The Case for Arbitrum Season 2.0

Definitely no financial advice, just insights based on my own journey in DeFi.

Nov 06, 2023

Hello there Crypto Enthusiasts,

busy with work and personal projects? Let me help. I’ve been navigating the DeFi space since 2020, and I love sharing what I learn.

These are the advantages you will get in each newsletter:

The key developments leading to an investment idea
1 practical insight to act on.

All packaged in a 5-minute read. No sponsored content, no trading chaos. Just insights based on my own journey in DeFi.

Let’s make the most of your time!

Key Developments

Shedding light on the recent significant developments within the Arbitrum ecosystem.

Arbitrum Season 2.0: A fresh episode in the Arbitrum narrative. Arbitrum's Short-Term Incentive Program (STIP): A catalyst for around 30 projects, with a grant pool of 50 million ARB (equivalent to 50 million $) awaiting distribution to kickstart their growth and innovation.
Arbitrum Odyssey Event: A 7-week exploration venturing into the major projects on Arbitrum One.
Why should you farm on Arbitrum?
→ Arbitrum is the most important Ethereum Layer 2 solution for DeFi with the highest TVL (total value locked).

Curated Investment Opportunities

Spotlighting some promising investment opportunities within the Arbitrum Season 2.0.

Investment Hypothesis: The increasing money flow into Arbitrum's system shows new investment coming in, hinting at possible growth. Looking back at past grants from Optimism Grant Season 1 and the 2023 Arbitrum Grants, we see they had a significant impact on the funded crypto projects, showing high levels of return on investment (ROI) across the categories:

Decentralized Exchanges (DEX):
- Top-funded with $15.9M across 13 projects.
- Notable average ROI of 198.68%.
Yield Protocols:
- Funded around $17.9M across ten projects.
- Steady average ROI of 127.44%.
Lending Protocols:
- $5.2M in grants across seven projects.
- Promising ROI of 150.97%.
Derivatives:
- Largest grant amount of $23.8M, yet performance isn't detailed.
Stablecoin Protocols:
- Stable ROI of 133.11%.

A quick glance at Arbitrum protocols and their grant allocations:

The Arbitrum Short-Term Incentive Program (STIP) appears promising, especially for DEX, Yield, and Lending Protocols, echoing the past positive ROI in similar categories.

Actionable Insights

Nested.fi - Adrian DeFi Portfolio: For those preferring a curated approach, I've crafted an Arbitrum portfolio to ease your navigation through the emerging opportunities. Discover here.

How to Strategize Your Investments:

Safe Bet: Engage in Liquidity Provision on GM pools: BTC / USD and ETH / USD at GMX.io.
Medium-Risk and Reward: Lend and provide Liquidity on Timeswap.io.
Venture Bet: Provide liquidity for traders on Goodentry.

1. GMX.io GM Pools:

→ GM pools are all getting quite a nice boost → 6m ARB are going towards liquidity incentives.

→ Some are getting significantly more than others and Stable Pool APR will most likely drop quite fast.

GM Pools:

→ Relatively safe investment to provide liquidity for BTC and ETH traders (numbers pre-grant. Will go up quite a bit).

2. Goodentry ezVaults:

→ Qualified for a 200k ARB grant over 12 weeks, which, considering their current TVL and value proposition, could open up exciting opportunities.

→ ezVaults consist of (currently) ETH, wBTC, ARB, and GMX paired against USDC where LPs can earn swap fees from Uni v3 as well as borrowing fees from Goodentry.

Yield distribution WETH / USDC.e Pool

More info about Goodentry:

The Daily Bolt by Revelo Intel

What You Need to Know About Good Entry

In this edition, we’re briefing you on Good Entry. Good Entry is a trading market built with the intention of protecting both traders and LPs. Learn about what sets the project apart, its performance on Arbitrum, and what to expect from their upcoming TGE…

a year ago · 2 likes

3. Timeswap.io Lending, Borrowing, Liquidity Provision

→ Rewards can be earned by different participants, namely — Lend, Liquidity or Borrow. Rewards will vary for each pool and can be seen on markets page as well as individual tabs

→ Additional yield through TIME tokens can be earned by users by interacting with boosted pools.

→ The first pool will be USDC/ARB pool — lenders, borrowers and LP will be eligible for rewards.

More info about Timeswap:

Timeswap Medium

Wrap Up

Key takeaways for your DeFi strategy:

Arbitrum Season 2.0 starts a wave of enhanced activity and engagement.
Ecosystem grants could act as catalysts for project growth and valuation.
Tailored investment strategies could yield promising results.

Meme of the week

(because a dash of humor always adds a fresh perspective!)

Until next time!

- Adrian

Adrian DeFi