## SECTION 1: APPLICANT INFORMATION
**Applicant Name:** Twells?

**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; use the product at app.shapeshift.com .

In addition to support for leading multichain DEX's and aggregators such as 0x, THORChain, LiFi, and CowSwap. THORChain powers permissionless and native BTC, LTC, BCH, and DOGE access for our EVM users. With the launch of our MetaMask Multichain Snap last fall, users can add the functionality to their MetaMask wallet to trade native EVM assets to/from native BTC in a few transactions using their MetaMask. This functionality is unique to our product, and we are working directly with MetaMask this year to promote its adoption. We currently support Arbitrum One and Nova, and this application proposes a collaboration to leverage this new DeFi UX and access to onboard users and liquidity to Arbitrum.

**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 [@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 MetaMask Snap, which enables users to do DeFi with BTC, ATOM, DOGE, and more, *all within MetaMask* on app.shapeshift.com. Our interface provides swap and bridge aggregators across 14 chains, including Arbitrum One and NOVA, where users always receive optimized rates for trades and bridges on and across Arbitrum. Lastly, ShapeShift has spent the last seven+ years perfecting and continuing to refine a truly multichain and decentralized expereience across EVM and UTXO's, and Cosmos Zones--becoming one of the best ways for a user to manage all of their assets accross multiple chains.

*Example user journey*:
A CEX user takes self-custody of their BTC directly to MetaMask on ShapeShift (31.5m monthly active users). They borrow against 25% of their Bitcoin stack with TC Lending, earn on 25% single-sided THORChain savers vaults, and trade the other 50% for native Ethereum (via THORChain), and bridge to Arbitrum One (via LiFi bridge aggregation).

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. A few interfaces offer native UTXO support through a clunky native wallet or keystore file. 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 is obsessive about its customers, their stickiness, and their feedback. app.shapeshift.com anonymously tracks parts of a user journey (does not track specific wallet addresses) from when a user lands on our landing page, through when they finally leave the app. We look at a variety of stats. Most important is trading volume in aggregate shooting for $150MM a month by June 2024. We look at DAU's,WAU's, and MAU's -- currently 30% 20% and 16% retention-- aiming at increasing our weekly active transactors which has been steady at about 1200. During our last incentive campaign this peaked to 7625. We'd be happier peaking at 5000 and retaining 80% of that new userbase.

**Relevant usage metrics** - Please refer to the OBL relevant metrics chart 42. For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:

[See spreadsheet 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 $12,000 grant from the Dev Tooling Committee for the integration and open-source, multilingual documentation of our support for Arbitrum One and NOVA.

**Protocol Performance**

As an aggregator of protocols shapeshift is a little different than a single protocol. You can see the goals we track on our [public mixpanel pages](https://mixpanel.com/p/R6BpiK4STsL2oHSzXhdMaZ), and are migrating all stats to be onchain verfied via Flipside.

We primarily monetize through trading volume, and look at increased FOX holder base utilizing discounts. We've been growing 20% MOM since November and just had a record amount of revenue from these levers.

**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**
[Provide historic audits and audit results. Do you have a bug bounty program? Please provide details around your security implementation including any advisors and vendors.]

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

## SECTION 3: GRANT INFORMATION
**Requested Grant Size**
1,000,000 ARB tokens

**Justification for the size of the grant**
*What are we trying to accomplish?*
1. Increase bridging to Arbitrum mainnet
- Current monthly bridging volume: $1,500
- Target montly bridging volume:
- Best Case:(note to twells--we can look at the optimism thing and just 2x it?)
- Success:
- Failure:
3. Increase trading volume on Arbitrum mainnet
- Current monthly trading volume: $10,944
- Target montly trading volume:
- Best Case:
- Success:
- Failure: (note: same as above)
5. Increase the number of 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: 100,000
- Success: 50,000
- Failure: 10,000

*How will ARB incentives be distributed?*
Users who complete all of the required tasks will be eligible to claim XX ARB tokens via the ShapeShift homepage on Mercle or rewards distribution platform of choice pending live-testing.

*What grant size does this require?*
Our total ask of 1,000,000 ARB will be distributed to 200,000 users at 4 ARB each upon completion of the user tasks (Install Multichain snap, trade & bridge to/from Arbitrum, participate in a user-feedback session with our product team).

*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. ShapeShift is more than happy to continue to report stickiness metrics post cycle and plans on continuing to monitor and assess user journey, stickiness, and flow to maximize the impact of this grant.

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

**Grant Breakdown**
80% Incentives
20% Overhead

**Funding Address**
[INSERT new multisig address]

**Funding Address Characteristics**
The funding address above is a 2/3 multisig controlled by the Marketing Workstream at ShapeShift DAO. This setup is designed to meet security, efficiency, and KYC expectations.

**Treasury Address**
[Please list out ALL DAO wallets that hold ANY DAO funds--this is on the forum somewhere--cannot find](/YgFEORzCRI2eTeU7IPGzAQ)

**Contract Address**
Upon confirmation of interest in the proposed incentive program, all distribution contracts will be built in collaboration with Mercle or our distribution partner of choice 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 (bridging and trading volume), as well as the total number of Multichain MetaMask Snap users (who are best positioned to be Arbitrum power-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 receive 4 ARB as a reward. ShapeShift will evaluate usuing a token distribution tool and custom subgraph or a tool like mercle.xyz with native minting and interactions.

**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. ARB airdrop for all users who complete the required journey, disbursed monthly. End users who qualify will have the Multichain Snap, making their use of Arbitrum and non-EVM assets easier than ever.
2. FOXatar upgradeable NFTs will be available to mint for free the as final task for airdrop eligibility (Step 4 above). End users will therefore possess a digital asset with secondary market value and association with ARB rewards.

FOXatar context: In 2023, ShapeShift DAO launched FOXatars in collaboration with Mercle. 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 all 6 parts of the proposed user journey.
Total UTAs Target:
Best Case:
Success:
Worst Case:

*Bridging to Arbitrum*
Proposed minimum bridging volume is:
$500 (for a limited amount of rewards to encourage newer users to engage with Arbitrum) We estimate having 5,000 of these opporunities available for users. A user will unlock 1 ARB through this task
$1,250-$3,500 in one trade/bridge is the regular non-new user volume required to unlock 2 ARB
$3,000+ in one trade/bridge will unlock 4 ARB as a reward.

Bridging Target (volume):
- Best Case: $219,000,000 (distibuting 7 ARB to incentivize 45,714 UTA's each that bridge at least $4,750 to claim all rewards)
- Success: $109,000,000
- Worst Case: $54,500,000

*Trading on Arbitrum*
Proposed minimum bridging volume is:
$500 (for a limited amount of rewards to encourage newer users to engage with Arbitrum) We estimate having 5,000 of these opporunities available for users. A user will unlock 1 ARB through this task
$1,250-$3,500 in one trade/bridge is the regular non-new user volume required to unlock 2 ARB
$3,000+ in one trade/bridge will unlock 4 ARB as a reward.

Bridging Target (volume):
- Best Case: $219,000,000 (distibuting 7 ARB to incentivize 45,714 UTA's each that bridge at least $4,750 to claim all rewards)
- Success: $109,000,000
- Worst Case: $54,500,000

**Grant Timeline and Milestones**
*Milestone 1*
Deadline: 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*
Deadline: Monday, April 1, exact time TBD
The incentive program is launched, and the first 5,000 users have completed the user journey and are eligible for ARB rewards.

*Milestone 3*

45,714 user journey completions or $100,000,000 of volume moved across bridging and trading.

*Milestone 4*
91,000 user journey completions or $200,000,000 across bridging and trading.

**How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?**
This grant will distribute ARB to specific power-users who complete a collection of tasks related to current economic activity, and pave the way for future growth of connetions across other chains to and from Arbitrum. Every ARB recipient will have completed bridging and trading transactions, and installed the MultiChain MetaMask Snap, providing a low-friction way to bring new liquidity to Arbitrum after completing the incentive program. Metrics from existing snap installs across the past 6-months show that once a user installs a snap, they are almost completely unlikely to uninstall, thereby creating the most sticky user for truly multichain experience with Arbitrum sitting right at the center of it all.

**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