Following feedback on the proposal to establish the STIP Bridge, it was agreed to involve the LTIPP Advisors in this process with the mission to “help applicants gain insights into their proposals. This not only guides applicants through the process but also ensures that the DAO will review better proposals.”
Despite the inclusion of Advisors, this process does not involve the Council, leading us to believe that this addendum places a significant burden on the delegates who must review all the proposals. One of the reasons for the LTIPP was precisely to avoid this excessive burden. Moreover, the optimistic model adopted in this phase could raise concerns about the real control the DAO will have over these proposals, as reviewing six months of data for each applicant is time-consuming.
For this reason, we decided to accompany each application we reviewed with a brief report. We ask the delegates not to take this as an in-depth or definitive basis for deciding your vote, but rather as a high level overview that can potentially raise questions for your own analysis.
Regarding Stella, their KPIs were:
According to their final report and the metrics provided by OBL, the outcomes in the distribution of incentives were good. They achieved the targets for TVL, leveraged positions, and user engagement.
When reviewing the addendum, our main concern was stickiness, given the significant drop in TVL after incentives ended. They explained that:
1- The LRT and EigenLayer narrative has faded out, so the borrowing activity in these pools have reduced significantly over past weeks.
2- They realized that lending is not that attractive without incentives
Something interesting is that, despite not including it in their bi-weekly reports, they informed us that for “leveragoors”, the incentives were fixed to 20% top up on profitable positions. If the leveragoor’s position was negative, no incentives were given. This was done to incentivise good behaviour and prevent sybil.
For more data and their answers, please review the Discord.
For lending pools, they managed incentives discretionally, considering the need of adapting to market trends and conditions (such as LRTs narrative).
Finally, we believe that it’s good that they set KPIs for this addendum.
Conclusions
Stella showed good results during incentives distribution. Acknowledging the stickiness issue, they enabled a points strategy. It’s quite early to determine the reasons for the drop in TVL, but more research is needed to avoid incentivizing strategies that bring mostly mercenary liquidity.