Inventory of the Arbitrum Long-Term Incentive Pilot Program (LTIPP) project, which participation yields the highest returns?

Author: Stephen, Founder of DeFi Dojo

Compiled by: Felix, PANews

The Arbitrum Foundation previously launched a Long-Term Incentive Pilot Program (LTIPP) aimed at driving greater network participation by directing protocol funds as liquidity incentives to collaborative projects based on Arbitrum through ArbitrumDAO. The granted LTIPP funding will be redistributed to the Arbitrum community as liquidity incentives via the recipient's protocol. This encourages Arbitrum users to explore emerging use cases while generating greater network activity.

The total amount of grants for the program is approximately $30 million, with most projects receiving funding until September. Stephen, the founder of DeFi Dojo, has reviewed the earnings of various projects.

Factor

Most incentive strategies are LRT Silo Labs leverage strategies or LRTPenpie LP strategies.

The yield ranges from 22% to 93%, but Factor's TVL is relatively low, so be cautious of dilution and security risks.

• Yield: 22%-93%
• TVL in Vault: \<$2 million

Gearbox

Gearbox initially launched lending activities but will soon introduce incentive trading and incentive Renzo leverage. In their new STIMMIES campaign, you can earn not only ARB rewards but also GEAR rewards. Current lending yields:

• USDC: 15%
• ETH: 14%

There is anticipation for subsidies on ezETH leverage, but full details will have to wait a week. You can also leverage mining with LSTs like rETH, wstETH, and cbETH, benefiting from low borrowing rates subsidized by LTIPP.

Trading on PURE will also have STIMMIES.

Contango

The DeFi protocol Contango has a significant amount of ARB flowing into leveraged ETH positions. In contrast, these can handle a large amount of ETH. Yields range from 20-30%, and some strategies can theoretically handle over $2 million.

Using Contango will also generate some points, which will be used for a TGE airdrop in about a month.

Silo Labs

While Factor and Contango both aggregate Silo opportunities, there are other opportunities worth noting.

The borrowing rate for WOETH collateral on ETH is currently -7.4%.

This means borrowing ETH can earn rewards.

At maximum leverage, this equates to an annual interest rate of 63%, although almost all is paid in ARB.

Be sure to acquire more WOETH by selling ARB to continue increasing your collateral.

Merkl

Merkl has many LTIPP incentives, as large projects like Lido, PancakeSwap, and Camelot use Merkl as the incentive layer for LTIPP activities.

However, so many options can be overwhelming.

The author tends to prefer stablecoin pairs and ETH pairs (if yields >30%, occasionally ETH/BTC).

ETH yields:

• WETH/ETHx: 45%
• wstETH/ETHx: 37%
• ezETH/WETH: 21%
• uniETH/ETH: 46%

Stablecoin yields:

• fUSDC/USDC: 52%
• USDe/USDT: 43%
• grai / usdc: 40%
• usdc / usdc: 25%

Note: These are average APRs; many of them have low liquidity, so be particularly cautious of dilution.

Curve and Convex

Curve and Convex use ARB rewards to subsidize some interesting pools. Similarly, the author prefers ETH, BTC, or stablecoin pools.

Stablecoin Pools:

• crvUSD/sUSDe: 41%
• usdd / fraxbp: 38%
• sUSD/FRAXBP: 32%

ETH and BTC Pools:

• 2BTC-nq: 27%
• WETH/weETH: 18%
• frxETh/afETH: 26%

Timeswap

The lending protocol Timeswap has an interesting Pendle market where you can earn ARB rewards through lending.

Here, lending PT-weETH can yield 30%, while borrowing WETH with collateral yields 9%.

Note: As this is an emerging market, there is interest rate liquidity available for lending.

Trader Joe

Trader Joe now also has some interesting farms running LTIPP.

There are some crazy annual interest rates here, but be aware that the annual rates advertised on Trader Joe assume single Bin (Tick) liquidity (which can be understood as a box storing liquidity).

This means any reasonable liquidity will receive a lower APR. You can quickly calculate the average APR of the pool. For example (WBTC/ETH):

• Advertised APR: 2065%
• TVL: $331,000
• 24-hour trading volume: $441,000
• Fees: 0.04%
• Rewards: 214 ARB/day ($173)

Thus:

• Average fee APR: 19.45%
• Average ARB incentive APR: 19.08%
• Total average APR: 38.53%

This is significantly different from the advertised single tick APR.

RAMSES

Ramses is similar to Trader Joe, promoting the APR of single-tick liquidity.

These are very unrealistic for ordinary miners, but at least they provide insight into where the incentives are going.

The author prefers to click "EPOCH REWARDS" to sort and see where all ARB incentives are located.

Then, by looking at token pairs like Renzo's ezETH/ETH, you can better understand what the actual reasonable yield is.

In 5 ticks of liquidity, an APR of 18% can be obtained (as shown below).

For stablecoin miners, they may be attracted to USDC/USDT, where miners can set 8 ticks as a range and earn 73% APR.