UPDATE as of 25 Oct 2023 -
Existing multisig: 0x5d4C14142d8771190Ac67b813eB57225AD0d7cD2
Change to the following multisig: 0x0A56ba03cC70582EA512f44B86d19aCDd631f475
This new wallet is compliant with signers and has been specifiically setup for managing the STIP + separated from other operations.
SECTION 1: APPLICANT INFORMATION
Applicant Name:
Hero
Project Name:
Trader Joe
Project Description:
Trader Joe is a leading Decentralized Exchange (DEX) that facilitates token swaps through use of liquidity pools.
Team Members and Qualifications:
Murloc: Co-founder
Cryptofish: Co-founder
DavideFi: General Manager
Blue: Head of Marketing & Growth
Hero: Arbitrum BD Lead
Alima: Arbitrum Marketing Lead
Project Links:
Website: Trader Joe XYZ | Leading Decentralized Exchange
Twitter: https://twitter.com/traderjoe_xyz
Github: Trader Joe XYZ · GitHub
Product Documentation: Liquidity Book | Trader Joe Help Center
Technical Documentation: https://docs.traderjoexyz.com/
Contact Information:
TG:
Telegram: Contact @blueclarity Telegram: Contact @hero_0x
Email:
hero@traderjoexyz.com, blue@traderjoexyz.com, davide@traderjoexyz.com, murloc@traderjoexyz.com
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?:
Yes
SECTION 2: GRANT INFORMATION
Requested Grant Size:
1,510,000 ARB
Grant Matching:
Up to 348k JOE committed based on the outcome of the execution (detailed below)
Grant Breakdown:
| Distribution Form | Total ARB | % Split |
|---|---|---|
| Market Maker Incentives: Native Protocols | 760,000 | 50.33% |
| Market Maker Incentives: Multi-Chain Protocols | 240,000 | 15.89% |
| Auto-Pool Yield Farms | 360,000 | 23.84% |
| New To Arbitrum Builder Allocation (Market Maker Incentives) | 150,000 | 9.93% |
| Total | 1,510,000 | 100.00% |
Funding Address:
Funding Address Characteristics:
Multisig: 0x5d4C14142d8771190Ac67b813eB57225AD0d7cD2
Signers 2 out of 3 required
Contract Address:
0x624C5b9BEB13af6893e715932c26e2b7A59c410a
SECTION 3: GRANT OBJECTIVES AND EXECUTION
Objectives:
- To grow and support the liquidity of native Arbitrum builders
- To grow and support the liquidity of multi-chain builders that are Arbitrum-aligned
- Onboard new builders to the Arbitrum ecosystem
- Increase user discovery of Arbitrum protocols
Key Performance Indicators (KPIs):
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
1) Support Builders
Liquidity is the lifeblood of DeFi ecosystems. This grant will help to enhance and deepen spot liquidity, allowing Trader Joe to offer a more stable and efficient exchange experience that directly benefits the builders whom the markets support. Since its expansion to the Arbitrum network, Trader Joe has already enhanced liquidity for several key Arbitrum protocols. This has been achieved through sustainable reward distributions from its bespoke Market Maker incentive program, utilizing its custom-designed Automated Market Maker (AMM) known as Liquidity Book.
2) Signal Growth
The Arbitrum DAO prides itself as a neutral and open governing body, upholding the values of interoperation and open innovation. As such, Trader Joe plans to use this grant to support both long-standing and newly launched protocols native to Arbitrum One but also those who have deployed to Arbitrum One. Trader Joe believes that by supporting multi-chain protocols that have shown commitment towards Arbitrum, this will signal to the wider DeFi landscape that Arbitrum can be a home to builders who have yet to deploy here. With this grant, Trader Joe will aim to directly bolster Arbitrum’s standing as the go-to Layer 2 platform for innovation in the DeFi space.
3) Grow the Arbitrum User Base
Trader Joe aims to leverage the incentives granted to attract a larger and more diverse user base to the Arbitrum ecosystem. Utilizing its unique multi-chain position alongside previously delivered growth campaigns, Trader Joe will amplify the network effects of the allocated grant incentives via an Arbitrum Adventure branded Marketing Campaign. This approach will see resources committed from the Trader Joe ecosystem to raise awareness with the aim of creating a ripple effect that drives user acquisition for the Arbitrum Ecosystem. The phased approach to incentivization outlined in the below execution strategy, will complement the efforts of new user acquisition as Marketing efforts will be timed with each phase transition. The goal is to champion Arbitrum as a vibrant hub ripe with activity, benefiting all participants within the ecosystem.
Justification for the size of the grant:
Trader Joe has built a reputable and trusted name in the space through a commitment to long-lasting, collaborative relationships and a community-first approach. In addition, Trader Joe has a track record of continuous product innovation and has maintained high safety and security standards. Since deploying to Arbitrum, Trader Joe has signaled a significant level of commitment to the ecosystem by not only fostering a great trading and liquidity experience, but also launching community focused efforts to grow Arbitrum with continued community campaigns to be launched and aligned with the Arbitrum Odyssey.
Trader Joe offers a unique DEX experience on Arbitrum with its custom AMM, Liquidity Book. This novel primitive discretizes liquidity, enabling on-chain zero slippage trade execution and surge pricing for liquidity providers. It also offers a granular, hyper-manageable liquidity provision experience. Liquidity Providers using Liquidity Book get full control and precision when managing liquidity where and when it’s needed, making it an excellent hub for liquidity that champions both efficiency and composability. Liquidity Book to date has facilitated over $3.15bn in trading volume on Arbitrum and the Decentralized Exchange has welcomed over 470k unique wallets.
The grant request of 1,510,000 ARB tokens will be utilized to foster and support liquidity growth of key builders that have demonstrated a strong commitment to scaling Arbitrum, and/or have introduced genuine product innovation that has helped to shape the diversity of the Arbitrum One ecosystem. To date this year over 1,400,000 JOE emissions have been utilized towards Arbitrum. Trader Joe will continue to support builders with JOE emissions moving forward.
Execution Strategy:
Trader Joe’s execution strategy will see 100% of the allocated grant distributed as liquidity mining incentives that will be distributed fully to Liquidity Providers by two incentivization forms, both are unique to the Trader Joe platform and, combined, uphold the values of efficiency, sustainability and accessibility.
| Summarised Distribution % Split | Total |
|---|---|
| Market Maker Incentives | 66.23% |
| Auto-Pool Yield Farms | 23.84% |
| New To Arbitrum Builder Allocation (Market Maker Incentives) | 9.93% |
| Total | 100.00% |
The incentives will be distributed over the duration of 84 days (12 weeks) with every 28 days (4 weeks) defined as a ‘phase’. A balanced approach will be taken when distributing incentives to ensure consistency throughout the phases. Each phase will see specific protocols selected to receive incentives, enabling a focused approach to incentivization that aids a core objective of the proposal, discovery.
| Distribution Form | Phase 1 | Phase 2 | Phase 3 | Total |
|---|---|---|---|---|
| Market Maker Incentives: Native Protocols | 17.88% | 17.88% | 14.57% | 50.33% |
| Market Maker Incentives: Multi-Chain Protocols | 5.96% | 4.64% | 5.30% | 15.89% |
| Auto-Pool Yield Farms | 7.95% | 7.95% | 7.95% | 23.84% |
| New To Arbitrum Builder Allocation (Market Maker Incentives) | 3.31% | 3.31% | 3.31% | 9.93% |
| Total | 35.10% | 33.77% | 31.13% | 100.00% |
1) Liquidity Book Rewards (Market Maker Incentive Program): Grant % allocated 66.23%
The Liquidity Book Rewards program was first introduced on Arbitrum and has successfully completed 12 Epochs since its inception on February 8th. This program incorporates a unique incentive mechanism through a competitive scoring system, known as the ‘MakerScore’. It encourages liquidity providers to manage their assets more efficiently, enabling them to earn increased trading fees and boost their MakerScore. A higher MakerScore translates to a larger portion of the available rewards. By introducing a competitive element to yield farming with concentrated liquidity, the program promotes sustainability and benefits builders by enhancing the depth of spot liquidity which improves the trading experience by enabling more swaps to execute with zero slippage thanks to the innovations of the Liquidity Book AMM.
Every liquidity provider who deposits into a participating liquidity pool is evaluated over the entirety of an Epoch in which they participate, with each Epoch lasting 14 days and each phase containing two Epochs. At the conclusion of each Epoch, The MakerScore is calculated for all participating liquidity providers. These rewards are then distributed to eligible liquidity providers through a smart contract, which vests the rewards over the duration of 7 days. Liquidity providers who have rewards to claim, can do so directly from the liquidity pool page where they accrued them.
- Full details for how this program works in its entirety, including formulas used can be found here
- All MakerScore calculations for every Epoch are published for public view here
Each incentivized partner pool will have rewards allocated in one of the three phases, enabling a focused selection of protocols for each phase that aids user discovery and concentrates reward effectiveness. Trader Joe proposes incentives to the following builders on account of key factors demonstrated, such as proven commitment, contribution and product innovation for the Arbitrum ecosystem.
| Native Partners | Phase 1 | Phase 2 | Phase 3 | Total ARB Allocation | % of Total Grant |
|---|---|---|---|---|---|
| GMX (GMX) | 120000 | 120000 | 7.95% | ||
| Treasure (MAGIC) | 120000 | 120000 | 7.95% | ||
| Radiant (RDNT) | 120000 | 120000 | 7.95% | ||
| Camelot (GRAIL) | 90000 | 90000 | 5.96% | ||
| Dopex (DPX) | 90000 | 90000 | 5.96% | ||
| Jones Dao (JONES) | 90000 | 90000 | 5.96% | ||
| Lodestar (LODE) | 50000 | 50000 | 3.31% | ||
| WINR (WINR) | 50000 | 50000 | 3.31% | ||
| Nitro Cartel (ALP) | 10000 | 10000 | 0.66% | ||
| Savvy (SVY) | 10000 | 10000 | 0.66% | ||
| Stella (ALPHA) | 10000 | 10000 | 0.66% | ||
| Total | 270000 | 270000 | 220000 | 760000 | 50.33% |
| Multi-Chain Partners | Phase 1 | Phase 2 | Phase 3 | Total ARB Allocation | % of Total Grant |
|---|---|---|---|---|---|
| Stargate (STG) | 70000 | 70000 | 4.64% | ||
| Pendle (PENDLE) | 60000 | 60000 | 3.97% | ||
| Gains (GNS) | 50000 | 50000 | 3.31% | ||
| Woo (WOO) | 30000 | 30000 | 1.99% | ||
| Level (LVL) | 20000 | 20000 | 1.32% | ||
| Swell (swETH) | 10000 | 10000 | 0.66% | ||
| Total | 90000 | 70000 | 80000 | 240000 | 15.89% |
2) Auto-Pools (Automated Liquidity): Grant % allocated 23.84%
As a DEX that is supporting liquidity for Arbitrum builders, deep spot liquidity for core pairs is important to ensure that users can seamlessly trade in and out of core tokens with high efficiency.
Auto-Pools is the latest product innovation by Trader Joe. They are designed to automate the balancing of liquidity in a Liquidity Book pool, offering users a highly accessible way to access concentrated liquidity, without the requirement to directly manage a position. Auto-Pools are utilized for core ‘blue chip’ pairs and will serve as an accessible way for users to access Arbitrum Token liquidity mining rewards via a one-click yield farming experience, whilst also supporting the core trading routes that serve all builders and participants in the Arbitrum One ecosystem.
The allocated incentives will be spread evenly across the total incentive period of 3 months and the rewards will be streamed in a linear distribution that is uninterrupted over that complete timeframe. Over 10% of the allocated grant will be put towards the ARB/ETH pair to ensure robust liquidity throughout the incentivization period.
| AUTO POOLS | Phase 1 | Phase 2 | Phase 3 | Total ARB Allocation | % of Total Grant |
|---|---|---|---|---|---|
| ETH/USDC | 50000 | 50000 | 50000 | 150000 | 9.93% |
| WBTC/ETH | 10000 | 10000 | 10000 | 30000 | 1.99% |
| ARB/ETH | 60000 | 60000 | 60000 | 180000 | 11.92% |
| Total | 120000 | 120000 | 120000 | 360000 | 23.84% |
3) New to Arbitrum Builder Allocation (via Market Making Incentives): 9.93%
Trader Joe proposes allocating 150,000 ARB (9.93% of the grant) to support new builders who either launch on Arbitrum during the incentivization period or deploy to it within the same timeframe. This allocation aims to bolster the growth of the Arbitrum Ecosystem by providing crucial early-stage support to promising projects, ensuring their long-term success. Trader Joe has consistently welcomed new builders to Arbitrum and this allocation directly aligns with the Arbitrum DAO’s objectives of expanding the ecosystem.
Any unused ARB would be returned at the end of the proposed incentivization period.
Grant Matching: JOE allocation committed up to 348k tokens
As part of the proposed KPI framework, Trader Joe will assess each participating Liquidity Pool 28 days following the end of the incentivization period for that specific Liquidity Pool. If the average TVL over a rolling 7d period falls below 25% of the peak measured TVL over a rolling 7d period during the incentivization period, JOE incentives equivalent to 10% ($ value) of the ARB tokens allocated to the pool will be distributed for a minimum of 2 weeks to a maximum of 4 weeks.
Grant Timeline:
Execution of the incentives will be structured over 3 phases, each lasting 28 days that run consecutively. Breakdown of the phases and reward allocations across the incentive mechanisms can be viewed above in the Execution Strategy.
- Phase 1: Starting from when the grant is received and last for 28 days
- Phase 2: Starts immediately after Phase 1 has finished and lasts for 28 days
- Phase 3: Same as above, lasting for 28 days
- Entire distribution of incentives: 84 consecutive days
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 - We acknowledge the linearity of the incentives and the possibility of their altering. In case incentives would be halted the incentives granted till that time will be fully distributed according to the proposed schedule in proportion to the amount received for the specific epoch.
SECTION 4: PROTOCOL DETAILS
Is the Protocol Native to Arbitrum?:
Trader Joe is a multichain DEX.
On what other networks is the protocol deployed?:
Trader Joe is also deployed on Avalanche, BNB, and Ethereum mainnet.
What date did you deploy on Arbitrum?:
December 2022.
Protocol Performance:
- 4th largest AMM based DEX of all time with $85bn cumulative trading volume (source: https://defillama.com/dexs)
- $10bn cumulative trading volume since launch for the Liquidity Book Protocol
- $3.15bn cumulative trading volume since deployment on Arbitrum
- $250m cumulative volume on Arbitrum (last 30 days)
- Peak TVL of $59m on Arbitrum
- Total Unique Wallets on Arbitrum: 473k
Protocol Roadmap:
Continued focused on the core product line: Liquidity Book V3
Audit History:
SECTION 5: Data and Reporting
Is your team prepared to create Dune Spells and/or Dashboards for your incentive program?:
Yes, Trader Joe will create a dedicated flipside dashboard to track and report KPIs as part of the usage of incentives from this grant.
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
Yes we can supply bi-weekly updates highlighting changes presented in the Grant Dashboard being built on Flipside (mentioned above).
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?: [Y/N]:
Acknowledged.
