[Thales] [FINAL] [STIP - Round 1]

Archive Incentive Framework (Round 1)
1

SECTION 1: APPLICANT INFORMATION

Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.

02_ThalesLogoWordmark_AltTransparent
02_ThalesLogoWordmark_AltTransparent800×600 12.6 KB

Applicant Name: padzank | Thales

Project Name: Thales Protocol

Project Description:

Thales Protocol provides a novel, fully onchain and permissionless Liquidity and AMM solution for any type of Exclusive Outcome Markets

Limited only by availability of onchain data oracles, Thales can be the engine behind any type of Exclusive Outcome marketplace (Digital Options, Sports Markets etc.)

With specialized AMM architecture for various derivatives, Thales successfully solved onchain market making and guaranteed collateralization while minimizing toxic flow and bolstering unprecedented capital efficiency of the liquidity pool.

Team Members and Qualifications:

  • Danijel - Co-founder and tech lead. More than a decade of developer experience and corporate software engineering. Early Synthetix protocol guardian role.

  • Vladan - Full stack senior developer.

  • Gorstak - frontend lead

  • padzank - Strategy Lead and Business Development

  • Red - Marketing and Growth

  • … +19 other Core Contributors with the roles of developers, growth team, analytics, marketing and design

Project Links:

Contact Information:

Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes

SECTION 2: 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: 500,000 ARB

Grant Matching: 200,000 THALES

Grant Breakdown:

Incentive program duration to last until the funds are depleted, part of total weekly emissions will depend on the usage of the products

Breakdown of the emissions and incentives is as following:

  • 10,000 ARB per week for 14 weeks as Direct Usage Incentives. These include global Trading Volume Incentives and Incentives for Discount Buyers that balance the AMM risk
  • 20,000 ARB cap per week as Fee Rebates across Thales Products (ThalesAMM, SportsAMM and SpeedMarketsAMM) for a minimum of 10 weeks. The most effective and efficient incentive program, that rebates the protocol and LP fees to traders, incentivising them to feel more comfortable trading and globally get better pricing for their trades, without the risk of the program being gamed.
  • 160,000 ARB for Focused Event Incentives such as: Trading Competitions, Incentives focused on trading activity of certain groups of markets such as Sports Tournaments and Playoffs, Parlay Leaderboards and Community Activity Campaigns

Funding Address: 0x2902E381c9Caacd17d25a2e008db0a9a4687FDBF

Funding Address Characteristics: Thales Protocol Arbitrum Treasury SAFE with 3/7 signature setup

Contract Address: Contracts and methods of distribution will be known and available in case of Grant approval.

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Clearly outline the primary objectives of the project and the Key Performance Indicators (KPIs) used to measure success. This helps reviewers understand what the project aims to achieve and how progress will be assessed.

Objectives:

Objective of this receiving grant will be to focus the growth of the products built on the Thales protocol to the Arbitrum Network via providing the best trading and participating environment due to sustainable ARB and THALES token incentives and rebates. With received Optimism grants giving us the experience on how grant incentives can provide sustainable growth and user retention to a specific network, we wish to see Arbitrum instances of Thales products reach the same KPIs and be on-par with other network deployments.

Key Performance Indicators (KPIs): Key performance indicators to look out for to gauge growth of Thales products on Arbitrum would be the overall increase in Daily Active Users and Daily Volume using the Arbitrum deployments of ThalesAMM, SportsAMM and the SpeedMarketsAMM.

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:

With Thales products being easy-to-understand, simple and fun, they are a perfect onboarding tool for a wider demographic of users who are not exclusively crypto native. Arbitrum ecosystem has the opportunity to, via supporting the growth of Thales on Arbitrum, increase the adoption of the network itself. With advancements of account abstraction infrastructure and simplicity of Thales products, it is a perfect onboarding tool for supporting networks such as Arbitrum.

Additionally, with Thales having stronger growth metrics on competing L2 network due to a deployment head start and receiving competing network grants, this ARB grant has the potential to incentivize better growth of the Arbitrum deployment. It can move unique users over to Arbitrum over more lucrative conditions and showcase how an Arbitrum deployment can have better growth metrics compared to other L2 deployments of the same product.

Justification for the size of the grant:

Size of the grant is on par with our previous experiences of balancing responsible and fair expenditure of incentives while maintaining the uptrend of relevant growth metrics retained even when incentives are depleted. With the planned duration of the incentive programs, 500,000 ARB tokens are the perfect middle ground required to reach our goals and maintain long term adoption levels of Thales Arbitrum deployments.

Execution Strategy:

Execution strategies will use our developed offchain scripts and leaderboards to weekly snapshot fee rebates data, volume incentives distributions, competition results and direct campaign rewards. This collected data will be used in weekly direct airdrops of ARB and THALES rewards to eligible users.

Grant Timeline:
Grant is set to be distributed on a weekly basis starting from approximate time of receiving funds in November up until January 31st.

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 4: 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?:
Thales Protocol has no native network but is a multichain project.

On what other networks is the protocol deployed?:
Thales Protocol products have a full suite of deployments on Optimism, Arbitrum and Base while it has limited deployments on Polygon and ZkSync.

What date did you deploy on Arbitrum?:
09/19/2022

Protocol Performance:

  • 5 novel AMMs live in production: ThalesAMM, RangedAMM, SportsAMM, ParlayAMM and SpeedMarketsAMM

  • $39M Total Buy Volume driven across products

  • ~ 24,000 Unique Users across products

Protocol Roadmap:

Relevant products:

  • ThalesAMM - Novel Automated Market Maker contract that market makes the ERC20 Positional Tokens (UP and DOWN ERC20 tokens) by pricing them via implied probability algorithm. These UP and DOWN tokens represent potential results of Digital Options of various crypto and non-crypto assets supported by the Thales Marketplace. The ThalesAMM architecture combined with dedicated Positional Markets contracts that collateralize and mint positions, revolutionized market making of onchain exclusive outcome markets.

ThalesAMM
ThalesAMM1097×592 95.1 KB

  • RangedAMM - Built on top of the ThalesAMM, RangedAMM uses similar architecture to market make Digital Options of price ranges (IN or OUT ERC20 positions) instead of price directions.

RangedAMM
RangedAMM1090×597 105 KB

  • SportsAMM - Automated Market Maker based on ThalesAMM architecture, that market makes onchain Sports Markets that are priced via Chainlink provided pre-game odds and resolved via Chainlink provided post-game results. By using the similar collateralization and market making architecture that is behind the Thales Marketplace, the SportsAMM is the world’s first successful Sports Markets engine that managed to minimize toxic flow and bolster unprecedented capital efficiency while ensuring a constant 100% collateralization thanks to the foundational Thales architecture.

SportsAMM
SportsAMM1272×574 89.8 KB

  • ParlayAMM - Automated Market Maker built on top of the SportsAMM, that market makes and collateralizes combinations of individual SportsAMM positions. This allows users to place fully onchain leveraged sports positions while keeping the same 100% collateralization and efficiency of the SportsAMM contract.

parlayAMM
parlayAMM366×563 44.3 KB

  • SpeedMarketsAMM - Newest addition to the Thales products portfolio, SpeedMarketsAMM is the engine behind the Thales Speed Markets that allow users to place simple and quick positions on in what direction will the price of chosen crypto asset finish within a custom intraday timeframe.

SpeedMarketsAMM
SpeedMarketsAMM1101×779 196 KB

Roadmap:

Thales Protocol next priority is implementing an Account Abstraction solutions that will allow frontends of Thales products to have a full Web2 experience while maintaining permissionlessness, non-custodial nature and decentralization. This will also allow onboarding users without prior crypto knowledge and developments of mobile apps driving on top of Thales smart contracts.

With the Thales smart contract architecture solidifying and maturing sufficiently, the next wave of growth and adoption comes from third party integrators. Thales is incentivizing, optimizing its architecture and streamlining documentation to fully support seamless integration of third party projects.

Audit History:

SECTION 5: Data and Reporting

Provide details on how your team is equipped to provide data and reporting on grant distribution.

Is your team prepared to create Dune Dashboards for your incentive program?:

Yes, our team is prepared. We already have running Dune Dashboards showcasing our key metrics across relevant chains. We are also willing to adapt or create a new dashboard specialized in the Arbitrum Grant KPI metrics.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?

Yes, we agree to provide bi-weekly program updates.

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

8 Likes
2

Hello @padzank thank you for submitting! Please make the following changes to your proposal to comply with the program rules.

  1. Please note the following regarding the expected timeline of the incentives program. Unfortunately, your 5-month timeline does not meet these requirements.
  1. Grant funds are only to be used for incentives and are not permitted to be used for subgrants for builders. Additionally, grant funds can only be used for “Event Promotions” in the sense of providing incentives they can not fund the marketing/operational aspect of event promotions.
5 Likes
3

Thales’ robust AMM architecture allows for positions to be taken on crypto markets as well as sports game. The two-sided AMM also allows users to participate in the liquidity providing behind these positions allowing users to be the “house”. While AMMs themselves are not new, the design created by Thales around sports is truly innovative.

We are broad supporters of Thales and the products they offer. We believe their grant is of adequate size. While it is listed for what general purposes the grant will serve, we would love to see clarity into how decisions around which specific products will receive incentives.

We are delighted to see that Thales will match these programs with some of their own tokens as they demonstrate their commitment to Arbitrum. We look forward to seeing future comments and thank Thales for their efforts on Arbitrum.

5 Likes
4

The proposal is revised and adjusted according to your inputs.

Thank you very much for the constructive feedback and the heads up!

2 Likes
5

Supportive of the STIP: Thales is in a unique position to bring non-crypto native users to Arbitrum via it’s ‘normie-friendly’ products such as the Overtime sportsbook (fully on-chain with competitive odds on NFL, NBA, Premier League etc.) and crypto speed markets. The grant is an opportunity for Arbitrum to not just capture market share from competing L2s, but grow the on-chain userbase altogether.

1 Like
6

Thank you for making these changes! Your submission now meets all requirements to be considered for a snapshot vote.

1 Like
7

This is a reasonable proposal and it is good to see you are offering your token as incentives as well. GambleFI is looking good. I do think WINR is a better product though but competition is good for the ecosystem.

2 Likes
8

Thales has already demonstrated in the past that they know how to use incentives very well to acquire users and develop volume with their products, I support this proposal.

2 Likes
9

To further showcase our experience and effectiveness in using grants for sustainable and responsible growth on the receiving network, here is an Analysis of Thales OP Rewards Impact from the Optimism Grants official monitoring article:

Relevant quoted segments from the OP Grant Monitoring Report:

Key Takeaways

  • The grant was put to excellent use by the Thales team & has demonstrated its effectiveness through their active governing members and development team.
  • Support and endorse these indigenous projects to foster and facilitate the expansion of the ecosystem.
  • Thales allocation of grants into Referral Bonus, Gamified Protocol Rewards & Liquidity Rewards is aptly picked for the growth of its protocol.

Recommendations

  • Any project aiming to introduce a fresh and innovative idea can undoubtedly draw valuable lessons from Thales’ work, particularly in terms of effectively utilizing grants.
  • Effective marketing efforts for Thales can also increase awareness among potential users, positioning it as a top-choice product within its niche.
  • Drawing in developers to engage in experimentation and establishing connections with various projects in a backward manner.
  • TIPs can also mention the contract addresses and the manner in which the grants will be disbursed for better transparency.

Closing Remarks

Bear markets can pose significant challenges for projects, especially when the market predominantly comprises crypto-native users who may already be facing losses. In such situations, the grants awarded to these projects can play a crucial role in preserving their attractiveness, sustainability, and potential for substantial future impact.

2 Likes
10

Hello @padzank ,

Now that your application has been marked eligible, please be advised of the remaining steps in the application process to be completed prior to the Review Period Deadline:

Please complete the following steps required for your application to proceed to Snapshot:

Once you change your proposal title to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness.

Once marked as [Final], your application post will be locked by moderators and you will no longer be able to edit your proposal.

11

@padzank Here is the updated process for changing your title.

To change your proposal to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness to proceed from [Draft] to [Final] status.

Once notified, the Arbitrum Foundation Forum Moderator will adjust your title from [Draft] to [Final] status. Once marked as [FInal], your application post will be locked by moderators and you will no longer be able to edit your proposal.

1 Like
12

Firstly, thank you for your proposal and your evident enthusiasm for contributing to the Arbitrum ecosystem.

Introduction and Rationale

The proposal aims to secure a grant to extend Thales’ unique offerings on Arbitrum, with a specific request for 500k $ARB and a 200k $THALES match from Thales themselves. Thales has already shown its commitment to Arbitrum by bringing innovation to the AMM sector, particularly in sports-related offerings. Their migration from Optimism to Arbitrum has generated significant volume, indicating their effectiveness. We’re particularly excited about their two-sided AMM design that allows users to both take positions and serve as liquidity providers. In our eyes, this proposal has strong potential to be effective, enriching the Arbitrum ecosystem.

Major Concerns

Clarity on Specific Product Incentives

  • The proposal lists general purposes for the grant
  • Lacks details on which specific products will benefit
  • Our recommendation for change: Offer a more detailed roadmap or criteria for how the grant would be allocated among your different products.

Minor Concerns

  • The relatively recent migration to Arbitrum
  • The absence of long-term performance data specifically on the Arbitrum platform
  • Our recommendation for change: Providing some performance metrics or targets related to your Arbitrum-specific activity would bolster the proposal.

Summary

Castle Capital appreciates the innovative approach Thales brings to the Arbitrum ecosystem, especially in the AMM sector. We’re broad supporters of their work and their dedication to the platform. However, the proposal could be strengthened by offering more details on how the grant will be utilized among specific products.

We hope our feedback proves constructive and look forward to Thales’ continued contributions to the Arbitrum ecosystem. Thank you for your commitment and efforts.

2 Likes
13

@stonecoldpat @cliffton.eth @eli_defi

Our proposal is ready to proceed from [Draft] to [Final] status.

Thanks!

1 Like
14

Post has been marked FINAL and locked.

15

We are thrilled at the prospect of this project coming to fruition and would like to formally extend our support for your proposal. We look forward to the possibility of further collaboration in the future!

BR,
iZUMi Team

1 Like
16

Thales: @padzank

From @Seedgov led by the @cattin delegation, we want to convey our support to this proposal. The reasons why we agree are as follows:

  • The way Thales incentivizes adoption is specific and well-known after its experience with Optimism.

We want to clarify that this is not the final vote, since as we clarify in this release, the final vote is defined by our community. We also want to invite you to attend our Governance Call that will be held tomorrow in our discord.

2 Likes
17

Firstly, we thank you for the proposal. Thales’ innovative AMM products are definitely unique. It’s very valuable that you have shared the impact report of the grant received from Optimism. Also, deciding how the received grant should be distributed through governance is quite important. However, when we compare the effect created by the grant amount received in Optimism, we believe it did not create sufficient TVL. The allocation of the desired grant, mostly to programs like trade competition, raised questions for us. We are of the opinion that trading competitions do not create a lasting impact.

Due to all these reasons, we as ITU Blockchain are casting an “Abstain” vote in this ballot.

1 Like
18

Hi and thank you for the constructive feedback.

To further clarify and try and assist you getting a clearer picture of the nature of our proposal:

  1. TVL growth is not a KPI that determines the success of Thales products due to the nature of our collateralization and AMM architecture. We are completely different than other onchain derivative products and should not be looked at under the same KPIs. Due to the high risk/high reward binary nature of our product, our capital efficiency of collateral liquidity is much much higher than perp and vanilla option products, meaning that we can cater to demand sufficiently with much lower total TVL. Matter of fact, the growth of our TVL is limited due to THALES token gating where only stakers have the luxury to LP into the AMM pools. Conclusion is: the performance of our products should be weighted by onchain activity such as unique users, fee accrual and volume.

e.g. for past couple couple weeks we averaged around ~400 weekly unique users on Optimism contracts without any incentives, while Arbitrum contracts are less than half that on average. This activity is present ever since we depleted our Optimism incentives from OP grants, meaning that we maintain a solid post-incentives user retention numbers. We wish to do the same on Arbitrum with this moderate ARB grant.

  1. Trading competitions are only a small part of the 160k ARB Focused Event Incentives, while the direct usage incentives are a total of 340k ARB. This means that trading competition incentives will be around ~10% to ~15% of this grant. Also, Trading Competitions as a growth tool for product such as our own should not be underestimated. We observed that promoting incentivized Trading Competitions on mainnet not only drive immediate usage and volume, but also increases the number of active regular users that stick around after trying out our products for the competition.
1 Like
19

Thank you for answering in detail and making the proposal clearer.

1 Like
20

Transparency update from the Thales Protocol to whom it may concern, in light of the pending STIP grant receival.

As additional internal security measures since the writing of the original proposal, the Thales Treasury Multisig on Arbitrum quoted on the original proposal has changed from a 3/7 signer structure to a 3/5 signer structure. The same multisig address will be used for the receival the grant.

1 Like