Yearn LTIPP Application - FINAL

SECTION 1: APPLICANT INFORMATION

Applicant Name: Corn

Project Name: Yearn

Project Description: Yearn is DeFi’s premier yield aggregator, providing individuals, DAOs, and other protocols with a platform to deposit digital assets and earn yield. Launched in the summer of 2020, Yearn quickly gained recognition for the highest risk-adjusted returns in DeFi with over $6 billion in deposits, largely credited to its core offering, Yearn Vaults.

Team Members and Roles: Corn, Ecosystem and Partner Integrations

Project Links:

https://yearn.fi/
https://twitter.com/yearnfi
https://docs.yearn.fi/
yearn · GitHub
https://juiced.app/
https://yaudit.dev/

Contact Information: Profile - omgcorn - Arbitrum

Point of Contact’s TG handle: @omgcorn

Twitter: @omgcorn

Email: corn@yearn.finance

Do you acknowledge that your team will be subject to a KYC requirement?: Yes

SECTION 2a: Team and Product Information

Today the Yearn Vaults V3 protocol provides builders the tools they need to access every source of yield in crypto. V3 is secure, modular, and built with automation in mind.

Yearn also provides structured yToken products such as yCRV, yPRISMA, yETH, and Juiced. These products leverage Yearn’s expertise and active involvement in crypto governance, enhancing user participation and yield through locking, voting, and other mechanisms.

Yearn has demonstrated its expertise in risk management and strategy creation at various global events, including ETHCC, ETHDenver, ETHDubai, ETHAmsterdam, and The Stanford Security Summit. Yearn also contributes as a whitehat to SEAL 911, an experimental Telegram bot created by samczsun which anyone can use to seek help during a hack. Contributors from Yearn have gone on to create the audit education program yAcademy, security services firm yAudit.

Beyond Yearn Vaults, contributors from Yearn have also assisted in the development of various software tools such as Ape-Safe, Apeworx, Allowlist (used by Metamask), Disperse ($1 billion in volume), Vyper, Brownie, Safe, Robowoofy, ERC-4626, Weiroll-py, and yPriceMagic. In terms of funding contributions, Yearn has supported Gitcoin, LexPunk, and Nomic Labs.

Contributors from Yearn have gone on to create the audit education program yAcademy, security services firm yAudit, and Coordinape, a DAO management tool. Additionally, Yearn’s work has been referenced in research conducted by Messari and Ark Invest.

Yearn is maintained by a team of full and part-time contributors and is governed by the YFI token.

Team experience (Any relevant experience that may be useful in evaluating ability to ship, or execution with grant incentives. Please provide references knowledgeable about past work, where relevant. If you wish to do so privately, indicate that. [Optional, but recommended]):

Yearn has received grants from Optimism, Polygon, Ajna, and the Arbitrum airdrop long ago, which still sits in whole in our multisig ready to be used.

We’ve been selective about when to rally for grants only when we have relevant and purposeful reasons to do so. For instance, on Optimism we requested a grant as our first push beyond Mainnet and for our new Factory vault technology that is behind Velodrome vaults. For Polygon, we requested a grant in exchange for their ecosystem to be at the center of deploying the first Yearn V3 Vaults. For Ajna, we’ve built an entire product around their grant that has been funneling lending liquidity and contributing to ~40% of the TVL in their project.

We’ve learned a lot through these partnerships about incentives, how to stretch them in conservative ways, how to ensure capital is sticky, and how to enhance composability.

What novelty or innovation does your product bring to Arbitrum?
Yearn V3 Allocator Vaults: Yearn’s V3 framework offers unrivaled composability for managing multistrategy vaults.

Juiced.App: Harnessing the power of V3 allocator vaults, Juiced uses incentives to funnel liquidity into Ajna lending pools in powerful and predictable ways.

Is your project composable with other projects on Arbitrum? If so, please explain: Yearn’s primary go to market is through b2b channels. Yearn offers a fee sharing partner program for those who are looking for Yield as a Service or want to operate their own V3 Allocator vaults.

In addition, Yearn strategists use Vaults V3 to build strategies that rely partner sources of yield.

Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains? Yearn Vaults V1 and V2 have been forked hundreds of times in various forms.

How do you measure and think about retention internally? (metrics, target KPIs)
The most sticky integrations we have are with our partners. When we incentivize vaults directly, that TVL only lasts until incentives are depleted. There is always a small amount of dead capital that sticks around, but we’ve noticed through our partners, even when incentives are gone, the funds are less likely to leave for other sources of yield.

Yearn Vaults TVL is most directly affected inversely by the risk-free rates of traditional finance. When DeFi rates are stronger, Yearn TVL thrives.

Relevant usage metrics - Please refer to the OBL relevant metrics chart 13. For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:
Our primary usage metric is TVL, a directional product of APY of our yield strategies.

In terms of grants and incentives, we rely on TVL per incentive per week as a reliable metric of success.

Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan:
Yes, we agree to not farm our own incentives.

Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant):
No.

SECTION 2b: 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?: No, Yearn was originally deployed on Mainnet.

On what other networks is the protocol deployed?: Mainnet, Optimism, Polygon POS, and Base.

What date did you deploy on Arbitrum mainnet?: January 20, 2022: Arbitrum Transaction Hash (Txhash) Details | Arbiscan

Do you have a native token?: Yes, $YFI, available on Coinbase, Binance, Uniswap, Sushi, and essentially anywhere tokens can be listed.

Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?
We do not have liquidity mining or incentives programs for $YFI.

Current Incentivization: How are you currently incentivizing your protocol? There is a finite amount of $YFI, we do not have emissions. $veYFI is powered by $YFI buy-backs.

Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?
We received the original $ARB airdrop, and it still remains in our multi-sig untouched. We’re ready to utilize it very soon in tandem with LTIPP.

Protocol Performance:
Peak TVL: $6.71 billion, Dec 5, 2021
Current TVL: ~$370 million
YFI Peak: $2.85 billion, May 14, 2021
YFI Current: $276 million
YFI Holders: 52,777

Mainnet TVL: $316 million
Optimism TVL: $23 million
Polygon TVL: $7.4 million
Fantom TVL: $2.4 million
Base TVL: $124,112
Arbitrum TVL: $97,893

Yearn on Optimism campaign: Yearn received a 1 million $OP grant back in October 2022 that we are still distributing. We have been able to stretch these rewards to reliably have between $22 and $30 million TVL for over 1 year, and we still have 33% of the grant remaining for distribution. At the peak of this campaign in July 2023, we had 12,809 daily user actions.

Yearn on Optimism Dune: https://dune.com/usc-blockchain-club/yearn-incentive-analysis

Juiced Vaults:
Weekly Incentives: ~$30,000
Current TVL: ~$10 million
Juiced Pools:
Weekly Incentives: ~$15,000
Current TVL: ~$2 million (5 days old)
Current Ajna TVL: $27.67 million (43% from Yearn)

Protocol Roadmap:

Arbitrum strategies:

wstETH leverage strategy using Aave
Pendle LP strategy
Gamma LP strategy
wstETH accumulator
Curve compounding
Aave lender
Compound lender
Stargate lender
USDC vault
USDT vault

Juiced: As part of this Arbitrum campaign, we’ll deploy Juiced and run an incentives campaign to create lending liquidity.

Audit History & Security Vendors:
Yearn has demonstrated its expertise in risk management and strategy creation at various global events, including ETHCC, ETHDenver, ETHDubai, ETHAmsterdam, and The Stanford Security Summit. Yearn also contributes as a whitehat to SEAL 911, an experimental Telegram bot created by samczsun which anyone can use to seek help during a hack. Contributors from Yearn have gone on to create the audit education program yAcademy.dev, security services firm yAudit.dev.

In addition to yAudit, Yearn also uses other security audit vendors like Chain Security, Mixbytes, StateMind, and more.

We always have an Immunefi bounty running: Yearn Finance Bug Bounties | Immunefi

Audits: yearn-security/audits at master · yearn/yearn-security · GitHub

Security Incidents: Please see yearn-security/disclosures at master · yearn/yearn-security · GitHub

SECTION 3: 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: 300k $ARB

Justification for the size of the grant:

For every ~$30k of weekly incentives, we get about ~$20 million TVL in Vaults, according to our experience with Optimism.

For every ~$30k of weekly incentives for Juiced, we get about ~$10 million TVL (so far, this is very new)

Projected Vaults TVL @~$25k per week: ~$16.6 million TVL
Projected Juiced TVL @~$25k per week, matched: ~$8.3 million TVL

Grant Matching: We’ll match with our existing 75k $ARB tokens untouched from the original Arbitrum airdrop. For Juiced, we have an interface for token matching. We’ll match all partner incentive deposits with $ARB from LTIPP as well. This should add ~$4 million TVL, for a total of ~$29 million TVL on Arbitrum overall for Yearn.

Grant Breakdown: Half will go to Vaults APY boosting via staking. Half will go to Juiced Vaults and Juiced Pools with matching incentives. No incentives will be sold by Yearn or autocompounded.

Funding Address: 0xb6bc033D34733329971B938fEf32faD7e98E56aD

Funding Address Characteristics: 3/5 multisig

Treasury Address:
Arbitrum: 0xb6bc033D34733329971B938fEf32faD7e98E56aD
Mainnet: 0xFEB4acf3df3cDEA7399794D0869ef76A6EfAff52, 0x93a62da5a14c80f265dabc077fcee437b1a0efde

Contract Address: TBD

SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
Clearly outline the primary objectives of the program and the Key Performance Indicators (KPIs), execution strategy, and milestones used to measure success. This helps reviewers understand what the program aims to achieve and how progress will be assessed.

Objectives: The primary aim of this grant is to enhance yields within Yearn Vaults V3 on Arbitrum while also stimulating lending liquidity for Juiced.app, a platform built on Ajna, within the Arbitrum ecosystem.

Execution Strategy: We are going to break this into two concurrent efforts:

  1. Vaults V3 yield boost: We’ll split the $ARB incentives into equal parts over 12 weeks and reward Yearn Vaults on Arbitrum. We’ll have yvUSDC, and yvUSDT to start.
  2. Juiced.app: We’ll immediately grow lending liquidity on Arbitrum through Juiced.app. We’ll work with our partner network and match all incentives with $ARB token over the 12 weeks of this program. Through Juiced.app we can lend assets without oracles, and within a matter of hours or days, and not weeks.

What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?

When incentives run dry there is always going to be some degree of attrition of assets seeking higher yields elsewhere. Stickiness for Yearn relies on partner integrations for Vaults and healthy lending markets for Juiced.

Juiced Pools and Vaults are not liquid all the time. If the funds have been loaned out, they may not be redeemable at the time you’d like to withdraw.

Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy.

TVL: The goal is ~$29 million TVL on Arbitrum overall for Yearn. There will be additional Ajna TVL from borrows also.

Utilization rate: While we may attract deposits for loans, utilizing these loans with borrows in Ajnafi.com is equally important. Decreased gas costs in Arbitrum will enable us to convert more deposits into borrowable TVL more frequently.

Stickiness: After incentives are gone, if 50% of TVL remains in the ecosystem that will be successful. We have not been able to replicate this in any Yearn environment though, because we’re still dispensing $OP incentives and we’ve only just begun Juiced Pools and Vaults. Stickiness is important for us, but we’re going to find out together what the real results are.

Daily active users: In our experience this is not a good metric of success for Yearn. While this may be a goal for the ecosystem, it’s not for Yearn. We’ve seen no correlation between more user activity and better TVL retention or TVL growth, especially in ecosystems with low gas costs. Yearn Vaults will attract users and create more transactions, but it has no impact on what we care most about and that’s what things look like after incentives are gone.

Grant Timeline and Milestones:

Weeks 1-12 - We’ll divide incentives equally over 12 weeks and stream rewards for APY boosting immediately. We’ll concurrently run 12 weekly epochs to deploy Ajna pools and incentivize them through Juiced.app.

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?
Incentives to jumpstart lending liquidity for Ajna isolated pools is very important. Without it, interest rates are very low and it’s unlikely that meaningful liquidity will gather. There are plenty of places to lend and borrow blue chip assets on Arbitrum today and this venue primarily is for longtail assets not at the top of the list. We’ve already seen demand for Ajna pools to reflect this with the 8 launch partners we had week 1 on Juiced.app. However, we also have received feedback from blue chip assets who are looking to use Ajna in the future for additional recursive lending strategies.

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 5: Data and Reporting
OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 16. Along with this list, please answer the following:

Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered?
Yes, we’ll comply.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?
Yes.

First Offense: *In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.

Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.

Third Offense: Funding is halted permanently

Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)
Yes.

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

6 Likes

Hello @omgcorn ,

Thank you for your application! Your advisor will be @JoJo.

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

2 Likes

Hey there as per your request on Discord, I’ve amended the title to reflect that the proposal is now FINAL. All the best!