Vela Exchange: STIP Summary

A complete overview of the original STIP proposal can be reviewed here.

An overview of our Bi-weekly updates can be reviewed here.

First off, Vela Exchange would like to thank the entire Arbitrum ecosystem for all of its support throughout the STIP process. We are enthusiastic and thankful for being chosen as a grant recipient in this program, and have created this summary as a way to help with the post-STIP assessment process. We believe that the results outlined below are evidence of a successful campaign, and that they might also offer a few insights into how future grant programs could improve.

Vela Exchange STIP Summary

1,000,000 ARB Grant Size:

150k for Multi-Chain / Fiat Onboarding

  • Vela Exchange was among the first projects to POC and launch a multi-chain deposit and LP minting integration with Squid/Axelar
  • We are improving the UX and planning to incentivize users who bridge and trade / provide LP
  • Fiat onboard/offboarding integrations are also being optimized and we wish to add an incentive to utilize our fiat integrations in the form of $ARB tokens

500k for Social Features / Trading Leagues

  • We building a trading league system that will offer $ARB / $esVELA rewards - this system will connect into the other social features of Vela Exchange, including social profiles, profile tracking, etc
  • Our team is also integrating social platforms including Discord, Telegram, Twitter throughout the platform to increase trader retention and build upon the community we have created - we wish to improve on social sharing with small incentives per action
  • Trading leagues will have a cap on incentives based on fees earned to prevent any wash trading → this is further prevented by being focused on PnL, although volume may play a factor

350k for VLP Vault Rewards

  • Hyper VLP is a liquidity program that helped bootstrap our VLP vaults, but we intend on adding another layer for new liquidity
  • $ARB as well as $esVELA will be distributed to VLP vault providers that contribute and keep their USDC in the vaults over several epochs


  • Increase TVL within the Vela Liquidity Provider (VLP) vault on Arbitrum
  • Direct new trading volume to Vela Exchange, with a priority focus being from multi-chain sources
  • Leverage the multi-chain minting and bridging solutions in order to onboard users and liquidity
  • Pursue automated trading solutions with ecosystem partners


Overall, we saw a highly positive result in growth across all key metrics. This is a huge win for both Vela Exchange, as well as the greater Arbitrum ecosystem. Below is an overview of the start and end of STIP outcomes:


1. TVL

Of note, nearly all $4,000,000 of the TVL that was secured during our STIP incentives were locked for 6 months, beginning in February.

Our team took special care to distribute the rewards in a long-term effective way that will provide a lasting value to both the exchange and the network as a whole. Creating solutions that earn user’s commitment is paramount to stability and longevity, which is why we assessed our original distribution model and pivoted. Although it required more bandwidth from our team to innovate, we created a new locked bridging contract that facilitated our onboarding of $2,000,000 new TVL from other networks. It’s crucial to highlight that we have specifically targeted new liquidity, rather than competing for TVL that has already been established on the network.

After evaluating the success of the locked multi-chain bridging and staking contract, we also applied a new (optional) locking opportunity to any new or existing VLP holders. This followed in the successes of the former event, resulting in over $1,850,000 additional TVL being locked for 6 months.

2. Volume & Fees

Volume surged as the popularity of our gamified trading competition grew, seeing the largest impact out of all other performance indicators. We believe that delivering socially competitive events is one of Vela Exchange’s key differentiators, and that the Grand Prix has solidified itself as a prime example of how to maximize user engagement through trading and rewards (as a ratio).

During the Grand Prix, users were pushed to the limits of their trading potential as they competed alongside one another in five themed rounds. Each round presented new challenges, new opportunities, and exciting new ways to earn credits - the currency of the Grand Prix. This approach to the social gamification of trading has illustrated enormous popularity and desirable KPIs throughout the duration of the STIP. Recently, we’ve kicked off Season 2 of the Grand Prix, introducing new assets and game mechanics to further challenge our traders! You can read more about the Grand Prix here.

Each round created new problems to solve and emphasized valuable user actions throughout the various avenues of the platform, attracting users of all types. Liquidity providers and yield farmers could take advantage of limited time events in which their contributions to VLP minting would net them greater credit multipliers, whereas the top traders knew when the time was right for a large leverage short position during a clandestine Black Market event. These excitingly unique variations on the traditional trading competition engaged and challenged users to learn and adapt, since any moment of the day could provide their best shot at carving their name out on the Grand Prix leaderboard. The success of this host of trading events can be seen in our analytics, which illustrate:

  • Cumulative volume more than doubled since the onset of STIP rewards
  • Daily volume spiked to their highest amounts, peaking at $59.5M
  • Although reduced to promote the Grand Prix, protocol fees broke record highs

Importantly, Vela Exchange did not utilize a paid market maker during this duration, resulting in solely organic trading. All metrics provided during include absolutely no wash trading.

Fees on Vela Exchange were slashed to their lowest levels while earnings for liquidity providers and the treasury remained very healthy. During STIP, our liquidity token holders saw an overall appreciation of 6.3% to their USDC.e on top of their additional ARB and esVELA rewards from staking VLP.

A staggering 51% of all liquidations since official launch (June 2023) occurred during the STIP incentives period. Meanwhile, protocol revenue was also an impressive $1,100,000, representing 47.8% of all cumulative revenues.

Over the course of the STIP incentive period Vela Exchange amassed a significant uptick in fees:

3. Bots and Automations

The process of finding the right partner and forging a plan led us to realize that this tranche wasn’t a perfect fit, primarily due to time constraints. After discussing our options with the grant team, we decided that a final kickoff round for the Grand Prix was the best fit, since all KPI data had provided us with high confidence in trading volume results.

Although we had to deviate from this approach, we were still able to forge a key partnership with Astrabit, just in time for their v2 rollout. Numerous hours from both teams went into realizing this, and we thank them for their effort and hard work that went into aligning documentation, testing, and collaboration.

Improvement Areas

Overall, STIP was a very fast-paced first step that can establish valuable precedence and structure. However, as a project that has now been through the full process, there were some areas that produced friction or felt left out.

Reporting Frequency: Bi-weekly reporting seemed unwarranted and lacking in oversight. We strongly believe that there should be frequent updates provided to the community and grant program managers, but the requirement to provide these every two weeks without receiving any feedback came off as an area that could be improved upon. We would suggest extending this to monthly updates and to assign personnel who could review and start discussions based on these updates. Any feedback midway through the STIP program or future programs would be so helpful and are likely to have a positive result.

Retention: Throughout the STIP, our team was challenged with creating and delivering thoughtful and effective mechanisms for users to engage with. There is a looming pressure for all decisions to be KPI driven, yet we soon realized that a KPI such as TVL might not consider longevity. In our bi-weekly updates we were to include an average TVL, however this did not capture the duration that TVL would be committed to Vela Exchange and, subsequently, the Arbitrum network. We believe that it is extremely valuable to establish the long-term value and effect of KPIs in addition to reporting snapshots of a given timeframe. This applies to most KPIs

1 Like