Arbitrum

Link to Application

https://forum.arbitrum.foundation/t/stakewise-ltipp-application-draft/21754

Council - 3/4 Yes Votes

Feedback

Wintermute Feedback) Stakewise had a strong application based on its product, attractiveness, user base, ability to execute, and potential for long-lasting benefits. We would’ve liked to have seen Stakewise actively try and expand to Arbitrum prior to the launch of LTIPP, however, given they have demonstrated a strong ability to grow TVL on Ethereum we think their grant size is justified (through their calculations as well). We appreciate their commitment to match ARB rewards with their native token and ensure that these rewards are committed for 12 months. Their execution strategy is simple and clear; we would’ve liked to have seen some more innovation than pure liquidity mining but their emphasis on rewarding migration is nice. Furthermore, we like that they will also be attempting to migrate their native governance token. We will be supporting this application.

GFX Feedback) The applicant presents a plan that is both simple in execution and easy to monitor. Staked ETH also should be a priority for Arbitrum, as it is a quality, yield-bearing asset, thereby creating a capital flow from Ethereum to Arbitrum. Despite the high request size, we feel the potential gains for Arbitrum outweigh the price tag. We recommend this grant be approved.

GMX Feedback) Unclear if they intend to support native minting as many other liquid derivatives have offered which greatly simplified the process of onboarding capital and continues to reinforce Arbitrum as a primary hub. The fact that the only reference was a small bridged amount of osETH (via presumably the canonical bridge) makes it seem unlikely; 40% of the incentives are going to incentivize their own native token (it is an 80:20 balancer token so that is potentially still contributing more so to osETH liquidity but again it seems a less productive use of the proceeds for building protocol usage and more towards their token. Would have been better to see these amounts go towards alternative uses.

The majority of the funds will be used to incentivize their own liquidity pool to deepen liquidity of the osETH/SWISE market and try and bring osETH from mainnet to Arbitrum. The grant size is large and I struggle to see how deep liquidity they may build with osETH will continue once the incentives end. I fail to see how incentivizing their own token liquidity will have a long lasting impact on the DAO and be a good return on investment.

Karel Feedback) Vote FOR Stakewise’s proposal.

Detailed proposal that scored well in the rubric, namely re: stickiness to retain liquidity post-LTIPP and matching from Stakewise. Growing Arbitrum’s share re: staked ETH is important and they’ve signalled a clear intention to align themselves with Arbitrum over the long term with the migration plans and incentives. The incentive mechanism is pretty straightforward re: liquidity mining. It’s a large requested grant size relative to Arbitrum adoption/market demand and would have liked to see greater granularity + detail behind the milestones/timelines to match the stated KPIs, as well as the early start to a move into Arbitrum prior to LTIPP. Endorsing to the DAO despite this given importance of LSTs in the market.