[Sommelier Finance] LTIPP Application FINAL
SECTION 1: APPLICANT INFORMATION
Applicant Name: Sun Raghupathi, Co-Founder of Seven Seas
Project Name: Seven Seas, a contributor in the Sommelier ecosystem
Project Description: Sommelier is an innovative decentralized asset management protocol that enables DeFi vaults to ingest real-time market information and dynamically adapt to market conditions. Seven Seas, a team of data scientists and smart contract engineers, is the most successful vault designer in the Sommelier ecosystem.
Team Members and Roles:
Seven Seas
CEO: Sunand Raghupathi is responsible for overseeing day-to-day operations of Seven Seas, business development and vault design.
COO: Stephanie Vaughan is responsible for operations and compliance and assists in business development.
CTO: Joseph Terrigno is responsible for vault monitoring and assists in vault design.
CSO: Phil Bal is responsible for managing Seven Seas’ technology stack.
Smart Contract Lead: Crispy Mangoes is responsible for vault smart contract development and deployment.
Project Links:
Sommelier
Sommelier Website: https://www.sommelier.finance
Dapp: https://app.sommelier.finance
Sommelier Protocol Docs: What is Sommelier | Sommelier Documentation
Github: Peggy JV, Inc · GitHub
Audits: Your dynamic DeFi strategy connoisseur
Bug Bounty: Sommelier Bug Bounties | Immunefi
Twitter: https://twitter.com/sommfinance
Telegram: Telegram: Contact @getsomm
Discord: Sommelier
Seven Seas
Seven Seas Website: https://sevenseas.capital/
Twitter: https://twitter.com/sevenseas_c
Contact Information
Sun Raghupathi
Forum name: SevenSeas
Telegram: @sunraghupathi
Twitter: @sunandr_
Email: community@7seas.capital
Do you acknowledge that your team will be subject to a KYC requirement?: Yes
SECTION 2A: Team and Product Information
Team experience:
Founded in 2022, Seven Seas is a team of dedicated professionals, including quantitative researchers and software developers, whose mission is to create innovative DeFi strategies.
In addition to designing vaults that have attracted and secured over $95M of TVL (as of March 14, 2024), Seven Seas has helped its vaults expertly navigate the market volatility of Black Swan events like the USDC de-peg of March 2023 or the Curve hacks of July 2023.
Seven Seas has been awarded developer grants from Aave DAO and FRAX for vault-related smart contract work. Likewise, Lido, Aave DAO, ether.fi, Swell and Stader have co-incentivized vaults designed by Seven Seas.
What novelty or innovation does your product bring to Arbitrum?
Sommelier vaults are the only multi-strategy vaults on EVM networks that intake real-time market information to dynamically adapt to market conditions all while remaining decentralized (e.g., not managed through a multi-sig). This means that Sommelier vaults can respond to arbitrage opportunities, market volatility, market inefficiencies, etc. on the order of hours where other competing products don’t react at all because they lack that agility (e.g., they are pure auto-compounders or only do the same basic DeFi strategy regardless of market conditions).
This has made Sommelier vaults some of the largest and most sophisticated market participants in DeFi. On Ethereum, Seven Seas vaults through Sommelier have over $700M of leveraged stETH exposure (example of one vault as of March 15 and shown below and here).
They have also done concentrated liquidity provision on over $10B (example here and shown below) of ETH-ETH LST trading volume.
By having Sommelier vaults on Arbitrum, the Arbitrum ecosystem gains a market participant that will increase liquidity efficiency on DEXs and lending markets.
For users, Sommelier vaults streamline DeFi UX by providing a single place to put their assets and earn risk-adjusted yield. Importantly, Sommelier vaults don’t grow stale because they are able to ingest real-time information, allowing them to adapt to different market conditions. Additionally, Sommelier’s modular smart contract architecture allows the same vault to gain new DeFi integrations through new smart contract adapters.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes. Each Sommelier vault launched on Arbitrum will be interacting with at least one DeFi protocol. This is because Sommelier vaults act as an optimization layer between the underlying DeFi protocol (e.g., Uniswap, Aave, etc.) and the vault depositor.
As an example, when a user comes to our Real Yield ETH vault on Arbitrum, the vault takes their deposited ETH and dynamically LPs it on Uniswap v3 ($4.4M as of March 15) and leverage stakes it on Aave ($2.4M for $38.4M of wstETH exposure as of March 15). Because of the expertise of our team at Seven Seas, an outsized portion of the trading volume gets routed to the vault, which benefits Uniswap. Similarly, as a leveraged staker, it increases capital efficiency of lending markets through its real-time adjustments to interest rates and borrowing capacity.
Additionally, Sommelier vault tokens are ERC-4626 compliant, which means they are also able to be used as collateral on money markets, CDPs or in LP token pairs.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
In our opinion, there is no protocol that has shown the combination of highly dynamic vaults that also have considerable amounts of TVL. We believe this statement to be true regardless of whether we’re talking about Arbitrum or in broader DeFi.
However, here are our thoughts on relevant protocols that already have a presence on Arbitrum:
- Beefy: Beefy vaults primarily focus on simple auto-compounding
- JonesDAO: JonesDAO vaults have thus far focused on Options strategies. While our vaults have not focused on Options, it’s possible that we could one day launch vaults that focus on Options or vaults that incorporate Options as a strategy.
- Gamma Strategies: Gamma vaults focus on DEX liquidity provision of both stable and volatile pairs. DEX liquidity provision is just one of the many DeFi strategies that our vaults run and we have historically focused on just stable pairs.
How do you measure and think about retention internally? (metrics, target KPIs)
TVL is the #1 KPI at Sommelier. To achieve this KPI, we develop products that have long-term appeal. Sommelier vaults are intended to be a one-stop-shop for users seeking a sustainable way to optimize a given asset or gain exposure to a specific ecosystem. Once a user deposits into a vault, their experience is hands-off and passive. However, that is not the case for their capital which is being actively optimized by the vault across a number of DeFi opportunities. As market conditions change, the vault adapts, all without any required action from the user. For this reason, many users are comfortable “setting and forgetting” their Sommelier deposit because they know their capital will remain active. This makes Sommelier TVL relatively sticky.
On Ethereum, this has translated to a loyal following, and in turn consistent, steady TVL growth (shown in chart below).
Relevant usage metrics:
Daily Active Users: DAUs are not as relevant for Sommelier vaults because we want users to have a hands-off experience and enjoy the peace of mind that comes with using dynamic vaults that stay optimized. This means that even though a user is not interacting with the Dapp daily, the vault still delivers the user daily utility and also generates daily fees for the protocol.
However, in terms of total users, there are 195 users in the Real Yield ETH vault on Arbitrum and 19 users in the Real Yield USD vault on Arbitrum (as of March 15).
Daily User Growth: We believe that TVL growth is a better indicator of Sommelier’s success.
Daily Transaction Count: As previously stated, our vaults are intended to provide users with a hands-off experience. We believe TVL growth is a better indicator of Sommelier’s success.
Daily Protocol Fee: Sommelier vaults generate fees that are shared between the strategist developing the vault and the Sommelier’s SOMM stakers. While each vault has its own fee schedule, The Real Yield ETH and USD vaults on Arbitrum charge a 1% platform fee and a 20% performance fee.
Daily Transaction Fee: As previously stated, our vaults are intended to provide users with a hands-off experience. We believe TVL growth is a better indicator of Sommelier’s success. However, a typical deposit into a vault on Arbitrum costs less than a dollar ($0.17 as of March 15).
Incentivized User List & Gini: The Sommelier community has provided incentives in SOMM, the native token of the Sommelier blockchain. SOMM is used to incentivize deposits into the vaults.
Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-cont: [Yes/No]
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):
We did not utilize a consultant on this draft. Like other applicants, we received feedback from our assigned advisor, JoJo.
SECTION 2B: PROTOCOL DETAILS
Is the protocol native to Arbitrum?:
The Real Yield ETH and Real Yield USD vaults have been deployed on Arbitrum. However, Sommelier vaults are not exclusive to Arbitrum.
On what other networks is the protocol deployed?:
Ethereum
What date did you deploy on Arbitrum mainnet?:
Real Yield ETH deployment: February 7, 2024 Arbitrum Transaction Hash (Txhash) Details | Arbiscan
Real Yield USD deployment: February 6, 2024
Do you have a native token?:
Seven Seas does not have a native token, but Sommelier does. Sommelier’s native token is SOMM. More about the SOMM token can be found at Tokenomics | Sommelier Documentation
Past Incentivization:
Vaults on Sommelier are typically launched with an accompanying liquidity mining program. These programs run for a period of 30 days at a time and are renewed on an as needed basis. Importantly, all liquidity mining programs funded with SOMM tokens must be approved through Sommelier community governance. In the past, Sommelier vaults have also received co-incentives from Lido, Aave DAO, ether.fi, Swell and Stader. Overall, liquidity mining programs were used effectively throughout 2023 to grow Sommelier TVL from $1M to $65M on Ethereum mainnet.
A liquidity mining program of 250,000 SOMM (~$50,000) over 30 days began on February 14, 2024 with the launch of the Real Yield ETH vault. At the end of the first program on March 15, the vault had a TVL of $7.0M.
A liquidity mining program of 250,000 SOMM (~$50,000) over 30 days began on February 22, 2024 with the launch of the Real Yield USD vault. As of March 15, the vault has a TVL of $2.5M.
Current Incentivization:
The next liquidity mining program for Real Yield ETH on Arbitrum is set to begin on March 17 distributing 200,000 SOMM (~$40,000) over a period of 30 days. At the end of the first program on March 15, the vault had a TVL of $7.0M.
A 250,000 SOMM (~$50,000) program began on February 22, 2024 with the launch of the Real Yield USD vault. As of March 15, the vault has a TVL of $2.5M.
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
Yes. Seven Seas has received a grant (ongoing) from the Arbitrum Foundation to develop vaults, create efficient liquidity, and attract net new capital to Arbitrum. The total grant amount is $115k with $25k up front (to cover audit and development costs) and $30k for each of three milestones based on features and TVL.
So far, the first milestone of deploying Real Yield ETH/USD and reaching $5M TVL has been achieved.
Protocol Performance:
TVL: Sommelier stands out as one of the fastest growing DeFi protocols on Ethereum Mainnet over the past year. 2023 commenced with a modest $1M in TVL and reached a high of $65M by year end. This translates to a remarkable month-over-month growth rate of 46% for the year. The momentum has continued in 2024 with TVL quickly approaching $100M.
Notably, Sommelier claims the title of the 4th largest yield aggregator by TVL on Ethereum. What’s even more noteworthy is Sommelier’s ETH LST vault, which ranks as the 3rd largest in DeFi, is also the highest yielding (~9% base yield since Apr 2023) surpassing LST vaults by more-established protocols.
For 2024, a dominant theme for Sommelier and Seven Seas will be expansion to the L2s and alt-EVMs. Arbitrum is a critical stop along this journey, and accordingly, is the first L2 to have a Sommelier vault. The reception we’ve received on Arbitrum thus far has been strong with ~$9.5M in TVL in the first 4 weeks.
User Base: Sommelier has cultivated a thriving community with over 2,500 current vault users.
Dynamic Liquidity Optimization: On Ethereum, Sommelier vaults have over $700M of leveraged stETH exposure. They have also done concentrated liquidity provision on over $10B of ETH-ETH LST trading volume making them the largest on-chain DEX liquidity provider for wstETH.
Protocol Roadmap:
A major roadmap item was recently completed which was the integration of Axelar’s generalized message passing into the Sommelier protocol. This allowed Sommelier to launch its first vaults on Arbitrum.
Our high-level goals in the Arbitrum ecosystem are (1) creating strong liquidity for stablecoins and ETH liquid (re)staking tokens and (2) providing users with simple access to best-in-class DeFi yields.
In accordance with these goals, the future roadmap on Arbitrum consists of new vault launches, continued growth of existing vaults, and increased distribution.
-
Vault Launches:
In the first 4 weeks of being on Arbitrum, we have already launched the Real Yield ETH and Real Yield USD vaults which have gained over $9M in aggregate TVL. We are in advanced conversations with other protocols on Arbitrum to launch LST, LRT and stablecoin-focused vaults. We plan to launch at least one vault in each of these areas over the remainder of Q1 and Q2. -
Growing Existing Vaults:
Our Real Yield ETH vault does a combination leveraged ETH staking and liquidity providing for ETH/LST pairs on Arbitrum. Real Yield USD provides stablecoin liquidity and does lending optimization.As these vaults scale in TVL we will add new yield capabilities such as new lending protocols or DEXs for LPing.
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Increasing Distribution:
Our mission is to increase the accessibility of sophisticated DeFi strategies. Bringing our vaults to new user bases through distribution partners is one important component of this mission. Currently some of our vaults are available on Superform (facilitating simple cross-chain deposits) and OKX (accessing a wider range of users).Making our Arbitrum vaults available through distribution partners is a priority for us. -
Vault Composability:
Sommelier vault tokens are ERC-4626 compliant, which means they are also able to be used as collateral on money markets, CDPs or in LP token pairs. Examples of these integrations outside Arbitrum include Sturdy, Levana, and Osmosis. We will also pursue similar DeFi integrations with protocols on Arbitrum.
Audit History & Security Vendors:
Sommelier and Seven Seas take security very seriously. Smart contract adaptors allow Sommelier vaults to take positions in DeFi protocols. Every Smart contract adaptor on Sommelier has been independently audited by 0xMacro. These audits can be found here and here.
Sommelier has an active $50,000 bug bounty program through Immunefi.
Security Incidents:
There have been no exploits.
SECTION 3: 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: 450,000 ARB
Justification for the size of the grant:
Our target outcome with this proposal is to Sommelier vaults to $40M in TVL over the incentive period. Our vaults create DeFi liquidity which results in more integrations (e.g. oracles), higher supply caps on lending markets, and greater ecosystem stability.
Our ask of 450k ARB (~$0.9M) over twelve weeks is ~9% APY on $40M TVL. With a base APY of ~13% the total is ~22% APY.
We believe this number is compelling enough to overcome switching costs and drive significant inflows into the Arbitrum ecosystem. Additionally, growth in our vaults creates a positive feedback loop for the ecosystem: more TVL results in more liquidity, which creates more DeFi utility, which in turn boosts vault APY and attracts more TVL.
Importantly, every dollar deposited into Sommelier vaults has a magnified impact in the Arbitrum ecosystem. Assuming the Real Yield ETH vault, which will receive 80% of our requested ARB, is composed of 50% leveraged staking and 50% LP, at 14x leverage on Aave, $1 into the vault equates to $7 of LST collateral on Aave and $0.50 of liquidity LP’d into 1 tick on Uniswap. Put simply, every $1 deposit into the Real Yield ETH vault on Sommelier is amplified throughout the Arbitrum ecosystem by 5x-8x.
Keeping in mind that the vault is dynamic and allocations and TVL may change, a recent snapshot of the vault shows the following:
Total TVL: $6.9M
Leverage Staking Exposure: $35.5M ($2.5M at 14x leverage)
ETH-ETH LST Concentrated Liquidity: $4.4M
On the dynamic liquidity previous side, our existing stETH liquidity supports a $1M stETH buy with 0.02% slippage.
Finally, TVL in our vaults is incredibly sticky. Since inception our vaults have maintained an 85% retention rate. This drives our strategy of quickly attracting TVL using incentives and maintaining it with our high base performance.
Grant Matching:
N/A
Grant Breakdown:
80% to Real Yield ETH, 20% to bootstrap remaining products (e.g. RYUSD, new LRT vaults, etc).
Overview of Real Yield ETH
Real Yield ETH is a dynamic multi-strategy vault that allocates (w)stETH, rETH and cbETH across Aave and Uniswap v3. The goal of the vault is to generate the highest ETH-denominated returns while only taking exposure to those assets and protocols. Within those constraints, the vault optimizes across 4 core strategies (listed below). Importantly, the vault has full discretion to allocate entirely to one of these strategies or spread its assets across multiple of these strategies, depending on what is optimal for returns.
- Leveraged Staking on Aave: Collateralizing the LST, borrowing ETH, etc. A minimum health factor is enforced on each rebalance and the vault is monitored to mitigate liquidation risk.
- ETH-ETH LST LPing on Uniswap: Self explanatory. Liquidity ranges are monitored and dynamically adjusted to capture volume and minimize impermanent loss.
- LST Peg Arbitrage: The vault opportunistically buys the ETH LST (e.g., wstETH) when it de-pegs providing an incremental yield opportunity. These micro de-pegs occur frequently, especially in times of market volatility, so the vault is monitoring for them.
- Opportunistic Farming: From time to time, Aave and Uniswap have offered their own incentives which the vault will farm. To be clear, the vault will NOT farm its own ARB incentives for the users.
This multi-strategy approach has allowed the Real Yield ETH deployments on Arbitrum and Ethereum to substantially outperform stETH as shown in the comparison chart below. Since the Arbitrum vault has only been live for ~1 month, we show base yield average for the first 27 days of data (as of writing). To highlight the longevity of this type of strategy, we also show the base yield average for the past 90 days on the Ethereum deployment, which has been running for 11 months. In both cases, Real Yield ETH consistently outperforms.
Our rationale for concentration incentives in RYETH is as follows: concentrating liquidity in the core RYETH product creates the strongest network effects for Arbitrum. Additionally, as we launch new products such as LRT vaults, Real Yield ETH can allocate capital to those vaults. RYETH acts as a primary entrypoint for users in the ecosystem while allocating capital to accomplish new strategic initiatives such as establishing LRT liquidity. This is also beneficial from a UX perspective (no frictions resulting from having too many competing choices).
Funding Address:
0x85974Dc8978De3Ba84E8B1D0CC67b54F40028Eda
Funding Address Characteristics:
0x85974Dc8978De3Ba84E8B1D0CC67b54F40028Eda is a 4/7 multi-sig of unique signers and private keys securely stored.
Treasury Address: The Sommelier protocol has a community pool that holds approximately 117M SOMM. It is held in an incentives module on the Sommelier chain which is not a smart contract. It is controlled by on-chain Sommelier protocol governance and is not controlled by any multi-sig.
However, when a SOMM incentive program is running on an Ethereum vault, the incentives are distributed to a staking contract. A mult-sig, 0x7340D1FeCD4B64A4ac34f826B21c945d44d7407F, is able to set the parameters and also start the incentive program on that contract.
The address multi-sig, 0x85974Dc8978De3Ba84E8B1D0CC67b54F40028Eda, plays a similar role for SOMM incentive programs on Arbitrum.
Contract Address:
The Merkl incentive distributor contract that users will be able to claim their ARB rewards from has been deployed here: IncentiveDistributor | Address 0x6d6444b54fee95e3c7b15c69efde0f0eb3611445 | Arbiscan
An off-chain algorithm will be used to calculate the rewards per user with the Merkl hash being posted to the distribution contract.
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives:
The goal of the grant proposal is to rapidly scale up TVL in our vaults (Real Yield ETH, Real Yield USD, and new launches) to foster increased liquidity in the Arbitrum ecosystem.
Increased liquidity creates the DeFi flywheel:
- Oracle integrations
- Increased supply caps on lending markets
- Better UX for swappers
- Ecosystem stability / reduced risk perception
- More DeFi integrations / token utility
Execution Strategy:
ARB will be distributed as weekly liquidity mining rewards to encourage users to deposit into the vaults, which in turn increases Sommelier/Seven Seas’ TVL on Arbitrum. A simplistic explanation of the distribution function is summarized as:
Individual’s ARB = % of vault TVL x bonding multiplier x time
When a user deposits into a Sommelier vault, they receive a receipt token representing their position in the vault. In the case of Real Yield ETH, it is RYETH tokens. By holding these tokens, the user earns the base organic yield from the vault’s strategies (e.g., leveraged staking, LPing, etc.). As part of their deposit, users will be presented the option to bond (e.g., lock) their RYETH tokens for 1, 2, or 3 weeks to earn the ARB rewards. A 1 week bond amplifies their proportional share of the rewards by 1.1x, a 2 week lock by 1.3x and a 3 week lock by 1.5x. Bonding makes the TVL “sticky” because it functions as a way to lock the TVL on the Sommelier protocol and requires users to wait out the bonding period before they can withdraw from the vault. An additional “stickiness” benefit is that once a user initiates the unbond, they earn ARB at a 1x rate instead of their amplified rate.
As an example, I deposit and select a 3 week bond on Day 1 of the 12 week period. I earn ARB rewards at my 1.5x amplified rate while I am bonded. In week 7, I decide I’d like to withdraw from the vault and begin the unbonding process. Since I selected 3 weeks, I must now wait 3 weeks more until my unbond is completed to withdraw my LP tokens from the bonding contract and then withdraw from the vault. During those final 3 weeks I still earn ARB, but at a 1x rate, not the 1.5x amplified rate I was earning in weeks 1-6 prior to initiating the unbond.
Rewards will be distributed at the same weekly rate over the course of the 12 week program. These rewards are also claimable weekly.
ARB will be distributed via a claim contract (already deployed) allowing vault users to claim at their convenience. An off-chain algorithm will be used to calculate the rewards per user with the Merkle hash being posted to the distribution contract. Importantly, Sommelier/Seven Seas is not selling ARB, but rather it is being passed through directly to users.
Because Real Yield ETH is our flagship vault, we intend on allocating 80% of the ARB rewards to help make that vaultone of, if not the largest, LST vault on Arbitrum. We plan to also distribute 5% of the ARB to other vaults like, Real Yield USD, as well as 7.5% to other planned LST vault and 7.5% to other LRT vaults. Since partnerships for theLRT and LST vaults are not yet finalized, and therefore the vaults are not yet live, we reserve the right to reallocate these earmarked ARB rewards back to Real Yield ETH/USD or another to-be-released Sommelier vault on Arbitrum.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?
As mentioned above, when a user deposits into a Sommelier vault, they receive a receipt token representing their position in the vault. In the case of Real Yield ETH, it is RYETH tokens. By holding these tokens, the user earns the base organic yield from the vault’s strategies (e.g., leveraged staking, LPing, etc.). As part of their deposit, users will be presented the option to bond (e.g., lock) their RYETH tokens for 1, 2, or 3 weeks to earn the ARB rewards. A 1 week bond amplifies their proportional share of the rewards by 1.1x, a 2 week lock by 1.3x and a 3 week lock by 1.5x. Bonding makes the TVL “sticky” because it functions as a way to lock the TVL on the Sommelier protocol and requires users to wait out the bonding period before they can withdraw from the vault. An additional “stickiness” benefit is that once a user initiates the unbond, they earn ARB at a 1x rate instead of their amplified rate.
As an example, I deposit and select a 3 week bond on Day 1 of the 12 week period. I earn ARB rewards at my 1.5x amplified rate while I am bonded. In week 7, I decide I’d like to withdraw from the vault and begin the unbonding process. Since I selected 3 weeks, I must now wait 3 weeks more until my unbond is completed to withdraw my LP tokens from the bonding contract and then withdraw from the vault. During those final 3 weeks I still earn ARB, but at a 1x rate, not the 1.5x amplified rate I was earning in weeks 1-6 prior to initiating the unbond.
Finally, our vaults are inherently sticky: they optimize over numerous DeFi positions to achieve the highest yield, which eliminates the dependence on incentives.
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.
TVL will be the primary KPI used to measure success in achieving the grant objectives. Outside of the Sommelier Dapp, Sommelier’s Arbitrum TVL can be independently verified on DeFi Llama.
TVL is the appropriate metric because it demonstrates how attractive users find the vaults and also represents the amount of optimized liquidity in the Arbitrum ecosystem.
Grant Timeline and Milestones:
| Vault | Week 4 TVL Target | Week 8 TVL Target | Week 12 TVL Target |
|---|---|---|---|
| Real Yield ETH | $13M | $21M | $30M |
| Other Vaults | $4M | $7M | $10M |
| Total | $17M | $28M | $40M |
Since Real Yield ETH is already launched, considerable focus will be on increasing the Arbitrum community’s awareness of the vault, enhancing its capabilities (and therefore resilience and scalability), securing distribution channels and partnering with other protocols to integrate the ERC-4626 vault token for DeFi composability.
Vault Launches: At least one new vault launch per month of the program. These vaults will be part of the LST, LRT or stablecoin categories.
Vault Capabilities: As of March 3, 2024, Real Yield ETH can only leverage stake through Aave and LP through Uniswap. Each month a new DEX or money market will be added to the vault’s capabilities.
Distribution: We will have each vault listed on Superform within one week of launch.
We believe the milestones outlined are appropriate within the given time frame.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
The grant program will help to rapidly scale TVL in our vaults, which directly improves liquidity and efficiency of DeFi in the Arbitrum ecosystem. As an example, our Real Yield ETH vault on Ethereum Mainnet (~$50M TVL) has facilitated over $10B in volume for liquid staking tokens. At the same time, our vaults are the largest operators of leveraged staking with over $700M in LST exposure. We aim to bring this efficiency and scalable yield to Arbitrum (and are already doing so with our Real Yield ETH vault on Arbitrum).
In addition to creating strong liquidity, our vaults provide simplified entry points into the Arbitrum ecosystem for users. When users deposit into our vaults, their capital is automatically deployed efficiently across DeFi in Arbitrum.
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
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 5. Along with this list, please answer the following:
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
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