Stephen, founder of DeFi Dojo, conducted a comprehensive review of various projects benefiting from the Long-Term Incentive Pilot Program (LTIPP) launched by the Arbitrum Foundation. This initiative aims to enhance network participation by directing protocol funds as liquidity incentives towards collaborative projects on ArbitrumDAO. The granted LTIPP funding is redistributed to the Arbitrum community through liquidity incentives, encouraging users to explore new use cases and increase network activity.
The total allocation for the program amounts to approximately $30 million, with most projects receiving funding until September. Here’s an overview of some key projects:
**Factor**
Factor employs mainly LRT Silo Labs leverage strategies or LRTPenpie LP strategies. Despite offering variable yields ranging from 22% to 93%, Factor’s Total Value Locked (TVL) remains relatively low, necessitating caution regarding dilution and security risks.
**Gearbox**
Gearbox initially launched lending activities but soon plans to introduce incentivized trading and Renzo leverage. Their new STIMMIES initiative not only rewards ARB but also offers GEAR incentives. Current lending yields are:
– USDC: 15%
– ETH: 14%
Anticipated subsidies for ezETH leverage are forthcoming, though detailed specifics will be available after a week. Additionally, leveraging mining with LSTs like rETH, wstETH, and cbETH benefits from the LTIPP-subsidized low borrowing rates.
**PURE**
Trading on PURE also features STIMMIES rewards.
**Contango**
The DeFi protocol Contango sees substantial ARB flow towards ETH leverage positions. Yield ranges from 20% to 30%, with strategies capable of handling over $2 million. Using Contango also accumulates points for a future TGE airdrop, approximately a month away.
**Silo Labs**
While Factor and Contango aggregate Silo opportunities, other prospects should also be considered. WOETH currently offers a -7.4% borrowing rate on ETH, implying profitable borrowing. At maximum leverage, this equates to an annual rate of 63%, primarily paid in ARB.
**Merkl**
Merkl implements numerous LTIPP incentives, partnering with major projects such as Lido, PancakeSwap, and Camelot for LTIPP activities.
**Curve and Convex**
Curve and Convex utilize ARB rewards to subsidize various pools, focusing on ETH, BTC, or stablecoin pools.
**Timeswap**
The lending protocol Timeswap features a unique Pendle market where lending PT-weETH yields 30% returns, while borrowing against collateral in WETH offers 9% returns.
**Trader Joe**
Trader Joe hosts intriguing farms under LTIPP, offering high APRs, albeit with APRs typically lower than advertised due to assumed single-tick liquidity.
**RAMSES**
Similar to Trader Joe, RAMSES emphasizes single-tick liquidity APRs, though actual incentives may differ.
Stephen suggests prioritizing stablecoin pairs and ETH pairs (with occasional ETH/BTC if yields exceed 30%). Notable average APRs include:
– ETH pairs:
– WETH/ETHx: 45%
– wstETH/ETHx: 37%
– ezETH/WETH: 21%
– uniETH/ETH: 46%
– Stablecoin pairs:
– fUSDC/USDC: 52%
– USDe/USDT: 43%
– grai/usdc: 40%
– usdc/usdc: 25%
These APRs reflect averages, with lower liquidity pairs requiring special attention to dilution risks.
Stephen concludes by recommending exploring Epoch Rewards to trace ARB incentives and gauging actual feasible returns from token pairs like Renzo’s ezETH/ETH, which provide clearer insights into achievable yields.