OpenBlock Labs is excited to submit a proposal for data monitoring and reporting on the Arbitrum Short-Term Incentive Program (STIP). Considering the scale of this incentive initiative, it is vital to closely monitor grants and conduct a thorough efficacy analysis. We’re confident that our efforts will provide the DAO with valuable data, empowering it to fuel ecosystem growth and extract maximum insights from this incentive program. Our past experience in leading ARB incentive optimization for Lido and efficacy analysis for Uniswap on Arbitrum positions us as the ideal partner for this initiative. OpenBlock also boasts a wealth of experience in collaborating with various blockchain networks, having spearheaded incentive optimization for Sui, and, more recently, leading the efforts for Solana RPGF.
To meet the objectives related to data monitoring and reporting, we expect to include the following features into a public dashboard:
- Monitoring grant amounts by protocol, cross-referencing on-chain approvals with received funds, and ensuring accurate transfer of amounts to the respective incentive distribution contracts at the protocol level.
- Identifying instances where funds are transferred to undisclosed addresses.
- Utilizing OpenBlock’s advanced models around volume profiling and wallet tagging to track the presence of wash trading, protocol team farming, and other indications of malicious behavior.
- Working with protocols to ensure compliance with reporting requirements and upholding data integrity.
To fulfill the impact analysis objective, we intend to incorporate various metrics, including but not limited to:
- Endogenous vs Exogenous Growth (volume, TVL, users): are users simply moving from one protocol to another for the sake of farming incentives, or is this program introducing net-new users into the ecosystem?
- Active tick liquidity in DEXs (pool-level)
- Price Impact on DEXs before and after (pool-level)
- Organic vs Inorganic volume (e.g. quantifying LVR for DEXs)
- Sustainability of incentives – are organic fees (swap fees for DEXs and borrow interest for money markets) becoming an increasingly large proportion of total revenue?
- Supply/Borrows on Lending
- Analysis by sector (DEXs, lending, yield aggregators, derivatives, etc.)
- Net inflows and outflows from other chains
- DAU and unique addresses
- Normalizing metrics based on grant size and incentive spend
- Normalizing metrics based on macro (e.g. normalizing DEX volume based on market volatility)
Below, we present a few examples of our previous endeavors in analyzing grant efficacy and detecting malicious behavior within various ecosystems:
Figure 1: Identifying Bot Volume for Lido
Figure 2: Competitive Intelligence for Lido
Figure 3: User Grant Efficacy for Moonbeam
Figure 4: TVL Grant Efficacy for Moonbeam
Timeline & Budget
Our proposed timeline aligns with the RFP schedule, providing a live dashboard within 4 weeks from the grant acceptance and a final report due on April 1, 2024. Bi-weekly reports will also be prepared for the community, sharing curated insights based on the collected data.
OpenBlock Labs requests $150k paid upfront (in ARB, 30D VWAP) for the outlined scope and $110k upon completion (in ARB, 30D VWAP). These funds will be used to finance the cost of 4-6 data scientists, 1-2 frontend engineers, 1 designer, 1-2 quantitative analysts, and 1 project manager.
OpenBlock Labs is an R&D firm focused on scaling decentralized organizations through data-driven incentive optimization. OpenBlock is backed by notable figures in the crypto space, including: Foundation Capital, Electric Capital, Circle Ventures, AlleyCorp, and others.
The team has backgrounds from a16z, Carnegie Mellon, Stanford, Amazon, MasterCard, and other top-tier institutions; the highly technical background of our team makes us confident that OpenBlock is uniquely positioned to tackle a problem of this nature.
OpenBlock Labs is committed to delivering a comprehensive solution for the Arbitrum STIP Data Monitoring and Reporting. Our extensive experience, data-driven approach, and dedication to excellence position us as the ideal partner for ensuring the success and integrity of the program. Thank you for your consideration.