This is the finalized LTIPP application for Steer
SECTION 1: APPLICANT INFORMATION
Provide personal or organizational details, including applicant name, contact information, and associated organization. This information ensures proper identification and communication throughout the grant process.
Applicant Name:
Samuel Feintech
Project Name:
Steer Protocol
Project Description:
Steer is an off-chain compute protocol that bridges off- and on-chain data allowing for robust on-chain automations. Steers Smart Pools power automated liquidity management for 980+ pools across 25 blockchains and 21 AMMs.
Team Members and Qualifications:
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Derek Barrera - Founder & CEO
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Deepak Gupta - COO
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Sam Feintech - Head of Growth
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Dharmil - Core Engineer, Smart Contracts
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Brandon Hunt - Core Engineer, Lead Strategist
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Rakesh - Core Engineer
Project Links:
Contact Information
Point of Contact: Sam Feintech
- Point of Contact’s TG handle: @catmandu13
- Twitter: https://twitter.com/0xc472
- Email: sam@steer.finance
Do you acknowledge that your team will be subject to a KYC requirement?:
Yes
SECTION 2a: Team and Product Information
Provide details on your team’s past and current experience—any particulars relating to past projects, recent achievements, and expertise utilizing incentives. Additionally, please provide further details on the state of your product, audience segments, and how you expect incentives to impact the product’s long-term growth and sustainability.
Leadership team experience prior to Steer:
The Steer Protocol team comprises experienced DeFi leaders and builders with a proven track record of success in developing and scaling innovative financial products. Our team members have an average of 6 years of experience in the Web3 industry, with past contributions to leading companies like Coinbase, Ethos, Voyager, Volmex, and Proof.
Leadership Team:
Derek Barrera, Founder & CEO: A blockchain engineer with 17 years of experience, Derek previously served as Core Dev at Volmex, CTO at Proof, Principal Blockchain Engineer at Voyager, and Founding Engineer at Ethos. His deep technical expertise and leadership skills are instrumental in driving Steer Protocol’s vision and development.
Deepak Gupta, COO: With 14 years of experience scaling startups, Deepak is a skilled operator and strategist. He previously served as Core Engineer at Proof, Engineer at Voyager, Blockchain Engineer at Ethos, and Head of Operations at OstLabz, where he scaled revenue from $100k to $3 million. Deepak’s operational expertise ensures the smooth execution of Steer Protocol’s growth strategy.
Sam Feintech, Head of Growth: An experienced product, growth, and operations professional with 5+ years in Web3, Sam previously held roles at Coinbase, Proof, Voyager, and Ethos. He co-authored a finance and tokenization paper with the UN FAO, demonstrating his deep understanding of financial markets and blockchain technology. Sam leads Steer Protocol’s user acquisition and growth initiatives.
Core Team:
Dharmil: Smart Contracts: Dharmil is a skilled smart contract developer responsible for designing and implementing the core contracts that power Steer Protocol’s functionalities.
Brandon: Developer Tools & Full-Stack: Brandon leads the development of Steer Protocol’s developer tools and contributes to full-stack development efforts, ensuring the protocol is accessible and user-friendly for developers.
Rakesh: Dapp, Node Engine & Node Interface: Rakesh is a talented engineer responsible for building and maintaining Steer Protocol’s dapp, node engine, and node interface, ensuring the protocol’s smooth operation and performance.
Advisory Board:
Steer Protocol benefits from the guidance of a distinguished advisory board with former members from ConsenSys, Ethereum Core, Sushi, Ethos, and Ondo. This board provides valuable insights and strategic advice to the team.
Commitment to Arbitrum:
The Steer Protocol team is deeply committed to the Arbitrum ecosystem and its long-term success. We believe that Arbitrum has the potential to become a leading DeFi platform, and we are dedicated to contributing to its growth and development. We actively participate in Arbitrum governance, collaborate with other Arbitrum projects, and continuously explore new ways to leverage our technology to benefit the ecosystem.
Product Information
State of Product
- Upon the launch of Steer Protocol, the Smart Pool platform was released. Smart Pools provides sophisticated automated liquidity management solutions for actively managing concentrated liquidity across 900+ pools on 25 blockchains and 21 AMMs.
- Steer Protocol utilizes its of-chain compute protocol to enable a developer SDK on top of concentrated liquidity AMMs. Developers can develop LP strategies and launch them within our strategy marketplace. Anyone can easily use these strategies through our point-and-click interface and permissionlessly launch meaningful LP strategies on any pair.
- Steer Protocol currently has the largest array of LP strategies as well as the deepest flexibility in liquidity placement due to its integrated developer stack and compute network.
- Smart Pool Growth: 1100% growth in TVL over the last 5 months (exceeding $20m), with a 100%+ YTD increase in TVL on Arbitrum.
- Has reduced time for AMM partners to onboard new assets from weeks to <1 day.
- Steer has had ~13,000 unique users, of which 2,500 (~19%) have completed multiple deposits.
Steer Staking
- Launched in July 2023 in coordination with Smart Pools. Steer Protocol’s staking module serves as an interoperability layer for Uniswap v3, enabling protocols and DAOs to direct liquidity incentives towards specific strategies. This targeted approach optimizes liquidity allocation, aligning it with strategic goals and enhancing market efficiency. By supporting various ERC-20 tokens as incentives, it offers customization, allowing for dynamic liquidity support across different trading strategies and risk profiles.
- One example of a successful staking campaign is the ZTX token running on Arbitrum that has garnered ~$6.6m in ZTX deposits from ~2,100 unique depositors.
Smart Trader
- Currently under audit.
- Through Steer and native integrations of Smart Trader with partner AMMs users can build and deploy, or follow, automated algorithmic trading strategies.
Users & Aquisition
Steer Protocol targets a diverse audience of DeFi users, including:
- Individual DeFi users: Both experienced and novice investors seeking efficient and profitable ways to manage their liquidity.
- Institutional DeFi users: Asset managers, hedge funds, and other institutions looking for sophisticated liquidity management solutions.
- Developers: Builders seeking to leverage Steer Protocol’s data marketplace and off-chain compute infrastructure to create innovative DeFi applications.
- Protocols: DeFi protocols, including AMMs, lending protocols, perps/options platforms, and RWAs, seeking to integrate Steer Protocol’s Smart Pools and other liquidity management tools.
- DAOs: Decentralized autonomous organizations looking for efficient ways to manage their treasuries and incentivize liquidity for their tokens.
- Launch Pads: Platforms that help new projects launch and bootstrap liquidity, seeking to integrate Steer Protocol’s solutions to offer enhanced liquidity management for their users.
- Consumer Apps: Consumer-facing applications that want to integrate DeFi functionalities and offer their users access to Steer Protocol’s liquidity management tools.
We primarily acquire users through:
- Partnerships and integrations with other DeFi platforms (B2B): Collaborating with leading DeFi protocols to integrate Steer Protocol’s Smart Pools and other liquidity management tools, providing direct access to their user base.
- Leveraging partnerships to reach users (B2B2B): Working with partners to run co-marketing campaigns, joint initiatives, and educational programs that reach their users and promote Steer Protocol’s solutions.
- Collaborating with consumer-facing applications (B2B2C): Integrating Steer Protocol’s tools with consumer-facing applications to offer DeFi functionalities and reach individual consumers directly.
- Active community engagement: Building and engaging with a strong community through online forums, social media channels, Discord servers, and community events.
- Creating educational content: Providing educational resources, such as blog posts and tutorials, to directly educate potential users about Steer Protocol and its benefits.
- Developer outreach: Engaging with developers through developer documentation, hackathons, and developer grants to encourage them to build applications and integrations on top of Steer Protocol.
How will incentives impact Steer’s long-term growth and sustainability?
The proposed liquidity mining incentive program is designed to significantly enhance user acquisition and engagement with Steer Protocol’s Smart Pools on Arbitrum. By offering attractive APRs for strategic asset pairs, including blue-chip assets, LST/LRTs, and stablecoins, we will attract new users to the Arbitrum ecosystem and encourage existing users to migrate to concentrated liquidity pools. This targeted approach will help us achieve our goal of increasing Steer’s TVL on Arbitrum to $37 million, contributing to Arbitrum becoming a premier DeFi hub.
This growth in TVL and user engagement will trigger a powerful network effect. As more users participate in Steer Protocol’s Smart Pools, liquidity will deepen, leading to:
- Reduced slippage for traders: Deeper liquidity pools will result in less slippage for traders, creating a more efficient and attractive trading environment on Arbitrum.
- More diverse and profitable strategies: A larger user base will encourage the creation and adoption of more diverse liquidity management strategies, offering users more options and potentially higher returns/less IL.
- Increased protocol revenue: Higher user engagement and trading volume will lead to increased protocol revenue, which can be reinvested into further development and innovation, benefiting all users.
We are committed to collaborating with partner protocols and the Arbitrum DAO to implement co-marketing campaigns and explore grant-matching opportunities. These long-term partnerships will not only amplify our reach and attract new users but also foster a collaborative environment where protocols work together to build a more robust and interconnected DeFi landscape on Arbitrum.
Ultimately, we envision Steer Protocol as a cornerstone of the Arbitrum DeFi ecosystem. By expanding the breadth and accessibility of our developer tools and off-chain compute infrastructure, we aim to empower the creation of more data-driven and structured products on Arbitrum. This will not only benefit users and protocols within the ecosystem but also contribute to Arbitrum’s overall competitiveness and position as a leading DeFi platform.
What novelty or innovation does your product bring to Arbitrum?
Steer Protocol is modular on-chain infrastructure, combining advanced off-chain compute with a comprehensive data marketplace. By addressing the challenges of on-chain and off-chain data integration and pairing that with developer tooling, Steer sets the stage for powerful automations and innovative DeFi solutions. We aim to transform Arbitrum into a premier liquidity hub and empower the development of cutting-edge applications.
Currently, Steer Protocol is the only protocol in the industry that provides multi-position liquidity management and strategy marketplace through a permissionless interface allowing any user or protocol to deploy data-driven liquidity strategies almost any CLAMM on their target chain Due to its flexibility it has been able to show standout performance on stables/like-kind pairs, blue chips, and long tail asset pairs. The flexibility and nuance has made Steer Protocol the fastest growing ALM.
Steer Protocol’s off-chain compute and data marketplace unlock the potential for unique and innovative DeFi applications to be built on-chain. By enabling developers to leverage both on-chain and off-chain data in their applications, we foster the creation of more sophisticated and data-driven financial products and services. This, in turn, expands the capabilities and robustness of the entire Arbitrum ecosystem, attracting new users and protocols while empowering existing participants to develop and deploy increasingly advanced DeFi solutions.
Smart Pools – Automated Liquidity Management (ALM):
- Core differentiators for Smart Pools are the ability to do multi-position liquidity placement which allows for the most efficient capital concentration, deepening liquidity with lower capital requirements and reducing slippage for traders.
- Revenue Share - Any creator of a liquidity management strategy that has other users leverage it receives 33% of performance fees collected.
- More concentrated liquidity positions allow for improved yields for LPs, with ongoing rebalancing to mitigate risk of IL. Steers ability to do multi-position liquidity placement has helped Smart Pools consistently rank #1 or #2 for APRs generated for LPs when compared to competing ALM solutions according to DeFi Llama
Steer Staking
Steer Staking provides protocols with a powerful tool to incentivize liquidity providers (LPs) and bootstrap liquidity for their tokens. By allowing LPs to stake their LP tokens and earn additional rewards, Steer Staking encourages long-term participation and contributes to deeper liquidity pools. This benefits both protocols and LPs:
- Protocols: Protocols can attract and retain LPs by offering additional rewards through Steer Staking. This helps them build and maintain healthy liquidity for their tokens, facilitating efficient trading and ecosystem growth.
- Liquidity Providers: LPs can earn additional yield on their liquidity positions by staking their LP tokens. This increases their overall returns and incentivizes them to continue providing liquidity to the protocol.
Steer Staking offers a flexible and user-friendly solution for protocols and LPs to collaborate and achieve shared goals of increased liquidity and sustainable growth.
Is your project composable with other projects on Arbitrum? If so, please explain:
Yes, Steer Protocol is designed to be composable with other projects on Arbitrum. This is achieved through its modular design, which allows different components to be integrated with or utilized by other projects within the Arbitrum ecosystem. For example, Steer’s Smart Pools work as a composable piece of liquidity infrastructure that now power Bonds in collaboration with Sushi and Bond Protocol.
Steer’s Data Marketplace can serve up needed price feeds to power lending protocols, pricing for assets newly launched on Arbitrum with markets on centralized exchanges or other chains, or on-chain automations can be configured and deployed to build next generation financial instruments and increasingly advanced applications.
This composable nature not only directly gives the tools to builders to be bold and creative in their on-chain pursuits, but it builds a synergistic relationship between Steer and other protocols, fostering a richer and more interconnected DeFi landscape on Arbitrum where new 3rd party app engines become available to all of Steer’s integration partners. Broadening distribution for new players by increasing the capabilities of existing ones.
Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?
A list of other protocols that provide automated liquidity management services:
- DeFi Edge
- Arrakis Finance
- Gamma
- Ichi
- Range Protocol
How do you measure and think about retention internally? (metrics, target KPIs)
Internally we think about a few key mechanisms for retention -
- UI/UX, making it simple and intuitive for users to create or deploy capital to pools
- Maintain competitive yields through better placement and management of liquidity positions
- Fostering relationships with protocols that manage liquidity for their tokens, providing high-touch customer support, co-marketing, and listening deeply to their needs to shape our product.
We primarily measure retention through:
- Ratio of Repeat Depositors / Total Unique Depositors
- Average time LPs maintain funds in Steer
- 7-day trailing TVL, where TVL = liquidity in Smart Pools
Relevant usage metrics - Please refer to the OBL relevant metrics chart 1. For your category (DEX, lending, gaming, etc.), please list all respective metrics and metrics in the general section:
Daily Active Users: A time series metric representing the daily count of unique addresses interacting with the protocol’s contracts.
Daily User Growth: A time series metric representing the daily user growth (in addresses) interacting with the protocol’s contracts.
Daily Transaction Count: A time series metric representing the daily number of transactions interacting with the protocol’s contracts.
Daily Protocol Fee: A time series data representing the daily total protocol fee generated. For example, swap fees, borrowing fees, etc., comprising all economic value generated through the protocol, contracts, apps, etc., by users.
Daily Transaction Fee: A time series, daily total transaction fees generated daily by interactions with the protocol’s contracts.
Daily ARB Expenditure and User Claims: Data on individual ARB incentive claim transactions made by users, as incentivized by the protocol. It should include the timestamp, user address, and the claimed ARB amount. The spent ARB will allow for the normalization of growth metrics.
Incentivized User List & Gini: The list should include users incentivized by the protocol along with their performance metrics. For instance, if trading volume is incentivized, this would be a list of traders with their respective trading volumes. If liquidity providers are incentivized, it would include a list of LPs and their liquidities in USD. Protocols should also strive for more uniform engagement levels across a wide user base for long-term sustainability, which will be measured through a gini coefficient across reward recipients.
TVL: A daily time series expressed in USD.
List of Depositors: A list of current and past participants who have deposited during the incentivized period to the protocol. The list should include depositor addresses, their current deposits in USD, time-weighted deposits in USD, and the duration of their deposit participation.
Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan?
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):
No, this grant was written by members of the Steer Protocol team.
SECTION 2b: PROTOCOL DETAILS
Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.
Is the protocol native to Arbitrum?: [Yes/No, and provide explanation]
No. As of June 13th, 2023, we announced our integration with Arbitrum and have been building with our partners on Arbitrum ever since - including managing 140+ Smart Pools across Uniswap, Sushi, Camelot, and Horiza on the network.
On what other networks is the protocol deployed?: [Yes/No, and provide chains]
Steer is currently deployed on:
- Arbitrum
- Arbitrum Goerli
- Astar
- Astar zkEVM
- Avalanche
- Base
- Blast
- Binance Smart Chain (BSC)
- Celo
- Evmos
- Fantom
- Kava
- LineaManta
- Mantle
- Metis
- Moonbeam
- X1 Testnet
- OP BNB
- Optimism
- Polygon
- PolyzkEVM
- Scroll
- Thundercore
- Injective
- Mode
- Flare
What date did you deploy on Arbitrum mainnet?: [Date + transaction ID. If not yet live on mainnet, explain why.]
Steer Protocol was deployed on 5/8/23 via the following tx: Beacon | Address 0xe1c56f99a459ed47b629f3d818bcc84826bced66 | Arbiscan
Do you have a native token?: [Yes/No/Planned, link tokenomics docs]
No, Steer does not have a native token.
Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
We currently run incentive programs through various partners, both protocols as well as various chains and their respective foundations/operating bodies. We currently run incentives on over 75% of the currently chain deployments.Additionally, we were the 3rd ALM added to the Angle Merkl reward distribution product and have worked with our partners to run incentives on top of Arbitrum as well as 23+ other chains.
A few examples of liquidity mining programs we have run for more than 5 months:
Evmos
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Type: DAO Driven
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Kicked off incentives August 28th, 2023
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3,000,000 EVMOS granted (~$1,500/day/pool)
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Current incentives: $5,579/day across all pools
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The average TVL gain per dollar of incentives is: $334
-
Current Incentives/Per Dollar Impact
- TASHI/WEVMOS: $1,013.43 of TVL per $1 of rewards
- stEVMOS/stATOM: $403.58 of TVL per $1 of rewards
- stEVMOS/USDC: $471.62 of TVL per $1 of rewards
- stEVMOS/USDT: $547.19 of TVL per $1 of rewards
- stATOM/ATOM: $842.91 of TVL per $1 of rewards
- WETH/axlWETH: $1,011.77 of TVL per $1 of rewards
- USDT/USDC: $1,217.98 of TVL per $1 of rewards
Kava Chain
- Type: AMM + DAO driven incentives programs
- Kicked off incentives late September 2023
- $1937.40 per day
- ~$161.45/pool/day
- The average TVL gain per dollar of incentives is $67.84
- Current Incentives/Per Dollar Impact
- USDt/WKAVA: $65.14 of TVL per $1 of rewards
- USDt/axlETH: $57.24 of TVL per $1 of rewards
- axlWBTC/axlETH: $69.40 of TVL per $1 of rewards
- axlETH/WKAVA: $72.38 of TVL per $1 of rewards
- axlWBTC/USDt: $258.04 of TVL per $1 of rewards
- ATOM/USDt: $90.92 of TVL per $1 of rewards
- ATOM/WKAVA: $209.18 of TVL per $1 of rewards
- WETH/USDt: $45.98 of TVL per $1 of rewards
- WETH/WKAVA: $73.59 of TVL per $1 of rewards
- USDt/axlUSDC: $55.54 of TVL per $1 of rewards
- axlUSDT/USDT: $53.19 of TVL per $1 of rewards
- MIM/USDt: $87.73 of TVL per $1 of rewards
- WETH/axlETH: $39.52 of TVL per $1 of rewards
Current Incentivization: How are you currently incentivizing your protocol?
Steer Protocol is currently using Merkl & Steer Protocol’s Staking Module for distributing rewards. Individual protocols and DAOs may choose to incentivize any pools at any time.
Steer Protocol is not currently incentivizing the protocol through its own token, but there are Smart Pool and Staking incentives being run by a majority of our AMM partners.
Polygon
- Type: AMM-driven incentives program
- Kicked off incentives on Jan 2024, incentives have expanded from staking to Merkl Rewards
ZTX (Arbitrum)
- Type: Protocol driven incentives programs
- Note: Large dips are migrations between staking programsNote: Large dips are migrations between staking programs
Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program? [yes/no, please provide any details around how the funds were allocated and any relevant results/learnings(Note: this does NOT disqualify an applicant)]
No, we have not received a grant from Arbitrum or any Arbitrum ecosystem program.
Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]
In the last 2 months, we have integrated with 11 new blockchains, 10 new AMMs, and deployed hundreds of new Smart Pools.
Since launch:
- 984 vaults deployed and automated
- 25 blockchains supported
- 21 AMM integrations
- Largest library of strategies (17) for managing liquidity
- $1.1m+ in fees generated
- Integrated with Uniswap, Sushiswap, Camelot, and Horiza on Arbitrum
- Native UI Integrations with SushiSwap & Camelot
Steer Unique User Growth Since Launch
Steer TVL Growth on Arbitrum - 370% growth in last 4 months
Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application. Include tangible milestones over the next 12 months.]
Over this year Steer will be implementing major upgrades at the protocol level as well as continuing to build out a robust modular liquidity stack.
Protocol Owned Liquidity Bonds
- Launch: Live in February 2024
- The typical liquidity incentive program allocates a predetermined budget on a monthly basis or per liquidity pool for incentives. However, the liquidity attracted by these programs tends to be transient, disappearing once the incentives are exhausted. Despite the variability in effectiveness, these programs are uniformly valued based on total expenditure, due to the fixed quantity of tokens distributed in each period. In contrast, bonds offer a variable allocation of resources while enabling protocols to acquire protocol-owned liquidity (POL). This approach ensures a more durable liquidity foundation. Furthermore, the acquisition of LP tokens, specifically the Steer Smart Pool LP tokens, facilitates active liquidity that is optimally positioned for concentrated liquidity Automated Market Makers (AMMs), which require active management to be effective. Our objective is to foster the adoption of our newly introduced Bond product, aiming to assist protocols in securing POL, enhancing liquidity, and encouraging more sustainable practices within the industry.
RWA Yield Anchor
- Launch Target: Q2 2024
- Steer Protocol is pioneering a strategy to enhance liquidity providers’ and protocols’ yield by incorporating Real World Assets (RWAs) into the DeFi ecosystem. This innovative approach allows protocols to tap into a new yield source generated from treasury-backed RWAs, offering an alternative to traditional liquidity mining incentives. By establishing partnerships with RWA providers, Steer Protocol enables the integration of stable and predictable returns from assets such as bonds, real estate, or infrastructure investments. This not only diversifies income sources for DeFi protocols but also promotes a more sustainable and less volatile financial strategy, bridging the gap between traditional finance and decentralized finance for more robust ecosystem growth. When paired with our Bond offering, RWA yield has the possibility of enabling long-term liquidity with a given chain.
Smart Trader - Automated Algorithmic Trading (with support across spot, perps, and options)
- Launch on track for early May; currently undergoing audit
- Steer Protocol is known for its revolutionary data marketplace where any developer can contribute a data connector, enabling instant access to data, both within a browser or on a server. This infrastructure allows developers to create unique algorithms which can manage not only liquidity but also other DeFi primitives. To further our toolset, we will introduce automated algorithmic trading vaults. Together with our AMM partners, we will be launching incentivized trading competitions to both drive adoption and build a library of powerful and effective trading strategies that any protocol or user will be able to deploy permissionless.
Zero-Knowledge Upgrade
- Launch Target: Q2-Q3 2024
- Steer Protocol plans to deploy zkWASM execution nodes by the end of Q2 2024. This upgrade will provide secure verifiable off-chain execution with both on-chain and off-chain data. Developers will be able to execute any off-chain algorithm/compute via Steer Protocol. Applications built on the Steer Protocol can drive both yield-bearing strategies or generalized compute, such as an Account Abstraction Wallet plugin (ref: ERC-6900)
Audit History & Security Vendors: [Provide historic audits and audit results. Do you have a bug bounty program? Please provide details around your security implementation including any advisors and vendors.]
Three audits were performed on different dates by two different auditing firms.
The first audit was performed by Omniscia, while the second one was conducted by Zellic.
- Audit report by Omniscia on Oct. 23, 2023.
- Audit report by Zellic on May 2, 2023.
- Audit report by Omniscia on Feb. 10, 2023.
Security Incidents: [Has your protocol ever been exploited? If so, please describe what, when and how for ALL incidents as well as the remedies to solve and mitigate for future incidents]
No, since going live Steer has taken a proactive and security-conscious approach, obtaining multiple audits and building risk mitigation plans.
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: [Enter Amount of ARB Requested]
250k ARB
Justification for the size of the grant 22:
Liquidity Mining for Strategic Asset Pairs
Our grant proposal is centered around liquidity mining incentives to attract LPs to activate capital that’s on Arbitrum, or to migrate capital cross-chain, to build the liquidity of assets on Arbitrum for assets that are aligned with strategically positioning the Arbitrum ecosystem as the premier liquidity and DeFi hub. Increasing the yield on pools offers the direct opportunity for LPs to earn more while decreasing the risk of Impermanent loss (IL) resulting in net negative returns.
For simplicity’s sake, we are assuming that the value of ARB is $1.71 as it was at the time of writing.
What are we trying to accomplish with this incentive grant?
Increase the total TVL of active liquidity on Arbitrum via Smart Pools for high-value assets.
- Currently at ~$8M in TVL on Arbitrum
- Targeting $37M in TVL (360% growth), increasing the amount of high value assets in LP positions on Steer and Arbitrum
How will the incentives be distributed?
We plan to deploy incentives through two mechanisms:
- Merkl for direct APR enhancement
- Steer Staking for additional rewards
Why will they make an impact on distribution?
By providing attractive APRs, we anticipate drawing both existing Arbitrum users and new capital from other chains, thus bolstering TVL and in turn trading volumes. These incentives are expected to make significant impacts, particularly by reducing the risk LPs face from Impermanent Loss (IL) and enhancing net yields for LPs. We’ve benchmarked against similar initiatives and predict our approach will foster substantial ecosystem growth.
What grant size does this require?
The proposed grant of 250k ARB tokens, equivalent to $432,000, is a strategic investment aimed at enhancing the robustness and attractiveness of our liquidity incentive programs. Based on our analysis of incentive programs running on Steer, 250k ARB would help attract our targeted ~$37M in cumulative LP TVL on Arbitrum.
An examination of our current programs indicates a compelling Total Value Locked (TVL) gain per dollar invested, signifying the efficiency and allure of our initiatives. This grant is justified by the demonstrable success and the expected continuation of such performance, which is detailed below:
- Efficacy of Current Programs: The average TVL gain per dollar of $67.84—weighted by the total value staked—signifies a strong return on investment for the current liquidity pools. This performance suggests that each dollar invested yields significant liquidity, which is essential for the sustained health and competitiveness of the ecosystem.
- The average dollar efficacy was determined by analyzing our staking rewards on Evmos and Kava chains. 13 reward pools were analyzed across both blue chip and long tail assets with a total TVL of $977,039.60 across the analyzed pools. This showcases the substantial engagement and confidence of liquidity providers in our platform. With the additional grant, we project a potential increase in TVL, which would contribute to the platform’s stability and growth.
- Please view the metrics in the incentive program breakdown section above
- Ongoing Execution Across Incentive Mechanisms: Steer currentlyruns 30+ diversified staking pools and 74 reward programs accessible through our Angle Merkl integration. As part of the current incentive program Steer Protocol demonstrates our commitment to offering a range of options to liquidity providers. This not only mitigates risk but also ensures that different market needs are met, widening the appeal of our platform.
The following table provides a succinct overview of the key data points underpinning the grant justification:
| Metric | Value |
|---|---|
| Average TVL Gain per Dollar | $67.84 |
| Number of Pools | 13 |
| Proposed Grant (ARB tokens) | 250k |
| Grant Value (USD) | $432,000 |
| Projected TVL Increase | $29.21 million |
The grant of 250k ARB is thus supported by quantitative metrics and the strategic foresight to continue expanding our liquidity programs. It ensures the project’s competitive edge while laying down a solid foundation for future growth and value creation within the decentralized finance landscape.
What will reaching this KPI achieve?
- Attaining a TVL of $37M on Steer on Arbitrum will further solidify Steer and Arbitrum’s status as a leading liquidity platform and attract a broader user base. It will demonstrate the scalability and efficacy of Steer’s Smart Pools, further validating our model in a competitive landscape. Additionally, the added liquidity to highly traded pairs will help increase the revenue Steer generates from liquidity management.
How will the growth be retained post incentives?
- Post-incentive, we plan to retain growth through ongoing optimization of Smart Pools to reduce IL and improve yields, community engagement with the protocols we partner with, and continued engagement with partner protocols to deploy additional incentives. The increased ecosystem activity and enhanced network effects from the grant period are expected to sustain higher base liquidity levels and user engagement, in addition to bringing trading volume which contributes to higher APRs.
Grant Matching:
$0
Note: While it will not be a requirement, during our outreach phase to protocols to engage them in this campaign of growing liquidity for their assets on Arbitrum and building awareness around the incentives program, we will seek additional funds from those protocols to further bolster the incentives we can offer to LPs. We’ve decided to not require this to ensure we can attract assets that provide high value to Steer and the Arbitrum ecosystem, while also pushing to maximize the effectiveness of each incentive dollar from Arbitrum by garnering deeper alignment between Steer, protocols building liquidity on Arbitrum, and the Arbitrum DAO.
Grant Breakdown:
In our strategic initiative to enhance the Arbitrum ecosystem’s efficiency, liquidity, and overall competitiveness, we have meticulously planned the allocation of grants to maximize impact across several key asset areas. The breakdown reflects our commitment to facilitating competitive ecosystem growth.
Here’s how the funds are planned to be used:
| Liquidity Mining for Strategic Asset Pairs | Total Arb | % of Total | Pairs | Reason |
|---|---|---|---|---|
| Blue Chip Assets | 125k | 50% | wAVAX/USDC |
LINK/USDC
ETH/USDC
ARB/USDC
WETH/USDC
WBTC/USDC|To target incentivizing liquidity towards core “blue chip” assets.
By increasing the total liquidity of blue chip assets on Arbitrum, we are directly targeting the largest concentration in value within Web3 - building Arbitrum into an increasingly more attractive ecosystem for investors, traders, and builders to call home.|
|Like-Kind assets|75k|30%|cbETH/ETH
stETH/ETH|To target incentivizing additional liquidity from like-kind pairs.|
|Below the TOP 10 TVL Assets|50k|20%|LINK/USDC
UNI/USDC
FIL/USDC
GRT/USDC|To target incentivizing additional liquidity going down the list in terms of top TVL, from assets which may include stable or volatile pairs. The goal is to provide incentives in which $50-100k of new liquidity is gainer per pair through this program going to lesser and lessser TVL pairs as the program runs.|
|Total|250k|100%|||
Funding Address: [Enter the specific address where funds will be sent for grant recipients]
Funding Address Characteristics: [Enter details on the status of the address; the eligible address must be a 2/3, 3/5 or similar setup multisig with unique signers and private keys securely stored (or an equivalent custody setup that is clearly stated). The multisig must be able to accept and interact with ERC-721s in order to accept the funding stream.
The multi-sig is active and requires majority approval before executing. All private keys are held via self-custody by the individual signers.
Treasury Address: [Please list out ALL DAO wallets that hold ANY DAO funds]
Contract Address: [Enter any specific address that will be used to disburse funds for grant recipients]
We plan to utilize Angle Merkl as well as our own audited and trusted staking contract which can be found verified here: Staking | Address 0x25Ef108B328Cf752F0E0b0169D499Db164173763 | Arbiscan
SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Objectives:
Our core objective is to increase the liquidity on Arbitrum via Steer Smart Pools driven by liquidity mining incentives, with a target of increasing Smart Pool TVL on Arbitrum by $29M.
Execution Strategy: [Describe the plan for executing including token distribution method (e.g. farming, staking, bonds, referral program, etc), what you are incentivizing, resources, products, use of funds, and risk management. This includes allocations for specific pools, eligible assets, products, etc.]
Distribution Method:
Distribution will be done via farming, for which we will leverage a combination of Merkl and Steer Staking to distribute incentive rewards.
What are we incentivizing:
We will be incentivizing the overall growth in liquidity (LP TVL) on Steer on Artbitrum for blue chip assets, LST/LRTs, and stable assets.
Products:
- Steer Smart Pools - accessible in the Steer app and AMMs that have integrated Steer.
- Steer Staking - rewards distribution
- Angle Merkl - rewards distribution
Risk Management
Steer, Merkl, and our AMM partners (e.g. Uniswap, Sushi, Camelot, etc) have undergone multiple audits. Steer maintains strong security practices internally, including requiring 50% of the team to sign off on any transaction from our multisig wallet.
Steer has a track record of secure management of Smart Pools, with over 20m in TVL across 900 actively managed pools currently.
Steer has no history of security breaches or incidents.
Building awareness
We will run co-marketing campaigns in collaboration with AMMs, protocols, and Arbitrum to build awareness and drive users to take action.
Use of Funds
All grant funds will be distributed to LPs directly or used to offset gas costs.
What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric? [Provide relevant design and implementation details]
- Automated and Compound Benefits: Steer Protocol provides automated long-term investment management with compound interest, making it attractive for users who prefer a hands-off approach.
- User Loyalty: Users tend to stick with Steer Protocol due to the hassle-free nature of its features and the confidence it builds over time.
- Additional Functionality: Steer Protocol introduces new features to enhance user experience without requiring additional setups, increasing user engagement.
- Continuous Improvement: Steer Protocol continually experiments with new features to keep users engaged and explore new ways to benefit from its products.
- Data-Driven Optimization: Utilizing real-time data, Steer Protocol optimizes incentives to retain long-term users and deter short-term speculators, ensuring sustainable growth.
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. [Please also justify why these specific KPIs will indicate that the grant has met its objective. Distribution of the grant itself should not be one of the KPIs.]
Key Performance Indicators (KPIs):
| Success/ KPI | Measurement | Source of Truth | |
|---|---|---|---|
| Liquidity Mining for Strategic Asset Pairs | The goal is to build liquidity and improve capital efficiency on strategic pairs. |
LP TVL for the selected pairs
TVL / Volume ratio indicating market efficiency|Change from baseline as measured from the start of incentives on a given pair.
This will be made visible through a Dune dashboard|Source of truth for verifying the accuracy of metrics is on-chain data.|
Grant Timeline and Milestones: [Describe the timeline for the grant, including ideal milestones with respective KPIs. Include at least one milestone that shows progress en route to a final outcome. Please justify the feasibility of these milestones.]
Week 1-6: Program Launch & Co-Marketing Kick-off
Objective: Officially launch the liquidity mining program, begin distribution of incentives, and kickstart co-marketing campaigns to boost awareness and participation.
KPIs:
- Successful launch of the liquidity mining program with at least 5 strategic asset pairs.
- 30% increase in TVL for incentivized asset pairs from the start of the program.
- Execution of initial co-marketing campaigns, measured by engagement metrics (e.g., social media reach, article views).
Week 7-9: Mid-Program Assessment and Optimization
Objective: Assess the effectiveness of the incentive program and co-marketing campaigns, make necessary adjustments, and continue engagement with protocol teams for ongoing support and alignment.
KPIs:
- Conduct mid-program review meetings with each asset pair team, AMM partners, and Arbitrum DAO.
- Adjust incentive structures if needed based on program performance and feedback.
- Achieve a 65% increase in TVL for incentivized asset pairs from the program’s start.
Week 10-12: Final Push and Post-Program Planning
Objective: Maximize participation and TVL in the final weeks while laying the groundwork for sustained growth post-incentives through strategic partnerships and enhanced product offerings.
KPIs:
- Reach the target of $16M in TVL in Smart Pools on Arbitrum.
- Finalize post-program strategies with asset pair teams for continued liquidity support.
- Conduct final assessment with Arbitrum DAO and prepare for a post-incentive period with strategies to retain liquidity.
Post-Incentives Period: Sustained Growth and Retention
Objective: Retain the growth achieved during the incentive program and continue to foster a healthy liquidity environment on Arbitrum through ongoing partnerships, product improvements, and community engagement.
KPIs:
- Retain at least 70% of peak TVL achieved during the incentive program.
- Establish at least two new strategic partnerships for ongoing liquidity support.
- Develop and begin implementation of new features or products based on program feedback and market needs.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem? [Clearly explain how the inputs of your program justify the expected benefits to the DAO. Be very clear and tangible, and you must back up your claims with data]
Enhanced Liquidity and Ecosystem Growth: The grant will be directed towards liquidity mining incentives for strategic asset pairs, specifically targeting high-value assets such as Blue Chip, LST/LRT, and Stablecoins. By increasing the yield on these pools, we aim to attract substantial capital, both native and cross-chain, to Arbitrum. This, in turn, enhances the total value locked (TVL) on the protocol, which is a critical metric for ecosystem vitality. An increase from our current ~$8M in TVL to our targeted $37M represents a substantial boost, aligning with Arbitrum’s goals of becoming a premier hub for builders and users.
Innovation and User Acquisition: The Steer Protocol’s Smart Pools demonstrate our commitment to innovation. By utilizing the grant for this, we not only provide utility and yield to LPs but also introduce attractive financial products and robust infrastructure that can attract users and builders from other chains and ecosystems, broadening the Arbitrum user base. This will drive user engagement and retention, contributing to the overall health and growth of the Arbitrum ecosystem.
Collaboration and Community Development: The grant facilitates collaborations with other protocols on Arbitrum and beyond. Through coordinated co-marketing campaigns and potential grant matching, we aim to foster a community of collaboration among different projects. This synergy not only enhances individual projects but strengthens the community and network effects, driving more users and developers to 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 25. 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?
We are able to comply with reporting and control group requirements. We request no special considerations.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? [Please describe your strategy and capabilities for data/reporting]
Yes
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.)
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