"Algofi Pay" Grants

Temperature Check
1

Summary

The Algofi DAO should offer grants to projects that implement Algofi as a part of their payment process. Users of a Dapp (ex nf.domains) would be able to pay for services in whichever ASA they please, with Algofi being used to facilitate swaps from the user’s chosen currency to the Dapp’s prefered payment ASA.

  • Incentivizing projects to implement this will automatically expand the places STBL2 can be used, expanding demand
  • Integrating directly with applications will increase transaction volumes and therefore attract more liquidity to pools
  • Incentivizing projects with BANK will facilitate new, valuable, incentive aligned, long term BANK holders
  • This requires no changes to the core protocol or variables around the core protocol.

Motivation

Supply Side vs Demand Side

Algofi is already one of the most attractive Dapps to put liquidity due to its innovative lending pools which allow participation in both lending and liquidity pooling at the same time. To fully leverage this advantage over other AMMs, maximizing the demand side of the equation is next.

STBL2 Dapp Support

There has also been previous discussion on how to get more of the ecosystem transacting in STBL2. In my opinion, it is a hard sell to convince projects to complete engineering work to accept STBL2 as payment. Given there is no CEX support, and therefore no ability to materialize STBL2 liquidity off chain, projects accepting STBL2 will always have to swap to USDCa or ALGO. It is a much easier sell to convince developer teams to do work that allows their users to utilize any ASA and they still receive payment in their preferred

Prior Art

Uniswap, in the Ethereum ecosystem, has recently rolled out similar functionality around NFTs. While this is somewhat of an appeal to authority, Uniswap has nearly $1B in daily transaction volume and clearly sees this kind of functionality as a means of growth.

BANK

Getting projects directly integrated with Algofi and holding BANK will solidfy Algofi’s market lead in the Algorand ecosystem. Projects holding BANK gives them a direct incentive to prefer integrating with Algofi when possible over alternatives. Now I’ve been very vocally against proposals that exist solely to increase the value of the BANK ASA. But for those of you who are solely motivated by that, this proposal is not counter your goals. Projects that are integrated with Algofi have the highest incentive to participate in governance, as changes to the protocol can directly effect their product. These holders would be less incentivized to sell than lenders/traders. Lenders and traders factor BANK rewards into their yields and as we’ve seen in practice will sell a large amount of the BANK they earn to lock in their yields.

Proposal

Offer Grants

I imagine these grants would be in the size of $10K to $20K. Projects would be approved for the grant via a governance vote and would not receive funds until the feature is live on Mainnet. Grants would be denominated in some combination of BANK and STBL2 (imo 70/30 is my gut instinct here). Projects that seem like good targets include but are not limited to:

I’d love to know any other projects that people think would be good fits for something like this.

SDK/Documentation Bounty

I haven’t played much with the JS SDKs (only Python) so I’m not super aware of how difficult this is to implement with what currently exists. Therefore, it might make sense to offer a bounty of around $10K (in BANK) to anyone who can put together a library, sample application, and documentation that projects can use to implement a “Universal Routing” capability.

Further Discussion

Funds

The treasury should have enough money to cover some initial grants even though we haven’t hit the first 1 year cliff. I don’t know how treasury assets are broken down right now between ASAs so it might require some rebalancing.

“Cash Out”

If the program is succesful, expanding it to projects implementing a “Cash Out” functionality would also work. Using NF Domains as an example, a user who sells a domain would be able to select an ASA to have their earnings cashed out into, facilitated by composed Algofi swaps.

Should we offer grants for projects to build Algofi powered Universal Routing?
  • Yes, $10K -$20K grants sounds right
  • Yes, but higher grant value
  • Yes, but lower grant value
  • Yes, but other tweak
  • No, better uses of funds
  • No, not a good idea
  • No, other reason

0 voters

2

i dont think this is a good idea, my reasons:

  1. Deflex and Vestige are working on a way to easily integrate their aggregators (look at folks). projects honestly shouldnt rely on purely algofi if there is something like this out there imho. what are the benefits for these projects besides getting paid for work they probably should do anyways since it might attract users more easily?

  2. why shouldnt the project just dump their BANK? And without BANK inside the treasury Algofi would have to buy BANK on the open market which would result in people buying BANK before that so they can dump after Algofi bought.

  3. I think algofi / the DAO should rather talk to projects directly instead to get STBL2 supported and if they actively say they dont want to do the engineering work without getting paid the DAO can decide to support their work on a case by case basis. this isnt very effective but there would have to be a vote anyways for projects who want to apply for grants

1 Like
3

Appreciate the dissenting view. Thanks for taking the time to respond

Wasn’t aware of this, but if that’s the case, ensuring Algofi is a part of those products is a simpler approach. I’d still be interested in a grant program to support projects that implement either a Deflex or Vestige based routing system as each project that did would be expanding the Algofi ecosystem.

Because if the project is relying on Algofi there are advantages to maintaining influence over the protocol and risks to not. Plenty of startups do deals like this where equity is exchanged for integration/channel partnerships as a means of strategically marrying two companies. I’m also not suggesting we spend all the BANK in the treasury, there is enough to write one or two grants without remotely depleting it. And the BANK that is being distributed via emissions is completely separate from this as that is a different allocation.

That’s essentially what I’m proposing here but saying its an easier sell if the proposal is for them to support any ASA via the Algofi Dex. There would have to a vote in either case, my proposal is just to formalize and advertise that projects can come here and ask for that.

1 Like
4

i like that idea! making sure those aggregators support algofi and especially the lending pools / nanoswap pools via grants if necessary might result in the same outcome: projects integrate deflex/vestige and more volume gets routed through algofi pools

yeah opening up the possibility to support any token via algofi would have been a really good idea if vestige and deflex werent a thing and their work towards easy integration of their respective aggregator

i like that. letting projects know we would love to see STBL2 supported and if that takes too much engineering work we would help them out

2 Likes