Beamswap: Ecosystem Grant Draft Proposal

Governance Grant Proposals
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This is a necessity for Moonbeam.

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I would like to contribute to the discussion on Wormhole vs. Multichain by sharing some insights from the Moonwell community’s perspective. Just as a disclaimer, we haven’t submitted a grant application this time, so our observations are coming from a neutral standpoint.

In the past year, Moonbeam has encountered various challenges related to building liquidity. A series of notable events, including the Terra/Luna implosion, the unfortunate Nomad security breach, and the FTX collapse, have led to periods of reduced liquidity on Moonbeam. It’s essential to consider that backdrop when evaluating the Wormhole and Multichain solutions, as they can help us better understand the potential risks and opportunities involved.

Now, let’s examine the present on-chain liquidity. You can find this information on Defi Llama. I suggest enabling the “borrows” option at the top of the page, as this will prevent any loans from being subtracted from the liquidity calculations. Below, you’ll find a list of the leading projects and their associated bridge:

Continuing with the analysis of on-chain liquidity, here’s a summary of the top DeFi projects and their preferred bridge:

  • Leading DeFi projects, such as Moonwell, StellaSwap, and Beefy Finance, collectively have $69.26 million in liquidity and primarily utilize Wormhole as their bridge of choice.
  • Prominent projects using Multichain, including BeamSwap, Zenlink, and SolarFlare, have a combined liquidity of $2.33 million.
  • In comparison, projects using Multichain account for only 3.4% of the total value locked (TVL) compared to those using Wormhole.

One possible explanation for this disparity could be the Moonbeam Ignite campaign, supported by the Moonbeam Foundation grants last fall. This campaign has contributed to the ecosystem’s progress, even in light of the FTX collapse and other external events.

As for my concerns about directing new grant funds towards Multichain assets, I’d like to highlight the following points:

  • With 96.7% of liquidity/TVL in projects standardizing on Wormhole and just 3.3% in Multichain, focusing on Multichain would essentially require rebuilding liquidity from a significantly lower starting point.
  • New liquidity incentives for Multichain assets may draw TVL away from existing Wormhole assets, rather than attracting net new liquidity. This could lead to increased slippage and fees for users wishing to swap those assets.
  • Having multiple versions of popular wrapped assets (e.g., USDC, Bitcoin, and Ethereum) can create confusion for users, leading to bridging the wrong asset and incurring additional slippage and fees when swapping to the correct one. This could be a frustrating and costly experience for newcomers to the ecosystem.
  • Wormhole doesn’t charge fees, whereas Multichain levies a 0.1% unbridging fee.
  • Multichain recently experienced a security incident on March 7th, which could have resulted in lost funds. Fortunately, the exploiter returned the Multichain USDC: https://twitter.com/MoonbeamNetwork/status/1633591584255098880
  • In contrast, Wormhole has substantially increased their security budget since their own security breach, making considerable improvements. The recent recovery of stolen ETH further demonstrates their commitment to building secure infrastructure.

In my opinion, these factors support the case for grant recipients to continue focusing on Wormhole-wrapped assets instead of Multichain. Rebuilding liquidity after the Nomad incident has been a challenging process, and I believe it’s crucial to avoid starting over again after investing so much time, effort, and resources in recovery. The progress we’ve made has been hard-fought, and it would be disheartening to see it reversed.

Thank you for considering my perspective, and I wish all projects applying for grants the best of luck in this new round of ecosystem funding.

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24

It seems that your concern has already been addressed earlier. Beamswap is ready to incorporate Wormhole assets, and if you have any inquiries regarding the actual grant, we would be delighted to respond to them.

We would like to ask everyone to read our proposal and answers before posting repetitive questions.

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The reason for selecting BSC Testnet is its speedy block time that provides us with the capability to closely monitor the platform and promptly address any potential issues. This testnet is essentially a faster iteration of Moonbase Alpha. Additionally, BSC Testnet already includes deployed Chainlink oracles, which are vital to our platform’s operation. If we were to try to simulate using Moonbase Alpha, we would encounter difficulties since Chainlink currently has no plans to deploy oracles on that testnet.

Both Axelar and Squid are our long term partners and have provided Beamswap with robust solutions that don’t have any downtime. We share mutual vision and work for the same goals on Polkadot and Moonbeam.

Beamex isn’t audited yet. The product is currently live in BETA version which means we are still fixing any potential anomalies in smart contracts. After resolving all bugs and being entirely satisfied with the product, we will conduct an audit before deploying Beamex on the mainnet.

This also partially covers the question

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This is the final time I’ll address this topic, albeit briefly. I’m not fond of the politics surrounding bridge selections, first involving Nomad and now Wormhole. When other projects chose Wormhole as their bridge, it had no assets on-chain, while Multichain had millions of assets on Moonbeam.

Nonetheless, we remain adaptable. Depending on the outcome of the grants, we’re open to incorporating Wormhole assets if needed.

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Hey @Jim_CertHum, thank you for your feedback.

Primary Goal

It is expected that the primary goal section clearly fits into either ‘Maintain and Grow Activity’ or ‘Building Connected Contract Use Cases’ template. Will you please clarify which one your proposal aligns with and elaborate on how the proposal works toward that goal?

Our intention was for the community to gain a comprehensive understanding of Beamswap’s objectives by reviewing our grant proposal. In brief, our current objective is to expand Moonbeam’s user base and increase transaction volume, total value locked (TVL), and overall activity by leveraging Connected Contracts technology. Since our suite of products supports multiple goals, it is not practical to focus on just one.

Section 9 of our proposal provides a detailed explanation of how our proposal aligns with our goals, and it cannot be adequately summarized in one or two sentences.

Vision of Success

In the vision section, it is expected that proposals set a clear vision of success including metrics that can be evaluated and which align to the specific goal of the grant. Will you please update to include this information?

Below are several quantifiable metrics that are consistent with the specific objectives of the grant. Our projections are based on current market conditions and are dependent on obtaining the entire grant funding.

Expected growth in Phase 1 of Beamswap Concentrated Liquidity (April 2023) :

  • Unique User Growth from 1100 to 1500 per month
  • Increase average monthly transactions from 40000 to 55000
  • Hit $3.5M TVL within 1st week of Concentrated Liquidity launch

Expected growth in Phase 2 of Beamswap Concentrated Liquidity (May - June 2023):

  • Increase Unique User Growth by 30% compared to Phase 1 results
  • Increase average monthly transactions by 30% compared to Phase 1 results
  • Hit $5.5M TVL within 1st week of Phase 2 launch

Expected growth in Phase 1 of Beamex Launch (First two weeks of May):

  • Onboard 300 unique users
  • Hit an average daily volume of 500,000$
  • Hit $1.85M TVL within 2 weeks of launch

Expected growth in Phase 2 of Beamex Launch :

  • Have 700 unique users
  • Hit a daily volume of 2,000,000$
  • Hit $3.5M TVL within 2 weeks of Phase 2 Launch

Besides using GLINT and GLMR as reward tokens we also plan to attract users with internal and external marketing powered by Airlyft and Crew 3. We will also implement a referral program and a strategic content strategy that emphasizes inbound marketing funnels to focus on user acquisition and total value locked (TVL) growth.

Grant Allocation and Fundamentals

It was noted that for purposes of the proposal 1 GLMR = USD 0.35. How was the 1 GLMR = USD 0.35 determined?

What is your action plan in case of unfavorable “black swan” events, or other events that create unfavorable market coniditions. Please consider the emergency tactics for the grant-related activities that will be adopted.

On March 10th, GLMR’s price was $0.35 when adjustments occurred. As for the other part of your inquiry, please refer to point 9 for the answer.

BLP Token

It was mentioned in the proposal that if USDC conditions deteriorated before launch that the BLP token would shift to USDT. Are there any protections or contingencies for BLP in the event of a de-peg of stablecoin (whether it’s USDC or USDT) after launch?

Yes, by setting the stablecoin Index weight to 0.

Can you provide more detail on the relationship and tokenomics of BLP in regard to BLP holders, liquidity providers, and leverage traders. This was only lightly touched on in the proposal. Please confirm that the minting and burning of BLP is 1:1 with the combined ratio of the underlying asset (there are no other facilities to mint or burn the token). If this is incorrect, please provide more detail on minting / burning contracts for BLP.

When a user acquires BLP, they contribute liquidity to the pool. An equivalent dollar value of BLP is minted and credited to the user based on the asset’s value at the time of deposit. Upon withdrawal, the user selects an asset to receive from the liquidity pool, and they obtain the same dollar value of that asset as the BLP tokens they return, which are then burned. The only way to obtain BLP is by providing liquidity, making BLP holders the liquidity providers.

Profits earned by leverage traders reduce the BLP value, as these profits are paid from the liquidity pool. Conversely, funds lost by traders are deposited into BLP, increasing the value of BLP tokens. Numerous statistics and broker reports indicate that 80-90% of traders lose money, which ultimately benefits BLP holders. When traders have open positions, they must pay a borrow fee at set intervals. This fee is paid into the BLP Index.

During the 2 phases of grant incentives to support Beamex and BLP, it’s not clear how the GLMR rewards will be distributed and how users will qualify for them, will you please provide detail around this (the proposal just mentions community rewards, but gives no further details)?

Users will stake BLP tokens to receive rewards in GLMR. Additionally, 70% of the platform’s fees will be converted to GLMR and distributed among liquidity providers.

Community and Ecosystem Engagement

Please provide more information on how you are collaborating with other teams in the Moonbeam ecosystem.

Our team is always actively exploring new ways and trends to work together with other teams in the ecosystem. We look only to continue to work hard towards this important initiative.

Regarding recent collaborations we have the Airlyft campaign, we hosted in co-op with Moonfit or the Take Flight Alpha sponsored promotion we did at Eth Denver where we also networked and had the opportunity to present and release Beamex open Beta to the world at the Moonbeam booth. This was done with other great builders in the ecosystem all networking and driving education together showing the value of Moonbeam. Other partners include: Subsquid, Axelar, Multichain, Braindex, DAM Finance and GLMR Apes.

I hope that helped clarify some things. Cheers.

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28

Grant Proposal has been updated.

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@beamswapio & Beamswap Team,

We (the committee) understand the reasons why you do not stick with only one goal, as its clear your proposal seeks to accomplish both goals. However, we kindly ask that you clarify which of the primary goals, ‘Maintain and Grow Activity’ or ‘Building Connected Contract Use Cases,’ your proposal aligns with. It is essential that each proposal falls within one of these categories to ensure fairness for all teams, as they selected one of both goals even when it’s development involved both of them. I understand that Beamswap aims to achieve both goals, but we urge you to choose one primary objective that your proposal will focus on.

From the committee’s point of view after re-reading your proposal again we believe your proposal aligns mostly with the ‘Maintain and Grow Activity’ bucket for the reasons listed below;

  • Directly from your proposal:

“The funds acquired through the Grant would increase market liquidity for Beamswap’s newest products, Beamex, a decentralized perpetual exchange, and concentrated liquidity AMM, leading to a stronger influx of active users to the Moonbeam network and their long-term retention”

“the intent to achieve two goals - initially, to increase market liquidity for Beamswap’s newest products, namely Beamex, a decentralized perpetual exchange (perpetual DEX), and concentrated liquidity AMM (CLMM), and consequently, to bring more active users to the Moonbeam Network and retain them long-term.”

As this vote is opening in ~2 hours, the committee will set Beamswap’s goal to ‘Maintain and Grow Activity’ bucket as to align with the other submissions and ensure a level playing field for all.

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We wish to notify everyone that we have made changes to our Grant objectives. Specifically, we have eliminated Beamex and made revisions to the Beamswap v3 goals to reflect this grant size reduction.

Modified goal based on the amount of GLMR Awarded:

657,900 from 2,000,000 requested which is 32.9% of the requested amount or a 67.1% decrease.

Expanded Vision of Success with decreased goals:

Below are several quantifiable metrics that are consistent with the specific objectives of the grant. Our projections are based on current market conditions and are dependent on obtaining the entire grant funding.

Expected growth in Phase 1 of Beamswap Concentrated Liquidity (late April 2023) :

Unique User Growth from 1100 to 1300 per month
Increase average monthly transactions from 40000 to 50000
Hit $1.5M TVL within 1st week of Concentrated Liquidity launch

Expected growth in Phase 2 of Beamswap Concentrated Liquidity (early May - June 2023):

Increase Unique User Growth by 15% compared to Phase 1 results
Increase average monthly transactions by 15% compared to Phase 1 results
Hit $3M TVL within 1st week of Phase 2 launch

Beamex will continue to be developed and should go live in Q2-Q3 of 2023.

Regards,

Beamswap

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A quick update on the grant reception and steps going forward.

  1. Concentrated liquidity is in the final stages of development, with Moonbase deployment coming around the 18th of May. Following a brief testing period, we will deploy to the Moonbeam network ASAP if everything checks out. The original date was missed due to an undisclosed partner not delivering the product.

  2. Beamex is in the second testing stage and is currently deployed on Moonbase. We are doing a final check that everything works as expected.
    The audit process will start soon and will be completed by June 7. If everything checks out, we will start the Moonbeam deployment ASAP.

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