Stake DAO is a Decentralized Finance protocol initiated in January 2021 and focused on liquid staking of governance tokens with lock mechanisms (such as CRV or BAL). Liquid Lockers are one of our two major products.
Liquid Lockers enable owners of governance tokens using veTokenomics to enjoy all the benefits of the locking process, without the trade-off of illiquidity, thanks to a derivative: sdToken providing liquidity when you wish to exit your position without waiting for the full duration of the lock.
Even though CRV can only be bridged on Mainnet, its liquid wrapper, sdCRV has been brought to Arbitrum. The idea of this project is to build up the liquidity necessary to successfully bring significant amount of CRV on Arbitrum thanks to the attractivity of CRV liquid staking on Arbitrum, so that CRV farmed on Arbitrum can effectively stay on the chain while deploying their full potential.
Landing Page: https://stakedao.org/
Liquid Lockers: https://lockers.stakedao.org/
Github: Stake DAO · GitHub
Documentation: Introduction - Stake DAO
asdCRV (yield bearing liquid wrapper of locked CRV) contract: OFT | Address 0x75289388d50364c3013583d97bd70ced0e183e32 | Arbiscan
TG: @hubirb / @Kii_iu
Email: firstname.lastname@example.org / email@example.com
- 200,000 ARB distributed until January 31st 2024 as liquidity incentives to asdCRV/CRV liquidity providers on Arbitrum.
Funding Address: 0xfDB1157ac847D334b8912df1cd24a93Ee22ff3d0
Funding Address Characteristics: 3/5 Multisig
Our goal for this grant is to successfully attract liquidity to asdCRV, a tradeable yield bearing wrapped version of locked CRV on Arbitrum, offering an accessible and cost-effective way for CRVholders to benefit from their governance token. More specifically, allowing users to seamlessly lock their governance tokens from the Arbitrum network, making the product accessible to smaller wallets and minimizing gas costs’ impact on user yield. It also allows users to keep their CRV on Arbitrum, while currently farmed CRV need to be bridged back to Mainnet to allow holders to extract their full value.
To measure the success of this grant, we will use the following key performance indicators:
- Total Value Locked: The total amount of governance tokens in CRV terms that are locked through our Liquid Lockers via Arbitrum.
- Locking share: The share of CRV on Arbitrum being locked, compared to circulating.
- Liquidity: the total liquidity of asdCRV on Arbitrum.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
Liquidity rewards will be the main advertising of locking CRV on Arbitrum. Furthermore, the success of liquid staking derivatives depends on the depth of their liquidity, and governance tokens are no exception. Stake DAO’s inflation is not sufficient to incentivise enough liquidity deposits to build solid liquidity for asdCRV, so this grant will be very helpful to incentivise this liquidity, and it should help bring more CRV from Mainnet to Arbitrum. It will give a good solution for users providing liquidity to Curve, Convex, or Stake DAO, to do something with their farmed CRV rewards, which should also make LPing on Arbitrum more attractive.
Currently there are 2m CRV on Arbitrum, but we believe that if there was a possibility to benefit from those CRV on Arbitrum, more of them would stay on the chain. Furthermore, with the Airdrop done by Arbitrum and the current grant program, we believe that incentives will bring more TVL to Arbitrum, and more CRV will be farmed. That being said, we believe it is reasonable to assume around 30m CRV should be brought to Arbitrum within one year. Out of these, assuming a similar locking rate than on Ethereum (around 50%), 15m should get locked. To have a successful liquid staking efficiency with a solid peg, we need to maintain liquidity for around 3m CRV (approximately $750k). To maintain this liquidity, a yield of 35% would be required to be competitive with simply holding asdCRV. The yield could be coming 15% from sdCRV native yield and 20% would come from the ARB tokens granted for this project. An additional incentive would be provided by Stake DAO through direct SDT incentives used as vote incentives on mainnet to direct CRV inflation towards Arbitrum. This 20% APR until January 31, 2024 would correspond to $50k of rewards (60k ARB tokens), distributed to the asdCRV/CRV Curve pool (asdCRV contract: 0x75289388d50364c3013583d97bd70ced0e183e32, pool to be deployed as soon as the cryptopool factory is live, which should be soon).
In addition to the direct incentives to lock CRV on Arbitrum, we plan on incentivising the following selected Curve pools through ARB vote incentives, to direct more CRV emissions towards Arbitrum and fuel this growth:
- USDC/USDT 2pool (0x0f958528718b625c3aebd305dd2917a37570C56a)
- Frax Base Pool (0xF82DC74d73bD2E4274fBd087FECB7720F02c3AbC)
- EURS/USDC/USDT pool (0x897AB1F979aD31E49DBC9eF8df517b2945A53705)
- tBTC/WBTC pool (0xEA13469E4D44246BB84ee8765ba5Bd70d9f87729)
- Overnight pool (0x61b7986dD9F1c41747B494680BE1d7EF54265d6c)
We will allocate 140,000 ARB tokens to incentivise these pools proportionately to their TVL until January 31st 2024, which should bring on aggregate $10m to $20m TVL to these pools.
For this purpose, we request a 200k ARB token grant to develop the Curve ecosystem on Arbitrum and bring efficient swap solutions to the chain for a set of key tokens.
Our execution plan includes the following steps:
- Technical development:
- All the work related to deploying the asdCRV contract on Arbitrum has already been done and is live.
- The last mile is to deploy the liquidity pool, for which we are waiting for Curve’s cryptopool factory. If the factory is not done before the second week of October, we shall deploy it as part of this grant program.
- Once the pool is deployed, we will deploy the gauge and push the governance vote on Curve’s DAO to make it eligible to CRV incentives.
- Incentive campaign: in parallel, a marketing program will aim to bring as much CRV as possible on Artbitrum
- Vote incentive campaigns on Votemarket to direct CRV rewards to Curve pools on Arbitrum
- Liquidity incentive program for asdCRV liquidity and key Curve pools on Arbitrum (objective of this grant request)
The projected timeline for this grant is fairly simple: as soon as we receive the grant, we will be able to start pushing the incentives to the pools mentioned as stated precisely under this proposal.
No, we initially built our products around Ethereum Mainnet native ecosystems (Curve, Balancer, Frax, Angle…), but have a chain agnostic approach.
We are also deployed on Arbitrum (and marginally on Polygon).
- TVL: $57M+
- Liquid Lockers TVL: $31M
- TVL on Arbitrum: $3m
Since liquid lockers have been launched in 2021, they were the most successful locking solution, before Yearn and Convex. Stake DAO went from 3m CRV locked to 56m CRV locked in a bit more than one year, and has brought $30m of LP in the strategies boosted by those locked CRV.
It has replicated this model on Angle, Balancer, Frax, Pendle, Maverick, and others, and is the first holder of veMAV and of veANGLE, and the third holder biggest liquid wrapper for veFXS, veBAL and vePENDLE.
Source: Stake DAO
Besides the lockers, our other product, Votemarket, has been extremely successful as it became by far the biggest vote incentive platform for veCRV vote incentives (source: Lobby). It is a main asset that will help us bring liquidity to Arbitrum.
Roadmap for short and medium term includes:
- Onlyboost for Curve on Ethereum and Arbitrum (a boost optimiser on top of Curve and Convex, whitepaper: https://github.com/StakeDAO/onlyboost-whitepaper/blob/main/ob-whitepaper.pdf). Live in October.
- Other sdTKNlockable on Arbitrum
- Onlyboost on Balancer
- veBOOST delegation
- Balancer strategies and Onlyboost on L2
- Claim delegation for Votemarket
- Votemarket v2 (with expansion on L2 made possible)
There are several L2 expansion plans in our roadmap. If this grant request is successful, we would like to focus primarily on Arbitrum before any other chain for our L2 development (as we have always done by the way, Arbitrum being the first side chain where we deployed our strategies).
All contracts have been fully audited by Chainsecurity and have been battle tested on the market for more than one year. Stake DAO was never the victim of any hack or exploit. You can find our Audit History here: https://lockers.stakedao.org/audits
Is your team prepared to create Dune Dashboards according to program requirements for your incentive program?:
Yes, we will be able to create a Dune Dashboard to measure this grant’s results and relevant metrics by November 15 2023.
TVL on Arbitrum Lockers
TVL in the liquidity pool sdCRV/CRV on Arbitrum
Share of CRV locked by chain
Peg maintenance for sdCRV
Unique addresses that use our Lockers via Arbitrum
Consumption of the grant