Stake DAO STIP Addendum

  1. Can you provide a link to your previous STIP proposal (round 1 or backfund)?

  2. Amount requested in arb?

    • 125,000 ARB
  3. Amount received during STIP?

    • 200,000 ARB
  4. What date did you start the incentive program and what date did it end?

    • 2024-03-14 (KYC provider lost documents which lead to a 3 months delay in the distribution of the grant).

    • The incentive program is still in progress due to the delayed delivery of the grant. We will keep deploying the grant at a rate of 25k ARB per week until the start of the STIP-Bridge campaign. The remaining amount (which we expect to be 75k ARB) is deducted from our STIP Bridge request, and will be deployed alongside the STIP Bridge grant, which explains why we are only asking for 125,000 ARB instead of the max 200,000 that we could have asked under the guidelines.

  5. Could you provide the links to the bi-weekly STIP performance reports and Openblocks Dashboard?

  6. Could you provide the KPI(s) that you deem relevant for your protocol, both in absolute terms and percentage change, month over month, for the first of each month starting from October 2023 until April 2024, including the extremes?

  1. [Optional] Any lessons learned from the previous STIP round?

    • We noticed that incentives directed to Stake DAO strategies were leading to short term TVL increase and new TVL mainly coming from somewhere else on Arbitrum. We therefore focused our deployment of the grant on bringing products from Ethereum to Arbitrum, to make sure that people had to bridge and add value to Arbitrum if they want to benefit it, while having no reason to go back to mainnet when the incentives will stop. We believe that this is the best way to convert this short term incentive plan into long term added value for Arbitrum.

    • We also understood it was easier and probably more efficient to deploy the grant in a flat way rather than to ramp it up.

New Plans for STIP Bridge

  1. Do you plan to use the incentives in the same ways* as highlighted in Section 3 of the STIP proposal?

    • No
  2. [Only if answered “no” to the previous question] How will the incentive distribution change in terms of mechanisms and products?

    • The overall idea will stay the same, but we will focus on bringing long term value added to Arbitrum by focusing on bringing mainnet products on Arbitrum, and limiting the basic liquidity mining rewards. We will increase the number of services and options for users, so that Arbitrum becomes a much more complete place for our products than even mainnet. A good example is the financing of various lending markets for our products.

    • We would like to also extend the use of our grant, not only to our Curve, but also to our Pendle products. This will double the surface of our grant usage, so by asking for a similar amount, we are de facto stretching the grant on a broader range of services.

  3. Could you provide the addresses involved in the STIP Bridge initiative (multisig to receive funds, contracts for distribution, and any other relevant contract involved), and highlight if they changed compared to the previous STIP proposal?

    1. Recipient Multisig: 0x3B985f06D624C74F270daeCcDb65DcC6ee582372

    2. asdCRV liquidity gauge: 0x25E822B65a58Ce1A53DbC327d4fA489351FB1Df0

    3. asdCRV/CRV Ajna pool: 0x17c47c760f10060cf3cec8f8793bf38fe1740f9c

    4. FraxBP strategy: 0x9B72d53bb8EF5B42046ea6EDdDF3c95571640685

    5. crvUSD/USDC.e strategy: 0x0dBd661c988F9a28095CA200a683A082505f441E

    6. vasdCRV strategy: 0xd038Af8545662af0625A11d15b18015fcD28B7FB

  4. Could you share any feedback or suggestions on what could be improved in future incentive programs, what were the pain points and what was your general evaluation of the experience?

  • Our main suggestions would be:
  1. Having one point of contact with the Arbitrum team/foundation. We currently have 10 groups, all with different people, and when we were stuck with the KYC process, nobody knew how to deal with the issue or whom we should be redirected to.

  2. Better overseeing of the KYC process since it was really awful and took three months for us, while we never had this issue with other grants or investors who yet required KYC

  • Overall very happy with the rest, and we would like to extend our thanks to the Arbitrum DAO and our wish to keep working together!
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Hello @MevPanda ,

Thank you for your application! Your advisor will be @JoJo.

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.

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ehy @MevPanda please join the discord!

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Hello Jojo! I have just joined the Discord.

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Following the ARDC recommendation, we believe that this proposed addendum requires further review by the DAO. Therefore, we challenge its optimistic approval so that the delegates can form an opinion on the merit of renewing the incentives received during the STIP.

We are publishing the review conducted by Blockworks for greater visibility and advice to the applicant to provide an explanation for the concerns raised.

“Original STIP incentives still ongoing: began distributing incentives in the middle of March at a pace of 5K ARB per week. At the beginning of May, jacked weekly distributions up to 25K ARB per week. Asking for a lowered amount to compensate, however, this could be seen as an unfair advantage since StakeDAO has been one of the only Arbitrum protocols with increased yields in April/May. KPIs quickly plateaued with weekly incentives at 5K ARB, recently saw an uptick, likely due to 5x increase in weekly incentives provided. Daily unique wallets constantly below 10 during 5K ARB per week period.”

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Thanks Cattin for your valuable comment.
I would just like to add a bit of light on this to explain why what you mentioned happened.

We began distributing incentives only in March because that’s when we received the grant. the delay was not coming from Stake DAO. The KYC provider, Fractal, lost our documents, and failed to let us know. When we were asking to various people “what’s happening with the grant, why didn’t we receive it” to the various groups we have with stakeholders of the Arbitrum ecosystem, the answer was always “talk to someone else”. We had a lot of groups with different persons supposed to be in charge of the grant distribution, which was not optimal for aligning the communication and getting a clear answer. In the end, it took us more than three months to sort the issue and receive the grants.

When we received it, we wondered “should we distribute everything until the deadline of the program, or at the initial rate forecast by the program?”. We asked the question in various groups but never got an answer. We therefore chose to distribute at the initial rate planned by our program as we thought it was innefficient to start depositing directly at an accelerated rate. However, when discussing the STIP-bridge program, it appeared we made the wrong decision.
We therefore, advised by members of the Arbitrum community, accelerated the distribution. It was also always the idea to ramp up incentives, so that TVL progressively accumulates (we figured TVL was more sticky that way, then if we were distributing a flat amount).

Due to this delay caused by Fractal, we asked for a lower amount as part of the STIP bridge, since we will still have some tokens to distribute when the bridge starts. I think that makes sense, it’s what we were advised to do as well.

I just want to make sure we don’t get the combined disadvantage of being told that we distribute the grant too slowly but have an unfair advantage for distributing it too quickly.

Finally, we have great plans for the bridge. We want to expand it to sdPENDLE, which will be massive. We believe we can bring a lot of liquidity. I hope you can understand that, and look forward to reading the outcome of the vote!

Anyway, thanks again for giving us the opportunity to take part in this RFP! I hope we will keep working together!

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On behalf of the Arbitrum community members who delegated their voting power to us, we’re voting Against this proposal.

While Stake DAO saw some solid TVL growth after their delayed incentives launch in March 2024, with vsdCRV growing from $0 to $2.79M, asdCRV rising 656%, and total TVL increasing 159% through April 19, concerns remain about the efficiency and sustainability of this growth.

The realization that early incentives drove mainly short-term TVL from within Arbitrum rather than attracting new users and capital to the ecosystem is concerning. The pivot to focusing on porting over products from Ethereum to establish more lasting value-add is a step in the right direction, but it’s too early to assess the impact of this strategy shift.

With 75K ARB still expected to be available from the initial 200K grant at the start of the bridge period, we question the necessity of dedicating another 125K ARB at this juncture. It seems premature to extend the program before measurable results from the revised approach of importing new offerings to Arbitrum are available.

The plan to expand incentives to Pendle products and fund lending market liquidity does have merit in increasing the surface area of the grant’s impact. However, given the lack of traction with the first iteration, a more prudent path would be to first demonstrate clear progress with the remaining 75K in establishing sticky Arbitrum-native liquidity and users before scaling up.

We empathize with the frustrations around the KYC process causing a 3-month delay and the challenges of fragmented communication with different Arbitrum entities. These are valuable learnings for the DAO to improve the grantee experience. But they don’t override the core questions around the ROI of the incentive program to date.

In summary, while we appreciate Stake DAO’s transparency and efforts to adapt based on initial results, we don’t believe expanding the incentive budget is justified at this stage. We would encourage them to focus on deploying the remaining 75K ARB efficiently, track progress rigorously once the OpenBlocks dashboard is available, and return with a follow-up proposal once there is stronger evidence of this funding driving sustained Arbitrum ecosystem growth. We’re rooting for their success and open to reassessing down the line.

Hello,
Thanks @mcfly for this valuable answer. Should we understand that when we finish spending the remaining 75k ARB we can come with a spontaneous proposal to receive further funding?

Correct, with the related data backing the new request.

Ok, we have done everything we were asked for data reporting. Openblocks asked us a dune dashboard that we provided. Hope this is enough, not sure if they need to do anything on their side…

Also, just wanted to add that I think our application has a few key strength that make it interesting:
1/ We focus on onboarding long term liquidity (it’s a bit technical, but with the vsdCRV pool, anything brought thanks to the ARB incentives will bring long term CRV incentives and should stay in the long run)
2/ We focus on bringing new use cases to the chain (such as voting for Curve gauges, but also allowing some stuffs that aren’t allowed on Mainnet for CRV) which should make the TVL sticky in the long term.
3/ We are not asking for a big amount compared to other protocols, while our growth on Arbitrum cannot happen without this support