StellaSwap: Ecosystem Grant Draft Proposal

[StellaSwapCD]

Title - StellaSwap: Ecosystem Grant Draft Proposal

Author - StellaSwap

TLDR

• Primary Goal- Maintain and Grow Activity (active users, transactions, TVL)

• Secondary Goal- Building Connected Contracts Use Cases

• Project Description - StellaSwap is a hybrid DEX that features a standard, stable and concentrated liquidity AMM to facilitate the most optimal price discovery for assets on Moonbeam

• Requested GLMR Grant Amount - 2M GLMR

• Use of Grant - The ecosystem grant will be used to sustain & deepen the market depth of strategic assets for widespread utility across the ecosystem

• Motivation for Grant Amount- Liquidity depth is a necessary requirement for a robust and efficient marketplace that powers the ecosystem. StellaSwap accounts for 80%-90% of trading activity on the network and therefore, the continuation of grants would foster greater market depth via our newly-launched Pulsar + stable AMM and allow vital functions such as the liquidation of underwater loans to occur.

PROJECT OVERVIEW & TEAM EXPERIENCE

StellaSwap is a hybrid DEX that features a standard, stable and concentrated liquidity AMM to facilitate the most optimal price discovery for assets on Moonbeam. As the largest DEX and an integrated DeFi gateway, users can tap on a comprehensive list of features that simplifies their DeFi experience. Users can engage in trading, liquidity provisioning, bridging, cross-chain swaps, and a whole host of things.

We’re proud to be the only DEX on Polkadot that have surpassed over $1B in trading volume! We were the first DEX to go live on Moonbeam, and have been the prominent DEX ever since. At its peak, StellaSwap accumulated over $140M in TVL and had an average daily volume of around $3-$5M. StellaSwap has pioneered several novel mechanisms such as our Initial Liquidity Offering (ILO) to foster capital inflows towards Moonbeam, ZAP feature to facilitate 1-click staking, and we’ve launched the first concentrated liquidity AMM called Pulsar, which is the most capital efficient AMM to date.

StellaSwap was the only native DEX - and one out of two protocols - that received Moonbeam’s Level 3 grants previously to spearhead ecosystem growth. We’ve worked with key protocols such as Moonwell, Lido, Beefy, Qidao, Wormhole and a long list of projects to develop a robust trading venue for the ecosystem.

StellaSwap is made up of a tight knit group of technologists and DeFi natives that previously founded one of the first regulated digital assets exchanges in the Middle East. Our founding team also includes a senior research associate from London School of Economics (LSE). Our team brings a wealth of expertise in digital assets trading and security systems, with prior experiences across high growth start-ups. We have been fully KYC-ed by the Moonbeam team.

PERFORMANCE & ANALYSIS
Before proceeding to deeper details of our proposal, it is only fair that we provide an overview of our performance in the last 6 months.

Achievements

Here is the list of things that StellaSwap has embarked on and launch in order to strengthen Moonbeam’s position as the leading Polkadot hub;

1. Proven Capital Efficiency for Ecosystem Liquidity via Launch of Pulsar
   We launched Pulsar at the start of the year to significantly boost capital efficiency for the ecosystem with the most efficient AMM to date. The success of Pulsar is manifested in;

• Utilization rate between 20%-100% vs standard AMM’s 5%-10%
• Efficiency rates of 10X - 20X
• Low-slippage trading with much lower TVL requirements
• Sustainable yields via trade fee generation
• Launch of the first emissions-free farm (Astar)

2. Simplifying User Journey via Key Launches
   We launched several features that aimed to simplify users’ DeFi journey to maximize our grants, These include;

• Fostering Cross-Chain swaps with Squid + Axelar, creating strong traction that led to greater capital inflows to Moonbeam. The top 2 out of 3 most popular paths for crosschain swaps was initiated towards Moonbea, from BNB and Polygon.
• XCM Transfers for native inter-parachain asset transfers
• Alleviated native USDT acquisition limitation with Meson
• Gas refunds program to foster greater trading
• Developed universal router for auto-trade routing across all our AMMs

3. Igniting Moonbeam as the Hub

• Worked with Moonwell to establish Moonbeam Ignite campaign to spread the word on Moonbeam
• Active participation in AMA’s with PolkaWorld, TeriyakiDon, DTMB, Polkawarriors to engage the community and attract users
• Worked with DTMB & Moonwell to establish Moonbeam’s DeFi Voyage NFT campaign to spur activity within the ecosystem
• Worked with parachains such as Acala, Phala, Astar to launch their native tokens on Moonbeam

CONNECTED CONTRACTS USE CASE (Updated Feedback from Turritz)
This is something we’ve been EXTREMELY EXCITED about! For context, we’ve been working with Squid since last quarter of 2022 to lay the infrastructure + provide optimizations for crosschain swaps (CCS). Kudos to the Squid team for their thought-leadership and responsiveness in ensuring CCS was perfect. The coordinated launch of CCS swaps on Moonbeam was a huge landmark for the ecosystem, and StellaSwap was the first to launch CCS powered by Squid & Axelar. The importance of CCS in abstracting complexities and simplifying DeFi was the main reason why we were extremely enthusiastic about CCS and pushed forward a slew of targeted marketing campaign (e.g. with Moonbeam, Polygon, Arbitrum) to drive adoption and capital inflow towards Moonbeam. We’re proud to say that CCS on Moonbeam has been a great success, with Moonbeam leading the charts on usage and capital inflows:

We will continue to induce behaviour towards using CCS, especially for first-time users and draw users toward Moonbeam, with the help of Squid+Axelar+participating ecosystems.

Beyond CCS as the base layer utility of connected contracts that just went live on Moonbeam on StellaSwap, we’re excited to also explore greater usecases that is built on Squid+Axelar’s infrastructure, such as one-click ZAP into LPs or borrowing protocols. With protocols like Prime going live very soon focused on cross-chain borrowing/lending, we’re excited to establish the liquidity infrastructure to power their use cases.

GRANTS PERFORMANCE
Let’s take a look at the performance of the previous grants cycle.

TVL Targets (Updated feedback from Natalia)

Our initial forecasted target for the first 4 weeks was $26M, which we promptly hit as we topped at around $28M. From then on, the market turned north as GLMR tanked approximately 40% in price from a high of $0.53 to a low of $0.32 in a span of two weeks. General market conditions were bleak, with the entire market bleeding along the same ranges. This impacted our TVL growth, as TVL is fuelled by 1) the USD price of GLMR & STELLA emissions as well as 2) USD price of all assets on our farm.

Market drawdown was aligned to the reduction of our TVL growth forecasts.

Total Volume

We’ve had a healthy cadence of trade volume throughout the duration of the grants, averaging around $1M - $2.5M daily.

User Count

We’ve also had a good range of daily unique users on Pulsar, averaging 500 daily.

RATIONALE
The Moonbeam ecosystem will stand to gain in the following ways;

1. Foster Market Depth
   With the next round of ecosystem grants, StellaSwap can deepen ecosystem liquidity depth to foster greater network activity on Moonbeam. Greater market depth facilitates efficient price discovery, which is required for protocols such as Moonwell, Prime protocol, DAM - and a host of DeFi applications - to operate. With incentives, there will be an inflow of new users that will be exposed to the various use cases within the ecosystem, including connected contract capabilities. Developers are more inclined towards building their dApps on a network with critical mass.

2. Optimize UI/UX for Simplicity
   With greater effectiveness of ecosystem liquidity (TVL) on Moonbeam, price discovery for token value would be the most optimal and slippage would be mitigated, thereby resulting in a conducive trading environment for users. Ultimately, end users will reap the rewards from a liquid market on Moonbeam from ecosystem incentives, resulting in lower slippages and a more streamlined user experience.

3. Extending Cross-Chain Connected Capabilities
   As part of Moonbeam’s vision as the hub for connected smart contracts in DeFi, StellaSwap aims to extend cool cross-chain usecases that adds more network utility, engagement and composability. We’re proud to be one of the first projects to support such advancements, starting with the launch of cross-chain swaps in conjunction with Squid & Axelar. In just a span of a month, we’ve managed to hold the 2nd spot (Polygon > Moonbeam) and 3rd spot (BNB > Moonbeam) for the most popular cross-chain trade route.

WHAT IS PULSAR?
We’re extremely proud to announce the next evolution of StellaSwap: concentrated liquidity. We’ve partnered with Algebra to launch a capital-efficient DEX called Pulsar, which represents a ground-breaking enhancement to StellaSwap’s current hybrid DEX, utilizing the power of concentrated liquidity to provide a much more efficient way of trading and earning as before. With Pulsar, users will access optimal asset prices, low-slippage and greater yield optimization for LP stakers!

Here’s a quick summary of how concentrated liquidity is a beast of AMMs;

• LPs can provide liquidity with up to 4,000x capital efficiency relative to standard AMMs, earning higher ROIs on their capital

• Liquidity utilization rates beyond 100%, compared to an average of 5%-10% that StellaSwap currently has. This is good news for LPs as they’ll earn more fees for a given capital base

• Capital efficiency results in ultra-low slippage trade execution that can surpass both centralized exchanges and stable AMMs

• LPs can significantly increase their exposure to preferred assets and reduce their downside risk

• LPs can sell one asset for another by adding liquidity to a price range entirely above or below the market price, approximating a fee-earning limit order that executes along a smooth curve️

• With greater ROI potential, STELLA emissions can be exponentially reduced. With a reduced inflation rate, we’ll be on the path of tokenholder-value maximization

VISION OF SUCCESS

On a high level, our vision is to be the Schelling point for trading on Polkadot. With Polkadot’s Cross-Consensus Message Format (XCM) to unite inter-Polkadot liquidity and the rise of cross-chain connected contract applications to unlock inter-network synergies, our main goal is to harness total interoperability for Moonbeam network.

In order to further work towards our vision, the core of our foundation as a DEX is predicated on providing a robust trading infrastructure that fosters a conducive environment to enable the most optimum price discovery. Once this is established, we can observe the actualization of flyover effects as protocols tap on StellaSwap’s liquidity depth for their corresponding use cases.

As we’ve demonstrated the establishment of baseline market depth, the next chapter entails unlocking capital efficiency to ensure ecosystem grants go much further in deepening ecosystem liquidity. The transition of both protocol & ecosystem emissions towards Pulsar will further reduce the cost of trading and would set the stage for sustainable yield generation emanating from organic trade fees. This has been validated via the launch of Pulsar, which has seen tremendous capital efficiency gains in the last month.

Here’s the list of suitable metrics that will be fervently tracked for the upcoming new grants program;

1) Cost of Trading

The ultimate goal for the usage of ecosystem rewards is to create a conducive market environment that fosters efficient pricing is the cost of trading. This is generally divided into two main components;

• Trading Fees: One of the core features of Pulsar is its dynamic (variable) fee component, that adjusts itself based on a myriad of factors that include asset volatility, liquidity and trading volume. Based on analytics, Pulsar’s trading fees have been consistently lower than the fixed 0.30% used by other AMMs.

• Price Impact: The most important metric related to the cost of trading is price impact, which is similar to the notion of slippage on an AMM. Essentially, a more efficient AMM like Pulsar would enable much lower price impact for trades. Pulsar’s efficiency enables ecosystem grants to be more productive in creating a deeper market, which translates into lower price impact. Ensuring price impact is low for trades facilitates greater trading efficacy, which creates a positive loop for liquidity deployment.

Moving towards measuring the effectiveness of liquidity relative to its quantity (TVL) would allow us to measure how far a certain amount of grants has succeeded in creating a conducive trading environment. In order to illustrate this point, we can analyze the current variance of TVL & price impact of pools from different AMMs;

Pool 1: USDC - GLMR

• AMM: Standard AMM
• TVL: $2M
• Price Impact of $5k trade: 0.52%

Pool 2: USDT- DOT

• AMM: Pulsar
• TVL: $176k
• Price Impact of $5k trade: 0.49%

With a TVL of more than 12X, USDC-GLMR has a higher slippage when trading a value of $5k. Although this clearly highlights the power of Pulsar, the emphasis should be on tracking the desirable price impact degree that ecosystem grants will foster.

2) Trading Volume

Greater volume indicates greater user activity on the chain, and is perhaps one of the most important metrics to optimize for a DEX. We were successful in attracting volume to the ecosystem as StellaSwap became the first DEX in all of Polkadot to surpass $1B in cumulative trading volume. Even with a lower grant amount, we’re confident of attracting a higher pace of trading volume when Pulsar is live with ecosystem rewards. Our average volume of around $2M daily was within the targets of the previous grants program, which we hope to surpass with the utilization of the upcoming grants.

3) Total Value Locked (TVL)

It is inevitable that TVL is regarded as one of the strongest indicators of popularity and health of any ecosystem. The higher the TVL, the stronger the ecosystem as it is more trusted and reliable. As we’ve hit the TVL targets that were previously forecasted, TVL will continue to be an important - but not defining - metric of evaluation. This is because TVL is quoted in USD, and is affected by numerous macro factors that may affect TVL targets which are beyond our control. Systemic shocks, volatility of bluechips and network effects can all affect our TVL targets.

The TVL forecast is highlighted in the Use of Grants section.

4) Unique Users

User acquisition is a core metric for growth of any protocol; a growing protocol is attributed - in part - to an increase in the number of users. It is imperative to track and optimize for user acquisition, especially when ecosystem incentives are used. The objective is to attract and onboard as many users as we can onto the Moonbeam network.

USE OF GRANTS TIMELINE

It must be emphasized that the totality of the 2M grants will be used to incentivize farms on both Pulsar & stable AMM to deepen liquidity. Under no circumstances would any of the grants be used for development or any other purposes beyond incentivizing the farms, which goes to LP stakers.

This current round of grants will run for approximately 3 months, and will be used to incentivize strategic farms as part of the transition to Pulsar. Strategic farms are made up of assets of strategic importance, which are in the form of blue-chips. Pulsar will ensure that grants will go a longer way in attracting more sticky and sustainable liquidity. Although the TVL forecast of this current grants round would be similar to our previous grant application, the market depth from Pulsar’s TVL will be multiplied given the greater concentration of liquidity. This will allow protocols within the network to tap on our deep liquidity for their full-functioning.

JUSTIFICATIONS FOR ASSET STRUCTURE
There are several farms that have been restructured. This section will delve into the context and justifications.

• GLMR-DOT as The Most-Incentivized Farm
  Our vast network of liquidity routes will be anchored by GLMR-DOT.xc, which will serve as the nucleus of our DEX liquidity. There are several reasons for doing so. Firstly, it is vital that the nucleus farm is made up of native assets. This ensures the absence of bridge risks or the risk of wrapped assets being depegged, as we’ve experienced via Nomad. Having the two biggest native assets as the nucleus would provide stability for our liquidity routing. Secondly, eliminating stablecoins from the nucleus ensures that we mitigate against stablecoin risks, which is very close to all our hearts given what happened to TerraUSD, aUSD and the recent USDC saga. This ensures mitigation against systemic destabilization if any bluechip stablecoins fail.

• Retaining USDC.wh on USDC-GLMR Farm
  As much as we’re focused on onboarding native assets, Tether’s USDT still has a long way to go before it could replace Wormhole-wrapped USDC (USDC.wh). This is due to structural limitations that prevent the inflow of native USDT to Polkadot in general. These include;

1. Difficult Onboarding for Bitfinex: Right now, the only way to mint native USDT is via Bitfinex, which - due to their KYC parameters - prevent a good chunk of users from native transfer and minting of USDT.

2. Limited Payment Rails: CEX withdrawals of DOT directly to statemint or Moonbeam is still extremely limited, which impairs the ability to transfer over their USDT from other L1s/L2s. We’ve done our utmost in relaying our feedback to Parity on this and even took the initiative to integrate with Meson, the stablecoin bridging protocol that leverages atomic (HTLC) swaps.

Due to this, the supply of native USDT is limited and fostering USDT as one of the highly-incentivized farm will be more expensive to maintain, given the premium required to support USDT over USDC.wh, owing to limited supply. There’s currently 3x more supply of USDC.wh vs native USDT.

• Converting USDC.axl Metapool to USDC.axl-USDC.wh Farm & Its Importance
  USDC.axl represents one of our strategic farms as it represents the conduit for crosschain swaps.This has been an extremely popular feature for users to streamline their DeFi journey and reduce friction. Having a deep USDC.axl farm allows greater crosschain swap utility. As to why there’s a restructuring of USDC.axl from a metapool to a direct USDC.wh farm, we believe that a correlated USDC farm would be more effective in attracting the desired liquidity and mitigate against stablecoin risks, which is at the maximum in a basepool configuration (a single depeg can mess with basepool’s dynamic). During the recent SVB failure that led to an uneasy weekend for USDC, there was considerable capital outflow from the basepool. The same underlying USDC - though different permutations - is more safer as compared to a basepool setting.

• Exclusion of Lido’s stDOT Farm
  Lido has announced that they’ll sunset their stDOT facility and recently they stopped providing LDO reward on Curve. In a couple of months, stDOT will cease to exist. Therefore, it is prudent to stop emissions for Lido’s stDOT.

TVL MILESTONES & CONDITIONAL REQUIREMENTS
(Updated feedback by Natalia)
The primary TVL milestone that the success of the grants program would be the aggregate TVL of all farms on StellaSwap, measured by the quantity of assets and not dollar value of the assets. One major limitation of tracking TVL based on the dollar value is that it is highly dependant on the volatility of asset prices. The main methodology of analyzing capital inflows is the quantity of assets that is flowing into Moonbeam, which does not take into consideration the fluctuating value of the asset. That being said, it is difficult to track asset quantity and TVL is the most appropriate aggregate metric for now.

Based on that, our target TVL would be around $20-25M - throughout the duration of the established grant duration. The failure for StellaSwap to reach a base TVL of $25M would require us to increase STELLA emissions in order to reach the $25M base. This is a sign of our commitment in ensuring that there is sufficient base liquidity to power the ecosystem.

In the opposite scenario where market conditions tend to be positive and GLMR prices pick back up, we will maintain status quo and facilitate the reflection of the increased APRs that will seek to deepen ecosystem liquidity. This will be highly beneficial to the ecosystem where the flywheel effects could be enhanced, given the limitations of a relatively small ecosystem grant cap (Level 3).

The reality is that if we don’t put sufficient incentives on Moonbeam ecosystem projects, we won’t attract meaningful liquidity and will continue to be a “ghost chain”. StellaSwap is deeply invested in the ecosystem, and is building for the long term, but there are certain economic realities that liquidity providers have when it comes to providing liquidity in an ecosystem:

• If the rewards are not sufficient in the form of APRs that justify the risk, LPs will not take the risk of using a new ecosystem, especially if bridges are involved.
• If LPs choose to bring their liquidity to other ecosystems with higher reward APRs, there may never be enough liquidity for Moonwell to establish healthy collateral ratios for these markets because liquidations cannot be successful.

Secondary Metrics Tracking*(Updated feedback from Natalia)
It is important for StellaSwap to also ensure the tracking of secondary metrics in a transparent manner so that we can analyze the effectiveness of the grants program. Here is the following secondary metrics that will be tracked, which is similar to prior metrics that were furnished to the Foundation during pre-Nomad times;

• Avg Trading Volume (Daily)
• Avg No. of Txns (Daily)
• No. of Unique Users
• Trade Fee APRs
• Farms APR

STEPS TO IMPLEMENT
We’ve launched Pulsar mainnet at the start of the year in order to prove the power of concentrated liquidity. After close to 2 months, we’ve optimized Pulsar and is ready to ramp up the next phase of liquidity building. In terms of the sequential steps;

• We’ll begin transiting strategic farms from Standard AMM to Pulsar on the last week of March in preparation for the grants
• Newly-transited Pulsar farms will be powered with STELLA token first
• Once grants are received, we’ll push the grants directly to the established farms on this proposal

Strategy for Farm Launches (Updated feedback from Natalia)
We’ve announced the formal plan for farm transmission, which entails;

SECURITY (Updated feedback from Turrizt)
Security is a core aspect of StellaSwap that deserves a section on so that the community can appreciate the processes that we’ve established. Here is a list of security mechanisms on StellaSwap;

• All our AMMs have gone through full audits via Certik & Solidproof
• Pulsar has been audited by ABDK consulting & Hexen. We partnered with Quickswap to do an additional layer of audit on Code4rena before deployment
• We have one of the highest bounty in the ecosystem on ImmuneFi across Critical & High
• Users can also insure their positions on LP of up to $1.5MM in capacity on InsureAce, covering SC vulnerability.

[AlbertoV19]

This Grant proposal was submitted on March 13th 23:26 UTC

It was approved by moderators on March 14th 00:15 UTC

[turrizt]

Hey, StellaSwap! Thank you for submitting your proposal.

1. • Can you provide more details on the use cases for connected contracts?
     

2. • What security measures do you have in place and how do you ensure user fund safety?
     

3. • How do you plan to innovate and stay ahead of the competition in Moonbeam DeFi ecosystem?
     

4. • How would your development plan be affected if there were no incentives for your project?
     

5. • How often do you audit your code for vulnerabilities or weaknesses, and who do you use as an auditor? 
     

6. • What updates or developments can users expect in the near future?
     

Moonbeam has established numerous HRMP channels with other parachains, and it’s encouraging to see that Pulsar now supports xcPHA and xcASTR. I’m curious to learn more about Stellaswap’s future plans in this area, as it’s crucial for Moonbeam DeFi to become a central hub for creating use cases for tokens from other parachains. this will enable these tokens to be utilized within the DeFi Moonbeam ecosystem, including for trading, farming, lending & borrowing.

I’m also interested in whether Stellaswap intends to submit grant proposals to other parachains to receive liquidity incentives. This could create more opportunities for users from different parachains to interact and explore other projects within the dotsama ecosystem, thereby avoiding fragmentation and encouraging users to discover the advantages and opportunities of other parachains.

[CryptoKichta]

hello guys I was wondering why didn’t you do like moonwell and wait for the second part to apply for a grant, you know I like your platform, and I supported you during the last grant application but I think that you should leave some for others too.

Since the beginning of your launch you practically only work with grants I’m curious to see how your platform will work without grants it’s supposed to help you get started but it shouldn’t not become a habit in my opinion, because in the end they no longer make sense it’s just a distribution of tokens to farmers and when there are no more incentives what will happen?

[jose.crypto]

hey, I support what Stellaswap is doing for the ecosystem, but I agree with the opinion above

In this opportunity, Stellaswap should give other teams the opportunity to obtain their grant, and surely participate in the 2nd tranche

Although it encourages liquidity, the protocol should also show its valences without external incentives and show that it is self-sustaining

since from the beginning Stellaswap has received multiple grants

[GLMRWhl]

I agree with the aforementioned replies. It’s greedy of Stellaswap to apply for another grant.

In an impressive development that deserves recognition, their Pulsar v3 concentrated liquidity has become self-sufficient purely off the efficiency of their dex fees. When they are able to move everything over to v3 then why do they need more GLMR to incentivise liquidity when they already offer hugely increased payouts to liquidity providers.

There has been a huge increase in grant proposals since last time, showing Moonbeam is growing fast. Taking another grant only restricts other projects in the space, and no, I’m not talking about Beamswap. More diverse projects on Moonbeam is beneficial for the ecosystem as a whole. What happens if those projects die off through lack of funding? There’ll be little use for a dex in the end.

[MoonbeamNext]

If I look at the updates from EthDenver from last week, it looks like the coolest projects on MB can get along pretty well and that’s how I would love to see our ecosystem. But, if I look at the grant proposal from Stellaswap it looks to me like they’re The Very Hungry Caterpillar, who is not leaving anything for others, but is only interested in their own gain. Too bad, from this way of thinking MB didn’t really profit in the past, why would it work in the future?

[GAMA]

Hello, grant is well written. I have to give you that, but StellaSwap again?

In the last two grants you guys preach how everything is needed for the “ecosystem” while you take from that exact same ecosystem. Players have already left due to this ecosystem being way too favorable towards you and Moonwell. How do you expect the ecosystem to grow while your hands are always taking the majority of the cookie jar?

It would be nice if you would give the public the numbers that you have been working on for the past year. Based on my research on your public multisig you have received over

14,450,000 GLMR valued at $9.602.350

(pastebin). And in return we have a DEX with $18.1 million Total Value Locked. You still have 620,000 GLMR left from previous grants. Use them before you ask for more?

I would like to begin by congratulating you on the achievements you have mentioned. However, I have some questions regarding the market conditions that may not have been favorable for your project. In your previous grant, you had anticipated a gradual increase in TVL, but it did not materialize. Additionally, it appears that your project fell short of the targets advised by DeFi experts by over 60% (GLMR price is the same as 6 months ago), as reflected in the TVL chart. Furthermore, despite having initial TVL and users, it seems that you were unable to retain them.

Market drawdown was aligned to the reduction of our TVL growth forecasts.

Market is more or less up only since early January. Yet your TVL is decreasing while volume is rising.

I have seen that you never take any accountability. For Nomad you have blamed Nomad and Moonbeam. For your failure to deliver what you promised you blame the market. Is it ever your fault?

In the motivation and also in the previous grant you have mentioned the need for market depth so liquidations can happen. How many so-called liquidations happened in the last 6 months when you had 6 million GLMR to work with?

Pulsar is a great product and it has a great potential to help the network. I believe v3 is the future of dexes. Looking at your product that has been live for two months and there seem to be a lot of issues with it:

• incorrect APY display for the farming pools (APY is actually 10 times lower than what you are displaying)
• incorrect FEE claim display
• issues with Cloudflare to even see the platform
• Majority of trading pairs that do not make sense (where is GLMR?)
• Risk of V3 is actually greater and not lower for people that don’t actively manage positions
• Discord only shows bugs and some of them have not been fixed for 2+ months

In the grant you also mention that:

With greater ROI potential, STELLA emissions can be exponentially reduced. With a reduced inflation rate, we’ll be on the path of tokenholder-value maximization.

• This isn’t relevant for the Grant Committee and actually doesn’t make sense from an APY and grant perspective. Your plan to reduce STELLA emissions simply shows that you plan to ask for even more GLMR in the future.

I believe that grant template asks you to provide clear goals and KPIs that you want to achieve. You have provided us with one sheet that has a target TVL but there is no mention on when or how this will be achieved. Looking at your previous failure to meet targets with even more money than now makes me really skeptical that this will stick.

There are no milestones here, just throw in GLMR and wait for liquidity to come or not. No dates, no timeline.

I would like to see that StellaSwap Grants are put on hold. They should show their growth capability without Moonbeam Foundation giving them millions and millions of GLMR for their launches and so far this hasn’t been the case in the past year. If this goes to vote, the GLMR that was farmed will surely be used for vote to pass and farms to continue. It is time to take some action and accountability Moonbeam Foundation, Grant Treasure and Ecosystem Committee.

They still have 620,000 GLMR and should grow Pulsar with that. For 95% projects on Moonbeam this would be a luxury and for some it is “not enough”.

Due to one sided support we have already lost a lot of builders: Moonsama, Zircon, We Move LIDO and more. Let’s not repeat same mistakes and actually try to grow the network.

[superdupont44]

We’ll be happy if you could replace any stDOT by xcvDOT (Bifrost’s equivalent) in the near future.

Love the team and what they did so far, very good product, pushing team. Fully backed x100

Bifrost’s team is working on a SLP SDK for easy integration of their LST products.
xcvDOT and xcvGLMR should find their way on Stellaswap at a given moment

[TheOyster]

I back this proposal 100%

Clearly the Stellaswap team are the team in the moonbeam eco that have shipped the most products.

I will vote in favour of this proposal, looking forward to seeing it roll out.

Thanks all

TheOyster

[SvPatrik]

I believe that Stelaswap has received enough funds from the Moonbeam Foundation. The ecosystem should grow, not get hung up on one project. So guys, show what you can do. Moreover, you still have funds from the last grant.

[CryptoKichta]

it’s normal it’s them who take all the grants it would be a question of sharing and I think that we can have pleasant surprises if we give a chance to others

[TheOyster]

I trade on moonbeam literally everyday,
I’ve used every app, was in the CL, active in the community.

And the honest truth is I just don’t see any other teams on moonbeam actually shipping products.

There’s many people talking about it,
but only Stella ships.

TLDR; we should give the incentives to Stella ASAP.

If other projects want rewards, then they can just apply too.

[CryptoKichta]

it’s true stella delivers and i also use and appreciate their dex but i think doing like moonwell and waiting for the 2nd tranche was a good move to let others have a chance to show what they can do with the grants we can’t have only one dex the grants helped a lot stella it would be nice to help others too

[TheOyster]

yeah so, payout Stellaswap on this grant proposal.

Then moonwell are more than welcome to apply for another one themselves and i’m happy to vote in favour of them also getting a grant

to be clear, I want ALL teams on moonbeam to get grants / funding / support,

but clearly the Stella team are shipping new products harder and faster than anyone else and they are a key part of the ecosystem, I only see positives from paying out this grant to the Stella team.

[GAMA]

I would like to ask how do you label GLMR-xcDOT as a Most-Incetivized Farm while you have put 5% or 100,000 GLMR more into a BasePool?

How do you justify 500,000 GLMR being used for a BasePool that has relatively low on StellaSwap v2 (comparing it with other pools?

Stablecoin farms are commonly utilized by farmers and for small multi-hop routing. By utilizing Concentrated Liquidity, you can minimize the BasePool as it is not typically utilized for trading. This is evident in the analytics data available at https://analytics.stellaswap.com/, where the volume in BasePool over the past 30 days averaged at ~$200,000 compared to the significantly higher volume in other liquidity pools, despite the TVL being $1.8M. Based on this data and general AMM knowledge, it is apparent that this pool will only serve as a farming tool and should not be prioritized.

The more time I spent on your website the more bugs I encounter. Please fix your analytics as it looks like StellaSwap is a half polished product with errors happening daily (looking at your discord)

[LiFeDroiD]

I fully back this proposal as it’s the best DEX on moonbeam let alone on Polkadot and the team is super active, delivering new products and shipping them on time.

[StellaSwapCD]

Hey thank you @turrizt! Appreciate your feedback and will try to answer as best as we can.

1. Can you provide more details on the use cases for connected contracts?

This is something we’ve been EXTREMELY EXCITED about! For context, we’ve been working with Squid since last quarter of 2022 to lay the infrastructure + provide optimizations for crosschain swaps (CCS). Kudos to the Squid team for their thought-leadership and responsiveness in ensuring CCS was perfect. The coordinated launch of CCS swaps on Moonbeam was a huge landmark for the ecosystem, and StellaSwap was the first to launch CCS powered by Squid & Axelar. The importance of CCS in abstracting complexities and simplifying DeFi was the main reason why we were extremely enthusiastic about CCS and pushed forward a slew of targeted marketing campaign (e.g. with Moonbeam, Polygon, Arbitrum) to drive adoption and capital inflow towards Moonbeam. We’re proud to say that CCS on Moonbeam has been a great success, with Moonbeam leading the charts on usage and capital inflows:

We will continue to induce behaviour towards using CCS, especially for first-time users and draw users toward Moonbeam, with the help of Squid+Axelar+participating ecosystems.

Beyond CCS as the base layer utility of connected contracts that just went live on Moonbeam on StellaSwap, we’re excited to also explore greater usecases that is built on Squid+Axelar’s infrastructure, such as one-click ZAP into LPs or borrowing protocols. With protocols like Prime going live very soon focused on cross-chain borrowing/lending, we’re excited to establish the liquidity infrastructure to power their use cases.

2. What security measures do you have in place and how do you ensure user fund safety?

Security is #1 priority for us.

• All our AMMs have gone through full audits via Certik & Solidproof
• Pulsar has been audited by ABDK consulting & Hexen. We partnered with Quickswap to do an additional layer of audit on Code4rena before deployment
• We have one of the highest bounty in the ecosystem on ImmuneFi across Critical & High
• Users can also insure their positions on LP of up to $1.5MM in capacity on InsureAce, covering SC vulnerability.

3. How would your development plan be affected if there were no incentives for your project?

Great qns. The whole reason we spent a tremendous amount of resources on Pulsar is to transit toward a sustainable future that is contrary to the typical DeFi “bootstrapping liquidity via rewards” narrative. With Pulsar, incentivization transits to a more sustainable approach driven by trading fee APR, which fosters a positive loop owing to the efficiency of concentrated liquidity model. The launch of Pulsar across 2 months has allowed us to monitor and optimize our approach, even launching the first incentive-free farm (aptly called ‘Au Naturel’) that we worked together with one of the most prominent parachain, Astar with. And this is a defining point for StellaSwap; our new proposal is predicated on Pulsar’s success; meaning we’re basing our ask based on ongoing analytics and proven success, rather than theoretical.

In the event that we receive no grant, we’d still continue to be operational comfortably owing to the efficiency of Pulsar. However, that would not be optimal for the ecosystem, where the need for deep liquidity to foster efficient markets represent the backbone for growth. This has been a recurring theme across all L1/L2 expansion strategies.

4. How often do you audit your code for vulnerabilities or weaknesses, and who do you use as an auditor? 

We’ve used Certik,Solidproof & Code4rena for our audits. We’ve strict internal security controls, we conduct Risk Assessments every month and mitigate single point of failure.

5. What updates or developments can users expect in the near future?

There’s several exciting stuff that users can look forward to, namely;

• Extension of crosschain swaps to more L1s & L2s
• Full launch of our universal router that enables auto-trade routing across all our AMMs
• Launch of ALM with Beefy & Gamma to abstract concentrated liquidity complexity
• Cross-chain bridginging/swaps with Wormhole
• Liquid staking GLMR facility
• Migration tool to facilitate V2 > Pulsar LP migration conveniently
• Further Pulsar optimization & simplification

I’m curious to learn more about Stellaswap’s future plans in this area, as it’s crucial for Moonbeam DeFi to become a central hub for creating use cases for tokens from other parachains.

We plan on being the Schelling point of Polkadot, leveraging on inter-parachain synergies via XCM & inter-network synergies via technologies like CCS, allowing us to harness holistic interoperability. Therefore, this entails that we’re going to continue listing other parachain assets. Beyond listing, it is vital to have a great relationship with other parachains and projects across Polkadot to harness further usecases to significantly add value to ecosystems including Moonbeam’s. We’re proud to the forefront of that!

I’m also interested in whether Stellaswap intends to submit grant proposals to other parachains to receive liquidity incentives.

Owing to our great relationships with parachains and projects around Polkadot, we’ve been very fortunate to tap on the resources such as farm incentives for parachain asset listings on Pulsar. Going forward, we’re also keen to have an active role across other communities in tapping their communities for synergies with StellaSwap on Moonbeam, which include farm incentives.

[nataliak.8]

Hi StellaSwap Team

Thank you for submitting your proposal for the Ecosystem Grant. I really appreciate your commitment to the ecosystem and your contribution to ecosystem growth. Thank you also for providing an overview of your performance in the last six months and showing the Moonbeam community your achievements after receiving the previous Level 3 Grant.

After reviewing your application I would like to give you my feedback on the proposal format and ask a few questions about your draft proposal.

Proposal Format

The proposal should be in line with the grant guidelines and provide some specific information to make it more transparent for the community.

Goal: We asked teams to choose one of the two options as a main goal for their application. You have mentioned primary and secondary goals. Can you choose only one which better fits your proposal?

Team experience: You described the team in general terms but we recommended listing the names of the team members and the relevant experience in the proposal. To enhance the project’s transparency and the community’s confidence I would recommend you provide more information about the StellaSwap team.

Proposal feedback & questions

I would like to see in your proposal, what is your action plan in case of unfavorable “black swan” events, such as hacks, market crashes, etc. Please consider the emergency tactics for the grant-related activities that will be adopted.

Here are my questions:

• Describing the performance of the previous grants cycle you mention that your “initial forecasted [TVL] target for the first 4 weeks was $26M” which you quickly hit as you “topped at around $28M". Why isn’t it visible on the following bar chart?

• What marketing activities are you currently conducting to raise the interest in Pulsar and attract more new users?
• You describe that the newly launched Pulsar utilizes “the power of concentrated liquidity to provide a much more efficient way of trading and earning as before” and you want to use the grant “to incentivize strategic farms as part of the transition to Pulsar”. So if Pulsar has more advantages than the standard AMM, why is there a need to incentivize farmers to migrate to it?
• How will you incentivize the farms? Can you describe the strategy? In what timeslots?
• A few questions to the Use of Grants Timeline:
  
  
  • In the proposal, you mention 4 metrics that will be tracked for the upcoming grants program: cost of trading, trading volume, TVL and unique users. However, your milestones are based only on TVL only. I would like you to explain why you have chosen only this metric; alternatively please add some more.
  • In the table, there is only one pair DOT.xc-USDT.xc that is now on Pulsar. Where are the other 4 farms? Do you plan to create them and if so what is the timing for the launch of these farms?
  • How was the price 1 GLMR = 0,3521 UDS determined? If the GLMR price is higher, in the future, how will you use extra funds?
  • What does the percentage column mean?
  • How did you calculate the estimated GLMR APR?

Updates to Proposals

Please note that you have until March 19th 2023 11:59PM UTC to make changes to your proposal. A list of changes based on community feedback should be added to the “Updates’’ section of the proposal and any changes should be reflected in the text of the proposal itself.

Best regards

Natalia
Non-Foundation Community Grants Committee Member

[StellaSwapCD]

Hello ser,

Thank you for your support and we appreciate your feedback!

On Moonwell, they opened markets relatively later overall and they still have grants that hasn;t been disbursed. StellaSwap on the other hand, has disbursed the rewards exactly as per the emissions schedule we established at the start with no delays. That is why our grants are ending.

Before getting any grants, we were the top DEX both in terms of TVL & volume. I hear your point about the dependency on grants, but the bigger picture is ensuring sufficient market depth to enable ecosystem growth. To be clear, StellaSwap is and should be arbitrary, in that the most important thing for the ecosystem is a robust trading environment that can only happen with sufficient liquidity. If you agree on this, then the natural question should be “How?”

StellaSwap has proven to be one of the top builders in the space, with several launches aimed to simplify DeFi and onboard new users. Pulsar, cross-chain swaps & universal router was shipped in the last 3 months. In order to transition liquidity from V2 to Pulsar, which is far more superior in terms of capital deployment efficiency and facilitating low-slippage trading, we need to have a fresh round of grants. That is why we’re highly supportive of the newly revised grants that has a cap of 2M for each tranche to ensure fairness.