Hey Serum Community, Kaiba from Atrix here with a SRM grant proposal.
Atrix is the top Serum AMM on Solana, with over $350m in TVL and the highest market maker volume on Serum (over $700m in 24hr volume just recently). Atrix features permissionless constant product and stableswap liquidity pools and permissionless farms, with 120+ pools, most of which are community created, all providing liquidity exclusively to the Serum orderbook.
Atrix will be the entrypoint for Solana and Serum DeFi by offering a variety of different features the average user enjoys. These features will involve partnerships with protocols to help them launch, bootstrap liquidity, and build their community. Atrix will also continue partnering with established projects to onboard them onto the Serum ecosystem, such as our recent partnerships with Angle and Terra.
We propose a 10m SRM grant as LP emissions for major token pairs, stable pairs, and hot alt pairs. This will help boost Serum liquidity and volume even further to help secure its spot as one of the top 3 DEXs in the entire DeFi ecosystem.
UPDATE: We have changed our proposal from 10M SRM to 6M SRM as stated here: Atrix $SRM Grant Proposal - #17 by kaiba
Isn’t this circular? Atrix is a large volume contributor because it received a previous grant; receive another one so it can maintain current volume. Is this just gonna continue forever? What’s the plan for Atrix to become sustainable without SRM emissions?
For such a massive grant it would be nice to see quite a bit more detailed breakdown of how the atrix protocol is doing. Particularly in terms of fees generated for serum and an accurate view of how much LPs are making.
Just posting that Atrix got $350m volume after being arbed by mango traders isn’t sufficient information given the size of the grant and the amount of previous grants received.
EDIT: I think I am being a bit negative in my below comment so want to put some context. Atrix IMO is one of the best things that happened to serum and its one of the primary reasons I still own Serum. It put a new life into this project that I didnt feel it had before it and I am a big fan of the project.
However, I am really not a fan of this proposal.
A lot of companies are composing on top of Atrix (i.e. Solvent) at this point which is in defacto a grant towards atrix. I think the grant money should probably be voted to newer protocols / partnerships like angle and terra should be put in this forum. This is because it publicizes the relationship better and second it provides more transparency. Moreover, the grants make it seem like Atrix is the gatekeeper and arbitrager of truth rather than the serum community which feels very off to me. I am primarily worried that in the future companies like solvent wont go through the DAO and just go through atrix.
The previous grants dont have liquidity expiration dates. It seems like every 3 months there is another request, and I am hoping that is more clear
The code isnt open source yet – which to me means it hasnt been audited. I think a 5x jump is fairly high for a relatively newish swap.
I’d be very curious to see some chain analysis on how these SRM tokens from the emissions are going into the ecosystem. Are most recipients farming and dumping?
Having looked into this a bit more, I’d like an official explanation from Atrix / @kaiba about why they’re applying for a new grant when the previous 2m grant hasn’t even been used yet and why the token transfers on the account would suggest they may have been trying to disguise the fact that the 2m SRM has been unused by transferring them out of the SPL account prior to submitting the governance proposal? The target token account
Wanted to respond to comments before formally starting the on-chain vote again:
Atrix is not the largest contributor to volume just because of the previous SRM grant. If that was the case, Raydium would have much more Serum volume than Atrix, since their previous grant was much larger than Atrix’s previous grant. Atrix’s algorithm for placing tight orders and cranking often is what helps Atrix achieve its high volume and utilize its TVL efficiently.
A constant product AMM actually generates revenue by being arbed. Since the AMM has no knowledge of the market price of the tokens in its pools, it’s the job of arbitrageurs to bring the prices in line with the market price. However, every time the arbitrageur makes a trade against the pool, they have to pay a small fee to the LPs, which is how the AMM generates yield. More arbs results in more fees generated. Serum’s recent boost in DEX volume rankings was mainly powered by Atrix’s liquidity, as shown in the tweets linked above.
Regarding @Henrye’s mention of the transactions moving SRM tokens, the reason we did that was because the Realms governance UI makes users deposit their entire governance token balance when interacting. We only wanted to deposit the minimum amount of SRM required to generate a proposal, not our entire SRM token balance, since that SRM is supposed to be used for emissions, not influencing governance voting. So we transferred the excess SRM tokens to a different account, deposited 25K SRM into Realms to create a proposal, then transferred the excess amount back to the main account.
Atrix has approximately 2 more weeks of emissions from the previous grant based on current pool emissions rates. We are aiming for this grant to last exactly 2 months for liquidity pool emissions mainly on major token pairs. This ensures that Serum provides the best price for users swapping across all platforms, while also supporting a diverse array of liquidity for all relevant tokens:
- 4M to SOL/USDC
- 2M to BTC/USDC
- 1.5M to SRM/USDC
- 1M to ETH/USDC (Wormhole)
- 1.5M for tokens that are gaining rapid trading and culturally traction, to bring that volume into the Serum ecosystem
Projects want to partner with Atrix usually because we provide the easiest way for them and their community to provide liquidity on Serum markets and get rewarded. Market making directly on the Serum orderbook would likely require projects to engage with a centralized market making firm, which requires capital to pay fees and makes engaging and rewarding community members a lot more complex.
We agree that other projects should go to the Serum forum for grants instead of Atrix, which is what we encouraged Solvent to do. We are aligned on your views around keeping the process as decentralized as possible. Thank you for clarifying this point.
@jhl are you ok with this type of emission structure? I just see massive amounts of dilution, but that might be a good thing for decentralization.
cool, I am really rooting for you!!! Atrix is such a cool product and will be voting yes if you need it in the last 10 minutes.
Cool, thanks for the update and clarification. It is one of the more annoying default behaviors of the governance program that it drains all funds in the wallet.
Though, I’m still curious about the fact the two million serum from the last grant hadn’t been used before this new grant was applied for. If you’re planning on a major distribution of tokens and want to supplement with a bunch of extra one, then sure, that sounds reasonable. But it’s just preferred if these things are more open and clear. Rather than popping up from looking at the token account.
Atrix has approximately 2 more weeks of emissions from the previous grant based on current pool emissions rates. These emissions are mainly directly towards SOL/USDC, which we top up every week from the account you referenced. We did also use a smaller portion of the SRM grant for partnerships with projects like Angle and Terra. We didn’t want to apply for this grant after emissions had run out and reward APYs drop, and then are topped up a week later to normal reward APYs, since that’s not a great user experience for LPs. But we agree that we should have clarified this in our initial post. Thanks for mentioning.
The treasury doesn’t have 10m SRM in it .
SRM announced a liquidity program and it should be used up. Whether concentrating availabble grants to a handful of projects is the right thing to do I am not so sure. but, there hasnt been that many other projects coming to ask for grants/nowhere near as successful as Atrix.
I support this, but we all know long term this isnt sustainable but for now this is a perfectly good usecase for the liquidity program.
@kaiba I feel like my question has gone unanswered.
Don’t think Kaiba can answer this because its a conflict of interest, but I think this is stemming out from a fundamental misunderstanding of what Atrix should be. Atrix is trying to be an incredibly easy way to bootstrap liquidity for tokens w/o needing to run a MM bot. Atrix sacrifices some capital efficiency by using an algo that has some math behind it, but isnt 100% perfect (a bit degen, but probably smarter than most non sophisticated mm firms), but as a project maker you dont need to worry about it too much – Atrix will just quote wider when its starting to lose money etc. and as long as you can guarantee hype, there will always be a place where people can purchase and sell tokens.
Now the circular grant thing is basically two things: One, a lot of the serum community dont mind paying for this liquidity because it brings money into SRM which normally wouldnt be there. Secondly, there is a huge amount of SRM in the treasury and one way to decentralize SRM further is to dish it out as liquidity incentives since Atrix allows everyone to put money. Finally, I am not sure if Atrix is even losing money on most of its pools sans incentives–during heavy amounts of volatility it still should be printing the dollars. It only loses money if the price shoots on one direction a lot, but I would personally like to see what % of tokens are at risk when this happens. I think Atrix is refining this everyday though, so its hard to comment on it.
Furthermore, if you are asking if other protocols besides SRM are willing to pay extra for liquidity, the answer is pretty clearly yes. Lots of people would love to guarantee liquidity and will pay big $$$ for it–Atrix is exceptionally good at that.
Hi everyone, we’re going to adjust our grant proposal to 6M SRM and update the emissions to be distributed over 2 months. Here is the new distribution:
We have created an on-chain proposal with these updates here: https://realms.today/dao/SERUM/proposal/BLgLPpFAsuDMDzRuGTgveFGE84duKm3dHKX8L1NWEj24