IIt is indeed agreeable that ARB token incentives may not lead to “sticky” network effects within the Uniswap pools.
The primary concern lies in the likelihood of these projects predominantly possessing the liquidity within their respective vault pools, ultimately resulting in the founders being the primary beneficiaries of the rewards = No value created.
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LVDs - Liquid Vault Derivatives - will be a new crypto-economic primitive.
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Since this proposal is aiming to get a share of the ARB for distribution, what are your plans for the ARB you receive? I noticed that the project currently has an ARB-USDC LP position so I’m wondering if the ARB will be used for this as well.
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The ARB would be used to pay for operating expenses to build the yield vaults, analytics, and Liquid Vault Derivatives. As for depositing ARB into the vaults, it is possible depending on how many ARB we are awarded. But yes it would be a possibility as that would be literally putting our money where our mouth is (so to speak).
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LVDs proposed for Uniswap present an exciting opportunity to revolutionize DeFi. It introduce a new crypto-economic primitive that allows vault tokens to be used as collateral for lending applications built into BrincX, enhancing yield generation and capital efficiency within the Uniswap ecosystem. Kudos to the BrincX team for their commitment to increasing Uniswap’s liquidity and integrity through this innovative proposal!
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Thanks for this proposal, and for your patience with the process. I think it’s important to make a distinction between your proposal and some of the others currently posted which seek to incentivize liquidity provision. Many of the teams that have written those proposals (Arrakis, Gamma, Angle, xToken, etc) have solutions working in production to which the DAO could send ARB that would be spent deterministically based on the parameters decided by delegates in the forum.
Because this proposal is requesting ARB to subsidize a private company’s operating budget, it is less deterministic and requires more oversight as it relates to accountability. That isn’t a bad thing! Funding teams building new products is an absolutely valid use of the Arbitrum airdrop. But to ensure that the funds are being spent as promised, it’d probably be best if such a grant were administered by a grant program such as the one described here or the UF as described here. This type of group can help to define scopes of work and deliverables, and to tie funding to development and product milestones in a way that just isn’t possible if every payment needs to be tied to a governance vote that gets 40m YES votes.
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Thank you for the feedback. If funding teams building new products is a valid use of the ARB airdrop then this is what we would like to propose. And to ensure that funds are being spent as promised we can provide detailed expenditure plan and report of such spending to a detail and specification level similar to the Grant program. We have already spoken to a person at UF that administers the Grants program and were told that UF is not looking to fund anymore projects like ours i.e. yield vaults. If the funding for operations will not work here then we would like to revise our proposal so the funds can be used to establish Yield vaults on our application which will be spent deterministically based on the parameters decided by delegates in the forum.
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I’m of the opinion that it may be better to add it to the vaults rather than using it to pay for operating expenses which would just add more ARB into active circulation. Since it looks like vaults will be in USDC, having the extra ARB will allow for increasing liquidity without needing to swap USDC for ARB.
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Agreed. Based on the feedback above we have revised the use of the ARB from funding development expenses to depositing and maintaining liquidity positions on Uniswap for ARB-USDC and ARB-ETH.
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Brincx provides analytical data to help providers of uniswap liquidity. For each pool of ARB/USDC and ETH/USDC:
TVL, Fees and Price Volatility, Active Liquidity Index(representing the theoretical maximum return for the pool), Concentrated Liquidity Index(The % of liquidity concentrated in a specific price range) is provided. In addition, Brincx provides charts of daily volume, liquidity distribution of each tick, and daily fees.
Brincx has created a position in the ARB/USDC pool on Uniswap v3, providing real-time information about our positions. Total TVL, ratio of assets and real APY, including impermanent losses, is disclosed in real time.
Brincx continues to work to provide more data that can help liquidity providers make better decisions.
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Yeah i’m using this analytics everyday for rebalancing my position! Appreciate for your efforts again 
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Great! Hoping that the ARB is granted to this project since it sounds promising. Looking forward to seeing the app once it’s available!
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BrincX Real Yields sounds like an exciting concept.
Looking forward to more updates!
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Since Uniswap recently announced V4, any plans of integrating it to BrincX or are you sticking with V3 to start?
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Great question! We will launch v1 of our BrincX vaults based on Uniswap v3 but, we have started planning how to utilize some of the important new features from v4, namely “hooks”, in order to improve the value created by our vaults. For example, we think there is a way to not just reduce, but, eliminate IL from vaults based on V4.
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You got my attention at eliminating impermanent loss as someone who’s felt that burn on several defi apps. Hope you guys make it happen!
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Yes, if you look at our live LP position that is up right now, we are showing an Impermanent GAIN. We have devised our strategies with wall street traders specializing in devising the best ways to maximize both Fees and capital gains on the underlying LP positions. If you look at many of the automated strategies, they are overstating their APYs as they do not account (deduct) IL from their APY calculations.
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Hi, we have taken your advice, and revised our proposal so that the ARB distribution will NOT be used for building but rather for depositing directly into our vault to create a liquidity position in ARB on uniswap v3 on the Arbitrum network. That way, unlike liquidity incentives, we are not simply giving away the tokens but creating more liquidity and proving our hypothesis that real returns or yields can be acheived on Uniswap v3.
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