SLURP-16 | Deploy stake.link to Arbitrum

SLURPs
1

Abstract

It is proposed that stake.link is deployed to Arbitrum as the first non-Ethereum Mainnet network, in lieu of Optimism. This would include: SDL, reSDL, wstLINK, and the ability to claim accrued stLINK rewards from reSDL held on Arbitrum. Not in scope for this initial deployment: Depositing LINK to the Priority Pool and claiming wstLINK on Arbitrum.

This SLURP would supercede SLURP-9, but not preclude the deployment of stake.link to Optimism (or other networks) in the future.

Rationale

Arbitrum has been, and remains a high activity network. They are #4 in TVL according to DeFiLlama, their Uniswap deployment recently had a >$1b trading volume day (the first ever for any L2), and they are supporting protocols deploying to Arbitrum with a robust grant program.

Why Contradict SLURP-9?

One of the major motivations for the deployment of stake.link to Optimism was the timing and opportunity. Had we been able to deploy the Priority Pool, etc. to Optimism in advance of the launch of staking (which at the time was believed to be a possibility) it may well have marked a “scoreboard” moment for stake.link as a protocol. In particular, the low LINK liquidity on Optimism relative to Arbitrum presented an opportunity to massively ramp up the LINK on Optimism.

Now, with the major fireworks of Staking General Access out of the way and given the relatively stable and more matured status of stake.link, especially with respect to the Priority Pool and its regular LINK stakes, going to where the volume and liquidity already are seems most reasonable. To this end, given Arbitrum’s leading position - and continued acceleration away from the rest of the pack - Arbitrum as the first non-Ethereum Mainnet home for stake.link seems a reasonable choice.

Specification

The deployment of stake.link to Arbitrum will leverage CCIP’s arbitrary messaging and lock and mint token bridging functionality to initially enable:

  1. Bridging stLINK (converted to wstLINK), SDL, and reSDL NFTs back and forth from Ethereum Mainnet to Arbitrum
  2. Purchasing wstLINK, SDL, and reSDL on Arbitrum
  3. Staking SDL, generating reSDL NFTs, and claiming accrued wstLINK rewards on Arbitrum

Audits for this functionality have been completed by Cyfrin and CodeHawks, and results and reports will be made publicly available in the stake.link audits repo on GitHub upon completion and resolution of any possible issues discovered in the course of the CodeHawks audit.

To be explored and developed:

  1. Depositing LINK to the Priority Pool and claiming wstLINK on Arbitrum

Liquidity Mining & DEX Listings

It is intended that the asset pairs, target liquidity , and target SDL APRs described by SLURP-10b be preserved, which means different absolute amounts of SDL will be directed to these pools than was described and ratified by SLURP-10b.

Internal research and discussions are ongoing regarding the DEX of choice for the initial liquidity pools on Arbitrum, with Uniswap (v2) and Camelot representing the leading initial candidates. Your feedback is desired in the replies below!

Copyright

Copyright and related rights waived via CC0.

6 Likes
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No issues here, at this point we need deployment to either now before gas starts to ramp up on eth

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Great to see stake.link going with Arbitrum.

  • Is there any information available about possible ARB incentives? I see that the Short Term Incentive Program is now closed but I assume that there will be more opportunities coming.

  • Given the routing issues we had with SushiSwap, I think a conservative path with the tried-and-tested Uniswap should be taken. I also see that the SLURP-9 choice of Velodrome had their front-end compromised recently and such incidents add to my wariness of alternative options.

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I tend to agree with a pro-active stance in consideration of some of these security issues surrounding routing.

Another issue to consider with a long term horizon are the long term steps perhaps any DEFI entity is taking to ensure compliance with what future regulatory standards could look like.

I do think Arbitrum is a natural evolutionary step.

Arbitrum founder Ed Felten bio from offchain labs website: “Ed Felten is Co-Founder and Chief Scientist. He was the Kahn Professor of Computer Science and Public Affairs at Princeton University. From 2015 to 2017 he served at the White House as Deputy United States Chief Technology Officer and senior advisor to the President. He is a member of the National Academy of Engineering and the American Academy of Arts and Sciences, and is a Fellow of the ACM.”

And Steven Goldfeder and Harry Kalodner are PhDs from Princeton. Brand based recognition should certainly be questioned on a regular basis, though, I just generally have a good feel from the direction this may take.

It further makes more sense to the most active L2 rollup solution; and slowly poise ourselves to go to the second most active which is optimism as the protocol attempts to get exposure to greater activity and liquidity.

It may also be worthwhile in the interim to see where the most interesting projects are headed…and which L2s will attract the most data, which may ultimately be a function of underlying tech.

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Hey eqs, as always glad to hear your feedback! As I called out in the abstract, Arbitrum is offering a grant program with a couple different tracks.

You call out some great points here, and we’re aligned.

Camelot has some strong pros in their favor I think, @Kubilay_Jackson has indicated their Round Table partnership program represents a strong possible BD/growth opportunity, they’ve received ample ARB grants and they’re directing these incentives to protocols listing on Camelot (this is also a killer overview of the protocol), and they’re also incentivizing with their token Grail. Here’s a somewhat price focused assessment of Camelot, but I think its useful.

It is my view that, even given the troubles with some other protocols, it is worth it to deploy liquidity to Camelot as the primary Arbitrum DEX for the SDL/ETH and wstLINK/LINK pools. Our DEX choices on Ethereum are now quite conservative (Uniswap v3, Curve). Note also, given Arbitrum’s existing LINK liquidity, it will not be necessary to create/incentivize an ETH/LINK pool to ensure that our other two pools are connected to the greater liquidity environment, and liquidity will be easily routed to them from arbitraryToken to ourTargetToken.

In summary, for the aforemenioned reasons, I propose we deploy and incentivize SDL/ETH and wstLINK/LINK pools on Arbitrum leveraging Camelot’s v3 pools.

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Hey eqs, as always glad to hear your feedback! As I called out in the abstract, Arbitrum is offering a grant program with a couple different tracks.

The Short Term Incentive Program was distinct from the Arbitrum Foundation Grant Program though with the former providing significantly higher amounts of ARB to projects.

I had a bit of a look and it seems a Long Term Incentives Pilot Program was recently passed by the Arbitrum DAO. This will have a fund of 45m ARB.

In summary, for the aforemenioned reasons, I propose we deploy and incentivize SDL/ETH and wstLINK/LINK pools on Arbitrum leveraging Camelot’s v3 pools 1.

Fair enough although I note that Uniswap volume is five times higher while providing “slightly lower” fees to users (as per The Holy GRAIL article you linked). I think a core principle should be to minimise external risks so we can maximise focus on the protocol.

If we have chosen conservative DEX options on mainnet then why wouldn’t we follow the same approach when launching on an L2?

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I agree with Eric here regarding Camelot and the pools. This appears to be the best path forward, at least to start.

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Voting for SLURP-16 is now live, lets continue discussing DEX options and achieve consensus here. This vote will decide yes/no on the deployment itself.

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Since Arbitrum has some established LINK/ETH liquidity, would LP providers prefer SDL/LINK over SDL/ETH?

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Its a good question. One unique benefit of an SDL/ETH pool would be providing a higher velocity arbitrage opportunity between SDL/LINK pools on ETH mainnet and the SDL/ETH pool on Arbitrum. This would in and of itself drive more volume to the two pools.

2 Likes