[Stargate Finance] [FINAL] [STIP - Round 1]

Archive Incentive Framework (Round 1)
1

SECTION 1: APPLICANT INFORMATION

Applicant Name:
Stargate Foundation

Project Name:
StargateDAO

Project Description:
Stargate Finance is a fully composable liquidity transport protocol that lives at the heart of Omnichain DeFi. Stargate is the largest bridge in DeFi, with over $20B in lifetime volume.

Team Members and Qualifications:
Angus 0xLamps: StargateDAO Core Contributor
Max Power: StargateDAO Core Contributor, Head of Special Project at LayerZero Labs

Project Links:
Website: https://stargate.finance
User Docs: Introduction - Stargate
Developer Docs: Stargate - Stargate
Twitter: https://twitter.com/StargateFinance

Contact Information
TG: Contact 0xLamps
Twitter: 0xLamps
Email: stargate@stargate.foundation

Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes

SECTION 2: GRANT INFORMATION

Requested Grant Size:
2,000,000 ARB Tokens

Grant Breakdown:
Stargate has seen an average of $700m of monthly volume into Arbitrum over the past 5 months, being a key facilitator of liquidity injection into Arbitrum. The grant will be used, in its entirety, to rebate bridging fees for users who are bridging into Arbitrum over the Incentive Program period. This will ensure that users who are looking to participate in the Arbitrum ecosystem throughout the Incentive Program have a reliable, subsidized way of bringing liquidity to the overall ecosystem.

This grant will subsidize up to an estimated $2.7B of volume (based on standard protocol fees of 0.06%) across the 4 months of this program. This is roughly equivalent to the amount of volume Stargate has seen into Arbitrum in the past 4 months. The incentive subsidy will also therefore always be lower than total fees, providing an incentive to utilise this service, but not abuse it. Additionally, the subsidy is provided for bridging into Arbitrum, not out of.

Any funds not distributed by the 01/31/2024 cut-off date will be returned to the Arbitrum DAO Treasury (0xf3fc178157fb3c87548baa86f9d24ba38e649b58).

Funding Address:
Stargate Finance: Multisig - 0x9CD50907aeb5D16F29Bddf7e1aBb10018Ee8717d

Funding Address Characteristics:
3/6 multisig, with private keys securely stored.

Contract Address:
Grants funds will be sent from above-mentioned multisig to a purpose-built smart contract that will stream fee rebates to wallets that have bridged into Arbitrum. This smart contract will be deployed if/when grant is approved, and the address will be disclosed within governance forums and prominently displayed within the Dashboard built for this program

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Objectives:

  • To incentivise liquidity bridging into Arbitrum
  • To reduce fee barriers for net new users wanting to explore Arbitrum
  • To contribute to the success of other recipients of this grant
  • Ultimately the goal is to make it as easy as possible for users to participate in the wider Arbitrum ecosystem.

Key Performance Indicators (KPIs)

  • The number of unique wallets that receive a subsidized bridge into Arbitrum.
  • The number of net new wallets that bridge into Arbitrum (fresh address)
  • An analysis of how users elect to use funds they have bridged into Arbitrum through this Incentive Program (i.e. what are the next 3-5 transactions for each wallet)
    • Success would be seeing the majority of users bridging into Arbitrum through Stargate participating in other Incentive Programs, and other protocols

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
In 2023, Stargate volume has picked up significantly into Arbitrum, commensurate with the growth in TVL and stablecoin market cap on the chain. Stargate’s goal through receiving this grant is to allow for significant growth to the ecosystem. Stargate is already well known as the dominant bridge to use for bringing liquidity into Abitrum, and merely hopes to provide users with a cheaper experience throughout this program. Ultimately, this will ensure users have more funds to explore exciting quests, incentives programs and protocol launches.

Justification for the size of the grant:
Stargate is eligible for the Pinnacle size grant, as the 4th largest protocol (by TVL) on Arbitrum, and typically 2nd largest by daily volume.

  • Has been live for 18 months on Arbitrum
  • Has >$700M in 30D Volume
  • Has ~$100M in TVL on Arbitrum

Stargate is also uniquely positioned as the largest bridge to Arbitrum to provide users with a significant amount of liquidity to participate in both Arbitrum Odyssey and the full Incentive Program. The amount of volume Stargate has done, as well as it’s TVL of ~$100M, is testament to Stargate being a source of sticky liquidity on Arbitrum.

Execution Strategy:
The execution strategy involves using 100% of the grant allocation to subsidize bridging fees for users (by rebating 0.06% of volume, equivalent to the protocol fee on Stargate). This will include all pooled assets on the core Stargate protocol: USDC, USDT and ETH.

The smart contract to stream these funds to users will be developed and deployed by technical contributors to Stargate, and will also be audited. Users will not incur any costs, and will not have to retroactively claim these rebates. Once the grant is approved and funds are received, Stargate will communicate on Twitter as well as in governance threads on the commencement date and time of the rebates.

Grant Timeline:
This grant will be streamed to the above-mentioned Stargate Finance: Multisig throughout the duration of the STIP. The grant will expire when either all 2,000,000 ARB have been distributed to users, or the 01/31/24 deadline is hit, upon which the remainder will be returned to the Arbitrum DAO Treasury.

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

Is the Protocol Native to Arbitrum?
Stargate is naturally an omnichain protocol. Arbitrum was one of the 7 initial chains Stargate launched on. Stargate has since expanded to 11 chains.

On what other networks is the protocol deployed?
Ethereum, BNB Chain, Avalanche, Polygon, Arbitrum, Optimism, Fantom, Metis, Kava, Linea, Base

What date did you deploy on Arbitrum?:
March 2022

Protocol Performance:

  • Stargate has a lifetime volume of over $20B
  • Peak TVL of over $4.4B
  • Stargate in the past 6 months has done ~$3B of volume into Arbitrum, helping to almost double TVL on Arbitrum
  • Stargate regularly does more transactions than all other bridges combined across any 24h period
  • The significant majority of Stargate governance participants (veSTG holders) are staking on Arbitrum
  • Protocol Overview: https://stargate.finance/overview

Stargate Protocol Performance on Arbitrum

Source: https://pro.nansen.ai/multichain/arbitrum

Protocol Roadmap:
Stargate continues to grow to new chains, providing deep unified liquidity to growing chains. The DAO and community are particularly excited about supporting Arbitrum Orbit chains as they become more prevalent, ensuring liquidity is accessible to the broader Arbitrum ecosystem.

Audit History:
Stargate is one of the most heavily audited protocols in DeFi, and relies on LayerZero messaging which has also been thoroughly audited. Every contract deployed to Stargate goes through multiple audit cycles, and all smart contracts are immutable.

Core Protocol Audit Reports: Audits - Stargate

SECTION 5: DATA AND REPORTING

Is your team prepared to create Dune Dashboards for your incentive program?:
Yes, a Dune Dashboard will be created specifically to highlight the success/KPIs of this incentive program.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
Yes we will provide bi-weekly reporting in the Arbitrum Forum thread, including total volume bridged into Arbitrum number of users subsidized. This will include both Dashboard screenshots as well as broader analysis on impact

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?
Acknowledged.

7 Likes
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Reserving for additional helpful links and points of clarification.

10/2 edit - adding line to clarify that this incentive proposal is not griefable/exploitable, as users are incentivised to bridge, but never outright paid to bridge.

1 Like
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Hello @0xLamps thank you for your application! Your submission meets all requirements to be considered for a snapshot vote.

2 Likes
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There is no better way to kickstart Arb Season 2 than subsidized bridging. Full send.

5 Likes
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Appreciate that Matt, thanks for reading through the proposal!

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AS a member of the Arbitrum ecosystem I would like to say that Layer Zero is one of the best teams we had the pleasure to work with at Abracadabra.

I would love to see this grant approved, and build products on top of it.

1 Like
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This is way too much for a non-native protocol.

Also, there are already multiple cheap and fast bridging options to Arbitrum, so I struggle to see how this really brings in new value to the ecosystem.

This does not focus on supporting ecosystem protocols or how it really brings in new users and expands the eccosystem - it’s solely about getting more users on Stargate.

2 Likes
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Hello @0xLamps ,

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:

To change your proposal 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 to proceed from [Draft] to [Final] status.

Once notified, the Arbitrum Foundation Forum Moderator will adjust your title from [Draft] to [Final] status. Once marked as [FInal], your application post will be locked by moderators and you will no longer be able to edit your proposal.

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Appreciate this Matt! Will make sure to do so soon after the Pitching Session for today.

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Blockworks Research is inclined to support this proposal on the condition that the requested amount comes down from 2M to 1.5M ARB based on, among other things, the anticipated sustainable impact on, and goodwill to, the ecosystem, metrics such as TVL / volume / fees on Arbitrum and overall, a comparative analysis of all submitted STIP proposals, the distribution of incentives across verticals, as well as, to a certain extent, the recommendations made by the Arbitrum Working Group through the four grant categories.

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@0xLamps Friendly reminder to complete the following:

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@stonecoldpat @cliffton.eth @eli_defi The proposal is ready to proceed from [DRAFT] to [FINAL]. Thank you for your help.

1 Like
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Post has been marked FINAL and locked.

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Stargate: @0xLamps

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

  • Arbitrum main bridge and the preferred one among users.
  • The proposal is simple: subsidize user fee reimbursements for those who cross USDT, USDC, and ETH (0.06% of the volume).

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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Thanks for the comment, and support, @SEEDGov. Will join your Governance Call!

1 Like
16

Thank you for providing a detailed proposal. If we want Arbitrum to stand out among its competitors in the coming period, incentivizing users to migrate their assets to Arbitrum makes a lot of sense. Stargate is already a proven bridge protocol. They have also mentioned that any unused ARB by the end of January 2024 will be returned to the treasury.

ITU Blockchain votes “For” this proposal.

1 Like