Research Summary
The report discusses the return of Arbitrum Ants for the 50m ARB, with top plays including plsARB, GND, JONES, and GRAIL. It provides an analysis of the recent shift of TVL from Arbitrum to Optimism and anticipates a reversal due to the newly passed 50m ARB incentive program. The report also identifies potential beneficiaries of the program and provides an overview of current proposals.
Key Takeaways
TVL Flow and ARB Performance
- TVL Outflow from Arbitrum: Over the past three months, there has been a significant outflow of TVL from Arbitrum, falling from $2.5b to ~$1.7b. The Optimism ecosystem has been a major beneficiary of this shift, with an inflow of over $200m.
- ARB Underperformance: The price action of ARB/OP has reflected the TVL outflow, with ARB underperforming by nearly 30%.
- Anticipated TVL Inflow to Arbitrum: The report predicts a reversal of the TVL flow back to Arbitrum, driven by the recently passed 50m ARB incentive program. This program is expected to attract users to newly incentivized projects.
50m ARB Incentive Program
- Program Overview: The 50m ARB incentive program is designed to attract farming capital and stimulate activity across the ecosystem. The incentives, worth over $40m, are expected to be distributed to the most active Arbitrum protocols.
- Incentive Tiers: The program includes four tiers of incentives: Beacon (<= 200k ARB), Siren (<= 750k ARB), Lighthouse (<= 2m ARB), and Pinnacle (>= 2m ARB).
- Program Timeline: The granted funds are to be distributed until January 31, 2024, with two voting rounds planned.
Top Beneficiaries
- PlutusDAO: Despite controversies, PlutusDAO is expected to benefit significantly from the program, potentially receiving a Siren Grant (<=750k ARB).
- GND Protocol: GND Protocol, a Univ3 liquidity engine and farm, is likely to receive a Siren Grant (<=750k ARB), which could help it recover from previous underperformance.
- JonesDAO: With a TVL of $20m and a long history on Arbitrum, JonesDAO is eligible for a Lighthouse Grant (<=2m ARB).
- Camelot: Despite a failed grant application, Camelot is still likely to be eligible for a Lighthouse Grant (<= 2m ARB).
Actionable Insights
- Investigate the Potential of plsARB: Despite its current discount, plsARB could be a direct beneficiary of the STIP, potentially offering significant returns.
- Consider the Impact of Grants on GND Protocol: The potential grant could help GND Protocol recover from its previous underperformance and stimulate growth.
- Monitor JonesDAO’s Use of Potential Grant: The potential grant could be used in various strategies that could benefit both JONES holders and vault depositors.
- Track Camelot’s Grant Application: Despite a failed application, Camelot could still receive a significant grant, which could be used to incentivize LPs or provide additional value to xGRAIL converters.
