Simple Summary Establish and confirm grants distribution through Derive Governance

Abstract This is a formal proposal to establish and confirm Derive Grants through Derive Governance. Derive was awarded a large sum of $OP tokens to reward community contributions and builders.

Specification This proposal sets in stone a governance mechanism that gives authority to the Derive Core team for decision-making on liquidity incentives, Builder Grants, and Protocol incentives until such time that Derive governance approves a body to administer the grants process. Intake of grants are done with Ksett and the Grant Ambassadors. https://lyra-finance.notion.site/Mission-Request-Ambassador-RFP-13f03b51517e8079bd68cb229e8a1986

• Format for all Grant applications including allocation and evaluation criteria follows the current Optimism Grants program.

• Formatting framework for Derive Grants can be found here: https://lyra-finance.notion.site/Derive-Builders-Grants-12a03b51517e8042bb2cfaa2c12732e9

Rationale Derive secured two grants through Optimism for a total of 1.5 million $OP (400k OP for Builders, and 1.1 million OP for Incentives)

Grant Allocation Categories and Distribution:

Builders: 400,000 OP

• Technical Integrations (33%): Support third-party technology vendors, such as SaaS providers and OEMS, that lower barriers to interaction with Derive and Optimism.
• Infrastructure Providers (33%): Fund technical integrations and infrastructure development, including price oracles and volatility feeds.
• Audits (33%): Ensure ongoing security and compliance through regular audits. This framework aims to attract market makers, flow providers, and infrastructure partners, driving growth and innovation within the Derive ecosystem.
• Liquidity: 1,100,000 OP
• Market Makers (50%): Incentivize liquidity provision on spot, options, perpetual futures to enhance market depth.
• Protocol Activity (50%): Encourage trading and institutional flow providers to increase transaction volume. Promoting strategy deposits and lending activity.

Goals and Objectives of the Derive Grants:

• Increased TVL
• Increased number of unique users
• Increase transaction volume and block space demand on Derive L2
• Promote competitive liquidity vs centralized venues
• Support integrations with protocols on OP mainnet and other OP stack chains
• Strengthen technical support, connectivity, security, and robustness of Derive L2

Approved Derive Grants will be found here: https://lyra-finance.notion.site/Derive-Grant-Approvals-15903b51517e80508bc2cfcde7ec18ab

Approved Optimism Grants: https://app.charmverse.io/op-grants/derive-formerly-lyra-chain-intent-3b-9106030612947877

Test Cases n/a

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