Project Name: Homora V2 on Optimism
Author Name and Contact Info:
- Alpha Venture DAO
- Arin Trongsantipong (Head of Product) email@example.com
L2 Recipient Address: 0xCDE30CC7502290a6B8827254810F4C852f5f3EE6
I understand that I will be required to provide additional KYC information to the Optimism Foundation to receive this grant: [Yes/No]
Which Voting Cycle are you applying for? : Voting cycle #6
Grant category: Optimism Governance Fund (Phase 1)
Is this proposal applicable to a specific committee?
This proposal may fall under the revision of DeFi committees
Homora is the world’s first multi-chain leveraged yield farming and lending protocol, and is also the first and flagship product from Alpha Venture DAO’s build arm. Homora V1 was first launched on Ethereum in October, 2020. To offer a more disruptive value proposition, Homora V2 was introduced on Ethereum in April, 2021, with enhanced technology and functionalities such as single asset liquidity providing and flexible borrowing of multiple assets for leveraged yield farming. After the Homora V2 launch, the product has reached significant usage and adoption with a record high Total Value Locked (TVL) of 2 billion USD in May 2021. Homora V2 continuously expanded across other L-1 chains, including Avalanche and Fantom, to bring high yield opportunities to mass users at lower transaction expenses. To continue lowering the barrier of entry for users, Homora V2 scaled to L2s, starting with Optimism and launching as the first leveraged yield farming protocol to integrate with Uniswap V3.
- Website: https://homora-v2.alphaventuredao.io/
- Twitter: @Alpha_HomoraV2
- Discord: Alpha Venture DAO
- Please include all other relevant links below: Homora V2 by Alpha Venture DAO | Linktree
Additional team member info:
- Tascha Punyaneramitdee (CEO & Project Lead) https://th.linkedin.com/in/tascha-panpan
- Nipun Pitimanaaree (Head of Tech) https://www.linkedin.com/in/nipunpitimanaaree
Relevant Usage Metrics: (TVL, transactions, volume, unique addresses, etc.)
Since the launch, Homora has witnessed explosive growth on the platform, which rides along with Optimism’s growth. At the moment of submitting the proposal (September 8th, 2022), Homora V2 ranks #1 in the leveraged yield farming and lending category and #11 among protocols within Optimism ecosystem
Public dashboard: Grafana
Total Value Locked:
Total Value Locked (all chains): ~67.5M
Total Value Locked on Optimism: ~20M
No. of opened positions:
No. of opened positions (all chains): 17,231 positions
No. of opened positions on Optimism: 433 positions
Unique address: Homora: TVL and Stats - DefiLlama
Total unique address (all chains): 4,966 addresses
Unique address on Optimism: 211 addresses
Competitors, peers, or similar projects (please link):
- Alpaca finance (BSC, FTM): https://www.alpacafinance.org/
- Francium (SOL): https://francium.io/
- Tulip (SOL): Tulip
- Tarot Finance (OP, FTM): https://www.tarot.to/
- Reaper Farm (OP, FTM): https://www.reaper.farm/
Is/will this project be open-sourced? Yes/No/In Future
Optimism native?: Yes/No
Date of deployment/expected deployment on Optimism: 18th August, 2022 10AM UTC
Ecosystem Value Proposition:
Optimism is the first L-2 chain that Homora launched since we believe in the growing ecosystem and the vision of decentralized governance. With our growth strategies to integrate and build partnerships with more DeFi projects on Optimism, we believe that our launch will further drive DeFi activities and liquidity locked on chain, supporting Optimism to grow into a leading L2 chain. Moreover, we believe that our launch will benefit the whole ecosystem stakeholders, including
- Users on Optimism to get access to high boosted yields on high-quality pools from top DEXes with enhanced protocol security through leveraged yield farming and lending on Homora V2.
- Builders on Optimism, including
- DEXes we integrate on top will gain higher TVL and deeper liquidity added to their pools, facilitating higher efficiency and lower slippage on AMM swaps.
- Other protocols that integrate on top of Homora can leverage this partnership to expand more use cases of leveraged yield farming, such as yield strategies and vaults.
Additionally, we have strengthened the Optimism ecosystem by co-launching with ecosystem partners, including Iron Bank, Yearn Finance, and Perpetual Protocol and gained impressive traction of ~$20M in TVL, > 30k impressions and >900 engagement.
Has your project previously applied for an OP grant?: No
Number of OP tokens requested: 800,000 $OP
Did the project apply for or receive OP tokens through the Foundation Partner Fund?: Yes/No/In Process
How much will your project match in co-incentives?
It’s unlikely that Homora v2 would be able to match incentives.
Proposal for token distribution:
How will the OP tokens be distributed?
As a builder on Optimism, Homora V2 is requesting 800,000 $OP tokens where
Type1: ~80% of granted OP tokens (~640,000 $OP) will be allocated to users as promotional liquidity mining rewards to help bootstrap liquidity at launch in addition to the organic usage. We plan to prioritize listing the pools with OP tokens to ensure that the distributed rewards benefit back to the ecosystem. The tokens will be allocated to leveraged yield farmers and liquidity providers on Homora V2 on Optimism. Currently, Homora V2 on Optimism offers four liquidity pools from Uniswap V3, including USDC-DAI 0.05%, WETH-USDC 0.05%, WETH-DAI 0.3%, and WETH-OP 0.3%. Therefore, the requested OP tokens will be distributed among selected pools at a fixed rate of a 40,000 OP tokens per week with the distribution at start as follow
- WETH-OP 0.3% (50%) = 20,000 OP tokens distributed among OP borrowers
- WETH-USDC 0.05% (25%) = 10,000 OP tokens distributed among WETH borrowers
- WETH-DAI 0.3% (25%) = 10,000 OP tokens distributed among WETH borrowers
- Type2: ~20% of granted OP tokens (~160,000 $OP) will be allocated as builder’s grant for protocols looking to integrate on top of Homora. For example, building yield strategy vaults on top of Homora’s leveraged yield farming pools. This will allow Homora to leverage the synergies with integrated protocols and further increase liquidity and leveraged yield farming and lending activities on Optimism. See example of previous integration here
Below is an outline of our approach to calculate the proposed amount of OP token allocations Type 1 for Homora.
However, we lower the requested tokens amount according to the delegate feedback (See more details in the comment section below)
- Homora V2 on Optimism launched with four Uniswap V3 pools [USDC-DAI 0.05%, ETH-USDC 0.05%, ETH-DAI 0.3%, ETH-OP 0.3%] and four lending assets [ETH, DAI,USDC, and OP]
- Homora V2 contributes to ~50% of the liquidity locked on the underlying Uniswap V3 pools from organic usage without LM
- Homora V2 aims to target around 70% TVL of the underlying pools with around 10% as additional incentives for users
Calculation of the requested amount of OP tokens
Requested OP Tokens = Target increase in TVL * Target APY$OP price
- TVL is estimated from 3-month average TVL of each pools
- $OP price is estimated from OP token price EMA(50)
How will this distribution incentivize usage and liquidity on Optimism?
As a leveraged yield farming protocol, Homora aims to help bring large TVL and liquidity to the underlying DEXes and become the majority contributor of underlying liquidity pools that it integrates with. (e.g.Homora V2 aims to contribute over 70% to Uniswap V3’s liquidity for the pools that are integrated with Homora)
Since many of Homora’s users are degens and advanced investors looking for opportunities to boost their yields, distributing OP tokens as promotional liquidity mining rewards will help incentivize protocol usage and bootstrap the liquidity on Optimism after deployment. As a result, higher farming yields will attract more liquidity providers, while higher borrowing demand will lead to higher yields for lenders. In overall, this will help shape a positive feedback loop, leading to more lending and borrowing activities.
Over what period of time will the tokens be distributed?
The liquidity mining incentives of $OP token will be distributed over 16 weeks, with 8 active liquidity mining period (2-week each)
Key milestones/KPIs you expect to achieve
- Launch on Optimism (18 Aug 2022) with 3 leveraged yield farming + 3 lending pool listing
- Target 1-week after launch (with IB tokens LM rewards on lending pools)
- Gain an average of 20% organic traction on leveraged yield farming pools: 5M (exceed, actual TVL = 10M, contribution = 50%)
- Bootstrap 20% of the target liquidity on lending pools: 7M (exceed)
- List ETH-OP pool and OP lending pools (07 Aug 2022)
- Target 1-month after launch
- Gain an average of 50% organic traction on leveraged yield farming pools (meet, actual TVL = 12M, contribution = 50%)
- Bootstrap 30% of the target liquidity on lending pools (exceed, contribution = 57.5%)
- Target 2-month after launch (with OP tokens LM rewards on leveraged yield farming pools)
- Gain an average of 70% on leveraged yield farming pools after the LM rewards are distributed
- Bootstrap 50% of the target liquidity on lending pools
- Continue new DEXes, asset listing, and explore integratation with other protocols to increase protocol use cases
- Target 4-month after launch
- Maintain a TVL share of 2% across Optimism DeFi landscape
Why will the incentivized users and liquidity remain after incentives dry up?
After incentives dry up, there are three key factors that can help sustain the liquidity on Homora V2, including organic traction, a strong track record of usage from Uniswap V2’s liquidity pools, and the first-mover advantage from integrating with Uniswap V3. First, by launching without distributing additional liquidity mining rewards on liquidity providing pools, we can organically bring in a total of $20M in TVL at its peak since launching on Optimism, with ~80% liquidity locked on Uniswap v3 ETH-DAI 0.03% pools from Homora. Secondly, with proven track records on other chains that Homora is currently live on, such as Ethereum, ~50% of Homora’s TVL on Ethereum comes from Uniswap V2 even after incentives dry up. This proves that integrating leveraged yield farming protocol on top of a large DEX like Uniswap can bring sticky organic usage without extra incentives. We aim to replicate a similar impact to Homora on Optimism after integrating with Uniswap V3. Finally, Homora is the first leveraged yield farming protocol to integrate with Uniswap V3, which gives it a first-mover advantage to offer a more unique value proposition towards the Optimism community.