[READY][GF: Phase 1 Proposal] Biconomy

ARCHIVED & OLD Missions Governance Fund: Phase 1
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Project Name: Biconomy

Author Name: Rhic

Biconomy is a web3 infrastructure project that enables developers to deliver a frictionless experience to end users of their dapp. We believe that a frictionless experience is the key to onboarding the next billion users onto Web 3. By abstracting away transaction layer complexities using our products - Gasless & Hyphen - you can simplify transaction journeys, improving product love and user engagement & retention.

Number of OP tokens requested: 750,000

L2 Recipient Address: 0x31B73B0549E0151b6233C5d179580B8A840B83fb

Relevant Usage Metrics: (As of July 4th, 2022)

Gasless:

  • Total Volume relayed = $1.77B
  • Total transactions relayed = 19.54m
  • Total Gas Savings to users (in Q1 & Q2 2022) = $2.47m
  • Average Transactions relayed per day (in Q1 & Q2 2022) = 35k
  • Live dApp Integrations (in Q2 2022) = 186

Hyphen: TVL on Defillama

  • Total Volume = $158m
  • Total cross-chain transfers = 81k
  • Total Unique Users >25k (undercounted due to aggregator data being difficult to capture)

Hyphen launched on Optimism on 20th June, 2022, and in the 14 days since has-

  • Volume bridged to & from Optimism = $800k
  • No of transactions =916
  • Liquidity on Optimism ~$575k
  • No of unique users on Optimism = 139

Our relayers are waiting for the first Optimism project to delight their users with a gasless experience, and this grant will help that cause.

Optimism alignment (up to 200 word explanation):

Biconomy is already on Optimism, and shares a similar vision in scaling for mass adoption as the Optimism Collective. Hyphen, the cross chain liquidity bridge built by Biconomy, has been live on Optimism since 20th June. The meta-transaction infrastructure for Gasless is also available for the network.

Hyphen is already integrated in-dapp on Optimism’s largest project, Perpetual Protocol, and we hope to help many more projects simplify user onboarding with an in-dapp bridge to Optimism. With more partnerships like Perp, Biconomy can make Optimism the most user friendly EVM chain on the planet.

Proposal for token distribution (under 1000 words):

How will the OP tokens be distributed?

Exact distribution would depend on interest and suitability for the builders, but our initial proposal is a 60/40 split between the two main stakeholders - dApp users & dApp Builders

OP tokens will be distributed for liquidity mining on Hyphen, to help bootstrap liquidity for the network. Since Optimism is still one of the younger chains in terms of daily transactions & volumes, maintaining the deep liquidity needed for seamless bridging will require liquidity mining incentives as usage currently doesn’t generate enough fees.

Liquidity mining is a tried and tested way to bootstrap the initial liquidity needed, but another way is by incentivizing usage itself, since that drives fees higher. OP incentives will be given to users to bridge their funds over to Optimism

Gas Grants will be given to new projects looking to go gasless on Optimism. This will allow younger projects to grow rapidly while bearing the cost of paying for their users’ gas fees on their dApp, as many of our partners previously have. Any project that wants to use our relayers on Optimism or seeks a gas grant to get started should reach out to our team.

In its capacity as an Infrastructure project, Biconomy will also give OP grants to Bicosystem projects (those using any part of our infra) to incentivise them to launch on Optimism. Projects building on or migrating to Optimism, and using Biconomy Infrastructure, will be eligible for these grants.

Hence we propose the following split:
Liquidity mining + User incentives = 250k (33.33%)
Ecosystem grants + Gas grants = 500k (66.67%)

The immediate distribution will start with Liquidity mining, with 12-18k tokens per month being distributed to bootstrap liquidity on Hyphen.

We are happy to work with the Optimism community, if they want, on the distribution of Ecosystem & Gas grants, as we want only deserving projects to get these.

How will this distribution incentivize usage and liquidity on Optimism?

Hyphen offers a simple token bridging mechanism to facilitate easy and cheap asset transfers to Optimism. It is the fastest bridge in the market and super gas efficient, making it the best low-cost bridge for regular users, but we need to incentivise more liquidity to make large transfers cheaper.
OP incentives will be given directly to LPs in the bootstrapping phase, and slowly phased out. Direct user incentives to bridge to Optimism will also be given to drive users to Optimism, making Hyphen the go-to bridge for the network. Bootstrapping via these methods, as adoption increases, the liquidity network will become self-sustainable.

Gasless provides Optimism developers the ability to sponsor gas fees for users, which makes onboarding to Optimism even simpler without requiring end-users to acquire native gas tokens. New users in the space often have difficulty understanding gas management, and abstracting these complexities away, making a dApp as easy to use as web2, is crucial for real adoption.

Why will the incentivized users and liquidity remain after incentives dry up?

Liquidity will remain, since the bridge fee itself will yield enough APYs to sustain the required amount of liquidity. This grant will be important for us to bootstrap enough liquidity to provide a seamless bridging service that becomes self-sustainable as adoption grows.

Gas grants will allow young projects to give users gasless transactions on their dApp and reap the benefits from a smoother UX. As they observe the growth & savings that using our gas estimation & relayer services provide, these projects will stay with Biconomy infrastructure to continue to provide the best transaction layer experiences in web3.

Over what period of time will the tokens be distributed?

The OP tokens will be distributed over a period of 12-24 months.
We’re here for the long term, thus grants or incentives will only be given where they make sense for Optimism & Biconomy Communities.

How much will your project match in co-incentives?

We will match the OP contribution with 150k BICO in incentives for various initiatives on Optimism, including liquidity mining, user incentives, gas grants, and ecosystem grants to projects building on Optimism.
We’re already doing BICO incentives for Hyphen liquidity on Optimism, and have committed almost 10K BICO for the first month of those incentives.

Please note that we are a Multichain project with the ambition of providing our services on all major chains; we are currently live on 9 EVM chains, expected to increase further. As a result, we will not be able to match the entire grant and propose to match 20% of it.

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Generally very supportive of the proposal and particularly excited about the gasless bridging functionality.

Some more clarification around User incentives would be great - I’m a bit skeptical around these being simply wash trading if you just incentivise bridging to protocols.

I’d actually love to see more focus around gasless incentivisation given it’s a no brainer from a OP onboarding UX perspective

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Gasless Incentives will look something like the program that we’ve done together with Polygon.

Bridging on Hyphen is Gasless when the source chain is Polygon; it’s enabled via metatransaction and Biconomy pays for the Gas fees there. Doing gasless bridging on Optimism would mean we incentivise people to move their liquidity from Optimism to some other chain, so not sure that would be the best way to use OP incentives meant to grow Optimism.

Instead we want to give user incentives in the form of Bridge fee or Gas fee rebates, and in a manner such that wash trading is not possible. We’re open to suggestions from the community on incentive mechanisms they believe will work well on Optimism.

Please note that the primary component of the 60% will be in the form of liquidity mining as outlined above. Direct bridge user incentives will be done if and when that can lead to sustained volumes, and will see us reduce liquidity mining emissions (since higher volume = higher APY for LPs from fees)

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Two suggestion, reduce the number of token request or match it with co-incentives.
Flip 60/40.

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We’re internally evaluating the suggestions you’ve made here and in the discord, it’s really helpful.

We understand your concerns, so the update we’re thinking is to change the split to a 1:2 instead.
This would mean we allocate 500k OP to the different grants, and keep only 250k for the liquidity mining, while keeping the matching amount same. Quite a large shift in terms of allocation, because we do understand concerns you have, and agree that grants overall go a longer distance in helping the ecosystem. Do you think this change will make you more comfortable to support the proposal?

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After that change, happy to support this proposal. This is overall in line with the other two allocations to bridge protocols (Hop and Stargate)

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Absolutely, with this update you will have my support too.

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Thanks everyone for the feedback. I’ve made the discussed changes in the proposal, in the segment about How will the OP tokens be distributed. Let me know if you believe the proposal is ready for a vote and what the next steps are.

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Hi @rhic , I personally see value in the proposal to allow gasless transactions to certain dapps; this could even be useful for users to be able to buy OETH (gas) as it was implemented in other network as Polygon with Dfyn (I used it often and it was really useful). Do you plan to take this same approach with any DEX in particular?

In the other hand, how can we help grants to be well distributed? is open to discussion with the community? It would be nice to participate there too.

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I’m glad you find the Dfyn feature useful, it’s powered by Biconomy!

We’re open to partnerships with DEXes to have similar Gasless Swap features on Optimism, interested DEXes can get in touch with me, my twitter is linked in the Proposal. We also have something exciting coming on Hyphen in a week or so that’ll allow users to get OETH, keep your eyes on Biconomy twitter for the announcement!

For the Grant distribution, here’s the Biconomy DAO Grants page
The plan is to follow our Governance process for this distribution, you can find the process above.

I’m not sure how the Optimism Community can get involved with the grants. I’d think if this grant is passed to us, the ownership is on Biconomy to allocate as per own Governance process. Would like to know if you have any other ideas that may work well.

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I voted YES :white_check_mark: for this proposal.

Project value: Strong, bridges are the building blocks for cross-chain and will allow easier onboarding of users.

Amount: Good, for the size of the project and usage of funds.

OP distribution: Good, majority is for developers integrating on OP and the amount for incentives is going to a good use for gas fee rebates.

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Hey rhic with the 500/750k and a first look the proposal seems to match similar proposals from Hop so without having gone into too much detail into your protocol it would not seem like a difficult ask.

Would also be interested to see how could optimism governance help in grants dispersal. Though I do realize this may not be easy.

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I love how this is a very unique proposal of funds going to both incentives as well as gas grants for dapps.
It’s like a two-in-one.

What I want to know actually are a few points:

  1. What type of dapps would want gas grants? And why?
  2. What dapps have you given gas grants to before on other chains?
  3. How long would a gas grant to a dapp on Optimism last for?

Im pretty much in favour of this, just would love to know the above.

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Thank you, looking forward to your support on this!

On the Governance, I did spend some time thinking on it and in the various Optimism Governance channels. It seems Delegates already have quite a massive task on their hands with these grants, I don’t see how we can effectively involve them for Biconomy’s Distribution. Note that most of these will be relatively small grants that will be given out.

Let us know if you, or the Optimism team, have any thoughts on how we can involve Optimism governance in the further disbursal of these grants

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Thank you, this proposal is very much aligned with how Biconomy has been doing grants and incentives, and I’m happy to see how similar a vision we share with the Optimism Community.

To answer your questions:

  1. Any dapp could use a gas grant. Dapps would seek a gas grant to try out Gasless without spending too much on it, before they decide their long term gasless strategy
    Gasless is a product that enables dapps to sponsor the gas fees for their users to give them a Gasless experience. This simplifies the UX, simplifies onboarding, and can be used as an incentive mechanism as well. I’ll give a few examples for what you can do with the product-
  • Decentraland have made their NFT Marketplace on Polygon completely gasless using Biconomy. This makes onboarding smooth for new users, and encourages more activity on the marketplace that generates profits for the Decentraland DAO.
  • Zed Run, using both Gasless & Hyphen has made it such that users can instantly bridge over their ETH from mainnet to Polygon and then play the game which is gasless, meaning their users never need to think about MATIC. Smoothest Onboarding experience.
  • Dydx enabled gasless onboarding from Ethereum to Starkware, incentivizing users to make large deposits to get gasless benefits. Perfect example of incentive mechanisms using gasless, and how you can enable gasless even on Ethereum mainnet
    None of these projects got gas grants, of course, and they paid for the gas costs of their users. What gas grants will enable Optimism projects to do is try out Gasless and see for themselves the growth such a feature can create for them, before committing to paying for it long term.
  1. We’ve given gas grants to Cask, Metapass, Method Metaguild, all on Polygon. There’s a few more projects who we’re working with on this.
  2. Our aim with gas grants has been to support ~20-40k transactions for the project with the grant. Our grants on Polygon have thus been quite small, but we’d need to give larger grants on Optimism due to higher gas costs. We expect adoption to pick up more after the Bedrock upgrade makes transactions cheaper, and more and more projects see the value in streamlining their UX by going Gasless.

I hope that answers your questions, please do go through some of the case studies I’ve linked, and try out some of the dapps using our infra, like Dfyn, as pointed out by @Joxes !

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I am supporting Biconomy! This project built for the community + useful integration for crosschain interaction. +8k from me)

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Voted: Yes

  1. Most of fund are going towards bridging and ecosystem growth on OP
  2. Token distribution duration is good

  3. Liquidity mining + User incentives = 250k (33.33%)

Assuming they will us 50% of this LP reward, they are matching co-incentives with 150K Bico which is more in dollar value so happy to support this.

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Absolutely, with this update you will have my support too

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I am not a delegate, but I am an active member of the DefiLATAM and OptimismESP community.

It seems like a good value proposition to me, but considering that in Optimism there are some bridges with similar strategies like Hop and Connext (and more) I would reduce the requested amount to 450k. Great project Biconomy I didn’t know about it.

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I support this proposal.

Hyphen is my favorite solution when transferring assets.

The incentives mechanism sounds good to me

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