[Siren] [DRAFT] [STIP - Round 2]

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: Tishana

Project Name: Siren Protocol

Project Description:

Siren Flow combines cutting-edge blockchain technology with a polished, expert-focused user interface for an options trading experience that is as effortless as using a centralized exchange, while still being permissionless and non-custodial.

The Siren Flow options trading platform is the culmination of three years of extensive research, development and backtesting, and represents the pinnacle of on-chain options development.
Beginning with Siren’s initial launch in March 2021, the team has consistently pushed the boundaries of DeFi technology to reimagine on-chain options comprehensively. The result is an unparalleled trading experience that rivals centralized exchanges while maintaining the security and transparency of DeFi.

Siren Flow is an options trading product with an interface that is designed for experts; a full portfolio margin management system; safe, market-neutral yield for liquidity providers; and extremely competitive pricing. The Siren platform private mainnet is integrated with GMX v1 and v2 and Perennial Finance, and will soon integrate with Rage Trade.

Our goal is to grow Arbitrum and the entire crypto space as a whole by bringing traders from traditional finance and centralized exchanges into DeFi.

Team Members and Qualifications:

  • SeaFi

    • Twitter
    • Responsibilities: Product Design and Development, Engineering, Business Development
    • Qualifications: Former custody engineer at a major cryptocurrency exchange. Former hedge fund engineer. Five years full-time crypto engineering.
  • Tishana

    • Twitter
    • Responsibilities: Strategy, Investor Relations, Business Development, Marketing, Operations, Finance
    • Qualifications: Former head of product research at a Layer 1 project. Former data engineer, former investment banking. Six years full-time crypto project development.
  • Scriptus: Solidity and Backend Development

  • Tuvasa: Operations, HR, and Finance

  • Rashad: Financial Engineering

  • Nazhumdin: Frontend Development

  • Dakra: Solidity Development

  • Muir: Community Management

  • Svyelun: Operations and Accounting

  • Theros: Frontend Development

  • Laquatus: Product Manager

  • Kabloom, Artystar, and Rxndy: Social account management and content creation, long-form content creation, business development

Qualifications:

  • Experienced team in building novel DeFi mechanisms and financial products
  • Previous options products created by the Siren team have generated over $150MM in Trading Volume
  • The Siren team is composed of experienced professionals with years of work in the crypto space. The Siren team is a well-balanced mix of talented engineers and product designers, financial analysts, operations specialists, and growth marketers. Since mid-2020 the team has been building and iterating on innovative solutions for DeFi options and has continuously pushed the boundaries of what is possible using decentralized technology.

Project Links:

Website: https://siren.xyz/

Twitter: https://twitter.com/sirenprotocol

Discord: Siren.xyz

Docs: https://docs.siren.xyz/

Medium: https://sirenxyz.medium.com/

Contact Information

TG: @tishana_siren

Twitter: https://twitter.com/sirenprotocol

Email: tishana@sirenmarkets.com

Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: [Yes/No]

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: 200,000 ARB

Grant Matching: 200,000 SI

Grant Breakdown:

This proposal requests the following allocation to attract users to the Siren platform:

100,000 ARB for option liquidity mining incentives
100,000 ARB for options trading volume incentives

Matching:

1:1 ARB to SI (200,000 SI)

Funding Address: arb:0x31F0DB767484515c80f203468a7a280Eb6Ae8637

Funding Address Characteristics: Gnosis Safe Multisig, 3 of 5

Contract Address: N/A

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:

Siren Flow intends to use its Arbitrum Short Term Incentive Grant to grow the number of users and TVL on its platform and in the Arbitrum ecosystem.

DeFi options remain less popular than other DeFi derivative products like perpetual swaps. This disparity persists even though options are a much more powerful trading instrument than perps –options allow traders much greater flexibility to capture profits from crypto market volatility.

DeFi traders have not gravitated more strongly towards on-chain options platforms because technical challenges have made the trading experience challenging. Most importantly, the lack of portfolio margin functionality has made it prohibitively expensive to trade popular “multi-leg” options strategies like spreads, straddles, strangles and butterflies. Siren Flow adds portfolio margin functionality and many other innovative features to make it DeFi’s only professional-grade options trading platform.

Siren Flow offers the world’s best crypto options trading experience – powerful, convenient, fast, low-fee, secure and decentralized. So, Siren Flow will vastly expand the on-chain options market by attracting crypto options traders who want both the convenient and powerful trading tools offered by centralized exchanges and the security of trading on-chain.

The objective of this grant is to introduce traders to Siren Flow and promote the launch Consequently, Siren Flow on Arbitrum will become DeFi’s leading platform for crypto options trading, expanding the TVL of both Siren Flow and Arbitrum.

Key Performance Indicators (KPIs):

Number of Traders

  • New traders (first trade within the past 30 days)
  • New liquidity providers
  • Number of traders by size
    • Large/Medium/Small based on total wallet holdings
  • New derivatives traders
    • No previous DeFi transactions in their wallet

Transaction Volume

  • Total number of trades
  • Number of trades by each trader group
  • Number of trades involving single contracts (calls/puts)
  • Number of trades involving multi-leg strategies
    • Can be broken down by strategy
  • Number of trades requiring margin

Transaction Value

  • Total value of trades by all trader types
  • Value of trades by each trader size group
  • Value of trades involving multi-leg strategies
  • Value of trades requiring margin

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:

Siren Flow will use its grant to offer rewards to traders based on account trading volume and each trade’s impact on the liquidity of the protocol, enabling the system to incentivize liquidity via favorable trading flows.

Siren Flow on Arbitrum includes numerous technical innovations to revolutionize DeFi options trading –

  • Portfolio Margin – Siren Flow introduces a sophisticated margin system, allowing traders to buy partially collateralized options and execute complex options positions. With the ability to use stablecoin assets as collateral, traders can engage in more advanced trading strategies, including vertical spreads, butterflies, calendar spreads, and straddles.

  • Hybrid Pricing Model – Siren Flow employs a unique hybrid on-chain/off-chain RFQ (request-for-quote) system to deliver competitive pricing for options trades. This innovation allows Siren Flow to offer pricing comparable to centralized exchange (CEX) derivatives while retaining the benefits of self-custody and decentralized trading.

  • Unified Delta-Hedged Liquidity Pool – Siren Flow introduces a new pool structure that aggregates liquidity and uses stable coins as collateral for all options. This innovative model enables traders to purchase options for any asset with a reliable price feed, greatly expanding the range of available options and deepening liquidity for any individual asset. By integrating automatic delta-hedging of pool exposure with perpetual and DEX protocols, Siren Flow provides LPs with yield opportunities uncorrelated with market movements.

These innovations will attract new and existing DeFi options traders to Siren Flow, growing the number of users and the TVL of both Siren Flow and Arbitrum. Existing DeFi options traders will switch to Siren Flow from other less robust and less capital-efficient on-chain options protocols from other ecosystems. Also, Siren Flow’s powerful, convenient features and on-chain security will attract many new DeFi options traders from centralized options trading platforms.

A grant will help Siren Flow accelerate user growth for its platform, propagating its innovative approach to DeFi options and helping grow the Arbitrum ecosystem.

Justification for the size of the grant:

Siren is currently live on Arbitrum in a private, request-only mainnet beta. Siren Flow is a product designed for expert power users, and we are currently perfecting the trading experience. We intend to use the Arbiturm Grant as an incentive program for our public mainnet launch in November 2023.

Participation in the Arbitrum grant program will bring visibility to the Siren project and show that we are a valued part of the Arbitrum community. A modest ARB grant is the appropriate size to provide incentives for traders to participate in our public mainnet launch.

Execution Strategy:

  1. Traders
    Traders will earn rewards based on a formula that takes into account trading volume and trade’s impact on the liquidity of the protocol, which will enable the system to incentivize liquidity via favorable trading flows. Rewards will be distributed weekly and will be capped per contract to avoid wash trading. Caps will be a function of bid-ask spread, fees, exposure, and, the time the position is held.
  2. Liquidity Providers
    LPs will be eligible on a weekly basis for a share of ARB based on their capital proportion in the pool.

Grant Timeline:

The ARB incentives will be vested over 6 months from public mainnet launch in November, 2023…

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?:

Siren Flow was created specifically for Arbitrum. All previous versions of the project have been sunset, and Siren Flow represents the culmination of three years of dedicated product research, development, and user testing which we are bringing exclusively to Arbitrum.

On what other networks is the protocol deployed?:

The protocol is currently not deployed on any other networks. Previous legacy versions of the software were deployed on Ethereum Mainnet and Polygon.

What date did you deploy on Arbitrum?:

  • Siren Flow has been deployed on Arbitrum Testnet since April 10, 2023.
  • Siren Flow Private Mainnet was deployed on Arbitrum on June 13, 2023.
  • Siren Flow Public Mainnet will be deployed in November 2023.

Protocol Performance:

Siren Lemuria on the Polygon network generated ~$80MM of trading volume on the Polygon network. Peak TVL was $25MM.

Siren Flow Testnet Performance Metrics:

  • Dates live: June 13, 2023 to August 18, 2023
  • Total volume traded: $3,447,911,072 ($3.4B)
  • Total premium traded: $18,448,600 ($18.4MM)
  • Average daily volume: $21,822,421 ($21.8 MM)
  • Individual participating addresses: 1547

Protocol Roadmap:

The Siren private mainnet launch was deployed on Arbitrum on June 13, 2023. The product is currently available for demo, and access can be requested here.

The public version of Siren Flow will be launched in November 2023.

Siren Flow will be expanded to support 5+ assets in 1Q2024.

Audit History:

Ackee Blockchain Audit
Quantstamp Audit

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?:

Yes. We will provide a very detailed Dune dashboard that is easy to follow along, along with frequent updates.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?

Yes, we plan to deploy a Dune dashboard to provide data, as well as ensure our team posts bi-weekly program updates on the Arbitrum Forum thread.

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

Unlisting until Stable Labs gives us direction to make Round 2 Applications Public.