Wanted to add some clarity on some of the items our advisor pointed out.
Data Reporting:
In the initial STIP Backfund program, Synapse Labs created a bespoke data stream on Dune to track solely the incentivized routes and RFQ. While we relied on this as the source of truth internally, other data tools did not support this level of granularity at the time. Thus OpenBlocks and the Synapse Explorer only offered a small peak into the efficacy of the program. An example of this is the API exposed only returns volume “from” Arbitrum, when a majority of the incentivized routes were “to” Arbitrum. To solve this Labs is working with OBL to upgrade the data streams so they have sufficient tooling to do their job, and also go a step deeper.
Another goal for the program would be to get more granular with data reporting and track where dollars are going/what users are doing once they enter the ecosystem. Research for Synapse on Optimism shows that Synapse drove 25% of all high-value users to the chain. Tracking this activity on chain helps to make the impact from grants like this more obvious, and more data on user behavior, organic activity, and alignment with general Arbitrum ecosystem goals for growth help everyone to make more informed decisions.
Incentive Structure:
In the addendum we specifically outlined what relayer incentives look like. The initial relayer incentives were a success: in the last month, 90% of intra L2 volume has gone through SynapseRFQ. Relayers offer quotes that are more competitive than fee-less CCTP, and most aggregators, and have finality times < 20 seconds. The new incentives should drive more competition and diversity amongst relayers, as well as offer new routes and assets.
The majority of rebates are allocated towards fee and gas rebates. In LTIPP there were several concerns with direct fee rebates. In this scenario, fee-rebates look more like liquidity incentives for just-in-time liquidity. A large portion of fees go directly to relayers in return for assets on the desired chain. This is infinitely cheaper than incentivizing the existing Uni v2/v3 pools on synapse that over pay for liquidity and offer worse pricing. This subsidy for liquidity provision also encourages the proliferation of relayers, and competition that drives down price and speeds. Relayers already offer slippage-free, near instant bridging, and this direct subsidy for liquidity provision encourages more relayers to onboard.
** Synapse DAO employed several measures to prevent sybiling, these methods were not publicized to prevent abuse of these rules.
Summary of KPIs:
Expand SynapseRFQ specifically by encouraging relayer onboarding and increasing competition. This includes the nominal amount of relayers in the ecosystem, the routes, chains, and assets supported, and the resulting decrease in quote prices and bridge speeds.
Encourage new $$ into the Arbitrum ecosystem. With SynapseRFQ, bridging to Arbitrum will be slippage free from any chain. This should also be directed in a way that encourages participation in the larger arbitrum defi ecosystem (ie users should bridge to use partner protocols like GMX to truly onboard onto the chain).
One note is that Synapse did not and will not incentivize traditional liquidity pools using the grant. The goal of the initial stip program was to provide slippage free bridging, and this is most efficiently done through SynapseRFQ