D2 Finance thank our advisors, council, and delegates for their valuable feedback to optimize our proposal and hereby submit our grant request for 100,000 ARB
See our forum post and subsequent follow up in the comments section for full details: https://forum.arbitrum.foundation/t/d2-finance-ltipp-application-draft-final/21826/12
Team and Product Information
D2 Finance brings a unique and innovative value proposition to the Arbitrum ecosystem consisting of; D2’s distinct position to on-board institutional capital to Arbitrum, a direct positive feedback loop to integrated protocols, and unique implementation of complex strategies, typically reserved Multi-Billion AUM Hedge Funds, aligned with investment opportunities dependant on market conditions.
Institutional Grade Infrastructure
Our platform features advanced, institutional-grade infrastructure, including a unique non-custodial smart contract vault. This vault is developed with custom, audited code (available for review at D2 ), allowing users to deposit capital during specific funding epochs.
D2 Unique Edge
D2 Finance employs some of the most complex managed trading strategies available in DeFi including a mix of:
- Volatility arbitrage strategies, Relative Value opportunities ( e.g. options vs LP), and funding arbitrage.
- Our strategies are deployed and managed according to the strategy mandate mimicking a true dynamic hedge fund and not just a wrapper on a static strategy.
Our strategies are typically reserved for Funds with Multi-Billion AUM, comparable will be similar to other pod shops like Millennium, Citadel, Brevan Howard, etc., once we reach scale.
Performance Data
- D2 has directed significant trading volume through partners, demonstrating a robust proof of concept with filled vault capacities and poised for scaling.
-
$11.66m of volume directed through partners
- $~15m options volume on Lyra
- 100% Retention rate on ETH++
https://dune.com/d2_finance/d2-finance-analytics
To our knowledge, no other Active Vaults protocols boast the number of integrations we offer, all of which have been audited, or provide the direct benefit to the Arbitrum ecosystem through true volume in terms of TVL / Volumes ratio.
Our vaults were quickly filled to capacity, hitting the cap put in place on TVL for security reasons. Now, we’re poised for scaling.
Security:
D2 maintains rigorous security protocols, including internal checks, secure passwords, multi-sig wallet access, and regularly audited smart contracts.
Smart Contracts:
- D2 Finance architecture is fully audited by Paladin Sec: D2
Security Incidents: None
GRANT INFORMATION
Requested Grant Size: 100,000 ARB
The primary goal is to incentivize ARB++ TVL and become the primary single click option for users to be able to receive yield on top of ARB, while maintaining exposure to the ARB token. The funds will be strategically used to maximize the long-term growth of ARB, optimizing for periods of volatility with advanced options-based strategies.
Full ARB++ details: D2 Finance: ARB++ Market Launching on Camelot | by D2 | Mar, 2024 | Medium
ARB++ Vault Strategy
Justification
As a baseline, there are currently no protocols offering meaningful solutions to deposit single-sided ARB and earn attractive yield.
Evaluating other protocols who passed the screening, our metrics in terms of TVL / ASK or Volumes and especially retention stickiness rates look robust, as ETH++ has 100% retention
A key differentiator for D2 is that ARB invested in D2 is effectively amplified within the ecosystem—potentially tenfold—in terms of both volumes and fees for other protocols.
Milestones:
- Upon Grant Approval: 20k ARB.
- Milestone 1: Achieve $5M in cumulative traded volume.
- Milestone 2: Reach $15M in cumulative traded volume.
- Milestone 3: Surpass $25M in cumulative traded volume.
KPIs
- TVL growth targeting >200% epoch over epoch
- 70% vault retention Epoch over Epoch
- Target $25m notional volumes generated exclusively through the ARBITRUM ecosystem over the LTIPP program
Securing a grant from the Arbitrum DAO will empower D2 to catalyze substantial growth and innovation within the Arbitrum ecosystem, underpinned by a strategic and data-driven approach:
- Enhancement of Ecosystem Volume. dune.com/d2_finance/d2-finance-analytics
- Optimization of Open Interest Balance on GMX
- Strategic Utilization of the ARB Token as a pivotal asset within our trading frameworks.
- Leveraging Institutional Expertise and Networks to onboard capital to Arbitrum
- Promotion of Ecosystem Growth as we are poised to emerge as the preeminent traders on Arbitrum’s options platforms.
Through a combination of sophisticated trading strategies, institutional expertise, and a focused approach to ecosystem growth, we are committed to delivering substantial and measurable benefits to the DAO and Arbitrum ecosystem.
We have observed an organic and accelerating trend in volumes which correlates with the available market opportunities.
Our milestones are not only achievable but also conservative, which benefit the Arbitrum ecosystem.
We kindly request delegates vote in favor of granting D2 Finance 100,000 ARB as part of the LTIPP program
