Written after incorporating feedback from several other stakeholders. Open to feedback, changes, additions, etc.
Radiant was awarded a 3,348,026 ARB grant by the Arbitrum Foundation. This proposal seeks to utilize this grant to grow the Arbitrum arm of the Radiant platform, facilitate a flywheel, and achieve platform metrics to be eligible for further large grants in future. An initial suggested split of 40% of ARB to borrowers, 40% to dLP lockers, 10% to depositors, and 10% to the Starfleet Treasury is proposed with a 12 month horizon for the current grant. If Radiant is awarded a larger allocation of any future grants prior to the 12 months ending, then these numbers could be altered to be more aggressive subject to governance.
Utilizing token grants for the purpose of platform growth has seen great success within other ecosystems: notably Velodrome’s use of OP to incentivize liquidity and kickstart their VELO flywheel. Radiant was among the largest recipients of the initial ARB grant, and it would be valuable to make use of this grant to cement our place as a pivotal protocol in the Arbitrum ecosystem.
Given ARB’s high proportion of supply reserved for future growth, further grants based on contribution to the chain’s TVL, usage, and activity, are very likely. By adding ARB incentives to the Radiant platform for depositors, borrowers, and dLP lockers, we are able to significantly increase the likelihood of increasing any future ARB grants, while increasing fees to dLP lockers in the process.
The alternative use of keeping these tokens for the project runway is a flawed proposition. If a leading ecosystem project like Radiant were to sell its ARB grant to fund its runway rather than to incentivize users and grow the network’s value, it would certainly be controversial and looked upon sourly by the wider Arbitrum/DeFi community, and detract from the likelihood of receiving future grants. The more productive route would be to use ARB to facilitate protocol growth, which in turn also increases the Radiant Foundation’s 15% OpEx budget for runway through increased TVL and borrowing (as well as real yield to dLP lockers). Also, ARB is of course a governance token, so distributing it into the hands of a wide variety of users to decentralize its voting power is likely to be looked upon favourably by the Arbitrum Foundation.
3,348,026 ARB grant, split into 12 months = 279,002 ARB/mo, broken down to:
111,601 ARB/mo shared between Arbitrum dLP lockers proportional to their lock length (the same split as the protocol revenue is currently)
111,601 ARB/mo shared between Arbitrum asset borrowers, encouraging more borrowing & therefore real yield fees to dLP lockers. This should be applied to each asset proportional to the RDNT emissions currently being emitted.
27,900 ARB/mo shared between Arbitrum asset depositors. This should be applied to each asset proportional to the RDNT emissions currently being emitted.
27,900 ARB/mo sent to the Starfleet Treasury.
90 day vesting for depositors and borrowers, no vest for dLP lockers or the Starfleet Treasury.
Steps To Implement
Add ARB as a reward token to the Radiant platform (Arbitrum Chain only) and move 279,002 ARB/mo to the relevant contracts for emission.
However, given that contracts enabling dual emissions for depositors/borrowers have not yet been completed & audited, hold this portion back. If this takes 1 month, then split the allocations over the following 11 months, such that the allocations to each category are in sync and ‘run out’ at the same time.
Immediate as approved and implemented. Incentives to depositors/borrowers subject to completion & audit.
279,002 ARB/mo for 12 months = 3,348,026 ARB