[READY][GF: Phase 1 Proposal] Mean Finance

Project Name: Mean Finance
Authors Name: @0xged
Number of OP tokens requested: 300k
L2 Recipient Address: optimism.mean-finance.eth (0x308810881807189cAe91950888b2cB73A1CC5920)
Relevant Usage Metrics (as of June 21st):

  • Latest TVL can be checked on Defi Llama
  • Unique addresses: 1607
  • Total positions: 2481
  • Volume traded: ~900k
  • Total swaps executed for users (Optimism): 24116
  • Total mean finance executions (Optimism): 271
  • Total cost of executing user swaps (Optimism): ~$215
  • Average cost of each user swap (Optimism): $0.0089
  • Gas costs saved for users (Optimism): $14470

Optimism alignment:
Mean Finance and Optimism are aligned on a fundamental level. Our main product enables users to dollar cost average from any ERC20 into any ERC20 with their preferred period frequency without the user having to pay gas costs for each trade, while still being decentralized, open and traceable.Not only our protocol aligns with Optimism’s general philosophy, but our users do too: DCA is considered to be a long term investment strategy, trying to get the best average entry price over time. In other words, being Optimistic about the future.

From a technical standpoint as OP we aim to be completely scalable by design: Our costs will be the same if we execute 1 million trades or if we execute just one. Basically creating scalability at the app layer, on top of scalability on the execution layer (L2), on top of scalability on the consensus layer (L1).

A little recap about our scalability data: https://twitter.com/mean_fi/status/15020361694288158873.

Additionally, we consider our oracle infrastructure a public good since its open source and it builds (and hardens) upon Uniswap’s V3 TWAPs and Chainlink. Equally important, we’ve worked to improve lower the entry barrier for developers to use Uniswap’s V3 TWAPs through their grants program. More info on this: https://twitter.com/mean_fi/status/1537854948398010374

Lastly, we’ve shown our passion and compromise for the Optimism network by deploying our Beta version (December 8th of 2021, well before $OP token hunters show up) while onboarding new cohorts of users (via allow-listing Lobster DAOs’ members, and several LATAM related POAPs) that didn’t have other incentives to join the network at that time.

How will the OP tokens be distributed?

  • Subsidies (45%)
    The main goal of this part of the distribution will be to incentivize the creation of DCA positions continuously. We aim to provide the possibility of a zero cost deposit by covering the transaction fee for our users with certain base requirements as to avoid gaming the incentive system. Moreover, we would like to reimburse 25% of the swap fee (this is the percentage of the swap fee the protocol takes) in $OP as a distribution mechanism for real Optimism users.

  • Builders (30%)
    We know our trustless and open DCA primitive is just the tip of the iceberg and can be the base for new DeFi initiatives. That is why we want to create grants, bounties and incentives for builders and protocols to create new products, integrations and strategies while having our product be a core part of them.

  • Growth strategies and community engagement (20%)
    This is to help in the outreach of new community members (while maintaining and growing engagement of our current community) by creating and incentivizing behavior through trading competition, users quests, and more!

  • Early adopters (5%)
    We want to thank all genuine users created positions and used Mean Finance on Optimism in the most early stages.

Percentages may change a bit in the process of iterating and measuring impact.

How will this distribution incentivize usage and liquidity on Optimism?
If conditions are met, users will be able to create long term DCA trades that will get their gas and fees cost paid (retroactively, since we have no on-chain mechanisms for that), basically getting near-to-zero cost on their trades. This is something we think will bring a lot of new liquidity and users to the platforms.

Additionally our default market maker looks for liquidity on decentralized money legos already deployed on Optimism such as Uniswap and 0x, therefore increasing traded volume and liquidity providers’ APY.

Last but not least, we are also developing a product for DCA-ing with yield generated by other dapps. Meaning that users of this new product will need to lock their capital (to be lend, liquidity providing, etc.) in other Optimism deployed protocols, increasing TVL on the network.

Why will the incentivized users and liquidity remain after incentives dry up?
As Optimism we believe in having a long term vision for the ecosystem, and that is why we have focused on growing organically our community. Implemented incentives will continue in the same line of thought, searching for the balance between fair incentives and organic use of both Optimism and Mean Finance. Also, we’ve got some products on our pipeline that will need users to lock capital in the network.

Over what period of time will the tokens be distributed?
We anticipate that these incentives will be distributed over a 6-18 months time frame.

How much will your project match in co-incentives?
We currently don’t have a token, so monetary incentives can’t be matched.

22 Likes

You have my support.
Great Idea.

3 Likes

Love Mean and wholly support this proposal. Excited to see what innovations are built on it over the next few months!

2 Likes

I think, you also need to post on discord under #gov-temp-check

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for more information, please check here:- Governance Fund Phase 1: How to Create a Proposal

Hey OPUser, we did :blush: - we were the first to ask for #gov-temp-check to be made public hehe. Thanks for checking tho’!

2 Likes

got it, just saw that indeed you were the first one. gonna check later tonight. thanks

1 Like

Ya lo publicaron, es el primer mensaje

4 Likes

Good proposal. Not many proposals that i have read propose using OP rewards for marketing and user onboarding - and i think this is a good idea for finding users that are a good fit and will therefore become long term users. As far as the security section, i don’t see a straight line from these incentives to generating new users. Curious for others’ thoughts on that as I am still relatively new to the space.

2 Likes

Hey Ja! Thanks for the feedback. Yeah, I don’t think security section is for engagement but for keeping Optimism’s users safe.
As said there, I think the best part of that is that $OP tokens would only be paid out if a direct vulnerability that puts OP users funds at risk is found.
Thanks for taking the time to read our proposal!

I don’t see how these incentives generates new users or improves the OP value. Specifically around Safety (dot point 5). Perhaps I am missing something here. If you could elaborate more on this that would be good.

If there is no direct vulnerability, what will you do with the tokens?

Bug bounties usually don’t have a deadline, they are an ongoing security practice. So those tokens should / will not be used -unless publicly discussed through this forum or our discord- for other stuff.
That being said, if Aave or some low-risk-battle-tested platform lists $OP, it would be a good idea to provide liquidity (as my comment above).
Did you have other idea here to suggest? :brain::nerd_face:

Thanks for the info - The only additional thing I can think of is that if the tokens don’t get used after a certain amount of time, that they roll into one of the other allocation categories since these tokens are probably intended to be spent on incentives rather than held in reserve.

1 Like

Hi @0xged moving from discord to here as we are closing on the proposal vote date and its better to get idea from other users as well.

Two things, first, i would increase the builders rewards and second 30% of safety need more clarification.
I assume those 30% will sit on the address unless a bug has been found, right? Do you have any timeline as how long you are planning to keep this bug bounty active? what will happen to those token once this period is over ?

1 Like

I honestly don’t see the value in this proposal. A project with 825k$ volume traded wanting 350k of OP, how will any of this benefit growth and adoption of Optimism?

When I checked the distribution it seems:

  • Builders (15%) - You basically want to use Optimism funds to grow your project. I would see if this was mutual like you give grants to projects that integrate you and in return you do something for those projects. There is no clear information on this.

  • Growth strategies and community engagement (11.5%) - This seems to be for you to grow rather then as a airdrop or invective for user that may not already use Optimism to get on board.

  • Safety (30%) - This looks like you want Optimism to pay for your bug bounty, how does any of that drive adoption or usage?

Overall this proposal seems mainly for you to use funds to grow and develop out your project with little benefit in growing Optimism or providing value to the other projects in it.

1 Like

Hi all,

Loved the Protocol and the proposal.

As per the OP distribution, I agree with OPUser’s questions about the clarifications needed for the 30% Safety allocation.

As per cryptouser42’s comment, I’m afraid I have to disagree. Despite their traded volume, Mean Finance aims to allow users to DCA in a simple and seamless way. An L2 like Optimism should be a perfect fit for a Protocol like them. Safety allocation demands more explanations, but for the rest, I find plenty of value that such protocol may add to Optimism.

1 Like

Okei, Safety allocation seems to be the one of the most heated points. I do see where y’all coming from tho.

Just to share how our logic went about this:

  • Our biggest user base (by far) is Optimism.
  • OP users might get hurt if a vulnerability is found (we still have an ongoing but bounty and audits tho).
    • Creating apathy on Optimism
    • Maybe it doesn’t increase Optimism value directly, but it aims to avoid any negative impact on the network.
  • Tokens would not be dumped if a vulnerability is not found, therefore locked capital does not affect directly $OP value.

There a few changes that I can think of:
a) Reduce the % dedicated to Security, increase Builders %.
b) Reduce the % dedicated to Security, reduce overall $OP tokens asked.
c) Remove security completely, reduce overall $OP tokens asked.
d) Keep it as is.

Of course, personally I’d like a, b or d.

What do you guys think? @allera @OPUser @Justin

Thanks everyone for taking the time for giving us feedback and helping improve the proposal :rocket:

3 Likes

Hey there! I obviously don’t share the pov of us not adding value or growth to Optimism. We are a team of experienced builders creating novel, and decentralized products while having an Optimism-first approach. With the lack of experienced professional builders in the space I’d urge any project to try to engage and get developers to commit to an Ethereum aligned network. But this is all my personal opinion, and not the team’s. I just think is a good point to raise :slight_smile:

Now, in terms of the distribution:

- Builders: That is exactly what I meant to propose. Maybe (since I’m not english native speaking) I was not clear enough when drafting the proposal.

- Growth strategies and community engagement: Yes, its for us to grow (on Optimism). I don’t see value on your counter-proposal. Airdropping has already been done. This is for growth, keeping community engaged (positive sentiment feedback loop) and user acquisition focused on Optimism. Additionally, our current smart contracts wouldn’t allow us for liquidity mining, which we can also debate on “if it adds real value, or just buys interest”.

- Safety: Added comment on the bottom of the post addressing what the logic was. Maybe my train-of-thought wasn’t intuitive or the community simply doesn’t agree, which is ok also.

Again, I find a lot of value on your feedback so thanks for taking the time for reading our proposal and writing here anon.

I agree with you on creating apathy, but risk is always there, defi is inherently risky and as a user we know that and that is why you have “T&C” pop-up/page on all the projects.

I would move this 30% to Subsidies and Builders rewards.

3 Likes