[OPEN GRANT APPLICATION] GMX <> Perpy

Grants
1

SECTION 1: APPLICANT INFORMATION

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Applicant Name: Kharn

Project Name: Perpy

Project Description:

Perpy is the ultimate Social Fi & Asset Management Hub. With Perpetual, Spot, and Options supported within a streamlined UI, Perpy is the all-in-one dApp for traders to execute their most complex strategies seamlessly.

Traders attract investor funds into their vaults, trade on their behalf and earn a transparent commission on any generated profits. Experience an unmatched trading journal and comprehensive trade statistics.

Investors seeking portfolio growth without the hassle of trading will find a wide range of skilled vault managers to invest in while maintaining full custody of their funds at all times.

Team Members and Qualifications:

  • Erasme: CEO & Co-Founder (core team)
  • Montaigne: Lead Dev & Co-Founder (core team)
  • Baal: Front-end Dev
  • Amospi: Community Manager
  • Kharn: CMO
  • Four freelance developers

Project Links:

Contact Information

  • TG: @KharnHash
  • Twitter: @KharnHash
  • Email: kharn@perpy.finance

SECTION 2: GRANT INFORMATION

Requested Grant Size: 100,000 $ARB

Grant Matching: N/A

Grant Breakdown:

  • 40,000 ARB for “Competition incentives” - Incentivize Traders with bi-weekly Trading competitions to increase trading volume on GMX.

  • 20,000 ARB “Vault incentives” - Incentivize deposits in Perpy’s vaults to increase the liquidity available for traders to make more trading volume on GMX.

  • 40,000 ARB “Account Abstraction trading rebates” - Incentivize traders with trading transaction fee rebates when they use Perpy’s account abstraction solution to trade on GMX.

Funding Address: 0x556680340d80858BA6b03404efF4c50BAc8b5dc2

Funding Address Characteristics: 2/3 multisig with securely stored private keys distributed across the Perpy core team.

Distribution Contract Address: Same as Funding (each week, trading incentives will be sent directly from the multi-sig to eligible users using a multi-send tool).

Incentivised Contract Addresses: None

SECTION 3: GRANT OBJECTIVES AND EXECUTION

Objectives:

Perpy’s primary goal with this requested grant is to attract and retain skilled traders (vault managers) and liquidity from investors to the platform and, consequently, increase the trading volume on GMX. This will also help us develop the Social Fi vertical on Arbitrum, as Perpy has a unique position to attract more TVL and Trading volume, which will, in the end, benefit GMX.

With a diverse offer of profitable vault managers, investors seeking exposure to trading revenue without trading will be attracted to Perpy. This is a new influx of TVL, which will generate trading volume for GMX coming indirectly from non-trader users, a user base to which GMX currently has no access.

In the meantime, vault managers will discover why Perpy is the all-in-one dApp for traders with the support of GMX, Spot & Optıons, enhanced UI & trading tools and trading journal & statistics.

Key Performance Indicators (KPIs):

These are the KPIs we will track and provide a monthly report:

Users:

  • New users (Traders and Investors)
  • New vaults created
  • Active users using AA
  • Daily and weekly active traders

Performance:

  • Daily, weekly and monthly Trading Volume on GMX
  • Total Trading Volume before, during and after the grant period

Total Value Locked:

  • Total Value Locked (AUM) before, during and after the grant period
  • TVL behaviour of incentivised vaults

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

The rationale here is, on one hand, to leverage GMX as a robust venue to trade with deep liquidity to attract traders from other blockchains and protocols and, on the other hand, organically attract new users who don’t trade, both personas contributing to Perpy TVL, GMX Trading volume fees and the overall success of both protocols.

This grant is divided into three incentive categories, as presented in Section 2:

  • Competition incentives
  • Vault incentives
  • AA fee rebate incentives

The aim behind these categories is to incentivise traders by getting direct incentives and trading fee rebates while experiencing a CEX-like trading journey and getting all the statistics needed to improve their trading. Meanwhile, incentivizing investors to deposit in vaults will increase the trading volume generated with more liquidity available for traders.

Account abstraction integration will drastically improve the trading experience on Perpy, giving the users the possibility to trade without signing nor paying for any TX thanks to the trading fee rebates of this grant. This will help to onboard Web2 and CEX users, who will become investors in Vaults thanks to a seamless social login, no seed phrase management, fiat on-ramps and no need to fund your wallet with gas token. That’s again an untapped source of TVL, which would generate more trading volume as this user category would be interested to invest in skilled traders to trade on their behalf.

Justification for the size of the grant:

We’ve been live on Arbitrum since Nov. 2022 with Perpy V1, our previous MVP: old.perpy.finance.
This first iteration had real traction between March 2023 and June 2023, seeing a rough $50M trading volume before the overall market volume was drastically reduced.

Then, we launched Perpy V2 closed beta in September 2023, which we started to build from scratch in March 2023. Perpy Spectra has been public since November 24th, and GMX V2 support is expected before mid-December 2023.

With these incentives, we expect to reach a $20M-$40M/month trading volume.

Execution Strategy:

Perpy plans to distribute the granted funds through the following process:

Competition incentive

  • 40,000 $ARB will be split into bi-weekly 5,000 $ARB incentives over 16 weeks (8 competition epochs)
  • Distribution will be based on the last 14D notional Trading PnL leaderboard, resetting after each competition epoch on Sunday or Monday (TBC) to ensure fairness for new traders coming to the platform
  • At the end of each epoch, the 5,000 prize incentive will be distributed as follows:
    • (Total epoch Trader PnL / Trader PnL) * 5,000 $ARB
  • If the Total epoch PnL doesn’t exceed in notional value 5,000 $ARB, only a portion will be distributed to ensure that incentives are spent wisely (meaning that $ARB distributed will never exceed the Total epoch PnL)
  • Incentives will be airdropped directly to vault manager wallets to avoid any extra security risks in developing an emission module
  • The Perpy team will monitor the weekly distribution and report useful metrics for the monthly grant report

Vault incentive

  • 20,000 $ARB will be split into weekly 2500 $ARB incentives over 8 weeks
  • Every week, a random snapshot will be taken on the first 10 more profitable vaults
  • Vault depositors will receive their ARB airdrop based on this distribution formula
    • (Total 10 Best Vaults TVL / User TVL deposited) * 2,500 $ARB
  • Incentives will be airdropped directly to users’ wallets to avoid any extra security risks in developing an emission module
  • The Perpy team will monitor the weekly distribution and report useful metrics for the monthly grant report

AA Trading rebates incentive

  • 40,000 $ARB will be split into monthly 20,000 $ARB incentives over 2 months
  • Traders using GMX with a smart account will have their transaction fees sponsored by Perpy paymaster using this GMX grant
  • Each month, Perpy will swap the 20,000 $ARB in ETH and deposit them in the paymaster
  • This incentive will be live when Account Abstraction is integrated (Q1’24)

It’s worth noting that Perpy is covering the R&D expenses for integrating Account Abstraction and will not request a grant for this feature. The same goes for GMX V2 support in Perpy vaults (backend and frontend).

Grant Timeline:

To stay aligned with Round 1, we request that the grant be streamed over three months.

Competition and Vault grants: 60,000 $ARB over 4 months

  • Month 1: 20,000 $ARB (10K Competition + 10K Vault incentives)
  • Month 2: 20,000 $ARB (10K Competition + 10K Vault incentives)
  • Month 3: 10,000 $ARB (10K Competition incentive)
  • Month 4: 10,000 $ARB (10K Competition incentive)

AA Trading fee rebate grants: 40,000 $ARB over 2 months

  • Milestone AA live on Perpy: 20,000 $ARB
  • Month 2: 20,000 $ARB

Fund Streaming: [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 streamed grant at their discretion at any time?] Yes

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.

What date did you build on GMX?: We launched Perpy V1 (https://old.perpy.finance/ site deprecated) on the 15th December 2022 on Arbitrum with the native support of GMX V1 Perpy Launch Tweet

Protocol Performance:

Performance

GMX has always been a strong focus for Perpy to have a secure and robust underlying Perp DEX.

We’ve been building on GMX since December 2022, and here are the key dates:

  • Dec. 2022: Launch of Perpy V1 (MVP) with GMX V1 support
  • March 2023: Public sale on Camelot launchpad to seed the V2 development
  • Sept 2023: Perpy V2 (Spectra Update) closed beta launch
  • Sept 2023: GMX V2 support development kickoff
  • Nov 24th 2023: Perpy V2 public launch
  • Mid-December 2023: GMX V2 support live

Here are the metrics of the Perpy V1 before the launch of Spectra Update in September 2023:

  • Vaults created: 1884
  • Total Trading Volume: $50,662,708
  • Peak Users on the dApp: 2972
  • Average active users: 320

Trading volume above was routed only to GMX V1 as it was the only Perp DEX supported back then.

During the closed beta, we kept the number of beta testers relatively small. Here are the metrics:

  • Vaults created: 80
  • Trading Volume: $698,433
  • Whitelisted Users:167

It’s worth noting that this volume was made on Level Finance during the closed beta period while GMX V2 support was being developed.

Since our public launch on November 24th, we have the following metrics (snapshot Dec. 4th):

  • Vaults created: 115 (+35 since Nov. 24th)
  • Trading Volume: $1,267,582 (since Nov. 24th, not including $698K closed beta volume)
  • Users: 412 (+245 since Nov. 24th)

Achievements

The biggest achievement in 2023 was the complete revamp of the Perpy V2 and GMX V2 support (coming mid-December):

Protocol Roadmap:

Perpy will adapt its roadmap in an agile way, taking into account community and traders’ feedback as we always did to shape a product that users actually want to use.

The priorities for the next 3-6 months focusing on onboarding users (not in a particular order):

  • Vault - GMX V2 support (coming before mid-December)
  • UI - Account Abstraction and On-ramp solution
  • UI - dApp Notifications (trade open/close, vault deposit/withdraw…)
  • UI - Metavaults
  • Trading Engine - Drag&Drop Take Profit/Stop Loss
  • Trading Engine - One-click Trading
  • Trading Engine - Bot SDK support

Audit History:

Audit done by Peckshield for Perpy Spectra Closed Beta release (Aug. 2023)

SECTION 5: Data and Reporting

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

Yes, we will provide a Dune Dashboard or a specific section of our upcoming Statistics page to track the incentive program with the KPIs presented in Section 3.

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

Yes, we will provide bi-weekly updates on the GMX Forum with the support of our Dune Dashboard/Statistics page, and we would be more than happy to get the feedback of Labs, the Grants Committee and the community on our updates.

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

2 Likes
2

The Pepry team has managed to launch a highly innovative product that is supposed to become a hub for traders and investors.
Traders get an opportunity to open their hedge fund on chain attracting investing capital by showing their trading skills.
Investors on the other hand get an additional stream of passive income by investing into trading vaults.

At the early stage of the product, we need to incentivize traders to use the platform and prove their skills so that future investors have a line-up to choose from to invest. This grant is supposed to play a significant role in starting the flywheel.

p.s. I am an early investor, user and active discord member

2 Likes
3

Thank you for submitting your application to the GMX DAO Grants. We will review your application and get back to you.

4

I fully support that,

Perpy is well positioned to take the lead in Social Fi, and it would be great to see the solution integrated into the GMX ecosystem, as this could attract more traders.

Muz :blueberries: :sparkles:

1 Like
5

Hello Perpy team,

after reading through this, looks like a great proposal; one thing that has been a question around account abstraction has been the unlikely but still real security concern that it can further encourage the phenomenon in web3 of bloated bot-induced volume/wash trading - usually this is onlyl a problem when a combination of factors are present (say low network execution fees and token-incentivized trading)

I think more confidence could be built around the final allocation of ARB incentives if they could possibly be re-worked, or some further insight shed on the thinking on the original intent, to soother possible concerns of temporary/mercenary trading - i.e. the event where users only decide to trade with GMX using Perpy because AA fees are temporarily subsidized, and then leave afterwards

All that to say, this already on its own a powerful proposal - even if you intend to keep as is, I think it would do the proposal well to at least shed some further insight for the grant committee contributors

thanks again and will nudge relevant folks on this matter

6

Hey @CredegarFhristensen thanks for your feedback.

Appreciate the concerns around boting the AA portion of the grant. We will implement two keepers to reduce them:

  • Operations cap (would prevent bot doing wash/trading)
  • Gas spent cap (to distribute fairly the trading fee rebates across accounts)

We will monitor these parameters for the first two weeks and tweak them regarding the usage we see.

We think these two caps would prevent bot/wash trading. There are no incentives for bad players to try to game Perpy with fake volume, as the incentives from this grant are based on PnL, not volume.

To address the temporary/mercenary trading, we think that when Traders get exposed to our value proposition, meaning that they can trade on Perpy like they would do on GMX with their funds but also with investors’ deposited funds and take commissions on profits, it should click.

If they are profitable in the long run, it’s a win-win for both the trader (aka vault manager) and the investors. It goes without saying that for GMX, the trading volume will be higher coming from Perpy as Traders have more size to trade with, thanks to the funds deposited by investors who generally don’t use Perp DEXs.

We can expand the AA grant period over 4 months (10K ARB/month) instead of 2 months to disperse this grant portion more steadily, giving more time to traders to try out Perpy and attract more traders over time. This should also prevent the AA grant from being spent too quickly on a limited number of traders.

Hope this clarifies your concerns.

Kharn

7

It seems I can’t edit the original grant post. Grant Section3 should have these modifications:

AA Trading rebates incentive

  • 40,000 $ARB will be split into monthly 10,000 $ARB incentives over 4 months
  • Traders using GMX with a smart account will have their transaction fees sponsored by Perpy paymaster using this GMX grant
  • Each month, Perpy will swap the 10,000 $ARB in ETH and deposit them in the paymaster
  • This incentive will be live when Account Abstraction is integrated (Q1’24)

To prevent bot/wash trading, two caps will be implemented:

  • Operations cap (would prevent bot doing wash/trading)
  • Gas spent cap (to distribute fairly the trading fee rebates across accounts)

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We will monitor these parameters for the first two weeks and tweak them regarding the usage we see.

Grant Timeline:
Competition and Vault grants: 60,000 $ARB over 4 months

  • Month 1: 20,000 $ARB (10K Competition + 10K Vault incentives)
  • Month 2: 20,000 $ARB (10K Competition + 10K Vault incentives)
  • Month 3: 10,000 $ARB (10K Competition incentive)
  • Month 4: 10,000 $ARB (10K Competition incentive)

AA Trading fee rebate grants: 40,000 $ARB over 4 months

  • Milestone AA live on Perpy: 10,000 $ARB
  • Month 2: 10,000 $ARB
  • Month 3: 10,000 $ARB
  • Month 4: 10,000 $ARB
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Hello Perpy 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.