[OPEN GRANT APPLICATION] GMX <> Beefy

Grants
1

SECTION 1: APPLICANT INFORMATION

Applicant Name or Alias: frondoto

Project Name: Beefy

Project Description: Beefy automates yield farming to make DeFi easy, safe and efficient for all. By autocompounding your tokens, Beefy unlocks higher returns so you earn more of what you love.

Team Members and Qualifications:

Weso - Solidity Developer

Roman Monk - Solidity Developer

Kexley - Solidity Developer

EPETE - Operations

Jack Gale - Finance

Frondoto - Business Development

Chebin - Backend Developer

Chimp - Backend/Frontend Developer

Eren - Frontend Developer

DefiDebauchery - Infrastructure

MrTitoune - Infrastructure

YR - Design

TBC - Marketing & Social Media

Project Links:

https://twitter.com/beefyfinance

Contact Information

TG: @frondoto

Twitter: @frondoto1

Email: frondoto@beefy. com

SECTION 2: GRANT INFORMATION

Requested Grant Size: 150,000 ARB

Grant Matching: No grant matching

Grant Breakdown: [Please provide a high-level overview and pro forma of the budget breakdown and planned use of funds]

Funding Address: Beefy’s Arbitrum Safe

Funding Address Characteristics:

Beefy’s multi-sig Treasury is controlled by the Treasury Council which has 8 members, and requires consensus from any 4 to sign off on any multisig transaction before it can be executed.

Details of the current 8 members and their Treasury EOA wallets are:

frondoto

ChiliConCarne

DefiDebauchery

Moodini

EPETE

JackGale

TBC

YR2150

Distribution Contract Address:

0x2951C806A75B19954Ce0BEd477676A54f3c1C200 for Boost Factory smart contract that will be used to create the incentivization contracts for different vaults.

Incentivised Contract Addresses:
BTC-USDC vault: 0xBE62C3b16789901066F882D94EF356f9C6aac414
ETH-USDC vault: 0xfb1Ea0ec3F727Cb62E0c8884d0Ae9aBAb32986ED
ARB-USDC vault: 0x56849a2632B29593fEF937aEAF397abE1368d2C9
LINK-USDC vault: 0xf3C483077c0202c2bc004E139B2e78e6e0f72593
SOL-USDC vault: 0xf3C483077c0202c2bc004E139B2e78e6e0f72593

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Objectives: Beefy’s app is multichain, meaning that users connecting from any chain will see the boosted vaults at the top of the app. The objective of this grant is to attract new users to GMX, and to its many ways to participate (providing liquidity/earning, trading, etc). Users staking in the boosts will earn the vault compounded interest, plus extra ARB. Beefy’s marketing team will draft comprehensive content to showcase GMX to our audience through blogs, tweets, discord announcements, and more.

Key Performance Indicators (KPIs):

We will measure the amount of unique users in the GMX vaults (expecting 1,500 unique new users), and Total Value Locked (around $16M).

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

The goal is to introduce Beefy’s audience to the GMX protocol through different types of communications, and with the boosted vaults as the center of the initiative.

Justification for the size of the grant:
We calculated that 150,000 ARB distributed during 7 weeks (approximately until end of GMX STIP distribution period) in 5 vaults (BTC-USDC, ETH-USDC, ARB-USDC, LINK-USDC, SOL-USDC), would yield between 6% and 13% extra APR.

**Execution Strategy:

Grant Timeline:
We will start the distribution of ARB a few days after receiving the tokens (need 2 to 3 days to deploy the contracts) and until 31 Jan. The weight of the allocation will be:
BTC-USDC: 0.35
ETH-USDC: 0.35

ARB-USDC: 0.2

LINK-USDC: 0.05

SOL-USDC: 0.05

Fund Streaming: Ideally we would need to fund the boost contracts in one go (or as few as possible, to avoid rewards stopping and manual actions.)

SECTION 4: PROTOCOL DETAILS

What date did you build on GMX?: Feb-09-2023 was the first GLP vault deployed on Beefy

Protocol Performance:

Beefy’s GLP Arbitrum vault had an ATH of $7,000,000 TVL in April 2023.

Protocol Roadmap:
Beefy just deployed new vaults supporting the new GM liquidity.

Audit History (if any): GitHub - beefyfinance/beefy-audits

SECTION 5: Data and Reporting

Is your team prepared to create Dune Spells and/or Dashboards for your incentive program?:

Yes, we will periodically report the amount of unique users in the vaults, TVL, and sizes of deposits, through our analytics dashboard.

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

1 Like
2

Hey @frondoto, Thanks for applying for GMX grants the committee will soon review your application.

1 Like
3

Thank you for your proposal.

Once the Arbitrum Incentives program ends how will the GM Compounding vaults maintain an APY? Is there any plan post GMX grants?

2 Likes
4

Hello @BlueBerry_KR !
That is a good question. When the boosts end the vaults will keep the underlying protocol APR, which is already attractive. Beefy users tend to not move between vaults very often, so with the current Base APRs we can assume liquidity will be quite sticky.

Thank you for sharing your question!

5

  • What is currently the “Base APR”?

  • Are you able to share some concrete stats in regards to the retention rates of users in vaults, since you mentioned Beefy users tend not to move between vaults often?

  • Also, is that statment made about reguler Beefy vaults, or ones which have incentives on top of them? would assume the user behavior is vastly different between these.

1 Like
6

Adding some changes after receiving feedback:

-Reduced the amount ask from 150,000 ARB to 100,000 ARB.
-Removed SOL-USDC and LINK-USDC boosts.
-Dispersement in 2 tranches. Second half distributed after meeting half of the milestones (users and TVL).

7

Hello @eqdegen !

-When I say Base APR I refer to the trading fees.

-We have previously boosted this vault with Lido Beefy which has been retired (no more rewards on Curve) for more than 210 days. There are currently 293 unique users in that vault, and at the peak it had 1141 (January 2023).
Obviously this is just an example and users could behave differently.

-Most Beefy users have the same behavior, its just that with the boost, you capture more users and more quickly.

Thank you for your question!

8

hi @frondoto, Fred here from BD; adjacent to the grants committee, but here to help the overall community process of applying and governance for grants goes smoothly

thank you for your application. many others have already commented with some great and relevant questions

i also appreciate the retrospective edit to the proposal, as it indicates honest reflection and intent to cooperatively build out the ecosystem

one question i would like to ask about:

  • are there potential other value-adds that can be reasonably attached to the proposal in the interest of its furtherance; for instance, i noticed some other Beefy vaults have options for Nexus Mutual coverage - it stands to reason that such coverage options contribute to the overall perceived stickiness of liquidity, and I’d imagine an effort to secure such an option would lend further confidence to the grants committee and GMX community in the support of granting the application with the proposed $ARB. if this is a standard for all Beefy vaults, highlighting this factor i think is generally helpful and informative in elucidating the fullest extent of Beefy’s value prospects to the GMX ecosystem

  • generally, i think it would also lend confidence to the support of this proposal if the community could generally hear how Beefy thinks aloud about their GMX GM vault product - it seems that from previous questions, there is some concern about how Beefy will distinguish their vault product from native GMX GM staking, and these might be general questions that the marketing half of the proposal will eventually have to face. i think the former point can be helpful in addressing this potential second point

either way, this proposal gives me much confidence, as does the Beefy team who has been doing good work in DeFi and with GMX for some time now. looking forward to hear the Beefy’s teams thoughts on this, and the further development of this application to best meet Beefy’s and GMX’s mutual interests

1 Like
9

Some thoughts here from someone who has some experience with Auto-Compounder products (Contributor at Yield Yak) and a GMX holder. My intent with the criticism below is simply to make sure the committee has the right information available to them when making a decision. I’m a big fan of Beefy’s contributions to the space in general.

  • The product being proposed for incentives here is inherently flawed due to the way that GMX $ARB incentives are distributed. New depositors dilute the rewards earned by the prior week’s depositors. Existing depositors will always feel robbed, which they are. It is for this specific reason (as well the product only being tied to STIP incentives) that other auto-compounding protocols (such as Yield Yak) have not released compounders for GM pools. I also think the current TVL of Beefy GM vaults (<$100K in total so far) reflect the lack of demand for such a product.

  • The claim that liquidity would be sticky after the STIP incentives seems incorrect to me. Users are simply taking on additional smart contract risk by being in Beefy vaults (even if that’s minimal) and most liquidity that ‘stays’ is simply liquidity that people forget about in our experience. There is zero benefit to being in the Beefy vault once STIP rewards end, so why would they stay?

This feels like just another proposal trying to justify taking a slice of ARB incentives whilst not offering a meaningful product to grow the GMX Ecosystem.

1 Like
10

Hello @CredegarFhristensen , you mention very valid points.

We will run several marketing promotions during the live period of the boosts. From tweeting about the boosts, but also posting educational content about GMX for our audience. Most of Beefy vaults are coverable by Nexus since a few years ago they assessed Beefy contracts, and gave our protocol a quite low premium for insurance. We could definitely add this to the comms.

Also I want to add that despite the Beefy GM vaults being 6 days old deposits are steadily growing and we expect that to increase exponentially if there are extra rewards on top (with the addition of the vaults appearing at the top of the app)

image
image620×1318 22.2 KB

11

Hello @ravageur77, I appreciate that you took the time to write feedback for my proposal. Let me add some context. Beefy GM vaults have less than 6 days live, so I wouldn’t call $100k in deposits a lack of demand. My feeling is that this proposal fits well the description and purpose of GMX’s original proposal:

  1. Onboard new users who stimulate sustainable on-chain activity and Total Value Locked (TVL) growth
  2. Encourage the growth and development of the Arbitrum ecosystem by attracting new builders to leverage the opportunity to build on top of the GMX layer
  3. Promote a strong and sustainable ecosystem that benefits all participants
12

After a conversation with @Saurabh we are open to receive the grant in three tranches, 33,000 ARB each, and getting the next batch after each third of the users and TVL milestones are completed.

13

Hey @CredegarFhristensen I think I didn’t fully address your last point. If ARB rewards run out, Beefy vaults will still provide the same exact APY as GMX native staking since we don’t take fees on trading. I think it can be seen as another way to access GMX staking without much downside.

1 Like
14

can you please make the amendments discussed with any grant committee contributors to the original proposal, with the noted changes

15

Adding one comment summarizing the suggested changes:

  • Reduced ask to 100,000 ARB.
  • Distribute the grant in three tranches. Subsequent distributions happen after each KPI is met.
  • Add 3 KPIs (First: 500 users and 5M TVL, Second: 1000 users and 10M TVL, Third: 1500 users and 16M TVL).
  • Removed SOL-USDC and LINK-USDC boosts (BTC-USDC, ETH-USDC, ARB-USDC is the final list)
  • Highlight the possibility to ensure the vaults with Nexus within the media content.
16

Hi Frondoto, thank you for your application, one thing we’re seeing on the GMX V2 side, is that pools like SOL-USDC are highly utilised (which make it harder for new traders to come trade), if it’s not feasible for introduce these vaults I understand, although incentivising by utilisation of these pools would bring great benefit to the V2 ecosystem.

Also wondering whether you would be willing to incentivise by the duration of liquidity provisioning would definitely strive for sticky liquidity at least for the short-term?

17

Hello @shogun We could add back SOL-USDC if you think that would be in the best interests of GMX v2. Is there another pool with high utilization besides SOL?

The incentives will be distributed based on deposit size like the rest of the GMX pools. The incentives will be distributed until the 31st of Jan of 2024 which is when the GMX STIP duration is due to end (and mentions that the unspent tokens will be sent back).

18

Hey Frono, I’ve attached below a screenshot of the current traction of Liquidity for Longs/Shorts, as for right now pools like DOGE/USD, LTC/USD, LINK/USD, ARB/USD, and XRP/USD have a high utilisation (in the last two columns).

image
image1620×797 114 KB

View here: GMX | Decentralized Perpetual Exchange

No worries, please let us know if its feasible to direct incentives or create vaults in line with highly utilised pools.

1 Like
19

Hey, yes we could bring back the LINK boost, would add more since the budget is limited.

20

Hello Beefy Team,

We want to thank you for applying to the GMX grants program. The window for applications has recently closed. In the interest of clarity, and to ensure continued lines of collaboration, we want to notify that your grant did not muster full support from the community to move on to approval. Such developments tied only to the STIP grant program are not the end of GMX working with you all. We understand that the opportunity presented by the grants program might have left you in the middle of some developments - we are more than happy to find other ways outside the grants program to see these developments through to a productive end, or to adjust scope accordingly in the interest of such ends.