Tradao - LTIPP [Post Council Feedback]

Following the initial feedback of LTIPP Council, Tradao would like to re-submit its LTIPP application.

The full proposal can be found here:

https://forum.arbitrum.foundation/t/tradao-ltipp-application-final/21884

Request: 100,000 $ARB (Reduced from 190,000 $ARB)

Feedback Summary:

The council feedback could be summarized as:

1. Wintermute: Criticized the large grant request, unverifiable metrics, and lack of anti-sybil measures

2. GMX: Lack of product-market fit and transaction numbers. Found the grant request to be inefficient and the incentive strategies unproven.

3. GFX: Highlighted concerns about the large grant size and the challenge in verifying Tradao's metrics. Recommended revising the application with enhanced sybil protection measures and to consider feedback from multiple reviewers for a future submission.

Key Metric Update

As Tradao's permissionless copy trading function launched in early March before the LTIPP application program deadline, the metric of copy trading cannot fully reflect our product-market fit. Here is some update about our metric.

Previous

• Trading volume: 27,920,792
• Traded: 828
• Address: 66

New

• Trading volume: 70,540,917(Copy Trading) + 11,053,160(Direct Referral)
• Traded: 2,576
• Address: 153

Source:

1. https://dune.com/patrick_tradao/tradao-dashboard
2. https://www.gmxreferrals.com/arbitrum (Search Code: Tradaox)

Key Adjustment

In response to feedback from the Council and recent dencun upgrade, we propose resubmitting the application with a reduced grant amount by removing the rebates of GMX's excution fee, eliminating trading competition and wallet generation incentive.

Setting the new grant request at 100K ARB, we will implement the following incentive scheme:

• Increase the total transacted volume via Tradao
  • Currently at $1.63M daily volume
  • Targeting ~$3M daily volume
• Incentivize fee rebate → less cost to trade → more trades → more volume and likely users
• As Tradao is totally free to every user, we don’t charge any cost from users. This means all the costs are the gas fee and the fee charged by GMX. We will rebate 80% of open fees back to users. To achieve this, at a target of $3M daily volume and 100 daily transactions, across 12 weeks, it would require:
  • USD equivalent = ($3M * 0.06% * 80%) * 365 * 12/52 = $121.29K
  • ARB amount = $121.29K / $1.2 = 100K ARB at $1.2

Expected milestones

Initial unlock 33% of ARB

Milestone 1: 84m Trading Volume (66% of ARB unlocked & 33% of ARB distributed)

Milestone 2: 168m Trading Volume (100% of ARB unlocked & 66% of ARB Distributed)

Milestone 3: 252m Trading Volume (100% of ARB unlocked & 100% of ARB Distributed)

The Tradao team agrees to return to the Arbitrum DAO any unused ARB funds once the 12-week LTIPP program is concluded.