After some tinkering, we’ve adjusted the distribution framework to include four new Arbitrum-native markets - PENDLE, PLS, GRAIL, and JOE. We’ve also increased allocations to the base assets paired with ETH/USDC.e.
We believe long-tail assets in the Arbitrum ecosystem will continue growing in DEX liquidity and trading volume, opening doors for new credit markets. The more significant allocation of deposit rewards to native tokens better aligns with the distribution goals of the ARB STIP proposal where more $ARB tokens will end in the hands of communities of Arbitrum protocols.
Two critical factors determine weights among markets:
Asset’s DEX liquidity in relation to its Liquidation Threshold (LT): Liquidity depth facilitates liquidations and ensures market solvency. Assets with deep DEX liquidity and lower LT generally receive more significant incentive allocation.
Asset’s importance to the protocol growth strategy: The framework favors liquid assets with many holders, such as ARB, wstETH, and wBTC, and bridge assets (ETH and USDC.e). Weights within markets are skewed towards bridge assets( USDC.e/ETH) to enable an array of yield strategies when they are sufficiently liquid. Base assets also receive decent allocations to increase borrower’s premium.
When Premia Vault LP Token Silo?
Think of a world where you deposit your arb in a premia call vault, collecting premiums AND Arb liquidity mining, receive Premia Vault LP Tokens, deposit into Silo earn more ARB liquidity mining, borrow usdc, deposit usdc in ARB put vault, collect premiums, earn ARB liquidity mining, and so on and so on.
That would be one magnificent world.
We’ve made some extra changes to the distribution, essentially shuffling incentives from our least utilized markets to our most utilized while adding incentives for sWETH-WBTC. All changes can be seen here: $ARB grant distribution (Community) - Google Sheets