[READY] [GF: Phase 1] Revert Finance Compoundor

ARCHIVED & OLD Missions Governance Fund: Phase 1
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Project Name:
Revert Compoundor

Author Name:
@mariorz

I understand that I will be required to provide additional KYC information to the Optimism Foundation to receive this grant:
Yes, grant recipient is Revert Labs Inc.

L2 Recipient Address:
0x8cadb20a4811f363dadb863a190708bed26245f8

Grant category:
Governance Fund, Phase 1

Is this proposal applicable to a specific committee?
Yes, the proposal falls under the DeFi committee. Perhaps also the Tooling Committee if they are willing to review.

Project description:
Revert’s mission is to build powerful analytic tools for liquidity providers in AMM protocols while keeping them open and accessible by everyone.

This proposal focuses on the “Revert Compoundor” a protocol to automate compounding of fees for LPs on Uniswap v3.

The Revert auto-compounder allows LPs to automate the compounding of the accrued fees in exchange for a fixed percentage of the compounded fees. This serves to incentivize a maximum number of compounds at optimal times with regards to gas costs.

Depending on the fee APR and size of positions this can significantly improve returns.

Project links:

Additional team member info:
Founder: @mariorz

Relevant Usage Metrics:

  • Revert Compoundor:

    • $1,500,000 USD across all chains, latest TVL can be checked on Defi Llama
    • $200,000 on Optimism

  • Revert App Connected accounts:

    • Over $940,000,000 USD across all chains
    • Over $2,000,000 USD on Optimism

Is this project be open sourced?
Yes, the compoundor contract and related projects (comopoundor-js) are open sourced along side other open sourced repos Revert · GitHub

Optimism native?:
No

Date of deployment/expected deployment on Optimism:
Revert Compoundor has been live on Optimism since July 18th.

Ecosystem Value Proposition:
Our mission is to build powerful tools for liquidity providers in AMM protocols. We believe AMMs are going to become a fundamental part of financial markets in the coming years, this will create new investment opportunities for retail investors but will also require open, transparent, and accessible tools for everyone. Optimism, by lowering gas costs, makes LPing more accessible to a much larger number of users, also making more active strategies viable for non-whales, which in turn makes tools like the sort we build required by a larger number of users. :handshake::rocket:

So far we’ve built and integrated with Optimism the following tools:

Has your project previously applied for an OP grant?
No

Number of OP tokens requested:
240,000

After reviewing other incentivized projects, we believe this is a reasonable amount to validate the strategy proposed with the goal of migrating sticky liquidity from mainnet towards Optimism. With ~300,000K USD to distribute over a 3 month period we believe we should be able to increase Uniswap liquidity on Optimism by over ~20m USD (total liquidity is currently around 60m). This would be measurable separate from Uniswap growth by measuring the TVL of the Revert Compoundor itself.

Did the project apply for or receive OP tokens through the Foundation Partner Fund?:
We have not.

How much will your project match in co-incentives?:
We have already done the heavy lifting in the sense that we are fully integrated with Optimism. But we will promote the OP rewards program with our users and the expected APR improvements in migrating their existing liquidity and make that as easy as possible.

Revert will also contribute with a significant marketing push over our community and user base by promoting this program on our Twitter account, Discord server, Mirror blog, and more importantly in-product, highly directed, communication on our app.

Proposal for token distribution:

  • How will the OP tokens be distributed?

    100% will go to Uniswap v3 LPs on the Revert Compoundor Protocol on Optimism. All LPs will be eligible to join the program, except team wallets which will be excluded. The distribution will be done in tranches via merkle airdrops. We will iterate on the criteria and parameters for the distribution, but they will be based on TVL, compounded amounts, and forms of vesting or minimum timeframes. The specific criteria and scripts will of course be made public. We will likely favor popular assets, or otherwise make sure valueless pairs are not a vector for exploiting the program.

  • Over what period of time will the tokens be distributed?

    • We are targeting 3 months, but we will adjust the period to try to incentivize more sticky liquidity as we learn from the results. Also explained in the previous answer.

  • How will this distribution incentivize usage and liquidity on Optimism?

    • It will make LPing any specific asset pair on Optimism more attractive, particularly more so for positions with a high fee-apr which would imply in-range liquidity and pools that have low liquidity relative to volume. In other words it will incentivize liquidity in Uniswap in the pools and ranges where it is more needed.

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

    • Ultimately we believe our users as LPs will flow towards the pools that offer the best returns. However, because compounding has a cost of gas and compoundor (keeper) fees, there is a period until using the autocompoundor reaches break-even. In general our protocol is more attractive to positions that have longer time frame expectations. We go into this in our whitepaper.
    • We will target the distribution rate of the rewards so that it incentivizes existing liquidity on Ethereum towards the Optimism pools, without being high enough to attract temporary “farming” liquidity. So the period over which the period will be distributed will be adjusted accordingly. We will also analyze and share the results of the incentives program, in terms of attracting long-term liquidity to Optimism, as a case study from which we can all learn from.

  • Please list the milestones/KPIs you expect to achieve for each initiative, considering how each relates to incentivizing sustainable usage and liquidity on Optimism.

    • With the requested amount, we expect to increase Compoundor TVL on Optimism by at least 20m. We will evaluate and publish results of 3 iterations of setting and parameters to maximize the amount of sticky liquidity we can bring to Optimism.

Please provide any additional information that will facilitate accountability:
Revert Compoundor Address: 0x5411894842e610C4D0F6Ed4C232DA689400f94A1

10 Likes
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Hi Mariorz, thanks for posting this proposal.

The analytics side of things looks really interesting, and I can see why this would be useful especially for Uniswap V3 which does make liquidity providing more complex than it used to be!

Please can you help me understand your TVL, I’m obviously missing some fundemental concept, but what exactly is it measuring? Is it the positions that have been set up using the ‘Initiator’, or ‘Compoundor’ or both?

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It’s cool
Opt nft maxis should have at least a tiny room

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Hi @MinimalGravitas, thank you!

The TVL is tracking the value of Uniswap v3 positions that have activated auto-compounding with the Compoundor protocol and by doing so moved their position into the Compoundor contract. Positions that have been started using the initiator would be a seperate metric.

For more clarity, as proposed the OP rewards would be distributed to LPs with positions on the Compoundor protocol on Optimism, not those that were started using the initiator.

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Thanks for the clarification. It seems then that the amount of OP you’re requesting is quite a lot higher than your TVL. On the other hand you are growing really quickly and it seems like your metrics are already out of date… DeFi Llama is showing ~$930k across all chains and ~$230k on Optimism (up over 40% in 4 days).

I guess if that carries on then the 300,000 OP you’re requesting might seem much more reasonable by the time the next season of proposal voting happens, however as it stands the amount requested seems out of proportion.

This goal sees pretty well defined, and probably a win-win for your users as once they are on optimism the benefit of lower gas fees presumably will keep them here after rewards run out.

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I guess if that carries on then the 300,000 OP you’re requesting might seem much more reasonable by the time the next season of proposal voting happens, however as it stands the amount requested seems out of proportion.

Fair point. The way I’m thinking about it is that regardless of our current TVL on Optimism, the rate at which it would be distributed would be adjusted to incentivize migration of liquidity without being too high where it would attract more temporary liquidity. So perhaps it would take us a year to distribute the OP given that constraint. But certainly reducing the amount of OP requested sounds reasonable.

This goal sees pretty well defined, and probably a win-win for your users as once they are on optimism the benefit of lower gas fees presumably will keep them here after rewards run out.

I think so as well. Would also like to highlight the aspect of us analyzing and sharing the results of the proposed OP distribution with the above goals in mind. Analytics is at the core of what we do, and have previously done analysis on liquidity incentives programs https://medium.com/@revert_finance/onetickdao-eth-and-the-narrow-rangers-f9a376f7f0c9

Appreciate the feedback above!

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Hi folks just wanted to update the post with a security update that might be relevant given that our protocol is quite new. We just finished an audit process with PeckShield publications/PeckShield-Audit-Report-Revert-Compoundor-v1.0.pdf at master · peckshield/publications · GitHub

The issues raised were informational and of low severity, and have also been addressed. More info here https://twitter.com/revertfinance/status/1560014215292882945

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I have had the opportunity to join the Revert team in the communities! Great tool. Very good that you are in Optimism

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Hey folks, appreciate the feedback we’ve gotten so far.
In particular @MinimalGravitas suggested we reduce the ask amount. Following suggestion have made the following updates:

  1. Reduced the asked amount from 300,000 OP to 240,000 OP

  2. Added app metrics of people using our analytics solutions to manage their positions. Admittedly not verifiable by a 3rd party so originally did not want to include, but hoping it might help show we believe with the OP incentives in place we could move a lot of liquidity from mainnet to OP

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Following the guidelines for proposal creation here: Governance Fund Phase 1: How to Create a Proposal and incorporating the feedback received here, changing the proposal from DRAFT to READY so that it may be included in the next round of votes.

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GFX Labs would like to see this come up for a vote when the author is ready

We are an Optimism delegate with sufficient voting power and we believe this proposal is ready to move to a vote.

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Hey, big fan. On this proposal, I appreciate the short horizon and your commitment to the consistent evaluation and adjustment of distribution settings. To date there’s been, imo, overreliance on longer timeframes and larger disbursements when we’re working off limited data.

The one thing I’m curious about is how you work out the effect of incremental incentives on TVL. Let’s say you do 80k OP per month as incentives. How do these incentives get Compoundor to add 20 mm TVL, and on which pools?

And given your existing crosschain footprint, have you seen evidence of new capital bridging chains when certain pools become especially favorable? (Understood if not enough data’s been accumulated to make any real determinations.)

1 Like
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Hey @mariorz. This a concerning tweet that was posted by your account on Twitter recently. It seems like you had a spat with another protocol (Gamma Strategies) which gave you a grant for a revert integration, but you never provided the service due to some unrelated conflict regarding publishing rights.

You stated that you “dumped” those tokens and had no intention of providing the integration. Can you explain why you didn’t simply return the grant funds if you had no intention of fulfilling the service?

If you didn’t provide the integration, but simply dumped the tokens, doesn’t that equate to stealing? The publishing dispute should not have given you the right to take grant funds without providing the service.

You could have simply returned the grant funds correct? After you dumped the tokens, did you pocket the proceeds or return them?

I think we need to have these questions answered given that this is another grant on a larger scale.

Edit:

Did some more digging and it seems like you had the intention of doing the integration with Gamma (formerly known as Visor)

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@cryptokitty , are you in any way affiliated with Gamma Strategies? Perhaps you can lend some more context.

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Hi @cryptokitty.

Regrettable to receive accusations of this sort from an organization with the low ethics as Gamma, previously known as Visor.

  1. There was never an agreement on our part to integrate the protocol in exchange for a grant, Visor approached us, asked for an integration, we explicitly told them we would probably integrate liquidity manager protocols in the future, but not at that time.

  2. Nevertheless they insisted in giving us a grant of 8,200 VISR (at current gamma price, the total is about 500 USD) which we immediately deposited into one of their vaults and left it there and was never withdrawn. This was in June 2021, here are the relevant txs:

  1. In December 2021 I wrote an article, linked on this thread, on how the Uniswap liquidity mining program for Ribbon had been exploited by a few accounts taking most of the rewards. They baselessly accused me of plagiarism even though the article was researched and written in full by myself (after they pinged me to ask about the situation)

  2. Towards the end of that month their protocol was hacked, iirc for the third time, and they rebranded with a new token now called Gamma. Supposedly a different team, but very likely just the same people, and airdropped it to vault depositors. We had no agreement in place with the original Visor grant, and no agreement in place with the new Gamma project. And definitely did not want to have any more dealings with them. I dumped those tokens, and good riddance.

I’ll end by saying that I would advice caution in any dealings with that project, beyond these false accusations against myself, the way they have conducted their protocol’s own security issues should be alarming enough as to what their character is.

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The one thing I’m curious about is how you work out the effect of incremental incentives on TVL. Let’s say you do 80k OP per month as incentives. How do these incentives get Compoundor to add 20 mm TVL, and on which pools?

Hi jack, thanks! We arrived at the number by going backwards.

I think one of the common pitfalls of a lot of liquidity mining programs is that they over assign rewards that increment the LPs APR drastically in a way that attracts temporary capital that is only LPing for the rewards.

Distributing 80,000 OP (~100k USD) in a month would be enough to increase the APR of ~20,000,000 in capital by about 6%. As described in the post the specific parameters are to be dermined and iterated on, but we believe we can attract that amount of capital from Mainnet to Optimism with the amount requested.

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Hey everyone,

I’m Brian, and I lead business development at Gamma Strategies. I was just notified that this discussion was taking place here by one of our community members.

Our intention was not to go public with any of this information until it had become evident that @mariorz was attacking our character which prompted us to respond. My aim here is to be as forthcoming as possible about our interactions with @mariorz (also known as Wario) and provide as much actual evidence of our interactions, so that it would be helpful to anyone who is doing business with him.

Just for some context, we had reached out to Wario back in June 2021 regarding an integration where Revert would provide analytics for Visor Finance (now known as Gamma), and Visor would be giving him a grant to do so.

Contrary to what he has stated here, there was most certainly an agreement in writing on Telegram.

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At this point, we had already given the grant to @mariorz who had promised us that we would be the first Uniswap v3 vaults for integration, and that he was excited by working with us to get analytics on revert. He even gave us a target date for when this would be ready.

He is correct that he received 8,200 VISR, but that was worth $10,563.56 on the day of transfer.

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He is correct in that we did do a token migration in December in which all VISR holders were given a 1:1 exchange for GAMMA tokens.

Despite his saying that the GAMMA price is worth 500 USD, this is obfuscating the fact that he had sold the GAMMA for 5,494 USDC on December 29th, 2021, and those funds have never been returned to us. He has also refused to do any integration despite monetizing the grant. See the sale transaction below:

We never accused him of plagiarism. We accused of him of failing to give credit where it is due. We had consulted him for a research article that we were writing on the Ribbon incident. However, during the middle of the conversations, he frontran the publication of the article, solely crediting himself and then subsequently asked the public to donate to his gitcoin grants for his publication. https://twitter.com/revertfinance/status/1468667993831915528?s=20&t=_p50abJ6jEdTQvDkBTY6zw.

Here is where we explicitly told @mariorz that we were doing a write up on the exploit of Ribbon’s Uni v3 staker contract. See my team member’s statement below where he states, "We are doing a write up on the 1tickdao.eth “EXPLOITER” on Ribbon’s staking contract.

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I do not want to bore everyone with the entire conversation but we literally had pages of dialogue of joint research for this article. In this text here, we had mutually agreed on a joint publication. It was very obvious that this was going to be a joint publication based on the entirety of the conversations

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We had pages of dialogue after his initial suggestion that we have a meeting on Monday to discuss. Yet, his main reason for writing the article without any credit to our contributions was that we didn’t actually schedule the Monday meeting. That reasoning is completely absurd and illogical given all the dialogue and joint work that we’ve done.

This is completely irrelevant and a straw man argument to whether he wrongfully accepted and monetized grant funds and whether he wrongfully took sole credit for a joint publication. However, I will still address it given that we are part of the Optimism ecosystem. Uniswap v3 management was a bleeding new space, and we were the original authors of our position manager contracts. As with many contracts that have been written for the first time, they have been exploited, and we took full responsibility and accountability. We spent hundreds of thousands on new audits by Arbitrary Execution (https://github.com/GammaStrategies/hypervisor/blob/master/AE_Gamma_audit_09_03_22.pdf) and a 4-week intensive audit by ConsenSys Diligence (Gamma | Consensys Diligence), the best in the business. In our rebrand to Gamma, we onboarded new security advisors and strategists specifically tailored to bolstering the safety of our contracts.

Based on the totality of the evidence, this is egregiously false. And I don’t think @mariorz is realizing that he dumped the tokens and monetized despite admitting to not providing any service at all. That is theft if I’m not mistaken.

Quite the contrary to what he has stated, all the evidence points to his duplicity in our business dealings. Our own security issues that he keeps referring to is a textbook strawman argument.

In conclusion, we never intended to air this dirty laundry evidenced by the fact that we never went public with any of this information despite this happening in December 2021. In my last DM to him, I said the following:

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Again, I would like to thank him for revealing his character to us. For us personally, we will never do business with this individual again.

Apologies for the negative energy, but I feel that this must be stated as he has consistently shown himself to be an unethical individual.

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This is pretty manipulative and I’m sorry this has to pollute this proposal. I’ll keep it short as Gamma’s stratgy is to drown the signal with a deluge of lies and out of context chat fragmets.

  1. In none of the screenshots does it say we agreed to receive payment for integrating their protocol. I would def have not accepted what would have been “a contract” to integrate their protocol. They did reach out to me, and insist on giving us “the grant”, and there is on-chain evidence that it was never spent, though in hindsight I should have never accepted it.
    This is the tx where I deposited the full amount into their vault and just left it there, all while their token price was in free fall. (At that point I had not yet realized the type of persons I was dealing with) Ethereum Transaction Hash (Txhash) Details | Etherscan

  2. WRT to the article, there was absolutely no agreement on a joint publication. They already went the road of posting out-of-context fragments so they should perhaps publish that section. On the contrary, what they likely wanted to do is publish an article that would shill their protocol as a solution to the exploit of the uniswap staker.

  3. this “negative energy” and lies were brought here by an obvious gamma sockpuppet, just by looking at their profile they have participated in this thread and on gammas own proposal, supporting it, and disputing concerns by external participants Profile - cryptokitty - Optimism Collective

19

The reality is that you have accepted the payments and explicitly sold the GAMMA you received in exchange for the VISR that you had deposited into the VISR staking contract. That is why you sold 8,392.3687 GAMMA, which represents the 8,200 VISR received + the interest earned from the staking contract.

It was abundantly obvious to everyone, but inconvenient to you, that this was a joint effort. I didn’t take snapshots of everything because there’s literally pages of text. If anyone wants to see the entirety of it, I’d happy to send it to you via DM.

That individual is a longtime community member and very likely a GAMMA holder, so take his opinion and all the evidence presented with that in mind. But for the most part, the presented evidence should speak for itself, especially his own admitting (as well as on-chain evidence) to selling the grant funds without providing any of the services.

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Replying to this message would be repetitive except to say that prior to yesterday’s Twitter feud with the Gamma team there was never any private or public message from them indicating that:

  1. they felt some kind of paid-for service wasn’t rendered on my part, because they were fully aware the VISR grant was not received as payment for a service to be rendered. And again those grant tokens were never sold and were just deposited and left in their vault, all while the token price was crashing.

  2. they wanted the airdropped GAMMA back, which they for sure would have gotten. Why did they even include the address in the airdrop if that was the case? What I was thinking of when dumping their airdropped tokens was that I did not look forward to having any more interactions with that team/project. (so much for that)