## SECTION 1: APPLICANT INFORMATION
**Applicant Names:** @twells | @Hpayne

**Project Name:** ShapeShift DAO

**Project Description:**
Founded in 2014 by Erik Voorhees, ShapeShift decentralized into a DAO in 2021, and we continue to pursue the vision of a borderless financial system built on open protocols. The roadmap for ShapeShift DAO’s product is ultimately driven by the community of FOX Token holders; our dapp has been live for over 2 years at app.shapeshift.com .

In addition to support for leading EVM-based DEX/bridge aggregators, our product is powered by THORChain, which provides users with access to native BTC, ATOM, RUNE, DOGE, and more. Our [MetaMask Multichain Snap](https://twitter.com/ShapeShift/status/1701602411549524039) provides unique functionality by making *all of these assets available entirely within Metamask*. Users can hodl, and enjoy DeFi opportunities on EVM and non-EVM assets alike. We currently support both Arbitrum networks, and this application proposes a collaboration to leverage our Snap to onboard new users and liquidity to the network.

**Team Members and Roles:**
@hpayne (Marketing WS Lead)
@twells (Grants Lead)
tyler (Operations Lead)
0xFBL (Product WS Lead)
0xean (Engineering Lead)

**Project Links:**
[Web app](https://app.shapeshift.com/)
[Android app](https://play.google.com/store/apps/details?id=com.shapeshift.droid_shapeshift)
[iPhone app](http://apps.apple.com/us/app/shapeshift-crypto-platform/id996569075)
[Website](https://www.shapeshift.com)
[GitHub](https://http://github.com/shapeshift)
[Twitter](https://twitter.com/shapeshift)
[Discord](https://discord.gg/shapeshift)

## SECTION 2a: TEAM AND PRODUCT INFORMATION
*Contact Information*
**Point of Contact**: @hpayne
TG handle: @hpayne1
Twitter: @hpayne_writer
Email: [e-mail]

**Do you acknowledge that your team will be subject to a KYC requirement?:** Yes

**Team Experience**
Our team has over 15 years of combined experience building in crypto. We have specific experience with incentive programs, such as this [novel campaign we ran with Optimism and Gitcoin Passport last year](https://gov.optimism.io/t/gf-phase-2-growth-proposal-shapeshift-dao/5568/15), which outperformed expectations. We would like to apply our learnings and expertise to help onboard, retain, and grow new users and activity on Arbitrum.

**What novelty or innovation does your product bring to Arbitrum?**
We bring a unique DeFi UX to Arbitrum through our [Multichain Snap](https://twitter.com/ShapeShift/status/1701602411549524039), which enables users to do DeFi with BTC, ATOM, DOGE, and more, *all within MetaMask* on app.shapeshift.com.

This proposal aims to incentize Arbitrum-specific economic activity within our app, and promote the adoption of our MetaMask Snap to enable low-friction liquidity migration from non-EVM ecosystems to Arbitrum One and Arbitrum Nova.

**Is your project composable with other projects on Arbitrum?**
Yes. Our interface could hypothetically integrate a wide variety of high-liquidity projects on Arbitrum One or NOVA.

**Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?**
Although there are numerous multichain DeFi interfaces, only ShapeShift enables users to interact with them through a single wallet (MetaMask). We also enjoy a highly decentralized backend, beautiful UI, and offer free trades under $1,000.

**How do you measure and think about retention internally?**

ShapeShift tracks aggregate DeFi signals while preserving the privacy of our users. We are currently targeting $150m monthly volume by June 2024. We look at DAU's,WAU's, and MAU's -- currently 30% 20% and 16% retention-- aiming at increasing our WAUs which is currently steady around 1,200. Our OP incentive campaign in 2023 saw a peak of 7,625 WAUs; we are calibrating this proposal to reach ~5,000 WAUs with a higher rate of retention.

**Relevant usage metrics** can be found [here](https://docs.google.com/spreadsheets/d/1Yj9RMYYU0AW-nwprm2GCm6gBuSPEAGCjU-z6V3hY8lg/edit#gid=0)

**Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan:** Yes

**Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal?** No

## SECTION 2b: PROTOCOL DETAILS
**Is the protocol native to Arbitrum?** We currently support both Arbitrum One and NOVA.

**On what other networks is the protocol deployed?**
In addition to Arbitrum network(s), our interface supports:
Ethereum
OP Mainnet
Bitcoin
Binance Smart Chain
Litecoin
Avalanche
Polygon
Gnosis
Cosmos
Dogecoin
Cosmos
THORChain

**What date did you deploy on Arbitrum mainnet?:**
October 30 2023

**Do you have a native token?**
Yes, [$FOX](https://coinmarketcap.com/currencies/fox-token/).

**Past Incentivization**
Over the past two years, ShapeShift DAO's Treasury Management committee has run $FOX liquidty mining programs on Ethereum Mainnet, Gnosis Chain, and Polygon. We'd also point to our incentive program on OP Mainnet for recent overwhelming success, learnings, and best practices.

**Current Incentivization**
We are currently running a farming program for FOX/ETH on Ethereum Mainnet accessible though our app.

**Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program?**
Yes, we recevied a [$13,000 grant from the Arbitrum Dev Tooling Domain Allocator](https://questbook.app/dashboard/?role=admin&chainId=10&grantId=0x706bc8efecb6002f00a052fe5688d0eb89ea45f4&proposalId=0x49c&isRenderingProposalBody=true) for the integration of Arbitrum One and NOVE, plus open-source, multilingual documentation.

**Protocol Performance**
ShapeShift DAO prioritizes DeFi volume, and our FOX holder base. Across all DeFi opportunities, we are growing 20% MOM since November, 2023. We track on our [public mixpanel pages](https://mixpanel.com/p/R6BpiK4STsL2oHSzXhdMaZ), and are migrating all stats to be onchain verfied via Flipside.

**Protocol Roadmap**
The most important 2024 roadmap details for ShapeShift DAO can be found [here](https://forum.shapeshift.com/t/goals-1-half-2024/2875) + [here](https://forum.shapeshift.com/t/the-themening-a-pob-sequel/2888)

**Audit History & Security Vendors**
ShapeShift is in the second year of its [bug bounty program on Hackenproof](https://hackenproof.com/shape-shift/shapeshift).

**Security Incidents**
ShapeShift DAO has not suffered an exploit to date.

## SECTION 3: GRANT INFORMATION
**Requested Grant Size**
325,000 ARB tokens

**Justification for the size of the grant**
*What are we trying to accomplish?*
The proposed incentive program is aimed at increasing economic activity on Arbitrum, and the number of Multichain MetaMask Snap users.

We've broken this into three overarching KPIs:
1. Increased bridging to Arbitrum mainnet
- Current monthly bridging volume: ~$1,500
- Total bridging volume targets:
- Best Case: $5,000,000
- Success: $2,500,000
- Worst Case: $1,000,000
2. Increased trading volume on Arbitrum mainnet
- Current monthly trading volume: $10,944
- Total trading volume targets:
- Best Case: $3,000,000
- Success: $2,000,000
- Worst Case: $750,000
3. Increased Multichain Snap users as a low-friction path for non-EVM capital to reach Arbitrum mainnet.
- Current number of Snap users: 4599
- Target number of ShapeShift MultiChain Snap users:
- Best Case: 50,000
- Success: 20,000
- Worst Case: 10,000

*How will ARB incentives be distributed?*
Users who complete all of the required onchain tasks (illustration below) will be eligible to claim 15 ARB tokens. Distribution will take place on a monthly basis via the [ShapeShift page on Mercle.xyz](https://app.mercle.xyz/shapeshift/events)

*What grant size does this require?*
We're aiming for at least 15,000 user journey completions. At 15 ARB for each user, a total of 225,000 ARB is the minimum required to reach this goal. Our total request is therefore 300,000 ARB, which includes a 75,000 ARB success buffer that will otherwise be returned if not distributed. ShapeShift DAO also requests 25,000 ARB to cover personnel and coordination costs.

*What will reaching these KPIs achieve?*
Reaching the stated KPIs above will produce increased economic activity on Arbitrum, and continue to improve upon our low-friction UX for liquidity migration originating from non-EVM assets. ShapeShift's goal is to be the best way to interface to interact with Arbitrum and their Multichain assets.

*How will the growth be retained post incentives?*
The combination of our Multichain Snap, FOXatar NFTs + onboarding flow, and smooth transaction experience on Arbitrum, make a very sticky user experience. By promoting the connection of non-EVM ecosystems with Arbitrum, we open a new world of possibilities for continued economic activity, even after the incentive program is complete.

**Grant Matching**
ShapeShift DAO does not have a specific matching figure at this time, but is *open to discussing* it futher with an Arbitrum grant advisor.

**Grant Breakdown**
92.3% User Rewards (300,000 ARB)
7.7% Overhead (25,000 ARB)

**Funding Address & Characteristics**
The funding address for this grant will be a 2/3 multisig controlled by the Marketing & Grants Workstream at ShapeShift DAO. This setup is designed to meet security, efficiency, and KYC expectations, and will be created upon confirmation of interest in the proposed incentive program. This funding address will be added in-thread for visibility.

**Treasury Address**
[ShapeShift DAO multisigs](https://forum.shapeshift.com/t/dao-treasuries-and-multisigs/892)

**Contract Address**
Upon confirmation of interest in the proposed incentive program, all distribution contracts will be built in collaboration with Mercle and shared as an in-thread update.

## SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES
**Objectives**
The objective of this incentive program is to increase economic activity on Arbitrum mainnet (measured by bridging and trading volume), as well as the total number of Multichain MetaMask Snap users. An increase in Snap users is a key metric as it creates a low-friction way for sources of non-EVM liquidity to migrate to the Arbitrum ecosystem.

**Execution Strategy**
ShapeShift DAO will implement an ARB incentive program built around the 5-step user journey illustrated below.
Once a user has completed the journey outlined above, they will be eligible to claim 15 ARB as a reward. We will use the existing ShapeShift dashboard on Mercle for the user journey completion confirmation and claim process.

**What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?**
We will use two primary mechanisms to incentivize stickiness:
1. A compelling user journey that rewards users for familiar DeFi actions on/to Arbitrum, and the use of a new multichain technology for MetaMask.
2. Upgradeable NFTs (FOXatars) will be available to mint for free the as final task for airdrop eligibility (Step 4 above). FOXatars add unique value to the user journey, and provide users with digital personalization, secondary market value, and branding association with Arbitrum.

FOXatar context: In 2023, [ShapeShift DAO launched FOXatars in collaboration with Mercle.xyz](https://x.com/ShapeShift/status/1666152413009412120?s=20). FOXatars are upgradeable NFT avatars for members of the DAO community, with custom gear and enhancements unlocked through user journeys.

**Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy.**

*Unique Transacting Addresses* (UTAs)
UTAs are defined as any address that completes the 5-step user journey.
UTAs Targets:
- Best Case: 25,000
- Sucess: 15,000
- Worst Case: 5,000

*Bridging to Arbitrum*
The minimum proposed bridging volume is $1,000.
Total bridging volume targets:
- Best Case: $10,000,000
- Success: $5,000,000
- Worst Case: $1,000,000

*Trading on Arbitrum*
The minimum proposed trading volume is $1,000.
Total trading volume targets:
- Best Case: $10,000,000
- Success: $5,000,000
- Worst Case: $1,000,000

*MetaMask Multichain Snap Installs*
Target number of ShapeShift MultiChain Snap users:
- Best Case: 50,000
- Success: 20,000
- Worst Case: 10,000

**Grant Timeline and Milestones**
*Milestone 1*
Target: Monday, March 18 at 11:59 ET
ShapeShift DAO coordinates with Arbitrum, MetaMask, and Mercle (or distibution partner of choice) to prepare co-marketing resources, tracking dashboards, and launch date of program.

*Milestone 2*
Target: Monday, April 1, exact time TBD
The incentive program launch.

*Milestone 3*
Target: Monday, April 29
2,500 UTAs complete Arbitrum user journey.

*Milestone 4*
Target: Friday, May 31
7,500 UTAs complete Arbitrum user journey

*Milestone 5*
Target: Friday, June 28
15,000 UTAs complete Arbitrum user journey

**How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?**
This grant will distribute ARB to power-users who complete a collection of tasks related to current economic activity on Arbitrum, and pave the way for seamless liquidity migration from non-EVM ecosystems via the MetaMask Multichain Snap.

**Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream?**
Yes

## SECTION 5: Data and Reporting
**Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO?** Yes, we are prepared to comply with these requirements for the life of the program, and three months following.

**Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?**
Yes, we have complete confidence in our POC to provide biweekly updates in this thread that summarize our progress, and reference our OBL dashboard.

**Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program?**
Yes, we committ to providing a closeout report within 2 weeks of the program conclusion. This report will include summaries of work completed, final cost structure, whether any funds were returned, user acquisition costs, and any lessons the grantee feels came out of this grant.

**Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?** Yes