[Spectra] GCGP - gDAI LP & Interest Rate Derivatives

Archived GCGP-Bridge
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[Spectra] GCGP - gDAI LP & Interest Rate Derivatives
Spectra GCGP (Gains Community Grants Program)

SECTION 1: APPLICATION OVERVIEW

Provide a brief summary of your application. This section should introduce the reader to your project, explaining its intentions, objectives, and scope.

Which category of integration is your project applying for:

  • gToken vaults

How many $ARB tokens are you applying for:

  • 20,000 $ARB

Please provide a description of your project:

  • Spectra is an EVM-centric protocol for interest rate derivatives with an easy-to-use flagship app. The Spectra protocol is permissionless, meaning its services are entirely open for public use. Spectra’s Yield Token and Principal Token, minted on top of ERC-4626 interest-bearing tokens, are core protocol primitives. Spectra separates the right to principal from future yield via a process called yield tokenization. This process unlocks new financial possibilities beyond standalone interest-bearing tokens. Anyone can create new markets at will, swap yield derivatives, or become a liquidity provider.

How will you integrate gTrade and what benefit does it bring to your users:

  • Spectra has initiated the integration of gTrade’s gTokens through a proposal to add a gauge for the Spectra gDAI-LP. This integration of gDAI will enable boosted yields on the native gDAI yield from swap fees and $APW incentives with the addition of the gDAI gauge. The benefits of integrating bribes for gTrade’s gTokens on Spectra include:
    • Liquidity Deepening: By increasing liquidity in the gToken IRD Pools, Spectra users will be able to facilitate larger trades and improve the efficiency of fixed rates and yield trading products. This deeper liquidity helps minimize slippage and enhances the overall trading experience.
    • Expanded Yield Opportunities: Users will benefit from higher yields on their gToken holdings through boosted rewards from $APW incentives and swap fees. This creates a more attractive investment for users seeking to maximize their returns on yield-bearing assets.
    • Improved Visibility and Adoption: Integrating gTrade’s gTokens will raise Spectra’s profile within the DeFi community, attracting more users, pools, and liquidity. This broader adoption is crucial for the platform’s growth and sustainability.
    • New Financial Products: Spectra’s permissionless pool creation on ERC-4626 allows for innovative financial products beyond Pendle’s gDAI-LP, such as gUSDC and gETH pools. These pools can be created with custom maturity durations, providing unique financial strategies, yield opportunities, and enhanced rewards through $APW emissions and third-party bribes.
    • Utilization of Fixed Rates and Yield Trading: The integration will enable users to lock in fixed rates for their yield-bearing positions, removing the uncertainty of fluctuating APYs. Additionally, yield trading will allow users to speculate on the future direction of interest rates, providing a hedge against rate volatility and potentially higher returns.
  • Specific Use Cases and Scenarios:
    • Enhanced Fixed Rate Investments:
      • Users can lock in attractive fixed rates on their gDAI holdings, ensuring predictable and stable returns regardless of market fluctuations. For instance, if the prevailing APY is 20.3%, users can lock this rate for a specified period, securing consistent income.
    • Yield Trading Opportunities:
      • Users who believe that interest rates will rise can purchase Yield Tokens (YTs) and profit from the increased yield over time. Conversely, those expecting a decline can sell YTs or hedge their positions, creating dynamic trading strategies within the Spectra ecosystem.
    • Tokenized Yield Strategies:
      • By separating yield from the principal, users can create customized investment strategies. For example, a user might sell their future yield for immediate capital while retaining the principal, enabling liquidity management and flexibility.
    • Leveraged Yield Farming:
      • Enhanced liquidity in gDAI pools allows users to engage in leveraged yield farming, boosting their potential returns by borrowing against their assets and reinvesting in high-yield opportunities.
    • Permissionless Pool Creation:
      • Spectra’s support for ERC-4626 allows users to create custom gToken pools with varying maturity dates and yield strategies. This flexibility encourages innovation in DeFi products and caters to diverse investor preferences.

What are your plans for the requested grant and how does it bolster the gTrade integration:

  • The requested grant will be used to fund bribes on Spectra IRD Pools for gTrade’s gTokens (gDAI, gUSDC, gETH), incentivizing liquidity for the principal tokens. Here’s how the grant will be utilized and its impact on the gTrade integration:
    • Incentivizing Liquidity:
      • Bribes will be used to attract significant liquidity to the gToken IRD pools. By offering these incentives, we aim to substantially increase the Total Value Locked (TVL) within this pool, thereby enhancing its stability and attractiveness for traders and investors.
    • Boosting $APW Emissions:
      • Bribes on Spectra Finance will help secure a larger share of $APW token emissions by gaining voter support. This increased allocation of $APW emissions will further enhance the attractiveness of the Spectra gToken IRD Pools and incentivize more users to participate.
    • Creating Unique Yield Opportunities:
      • The grant will enable the exploration of custom maturity durations for gTrade’s gTokens. This will provide unique yield opportunities and speculation for higher yields on gToken Vaults by stacking additional APY from Spectra on top of the interest-bearing gTokens. Specifically, the shorter maturity durations compared to Pendle’s gDAI-LP offerings can attract users looking for flexible and high-yield investment options.
    • Supporting Fixed Rate and Yield Trading Products:
      • The deeper liquidity enabled by the grant will support the use of fixed rate products and yield trading. Users can lock in yields, providing predictability in their returns and allowing for better financial planning. Yield trading products will allow users to benefit from changes in interest rates, providing opportunities for speculation and hedging.
  • Benefits to gTrade Platform:
    • The integration and liquidity incentives will bring several benefits to the gTrade platform:
      • Increased Demand for gTokens:
        • With the ability to earn additional yield through Spectra’s swap fees and $APW incentives, the demand for gTokens like gDAI, gUSDC, and gETH will increase. This, in turn, enhances the utility and attractiveness of gTrade’s offerings.
      • Enhanced User Experience:
        • Users will enjoy a more seamless and profitable trading experience due to deeper liquidity, reduced slippage, and more robust yield opportunities. This improved user experience can lead to higher user retention and platform growth.
      • Diversified Yield Sources:
        • By participating in Spectra’s ecosystem, gTrade can offer its users diversified yield sources, including fixed rates and variable yield trading, making the platform more versatile and competitive.
      • Broader Use Cases:
        • The integration opens up new use cases such as leveraging yield-bearing assets, tokenizing future yields for immediate liquidity, and engaging in sophisticated financial strategies. These innovations can attract a broader audience and stimulate further growth for gTrade and Spectra.

Provide a timeline and expected milestones with set ARB per

  • Week 1-3:
    • Milestone 1: Launch Bribes on Spectra: Initiate the bribes program to attract votes and liquidity to Spectra’s gDAI IRD Pool.
      • Distribute $10k ARB: $10k in ARB distributed as bribes for the Spectra gDAI IRD Pool
    • Milestone 2: Create gUSDC and gETH IRD Pools on Spectra: Establish new IRD pools for gUSDC and gETH to diversify yield opportunities.
  • Week 4-10:
    • Milestone 3: 50k TVL in Spectra gDAI:
      • Distribute $5k ARB: $5k in ARB distributed as bribes for the Spectra gUSDC once the Spectra gDAI pool reaches a Total Value Locked (TVL) of $50k.
    • Milestone 4: 100k Combined TVL in gToken (gDAI, gUSDC, gETH) IRD Pools:
      • Distribute $5k ARB: $5k in ARB distributed as bribes for the Spectra gETH IRD Pool once combined Spectra gToken Pools reaches a Total Value Locked (TVL) of $100k.

SECTION 2: APPLICANT INFORMATION

Provide personal or organizational details, including the applicant’s name, contact information, and the name of any associated organization. This information ensures proper identification and communication throughout the grant process.

  • Applicant Name or Alias: Absolute Unit
  • Project Name: Spectra
  • Project Description: Spectra is an EVM-centric protocol for interest rate derivatives with an easy-to-use flagship app. The Spectra protocol is permissionless, meaning its services are entirely open for public use. Anyone can create new markets at will, swap yield derivatives, or become a liquidity provider.
  • Team Members and Qualifications:
    • Gaspard Peduzzi
      • Qualifications: Invented Yield tokenization, President of Blockchain association in top university in Lausanne Switzerland, in crypto since 2013
      • Roles: Co-Founder
      • Responsibilities: Smart Contract lead / Product development
    • Uly
      • Qualifications: ex Software Engineer @amazon, built games since 13yo, 5 years in crypto
      • Roles: Co-Founder
      • Responsibilities: Full Stack / Smart Contract
    • Absolute Unit
      • Qualifications: Prev. bd for Socket / Bungee, Balancer, UMA, Harvest
      • Roles: Business Development
      • Responsibilities: Developing a network of contacts to attract new projects to the Spectra ecosystem
    • Z
      • Qualifications: Class of 2017, CMO @ Harvest & Spectra
      • Roles: Comms/Marketing/UXUI
      • Responsibilities: Spreading the word of Spectra/prototyping the product
  • Project Links:
  • Contact Information:
  • Are you currently a grant recipient in other $ARB incentive programs? Spectra is not a grant recipient for any $ARB incentive programs.

SECTION 3: GRANT DETAILS

  • Funding Address: 0x417c5997fc9f1fD341742C71dE9b1908028Fe381
  • Funding Address Details: 3 / 5 multisig
  • Other Contract Addresses: N/A

SECTION 4: DATA & REPORTING

Please describe how your team will be able to provide data & reporting on the grant distribution.

  • Is your team prepared to provide Dune graphs and/or Dashboards for your incentive program?
    • Yes, we will provide Dune graphs and dashboards to provide data & reporting on the bribes.
  • How does your team plan on posting bi-weekly program updates on the Gains Network forum?
    • Bi-Weekly Forum Updates:
      • Content: Each update will include detailed information about the progress and milestones achieved in the integration and operation of Spectra gToken pools.
      • Metrics: We will highlight key metrics such as Total Value Locked (TVL) in the gDAI, gUSDC, and gETH pools, yield performance, and user engagement.
      • Format: Updates will be structured in a clear and concise format, making it easy for community members to follow and understand the developments.
    • Social Media Engagement:
      • Twitter/X Posts: We will leverage our Twitter/X account to amplify our forum updates. These posts will include highlights of the TVL attracted to the Spectra gToken pools, additional yield opportunities, and significant achievements.
      • Visuals: Posts will be supported with infographics and charts to visually represent the progress and key metrics, making the information more engaging and accessible.
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