence in our POC to provide biweekly updates in this thread that summarize our progress, and reference our OBL dashboard.

Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program?
Yes, we committ to providing a closeout report within 2 weeks of the program conclusion. This report will include summaries of work completed, final cost structure, whether any funds were returned, user acquisition costs, and any lessons the grantee feels came out of this grant.

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

1 Like

Hello @twells

Thank you for your application! We can confirm your application has been submitted and you will be assigned an advisor shortly.

1 Like

Hello @twells ,

Thank you for your application! Your advisor will be SeedLatam Gov @SEEDGov

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.


@twells Arbitrum LTIPP

1 Like