[DRAFT] [GF: Phase 1] zeroDAO

Project Name: zeroDAO

Author Name: @jonto

Number of OP tokens requested: 400,000 $OP

L2 Recipient Address: TBD Multi-sig

Relevant Usage Metrics:
59 BTC in volume (in 3 months since public launch)

Optimism alignment (up to 200 word explanation):
zeroBRIDGE significantly lowers the barrier of entry to getting on Optimism by enabling gasless bridging from BTC to Optimism ETH.

zeroDAO is the only way to gaslessly bridge BTC directly onto RenVM enabled chains and swap to the native gas token. A user can bridge BTC directly to ETH on Ethereum mainnet or MATIC on Polygon as an example. zeroBRIDGE is live on mainnet, Arbitrum, Avalanche, Polygon, and just deployed on Optimism.

Our next roadmap item is the release of a native lending component that will allow for 0 and 1 confirmation BTC bridging and trading via the zeroDAO SDK. Native chain assets are lent out trustlessly while the BTC transfer is being confirmed, enabling a DEX-like experience of cross-chain BTC trades.

The Synthetix synth-swap framework, specifically on Optimism, makes it possible to create an Optimism+zerop2p application which can provide a BTC trading experience with no-slippage and low fees. With Optimism, zeroSWAP has potential to dominate permissionless BTC trading.

Proposal for token distribution (under 1000 words):
How will the OP tokens be distributed?

  • 100,000 $OP to support further development of zeroBRIDGE on Optimism, zeroBRIDGE integrations into Optimism native apps, and the development of the synth-swap module.
  • 50,000 $OP for grants to builders on the zero protocol on Optimism
  • 250,000 $OP for bridge incentives and lp incentives for integrated protocols

ZeroDAO aims to be the leader in bridging security and user experience. Bridging choice is important for user acquisition and mass adoption. Ideally there will be many zero-maintained endpoints for users to directly onboard from anywhere onto Optimism native apps.

How will this distribution incentivize usage and liquidity on Optimism?
Any Optimism project looking to onboard new users can make tutorials outlining how users can acquire BTC from a local ATM or exchange, bridge it to Optimism ETH using zeroBRIDGE, and then trade for any token required to use their service. Being completely gasless with BTC support makes zeroBRIDGE an optimal way to onboard.

Then, with the synth-swap features on zeroSWAP, for the first time in DEX history, BTC holders will not need to worry about depositing to an exchange or bridging to swap. Synthetix on Optimism currently has the best balance of low slippage and low fees to support this.

A bridge incentive program will be built to only reward those that bridge funds and keep them on optimism using a series of snapshots. By also having lp incentives on integrated protocols this gives users something to do with their funds after bridging over. For example a velodrome module could be built so users can bridge and swap through velodrome or bridge and deposit into an incentivized pool, building overall liquidity on optimism. Zero integrations will use those pools for routing, bringing volume to integrated DEXs.

Why will the incentivized users and liquidity remain after incentives dry up?
When the $ZERO token is released, a portion of the tokens will be used to incentivize activity through the protocol over the long term. The fees on the bridge are low so ideally the natural pull of users and assets onto optimism will continue generating fees for zeroDAO and any integrators. We will also look for application specific opportunities such as the synth-swap application where unique use cases can be built out, encouraging activity on optimism without users necessarily needing to explicitly bridge or need to know which chain the actions are occurring on. Optimism integration partners will benefit from being eligible for those incentives from Day 1.

Over what period of time will the tokens be distributed?
If approved, the 150,000 $OP for development and grants will be distributed upfront. The 250,000 for LP incentives can be released upfront as well or on delivery of a more detailed incentives plan.

We will also happily work with any other Optimism native projects that would like to have a native bridge of BTC or other assets either into their assets or into positions on their platform.

How much will your project match in co-incentives?
We have completed an initial seed round and have a modest runway. A grant from Optimism would allow us to move Optimism focused initiatives further up in our priority list. We will incentivize all flow through the protocol on token release, but we are exploring ways to incentivize integrators to bridge through the zeroDAO SDK using revenue share controls at the protocol level.

It will be possible for partners and integrators to set their own fee for bridging done using the zeroDAO SDK. If Optimism wanted to host a deployment of zeroBRIDGE, for example, an additional fee can be set with a community fund as beneficiary where it would accumulate fees and eventually the ZERO token.

About zeroDAO
zeroDAO has been under development for 2+ years by a doxxed team that has grown to 10+ regular contributors. It has received incubation support from badgerDAO, a DAO focused on bringing BTC to DeFi that has been operating for over 1.5 years.

Founders

Flex - Lead Dev - Founding CTO of Idex
Jonto - Product, Governance - BadgerDAO core contributor
Mitche50 - Full Stack Dev - BadgerDAO Core contributor
Miewenti - BizDev

Additional Contributors

Developers - 7 (Eynno, Alo, v, protoeloka, madrone, d1llon, aed)
Community & Marketing - 3 (DefiDan, grey, tito)
Advisors - Arthur Hayes (100x), Loong Wang (Founding CTO @ Ren)

zeroBRIDGE: https://bridge.zerodao.com/ 1
Homepage: https://zerodao.com/ 1
github, twitter, docs, discord, and matrix are all on the homepage. Forum rules limiting links to be posted

3 Likes

A BTC bridge would add some value but this proposal is focusing only on Development.
No co-incentives.
Dont see how this help grow OP ecosystem in the current form.

Would encourage you to submit once your bridge is live on OP chain.

We strongly believe that direct and gasless bridging from BTC to ETH and OP on Optimism will offer significant value to the ecosystem by drastically reducing the slope of the onramp process.

Additionally, zeroDAO makes possible direct bridging from BTC into popular Optimism tokens like SNX, PERP, THALES, LYRA, etc. which is also a significant value add.

Currently, the development team is working hard to push out a lending feature which will allow the bridged asset on destination chains to be released after only 1 BTC network confirmation. This feature is important to speed up bridging and mitigate slippage on transfers from btc to a non wrapped btc asset. Currently all BTC bridges on the renBTC and WBTC bridge apps suffer from between 30 minutes and several hours worth of slippage.

Following the completion of lending, adding support for additional chains, dapps, and protocols will be our top priority. An OP grant will help us get there faster and more efficiently for the Optimism ecosystem, so zeroDAO can start adding value here asap.

- eynno, zeroDAO dev

1 Like

Hi OPUser

The ZERO token is not out yet. When it is there will be incentives for bridge use that we intend to make as fair/even as possible. Bridge rewards are easily gamed as someone can do multiple round trips with the same assets, not like LP where you need to have a large amount of assets over time. Someone just moving in and out of optimism wouldnt bring value to zeroDAO or optimism.

Point being those potential incentives imo arent the core component here, its having effective tooling for onboarding assets onto optimism in the easiest way possible to take advantage of all of the great stuff being built there. Since our incentives will be largely integrator focused and we have an available integrator fee we also see zeroDAO as a great potential partner for native wallets which may struggle to find revenue sources otherwise.

We are chain/layer agnostic and building where the opportunities are whether thats existing flow/demand or funding. We are definitely a bit different than a protocol that my just be looking for matching LP incentives but we hope that there is clear value in having a focused bridge partner that can handle a diverse set of chains, layers and assets.

1 Like

I think if token is not live yet,asking you to match the incentive would be wrong.

its having effective tooling for onboarding assets onto optimism in the easiest way possible to take advantage of all of the great stuff being built there

Again, valid point and I would love to see a btc bridge but this proposal is for funding the said tool. I would prefer to support this proposal once the bridge is live and we will some on-chain metrics to support the proposal. I am aligned towards supporting actual uses rather than development.

Understood, seems to be just difference in opinion on intended uses for the grants.

Have seen a number of other development focused grant requests which we structured this off of. Thanks for the feedback.

2 Likes

Big fan of this proposal. zeroBRIDGE is one of the few bridges that is able to bridge BTC and it has the ability to abstract away gas AND allow contract interactions all within one bridge transaction. I would like Optimism to secure a strong bridge development team and this project seems like the right fit. In addition, if Optimism were to pursue this it would allow for a BTC revenue stream to the treasury.

Looking forward to more discussion on this.

Hello, we have reupdated the draft. Could you provide feedback again? We also deployed on Optimism.

well deployment on OP chain was quick. kudos to your team.

I see you have made significant changes to your proposal. Snapshot approach to make sure that fund stay long term is kinda unique to boost liquidity.

Token distribution still need some more information.

grants will be distributed upfront.

how can you do this upfront ? do you have grant candidate ready ?

250,000 $OP for bridge incentives and lp incentives for integrated protocols

how much you will use on bridge incentives ?snapshot will be weekly/ monthly ?

Also share more information on LP rewards, which pair ? how much you will use here ?

As we wait for season 2 to start, we will see some changes in overall gov process which might include template update and guideline on fund distribution. But in current form, I will change/remove the development funding.

The cadence of distribution is open, not sure how active Optimism wants to be in dripping the OP out to recipients. Whether its continued requests for funds or optimistically providing them upfront to the projects. Zero will need to have possession of the OP at some point obviously to distribute to grant participants.

Having allocations for dev grants or future lp incentives is pretty common amongst proposals in this cohort, is the assumption to deliver tokens upfront or on request?

We dont have exact specifics for the bridge incentive program right now. It would be snapshot based and run for several months. The delivery of those funds could be made contingent on providing specifics of the program if that would be preferable. We just want to make sure its done right.

Yes, the current program is great but more clarity and consistent guidance around use would be great. A portion of the funds to support development was pretty common in a number of proposals in READY state and also some LP incentives are going to pools projects themselves can farm. We tried to use those for guidance and also adjust for our product which isnt reliant on direct lp deposits but instead flow which is easier to game.

May be I misunderstood, once your proposal is approved you will get the full amount of token at once but when you say “grants will be distributed upfront.”

does this mean that you already have some grant proposal ready and once you have the OP token, you will distribute it to them. ?

We dont have exact specifics for the bridge incentive program right now. It would be snapshot based and run for several months.

I understand it will be snapshot based but its difficult to judge the proposal without a plan, you might distribute it in one month or in one year. there are many assumption here which give less confidence.

Yes, the current program is great but more clarity and consistent guidance around use would be great."

Goal of GF fund is to grow OP ecosystem but this can have different meaning to different delegate which is a good thing as it increases scope of a proposal.

A portion of the funds to support development was pretty common in a number of proposals in READY state and also some LP incentives are going to pools projects themselves can farm"

I cant comment on other proposal as each proposal is different to different delegate but so far I have supported only two dev project and that too at the early stage of gov when rules were not clear, i wish i can go back and change my decision but i simply cant. All i can do is learn and look forward.

LP is fine but giving some info on your distribution plan will help, look at curve proposal for reference. Provide as much information as possible and dont leave anything to assumption, it will help us all.

understand this, I am small delegate and just sharing my personal opinion, you might get support from other delegate so ask for feedback on discord too.

You can tag me on discord too if you need any input from my side.

1 Like

Hello zeroDAO team, it’s impressive that you deployed on Optimism so quickly, well done. However, this proposal seems to be more about development funding with no co incentives currently.

My feedback would be to develop a detailed incentive plan and share with the community. I would not vote yes on this proposal without an incentive plan being built out.

1 Like