[StakeDAO] [FINAL] [STIP - Round 1]

DAO Grant Programs Incentive Framework (Round 1)
1

SECTION 1: APPLICANT INFORMATION

Applicant Name: Stake DAO
Project Name: Stake DAO - “Locking CRV directly on Arbitrum”
Project Description:

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.

Team Members and Qualifications: Stake DAO Team
Project Links:

Contact Information:

TG: @hubirb / @Kii_iu
Twitter: https://twitter.com/StakeDAOHQ
Email: hubert@stakedao.org / quentin@stakedao.org
Do You Acknowledge That Your Team WIll Be Subject to a KYC Requirement?: YES

SECTION 2: GRANT INFORMATION

Requested Grant Size: 200,000 ARB
Grant Breakdown:
  • 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

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Objectives:

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.

Key Performance Indicators (KPIs):

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.

Justification for the size of the grant:

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.

Execution Strategy:

Our execution plan includes the following steps:

  1. 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.
  1. 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.
  2. 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)
Grant Timeline:

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.

SECTION 4: PROTOCOL DETAILS

Is the Protocol Native to Arbitrum?:

No, we initially built our products around Ethereum Mainnet native ecosystems (Curve, Balancer, Frax, Angle…), but have a chain agnostic approach.

On what other networks is the protocol deployed?:

We are also deployed on Arbitrum (and marginally on Polygon).

What date did you deploy on Arbitrum?:

October 2022

Protocol Performance:

KPIs:

  • TVL: $57M+
  • Liquid Lockers TVL: $31M
  • TVL on Arbitrum: $3m
Past performance:

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.

791×867 38.5 KB

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.

Protocol Roadmap:

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).

Audit History:

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

SECTION 5: Data and Reporting

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.

The different metrics are:

  • 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

8 Likes
2

Hey @MevPanda ; Great proposal

Do you plan to implement a bridge with Ethereum, similar to Aura, to maintain the peg with the native sdCRV, or will it only be due to liquidity depth?

Defillama It is not showing Arbitrum data, do you have a tool that provides it?

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Hello @MevPanda thank you for submitting! Please make the following changes to your proposal to comply with the program rules.

  1. Please note the following regarding the expected timeline of the incentives program. Unfortunately, your 12-month timeline does not meet these requirements.

  1. Under Protocol performance please provide your TVL and additional data for your protocol on Arbitrum in addition to your data from all chains combined.

  2. Please provide the addresses of the contracts you plan to incentivize.

2 Likes
4

Benjamin from QiDao

Liquid lockers play a very important role in DeFi. Going beyond LM, it’s what maintains people’s attention. From the perspective of a chain, this could be very helpful in increasing the volume of transactions on Arbitrum.

5 Likes
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Hey Jadmat,

Very good question.
The bridge will be Stargate, using Layer 0 technology.
asdCRV on Arbitrum will be fully redeemable on Ethereum, and that’s how the value will accrue on Arbitrum.

1 Like
6

i like stargate and layer zero

1 Like
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Hi,

Sharing some info’s relevant to Stake DAO and what sending a grant would mean for Arbitrum.

I strongly recommend pausing all proposal from stake until there is clarity on these topics for the safety and security of Arbitrum, it’s reputation and any potential legal actions that could come to Arbitrum for associating with Stake…

Note: Unfortunatly due to safety concerns from highlighting these challenging topics I have to post from a new account. There is a limitation on the links I can share so I had to put spaces in the links but they can be copied and put into your browser.

Just asking questions, my intention is to make sure our dear arbitrum ecosystem is protected and here for the long run. Reminder that I am challenging the proposal and not calling the stakedao contributors directly.

There is just a HUGE lack of information that hopefully when provided will show everything makes sense…

While Stake has shown they are building things there are some topics there is no or very little information about. I talk about it in this post.

Topics:

  • Similar grant from Avalanche and lack of performance + information on how AVAX used
  • Weird trading activity with treasury funds
  • Not respecting governance
  • Using treasury funds without voting
  • Involvement in shady projects and treasury funds used for RFV raids

Stake “DAO” doesnt respect governance?

They transferred 600k SDT and +100k stables from treasury to wallets that looks like the team but there is no governance proposals around this??

You can see the tx’s here:

  1. Ethereum Transaction Hash (Txhash) Details | Etherscan
  2. Ethereum Transaction Hash (Txhash) Details | Etherscan
  3. https:// etherscan. io/tx/0x3de192d70b6bc6278bb0b97bd6a9e29c9f31c1bff0bbdb80a64a42fb747b5d57

Question: Can you share the gov proposal for this and voting?

“Stake dao foundation”

they made a foundation for SDT: https:// stakedaohq .medium.com/stake-dao-contributors-reallocate-4-000-000-sdt-to-launch-the-stake-dao-foundation-8d4e58d6728a

But the promised amount never came and then how the SDT tokens that were sent its not easily found how they were used

foundation address
https:// debank .com/profile/0x40B4B1a259d48d96F08F099Deb07eFad31A2eB2A

Question: Can you explain what happened to these funds? sharing tx’s of course…

Questionable relationships and insider trading?

Stake also was involved in a pretty shady project called lobis and seems to be the only project that made money from it. See how they traded sdt for the lobis governance token and bought some more immediately before there was an RFV raid on the treasury…

Initial swap Lobis
https:// snapshot. org/#/stakedao.eth/proposal/0x8eae4106ad210cf7d063e41f820197ce4f94b19aabb28bf3d7ac94a7468de6ce

Lobis proposal
https:// vote.lobis.finance/#/proposal/0x81b4884136f0ea6774b54ac7103bf8580098e0fe787ce246fe87fd6387817695

Buying lobis suspiciously just before RFV
https:// signal.stakedao .org/#/proposal/0x6cc81060a79d4bd47ff50275dd8421abfbe8d63e35004080b9e47f5d84792469

Question: What was the relationship between stake, julien?

Question: How did stake know to buy lobi exactly at the right time to make money…? This money is in treasury and used to vote for incentives on their curve locker…

Costs & Governance

SDLI was voted for as the service provider to Stake DAO via governance on http: //gov .stakedao.org and snapshot for Stake DAO to cover all infrastructure provision e.g. employees wages, servers etc. for a 3 month period.

votes:
https:// snapshot .org/#/stakedao.eth/proposal/0xd3091afb37ffc10492808d5e7d10175418f2a1287ff94298a2c9bd75fe8751c2

https:// snapshot .org/#/stakedao.eth/proposal/0x5b873f81a0c846e84b1b0361634c57fdf281aa7cf3ca00ac5914824b68dff423

Stake dao multisig:
https:// app.safe. global/transactions/queue?safe=eth:0xF930EBBd05eF8b25B1797b9b2109DDC9B0d43063

Question: Can you share the multisig for this time period ‘costs’ paid to sdli and if they correspond to the figures? Its weird because tx’s from this time period are much higher than what was approved…

Question: there is no clarity on relationship between SDLI and Stake Capital and Stake, is it all the same? can you share info about it?

Avalanche

Stake was similarly given a grant from avalanche foundation during the defi bull run: https:// stakedaohq .medium.com/avax-rush-incentives-live-on-stake-dao-5792cc1337b4

Stake received a 1,500,000 AVAX delegation and rewards from Avalanche there were some things built, like an ‘arbitrage’ bot.

But seems avalanche stopped working with stake after the grant program and now stake dao isnt actively building on avalanche.

There is little information about it and it seems avalanche didnt benefit but lost a lot. So i’m highlighting some topics…

Its relevant because we need to know What will happen to the ARB stake dao receives?

seems there was a bot built and an ‘arbitrage strategy’ using delegation from Avalanche to stake dao validators and some AVAX they received to treasury.

Bots:
https:// snowtrace .io/address/0x5564d8c7c593b1eefe62a771d31b8c4398882009

https:// snowtrace. io/address/0x8c429ca60423f05953ce1bfa9ac4b642d0e9cccf

random transfer of 624 wavax sent to 0xbeef
https:// snowtrace. io/tx/0x9f80dd22d6549ff8609cad158c7b70be08b5a797a5e18a95df8c4694fc33639c

first delegated in : P-avax1n33j6wx28jz82c0cjnfh4rqc9p8tq99t94m2n5
second is in : X-avax1yd6755ej4vldxkyf7c4qtcr3847hgrw7gwwztq

Question: it’s related to stake dao validations?

there was also a huge account in the avalanche ‘arbitrage’ strategy, weird that the incentives were farmed here, could it be a way for stake to distribute reward to ‘community’ but then to collect rewards themselves… just asking questions not blaming! but it seems strange…
https:// debank .com/profile/0x9f705ff1da72ed334f0e80f90aae5644f5cd7784

Question: How were the avax used and what benefits did it achieve? sharing tx’s pls

Elrond Failure

There is another case with Elrond where users are clearly very unsatisfied abotu stake making a lot of promises but never delivering on the work promised.

The public chat is here “https: //t .me/stakedaoElrond”

Question: why was it was renamed from stake dao to stake capital?

Question: what is the relationship between the entities??

Then there is the story of the stake dao nfts

Had +100eth raised and seems they get rewards from the grant that avalanche gave…

Question: Before Arbitrum sends funds to stake again can you explain how these NFT eth was used and how AVAX incentives relates and what was achieved for avalanche?

Conclusion and request for more information

Over all there are a lot of unanswered topics and for the safety of Arbitrum foundation reputation being associated to stake and its concerning topics we need to know.

We need to make sure ARB not being used to pay team directly, its important to know information on the above topics.

I suggest pausing this proposal and reviewing topics before any more funds are sent to the team (and hopefully not team pockets!

Looking forward to clarity,
Askingquestions

8 Likes
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Hey ser,

Those matters have been discussed several times in our public channels or on our forum, but we would be very happy to talk about those again. There are rational answers to all the questions you raise, which I am sure will reassure you.
However, Arbitrum’s forum is not the place to have this discussion.
I therefore warmly invite you to come to our public channels where we can have this discussion.
Here is the link to our telegram channel: Telegram: Contact @StakedaoHQ
Looking forward to hearing from you there.

4 Likes
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The product isn’t live… and what value does incentivising another CRV locker bring to Arbitrum?

This does not support native protocols and with the product not live I am not sure this is even qualified to fit into the existing framework.

Whilst I respect StakeDAO as a legit team, I am disappointed that this application places very little emphasis on the value it generates for the Arbitrum ecosystem.

3 Likes
11

Product isn’t live, CRV staking is definetely not proven to be a growing ecosystem in Arbitrum at all either, its hard to see how this grant makes any sense, despite the requested amount being very modest.

Im glad to see other teams building in Arbitrum, and the amount isn’t big though – I guess you will have better chance once you have a proven product in next rounds.

3 Likes
12

Hey Meyaf, thanks for your comment!

The product is live actually, just need to deploy the liquidity pool to incentivise liquidity.
Contract is the following: OFT | Address 0x75289388d50364c3013583d97bd70ced0e183e32 | Arbiscan

Then, to answer your question about “why CRV is important on Arbitrum”, I am sorry we didn’t do a good job at explaining the value it would bring to Arbitrum… Here it is: Curve is the second biggest yield generator on Mainnet (after ETH liquid staking), and there is no reason why it wouldn’t be the case on Arbitrum. They issue more than 3m CRV token per week as incentives, which is massive, and we just need to attract some votes to Arbitrum to get those rewards coming on Arbitrum. But the main hurdle today, is that the full DAO implementation of Curve is on Mainnet. That’s why this grant request aims to start developping this CRV ecosystem on Arbitrum, by providing a use case for CRV. Next steps could be to add additional use cases for CRV, including votes etc. subject to further grant request. But the topic of this grant request, is to bring the best yield one can have on CRV, on Arbitrum.
As I said, contract is live, but to work, it needs liquidity incentivisation, and that’s why we ask for a grant.

7 Likes
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Hi Hubert,

While I appreciate the invite, this public forum is in place to determine grant requests from teams like yours, it is also a place for discourse through asking questions and getting answers from requestees (stake, and you in this case).

Answering questions related particularly to stake’s performance of the almost identitcal Avalanche grant (that was executed) and didnt produce much, as well as, the use of treasury funds historically without DAO governance for stake"dao" is pretty much as relevant as can be…

a reminder of the topics:

  • Stake got a similar and actually more expansive grant (multi million dollars at the time) from Avalanche but it seems like a total failure.
  • Using “DAO” treasury funds (that this Arb grant if executed, would be) without governance process is also completely relevant and frankly quite alarming.

Worst case scenario, given historical precident, stake gets the grant and then the treasury can use “DAO” grants without any “DAO” voting (again?)…

So we’re just asking questions that show historical precident can be explained and the failure of the avalanche grant was due to other reasons e.g. hand of god…?

Since you claim you have already answered these questions, it should be easy to share them here for everyone to get answers.

a reminder of public forum;

  1. request grant
  2. grant request is discussed and questioned (we are here)
  3. be able to get an answer for questions raised here, relevant to arbitrum grants, rather than answering questions to arbitrum grants in a channel that is not directly related to arbitrum.
  4. ???
  5. get or dont get grant

some may say trying to take public questions into less public channels is not industry standard practice…

looking forward to hearing from you on the topic of arbitrum grants for stake dao on the proposal requesting arbitrum grants for stake dao rather than a less public channel not related to arbitrum :slight_smile:

thanks,
askingquestions

3 Likes
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@MevPanda Thank you for making these updates! Your submission now meets all requirements to be considered for a snapshot vote.

2 Likes
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Defillama It is not showing Arbitrum data, do you have a tool that provides it?

1 Like
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Hey, you can find TVL data on Stake DAO’s yield page, by selectioning Arbitrum in the network filter:

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Hello @MevPanda ,

Now that your application has been marked eligible, please be advised of the remaining steps in the application process to be completed prior to the Review Period Deadline:

Please complete the following steps required for your application to proceed to Snapshot:

Once you change your proposal title to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness.

Once marked as [Final], your application post will be locked by moderators and you will no longer be able to edit your proposal.

1 Like
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Hi @stonecoldpat, could you lock the post please? Thanks in advance!

2 Likes
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woking is on progreass …

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StakeDAO: @Hubirb

From @Seedgov led by the @cattin delegation, we want to convey our support to this proposal. The reasons why we agree are as follows:

  • They propose implementing their CRV SL solution, “sdCRV,” on Arbitrum; this would be the first non-Ethereum LST for CRV. In addition to the composability that this can bring on its own, it helps attract Curve incentives from Ethereum to Arbitrum.
  • The grant incentivizes the sdCRV/CRV LP to help maintain the peg; although a bridge connected to native sdCRV will aid in linking.
  • StakeDao will accompany with their SD token, valued at $150,000, which they will use to incentivize stakers to direct emissions to Arbitrum through votemark.

We want to clarify that this is not the final vote, since as we clarify in this release, the final vote is defined by our community. We also want to invite you to attend our Governance Call that will be held tomorrow in our discord.

1 Like
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Hey @SEEDGov ,
thanks a lot for this detailed comment, and for this preliminary support.
We tried to do a proposal which is very precise in the way tokens will be used for, to give clarity to the Arbitrum community, and are glad you saw the seriousness of our proposal.
We stay available should any of your community members have questions.

1 Like