Stella STIP Program Updates

Brief context on Stella

Stella is the top leveraged farming protocol on Arbitrum with 0% cost to borrow. Stella is currently at ~$5M in TVL, with the TVL seeing an 85% increase since the start of the STIP incentives. More than 66% of Leveraged positions on Stella have generated a positive yield at 666% APR on average.

Abstract of the Stella STIP Proposal

  1. Stella received 186,000 ARB as incentives for the STIP incentives, out of which 120,000 ARB will go towards incentivizing the lending pools, and 66,000 ARB will go towards incentivizing the profitable leveragoors.
  2. The objective behind the incentives is two fold :
  • Help bootstrap lending liquidity on Stella lending pools, to fulfill the borrowing demand, which will in turn bring higher lending APYs, and kickstart a flywheel. The ARB incentives will be directed towards lending pools with higher utilization rates to attract more liquidity and ensure the judicious use of ARB incentives.
  • Give additional 20% profits to leveragoors as incentives on their profitable positions only. This will incentivize good behavior on part of the leveragoors, and prevent against any sybil attacks.

Note that both, the leveragoor’s and lenders incentives will be auto deposited in the ARB lending pool as ysARB, and will be vested over 30 days over the start of next epoch. This will ensure that the ARB incentives are not dumped and sell pressure is gradually eased.

## Recap of the Previous Two Weeks

ARB Received Last Disbursement: 26,572 ARB

ARB Utilized as Incentives in the Last Two Weeks: 11,120 ARB

Contracts incentivized over the last 2 weeks:

  • ysETH.h: 0x092d4BEe60B9F8904918bA7b0341c0B45f16FB55
  • ysUSDC.e: 0x3251f402Cc06b33E742f08E1ADbE0D2E4C1ea2FA
  • Strategy Gateway: 0xDc6c3dFb237D5202a8eE4d8472A52A94F9282053

Contract address label Form completed for all addresses: [YES]

ARB left over: 15,672 ARB

Plan for leftover ARB:

Any additional ARB leftover will be rolled over to the next epoch of incentives. Any ARB left over post Jan 31st 2024, will be duly returned to the Arbitrum DAO.

Please note that the leftover ARB incentives in the current epoch is a strategic move, because we will need more ARB incentives to support current APYs at higher TVLs some weeks down the line. Also, the ARB meant to be distributed as leveragoors incentives have not been distributed yet because most of the current leveragoors have not closed their positions yet. Since leveragoors can keep their positions open for not more than 30 days, we expect more leveragoors to close their positions soon, and see a spike in ARB distribution in the next epoch (as more leveragoors will realize the yield and get 20% extra ARB incentives).

Summary of incentives:

Stella received 186,000 ARB for the STIP incentives, out of which 120,000 ARB will go towards incentivizing the lending pools, and 66,000 ARB will go towards incentivizing the profitable leveragoors. Overall, Stella has spent 11,120 ARB out of the 26,572 ARB received in the past two weeks of STIP, and rolled over the remaining for the next epoch.

To summarize the effect of the current incentives :

  • Stella has seen an 85% growth in TVL since the Arbitrum STIP incentives went live, and is now the biggest protocol on Arbitrum in the ‘leveraged farming’ category according to DeFillama.
  • Stella has managed to get $4.4M in lending pool TVL (as of 14th Nov 2023). This is a big success given Stella is now able to bootstrap lending liquidity and is able to meet the high borrowing demand from leveragoors on the platform.
  • On the strategy side, Stella has managed to cross $4M (as of 14th Nov 2023) in cumulative TVL (including leverage) - which is at an all time high for Stella. Cumulative leveragoor yields on Stella has also crossed $100k since launch. Note that this figure is all real yields, and does not include incentives!

Additional Info / Disclosures to Multisig:

No updates related to the Multisig.

## Statistics

Average daily TVL: $4M

Cumulative TVL (as of 14th Nov 2023) : $5.26M

Average daily transactions: 52

Average daily volumes: $200,000

Number of unique user addresses: 156

Transaction fees: $1625.90

Link to Dashboard showing metrics: Stella Analytics

## Plan For the Next Two Weeks

Amount of ARB to be distributed: 18,100 ARB

Contracts that will be incentivized:

  • ysETH.h: 0x092d4BEe60B9F8904918bA7b0341c0B45f16FB55
  • ysUSDC.e: 0x3251f402Cc06b33E742f08E1ADbE0D2E4C1ea2FA
  • ysARB: 0xab416E57ec74e87295B8a1507745a954B0bB9F02
  • ysPENDLE: 0xee93D40DDA093936213F845CddF9Bf8AA14D7a51
  • ysGMX: 0xdab9DE68dF2FdE5db2da81f50265a4A21F8298e2
  • ysRDNT: 0xc1e2C1f9c4fe278d0dB0d3D8EfF359f8B235F853
  • Strategy Gateway: 0xDc6c3dFb237D5202a8eE4d8472A52A94F9282053

Contract address label Form completed for all addresses: YES

Mechanism for distribution incentives:

  • Lenders: Based on reward rate allocation in each epoch.
  • Leveragers: An additional 20% on top of the yield
  • For both Lenders and Leveragers, the $ARB reward has a 30-day vesting period after each epoch ends.

Summary of incentives plan:

Over the next two weeks, Stella will disburse ARB incentives as :

  • Leveragoor side : Stella will continue to give additional 20% leveragoor incentives on profitable positions. As done previously, the leveragoor’s incentives will be auto deposited in the ARB lending pool as vARB, and will be vested over 30 days over the start of next epoch. This will ensure that the ARB incentives are not dumped and sell pressure is gradually eased.
  • Lending side : Stella will turn on incentives for all lending pools currently listed on Stella since the ETH Hyperlending and USDC.e pools on Stella have reached healthy levels of utilizations. A lot of alt asset pools like PENDLE, RDNT, GMX are seeing high borrowing demands, and the incentives will help attract more liquidity to meet the borrowing demands.

Summary of changes to the original plan:

There are no major changes in the incentives plan. The only change the team wants to highlight is that in the initial 2 weeks, the lending incentives were only given to the ETH hyperlending and USDC.e lending pools, since these pools were at 100% utilization. Now that the pools have reached healthy levels of utilization (trending at ~80%), Stella will resume lending incentives across all lending pools.

This was a strategic call taken by the team to ensure that every ARB spent on incentives is spent very judiciously to unlock protocol growth bottlenecks.

We are happy to hear the thoughts of the community on this, and even change our approach depending on community feedback.

Feedback/ Suggestions :
We welcome any community feedback or suggestions regarding STIP or otherwise.
Please feel free to drop comments in the post thread, or else feel free to reach out to me on TG or twitter. My details are below :

Telegram : @apoorv99
Twitter : @apoorvanand99

image

Abstract of the Stella STIP Proposal

  1. Stella is the top leveraged farming protocol on Arbitrum with 0% cost to borrow. Stella is currently at $5.8M in TVL, with the TVL seeing an 253% increase since the start of the STIP incentives. Also, 67% of Leverage Positions on Stella have generated a positive yield at 614% APR on average.
  2. Stella received 186,000 ARB as incentives for the STIP incentives, out of which 120,000 ARB will go towards incentivizing the lending pools, and 66,000 ARB will go towards incentivizing the profitable leveragoors.
  3. The objective behind the incentives is two fold :
  • Help bootstrap lending liquidity on Stella lending pools, to fulfill the borrowing demand, which will in turn bring higher lending APYs, and kickstart a flywheel. The ARB incentives will be directed towards lending pools with higher utilization rates to attract more liquidity and ensure the judicious use of ARB incentives.
  • Give additional 20% profits to leveragoors as incentives on their profitable positions only. This will incentivize good behavior on part of the leveragoors, and prevent against any sybil attacks.

Note that both, the leveragoor’s and lenders incentives will be auto deposited in the ARB lending pool as ysARB, and will be vested over 30 days over the start of next epoch. This will ensure that the ARB incentives are not dumped and sell pressure is gradually eased.

Recap of the Previous Two Weeks

ARB Received Last Disbursement: 26,572 ARB

Total ARB Received: 53,144 ARB

ARB Utilized as Incentives in the Last Two Weeks: 23,757 ARB

Contracts incentivized over the last 2 weeks:

  • ysETH.h: 0x092d4BEe60B9F8904918bA7b0341c0B45f16FB55
  • ysUSDC.e: 0x3251f402Cc06b33E742f08E1ADbE0D2E4C1ea2FA
  • Strategy Gateway: 0xDc6c3dFb237D5202a8eE4d8472A52A94F9282053

Contract address label Form completed for all addresses: YES

ARB left over: 18,267 ARB

Plan for leftover ARB:

Any additional ARB leftover will be rolled over to the next epoch of incentives. Any ARB left over post Jan 31st 2024, will be duly returned to the Arbitrum DAO.

Please note that the leftover ARB incentives in the current epoch is a strategic move, because we will need more ARB incentives to support current APYs at higher TVLs some weeks down the line. Also, all the ARB meant to be distributed as leveragoors incentives have not been distributed yet because most of the current leveragoors have not closed their positions yet. Since leveragoors can keep their positions open for not more than 30 days, we expect more leveragoors to close their positions soon, and see a spike in ARB distribution in the next epoch (as more leveragoors will realize the yield and get 20% extra ARB incentives).

Summary of incentives:

Stella received 186,000 ARB for the STIP incentives, out of which 120,000 ARB will go towards incentivizing the lending pools, and 66,000 ARB will go towards incentivizing the profitable leveragoors. Overall, Stella has spent 34,877 ARB out of the 53,144 ARB received over the duration of STIP, and rolled over the remaining for the next epoch.

To summarize the effect of the current incentives :

  • Stella has seen an 253% growth in TVL since the Arbitrum STIP incentives went live, and is now the biggest protocol on Arbitrum in the ‘leveraged farming’ category according to DeFillama.
  • Stella has managed to get $4.96M in lending pool TVL (as of 1st Dec 2023). This is a big success given Stella is now able to bootstrap lending liquidity and is able to meet the high borrowing demand from leveragoors on the platform.
  • On the strategy side, Stella has managed to reach $4.8M (as of 1st Dec 2023) in cumulative TVL (including leverage) - which is at an all time high for Stella. Cumulative leveragoor yields on Stella has also crossed $132k since launch. Note that this figure is all real yields, and does not include incentives!

**Additional Info / Disclosures to Multisig: **
No updates related to the Multisig.

Statistics

Average daily TVL: $5.5m

Average daily transactions: 61

Average daily volumes:

  • Lending : $200,000 (Deposit + Withdraw)
  • Strategy: $904,000 (Borrow + Repay)

Number of unique user addresses:

  • Lenders = 285
  • Leveragoors = 274
  • Total = 559

Transaction fees: $3,100

Link to Dashboard showing metrics: Stella

Plan For the Next Two Weeks

Amount of ARB to be distributed: 18,100 ARB

Contracts that will be incentivized:

  • ysETH.h: 0x092d4BEe60B9F8904918bA7b0341c0B45f16FB55
  • ysUSDC.e: 0x3251f402Cc06b33E742f08E1ADbE0D2E4C1ea2FA
  • ysARB: 0xab416E57ec74e87295B8a1507745a954B0bB9F02
  • ysPENDLE: 0xee93D40DDA093936213F845CddF9Bf8AA14D7a51
  • ysGMX: 0xdab9DE68dF2FdE5db2da81f50265a4A21F8298e2
  • ysRDNT: 0xc1e2C1f9c4fe278d0dB0d3D8EfF359f8B235F853
  • Strategy Gateway: 0xDc6c3dFb237D5202a8eE4d8472A52A94F9282053

Contract address label Form completed for all addresses: YES

Mechanism for distribution incentives:

  • Lenders: Based on reward rate allocation in each epoch.
  • Leveragers: An additional 20% on top of the yield
  • For both Lenders and Leveragers, the $ARB reward has a 30-day vesting period after each epoch ends.

Summary of incentives plan:

Over the next two weeks, Stella will disburse ARB incentives as :

  • Leveragoor side : Stella will continue to give additional 20% leveragoor incentives on profitable positions. As done previously, the leveragoor’s incentives will be auto deposited in the ARB lending pool as vARB, and will be vested over 30 days over the start of next epoch. This will ensure that the ARB incentives are not dumped and sell pressure is gradually eased.
  • Lending side : Stella will continue to provide incentives for most lending pools currently listed on Stella since the ETH Hyperlending and USDC.e pools on Stella have reached healthy levels of utilizations. A lot of alt asset pools like PENDLE, RDNT, GMX are seeing high borrowing demands, and the incentives will help attract more liquidity to meet the borrowing demands.

Summary of changes to the original plan:
There are no major changes in the incentives plan.

We are happy to hear the thoughts of the community on this, and even change our approach depending on community feedback.

Feedback/ Suggestions :
We welcome any community feedback or suggestions regarding STIP or otherwise.

Please feel free to drop comments in the post thread, or else feel free to reach out to me on TG or twitter. My details are below :

Telegram : @apoorv99

Twitter : @apoorvanand99