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.
Applicant Name: Vaultka (Polaris Lab)
Project Name: Vaultka
Project Description:
Vaultka serves as a catalyst hub for Perpetual Decentralized Exchanges on Arbitrum, enabling users to optimize gains and tailor their strategies based on their risk preferences. Our offerings include LP optimization, Index Investment, Stablecoin Lending, and Perp DEX Insights, with a focus on enhancing liquidity and capital efficiency within the ecosystem. We vision to unite all Perp DEX on Arbitrum and foster the growth of the entire ecosystem.
Vaultka Grant Dashboard: Vaultka Arbitrum STIP Proposal
Discord feedback channel: Vaultka🍾
Team Members and Qualifications:
Business Development Lead: micheung
Project Manager: matt.arb
Product Manager: Ron
Marketing Lead: Mr. Gorilla
Research Lead: Tai
Developer: Jjjjj, Cale, Raymond, Vincent, Steve, Paul
UI/UX Designer: Renee
*Excluding Contractors and Freelancers
Project Links:
| Website | https://www.vaultka.com/ |
|---|---|
| https://twitter.com/Vaultkaofficial | |
| Chinese Twitter | https://twitter.com/VaultkaCN |
| Discord | Vaultka🍾 |
| Telegram | https://t.me/vaultkaofficial |
| Medium | Vaultka – Medium |
| GitHub | Vaultka-Project · GitHub |
| Youtube | https://www.youtube.com/@Vaultka_official |
| DefiLlama | https://defillama.com/protocol/vaultka |
| Zealy | Zealy - Join the movement |
| Spotify | 2023-05-22 Fireside Chat - The Emergence of Decentralized Perpetual Exchange by Vaultka |
Contact Information:
TG: Telegram: Contact @vaultkaofficial
Twitter: @Vaultkaofficial
Email: info@vaultka.com
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: 600,000 ARB
Grant Matching:
Yes, the lending vaults on Vaultka will be incentivized by esVKA token alongside the ARB tokens provided by this grant. A total of 42 million esVKA is allocated to incentive the vaults (2.1 million in the first 3 months), in order to attract more liquidity to the Perp DEX market.
Grant Breakdown:
- 20% Promoting Perp DEX Ecosystem Growth (120,000 ARB)
- One of the key objectives outlined is to consolidate and advocate for the utilization of various Perpetual Decentralized Exchanges (Perp DEX) on the Arbitrum network.
- A segment of the grant funds will be allocated to incentivize users to explore a diverse range of Perp DEX platforms, thereby nurturing a diverse ecosystem of Perp DEX and fostering healthy competition among them. Additionally, this initiative aims to amplify the visibility of smaller-scale Perp DEX platforms offering innovative solutions.
- As part of this effort, users who provide liquidity on any five of the top 10 (According to Defillama, sort by TVL) Perp DEX platforms on Arbitrum will be rewarded with an equal distribution of ARB tokens. This serves as a form of encouragement to engage with a variety of Perp DEX liquidity pools, promoting a more vibrant and dynamic ecosystem.
- 80% Connecting Lending Capital to Perp DEX LP (480,000 ARB)
- Another core principle of Vaultka is to establish a link between lending capital and the Perp DEX market, thereby optimizing capital efficiency across the entire Perp DEX landscape
- Vaultka serves as the bridge between lenders and leveraged LP users, creating a mutually beneficial scenario: LP users can amplify their positions and maximize returns, while lenders can secure a higher yield compared to traditional lending platforms, without compromising on risk.
- To showcase their commitment to providing liquidity to the Perp DEX ecosystem, ARB rewards will be distributed to lenders who lock their lending POD tokens within Vaultka
- A longer lock-in period translates to a higher multiplier applied to the locked funds, resulting in a larger share of ARB rewards.
- This initiative is designed to attract lending capital from traditional lending protocols, encouraging migration to and deposits in LP lending pools, thereby amplifying the influx of capital into the Perp DEX LP ecosystem.
Funding Address: 0x6CF1974e1f2C36bdE9F63071b0D5503194F0Da37
Funding Address Characteristics:
Address above is a 2/3 Gnosis Multisignature wallet. The private keys are securely stored.
Contract Address:
TBD. Specific contracts will be deployed, and their addresses will be made accessible to the public. Initially, the funds will be stored securely within the aforementioned multisig wallet.
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:
Vaultka’s aim is to unify Perp DEX protocols on Arbitrum, nurturing the robust growth of the entire Perp DEX ecosystem. This grant serves as a strategic avenue to advance our goal in two distinctive ways:
- Encourage users to try out different Perp DEX on Arbitrum
Our primary objective is to stimulate active user engagement with various Perpetual Decentralized Exchange Liquidity Pools (Perp DEX LPs) on the Arbitrum network. We aim to achieve this by incentivizing users to explore and participate in a diverse range of Perp DEX LPs, thereby cultivating a culture of diversified participation.
Simultaneously, we seek to champion the long-tail Perp DEX ecosystem, nurturing a landscape where smaller-scale Perp DEX platforms offering innovative solutions can thrive. Our intention is to foster a healthy competitive environment among Perp DEX players, enabling these innovative solutions to garner the attention and recognition they deserve.
Our commitment extends beyond Vaultka alone; we aspire to contribute meaningfully to the holistic growth of the entire Arbitrum Perp DEX ecosystem. By encouraging users to venture beyond their comfort zones and explore various Perp DEX options, we hope to fortify and invigorate the broader ecosystem. This way, our efforts will have a lasting and positive impact on the entire Arbitrum Perp DEX landscape.
- Connect Lending Capitals to Perp DEX and enhance overall liquidity efficiency
Another aim is to establish a seamless connection between lending capital and Perp DEX LPs on the Arbitrum network. We are dedicated to optimizing capital efficiency within this dynamic landscape.
Our strategy involves bridging lending capital with the vibrant Perp DEX market, all while preserving the inherently low-risk nature of lending. This mission underscores our commitment to maintaining financial security for lenders even as we channel their funds into the dynamic world of Perp DEX trading.
Through these efforts, we aspire to create a win-win scenario: lending funds will enrich the Perp DEX market, enhancing its capital efficiency, while lenders continue to enjoy the security and reliability they expect.
Key Performance Indicators (KPIs):
In line with our objectives, we will maintain a vigilant watch over the following Key Performance Indicators (KPIs):
| Objectives | KPIs | Description | Target |
|---|---|---|---|
| Promoting Perp DEX ecosystem Growth | Number of ARB token or users claimed | This measures how many active users have met the requirement and can be used to estimate the incremental increase of users trying out Perp DEXs | Increase 25% of the users that have tried out more than 5 Perp DEX |
| Average Number of Perp DEX that claimed users have interacted with | This measures if the campaign successfully retain users to try out more Perp DEX than the minimum | > 6 Perp DEX | |
| TVL created by claimed users after the confirmation of the grant | This measures the additional liquidity created to the Perp DEX ecosystem by this grant with Vaultka | > 825K TVL created | |
| Number of new addresses that have not deposited before the grant | This measures the effectiveness of attracting new users to Arbitrum Perp DEX ecosystem from other chains | 200 new users | |
| Connecting Lending Capital to Perp DEX LPs | Lending capitals locked | This measures the liquidity locked during the campaign | 4 million |
| Lending Vault TVL growth after the start of the campaign | This quantifies the appeal generated by this campaign, resulting in increased liquidity attracted to Vaultka. | 2 million | |
| Average locking period | This measures the commitment of users to lock their funds to support Perp DEX LPs | > 6 months | |
| Lending Vault utilization rates | This measures the percentage of lending funds are deposited into Perp DEX LPs | 60% Average Utilization rate | |
| Number of wallets that have locked their liquidity | This measures the ability to draw new user to the Perp DEX ecosystem | 200 new users |
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
- 20% for Promoting Perp DEX Ecosystem Growth (120,000 ARB)
This designated 20% of the grant will be utilized for experimental purposes, aiming to test innovative strategies that foster ecosystem growth. The ARB tokens will serve as an added economic incentive, motivating users to explore various Perp DEX LPs on the Arbitrum network. Users who contribute liquidity to at least five distinct Perp DEX platforms on Arbitrum will be duly rewarded for their active participation within the Perp DEX ecosystem. These rewards include LP incentives from the respective underlying protocols, alongside an additional ARB reward facilitated by Vaultka. This initiative not only encourages users to diversify their Perp DEX engagement but also fosters healthy competition among protocols.
Furthermore, this endeavor plays a pivotal role in nurturing the long-tail Perp DEX ecosystem on Arbitrum. Currently, GMX dominates the Perp DEX market, commanding roughly 70% of the Total Value Locked. Vaultka’s mission is to elevate the visibility and recognition of smaller-scale Perp DEX platforms offering innovative solutions. By doing so, we aim to stimulate healthy competition between protocols and promote a more diverse and dynamic ecosystem.
- 80% for Connecting Lending Capital to Perp DEX LPs
Lenders will be duly rewarded with ARB tokens upon locking their funds within Vaultka. These lending capital reserves will be actively utilized within leverage vaults, enabling the efficient deployment of lending funds into the Perp DEX ecosystem to bolster trading activities.
In traditional lending protocols, lending capitals are siloed and, existing separately from Perp DEX liquidity. This segregation results in capital inefficiency, largely attributed to the overcollateralized nature of these funds. Vaultka’s lending vaults bridge the gap, connecting lending capital directly to the Perp DEX liquidity pool. Crucially, this is accomplished without elevating the risk exposure of lenders. Furthermore, these lending vaults enable undercollateralized utilization on Perp DEX Liquidity Pools. This creates a win-win situation to both leverage users and lenders, and ultimately draws more liquidity to the Perp DEX market.
Justification for the size of the grant:
Why 120,000 ARB for growing the ecosystem?
- Active Arbitrum User past 30 days: 2.67m
- Total LP providers address is around 165,000, which is around 6.18% of the total Arbitrum DEfi users (Estimated by the number of holders of LP tokens from Arbiscan)
- Assume that originally there is only 5% (rough estimate, based on the pie-chart above) of the Perp DEX LP users have tried out more than 5 Perp DEX, which is around 8250 users
- Through this grant, we aim to increase 25% of the number of users, which is 2063 users that tried out more than 5 Perp DEX
- If we want to achieve 25% APR ARB reward to these users, assuming ARB price is $0.9, minimum deposit is 500 (minimum each $100),
Estimated Claimable ARB for each user = 25%*500/12/0.9 = 11.57 ARB
Total need of ARB = 11.5782501.25 = ~120,000ARB
Thus, a total of 120,000 ARB is reserved to boost the ecosystem
Why 480,000 ARB for attracting more lending capital?
- The current lending TVL in Vaultka is around 2M
- With this grant, we aim to double our lending TVL by attracting an additional 2M of deposits
- With reference to the APR calculation in the Execution Strategy below, users can get up to 26% APR in ARB with a stablecoin deposit, which is a very attractive offer for lenders
- The TVL created to ARB invested ratio will be
= 2,000,000 : 480,000*0.9
= 4.63:1
Thus, this grant is expected to create around 4.6 times of TVL in lending capital compare to that of ARB tokens invested.
Execution Strategy:
120,000ARB for using different Perp DEX on Arbitrum:
Details:
-
Every User will have an equal share of ARB. This is to maintain a fair chance for all users to try out different protocols, and their incentive will not be diluted by whales, which this also matches our thesis of attracting more new users to try out the Perp DEX ecosystem
-
Deposits in each protocol has to be >$100 in order to be count as a qualified deposit, to prevent malicious users gaming the system
-
Eligible Perp DEX: (Top 10 Protocols on DefiLlama under the Category “Derivatives” on Arbitrum). You may find the full list of whitelisted protocols here. The current list is based on data as of 26/9/2023, the list will be updated again after the grant is distributed.
-
Formula:
- User’s claimable ARB = 120000/Total Eligible Wallets
How to prevent people from creating multiple bot accounts to get more ARB rewards
- Implement a minimum of $100 to each deposit in order to be qualified, so that even if they created lots of accounts, they need to deposit a huge amount of liquidity to Perp DEXs in order to get the majority of ARB rewards. Plus, the withdrawal fees of these LPs will be enough to costly for the malicious actors as well, which in turn will be beneficial to the underlying protocols
- Double Check with the total increase of User in Arbitrum Defi to see if any abnormal increase
- Examine and match the increase with the increase of Arbitrum Perp DEX user
Execution Plan:
- Vaultka will take a snapshot on all the wallet addresses that have provided liquidity to any 5 of the whitelisted Perp DEX before the ending date
- Whitelisted Perp DEX (Top 10 Perp DEX on Arbitrum according DefiLlama)
- Eligible users can claim the ARB rewards on Vaultka page
- Filter out the Perp DEX LP vault contracts and fetch the user data from deposit events to filter out which users have deposited in more than 5 Perp DEX
- Unclaimed ARB after 3 month of end date will be refunded to Arbitrum DAO
480,000ARB for locking lending funds:
- Lenders restake and lock their POD tokens (WATER tokens) in a dedicated smart contract. With a longer locking period, a larger multiplier is applied to the locked funds.
- Locking period are fixed with 4 options
| Locking Period | Multiplier |
|---|---|
| 1 month | 1.2x |
| 3 month | 4x |
| 6 month | 9x |
| 12 month | 22x |
- Each Lending POD token will have an equal share of portion. The only variables that determine the users share is his/her deposit balance and the locking period.
- Only POD locked before the ending date will be included
- Users can claim their eligible amount of ARB after the 1 month locking window ends
- There will be a 3 month claiming period for users to claim their ARB
- Unclaimed ARB tokens will be refunded to Arbitrum DAO along with part 1’s ARB
- ARB distributed proportionally according to the weighted share of each user
- Users’ claimable amount will be proportion to the total weighted locked funds
= Users depositLocked multiplier / Total deposit total weighted multiplier - Assuming $0.9/ARB, additional estimated APR to lender if there are only 4 depositors with equal deposits:
| User Deposit | Locking period | Applied multiplier | Claimable ARB | APR |
|---|---|---|---|---|
| 500000 | 1 | 1.2 | 15911.60221 | 34.369% |
| 500000 | 3 | 4 | 53038.67403 | 38.188% |
| 500000 | 6 | 9 | 119337.0166 | 42.961% |
| 500000 | 12 | 22 | 291712.7072 | 52.508% |
Eligible Products for 480,000 ARB Reward:
- v-WATER (GLP Delta Neutral Lending vault)
- v1-WATER (GLP Leverage Lending Vault)
- w-WATER (gDAI Leverage Lending Vault)
- s-WATER (VLP Leverage Lending Vault)
- v2-WATER (GM Leverage Stablecoin Lending Vault)
- r-WATER (HLP Leverage Lending Vault) - Launching in early Oct
- m-WATER (LLP Leverage Lending Vault) - Launching in late Oct
Grant Timeline:
120,000 ARB for Perp DEX LP providers: 3 month after ARB grant is allocated
- 3 month period to allow users to interact and engage with different Perp DEX
- UI update/marketing promotions to notify users that this program is activated once grant proposal is passed and funds are allocated to Vaultka
- Snapshot will be taken 3 months (roughly Nov.) after the proposal passed
- Eligible users can claim their ARB allocation on Vaultka’s page
- 3 days for calculating each wallet’s allocation and checking for cheating activities
480,000 ARB for Locking Lending funds:
-
Start once the proposal is passed and funds are allocated to Vaultka (roughly beginning of Nov)
-
1 month period to allow users to lock their lending WATER (POD token of lending) tokens to mint another new POD token, to prove their locking deposits
-
Eligible Users can claim their ARB tokens after the end of the period (roughly mid Dec)
-
1 month period to allow more time for users to gather funds to join the program
-
Eligible users can claim their ARB allocation on Vaultka’s page
- Users do not have to wait for their funds to unlock to claim ARB. They can claim the ARB upfront after the 1 month deposit period
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?:
Yes. Vaultka has been a supporter of Arbitrum since day one because of its development environment, investment readiness, innovation, market demand and end-user experience. These pillars collectively lay a strong foundation for various Perpetual Decentralized Exchanges (Perp DEX) to thrive upon this cutting-edge Layer-2 solution.
At Vaultka, our commitment to Arbitrum is rooted in our vision for a thriving decentralized ecosystem. We specialize in crafting leverage and delta neutral strategies for Perp DEX LPs, and Arbitrum provides an ideal environment for us to realize this mission. Our dedication to Arbitrum extends beyond mere support; we aim to unite all Perp DEX platforms on the Arbitrum network. By forging strong connections and collaborations within this ecosystem, we believe in creating a synergistic environment that fosters innovation, liquidity, and, ultimately, prosperity. We see Arbitrum as a pivotal piece in the puzzle, offering the scalability, efficiency, and user-friendliness necessary to bring decentralized finance to new heights, and we’re excited to be part of this journey.
On what other networks is the protocol deployed?: NA
What date did you deploy on Arbitrum?: Feb-08-2023
Protocol Performance:
Key Milestones:
Feb 2023: Vaultka’s first product: GLP (GMX V1 LP) Delta Neutral Vault and its corresponding Lending Pool
May: Complete Beta
Jun: Launched gDAI (GNS LP) Leverage Vault and its corresponding Lending Pool
Jul: Launched VLP (Vela LP) Leverage Vault and its corresponding Lending Pool
Jul: Total Value Locked reached 1 million on Vaultka
Aug: Launched GLP (GMX V1 LP) Leverage Vault and its corresponding Lending Pool
Sep: Launched GM (GMX V2 LP) Leverage Vault and its corresponding lending pool
Product Coverage: Delta Neutral, Leverage
Protocols (LP) Coverage: GMX V1 (GLP), GMX V2 (GM), GNS (gDAI), Vela Exchange (VLP), HMX (HLP) - Launching in early Oct, Level Finance (LLP) - Launching in late Oct
Protocol Roadmap:
Vaultka remains devoted in its commitment to fostering the expansion of Perp DEX ecosystems on Arbitrum. We have extensive strategies in place to roll out a range of products aimed at bolstering the Perp DEX environment and enriching the overall user experience. Vaultka is also set to collaborate with various protocols to deliver innovative solutions tailored to diverse user needs:
- Market First LP Index Tokens
- Vaultka will be launching two types Perp DEX Index Token: a Mega LP token, and a Mega Perp DEX Governance Token
- The Mega token will be a combination of LP/Governance tokens from top Perp DEX on Arbitrum, as well as lower scale Perp DEX LPs that provide much higher yield to users but also high risk exposures
- It diversify the risk of smaller scale Perp DEX LP tokens but keeping users with the upside potential of these tokens
- The composition of the Mega tokens will be closely monitored to ensure holders are well protected
- This matches our ideology of encouraging users to engage in different Perp DEX on Arbitrum, where users can now deposit and mint Index Tokens to keep their exposure on these long-tailed protocols, but without taking much additional risks
- Alt-coin lending
- Vaultka fully understands that in order to attract more lending capital to the LP Perp DEX market, stablecoin should not be the only option for users to opt for. Vaultka is actively exploring alt-coin lending pools (ETH & ARB tokens) to allow users to lend their idle alt-coin capital to the Perp DEX LP market and earn additional yield
- This unlocks even more lending capital and fully unleashes the potential of Perp DEX LP market
- Integration with Pendle Principle Tokens
- Vaultka is also exploring the possibility to integrate Pendle Principle Tokens to our product - Mega LP Tokens and lending pools
- This allow users to restake their Principle tokens from Pendle and unlocks more yield options
- Issuance of LP backed stablecoin → unlocked even more liquidity/value to the whole Arbitrum Defi ecosystem
- Vaultka will be issuing the market first LP backed stablecoin
- Given the stable and asset-backed nature of LP tokens, they can be treated as a store of value and used as collateral to create additional liquidity to the market
- This opens up additional value and potential not only for the Perp DEX but for the entire DeFi ecosystem. It enables users to generate extra yield while maintaining liquidity efficiency.
- Exploration of New LP:
- Vaultka remains committed to ongoing exploration and integration with various Perp DEX platforms on Arbitrum, broadening our product offerings.
- Notably, we have HLP (LP for HMX) and SLLP (LP for Level Finance) prepared for imminent launch in the upcoming weeks.
- Our dedication lies in uniting all Perp DEX platforms on Arbitrum, providing protocols with increased visibility and attention on their respective platforms
Audit History:
- Zokyo Audit
- Hacken Audit (In progress)
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 Spells and/or Dashboards for your incentive program?:
Yes, a real-time dashboard will be created on the website of Vaultka, so that users can always track the performance and data regarding the use of funds. KPI listed above and related information will be listed on the dashboard
If not, how does your team plan to report grant data?: NA
