What is this about?

Archi Finance, a leveraged yield farming protocol native to Arbitrum, has submitted a grant application. The team, led by 0xT, Matt, and L.Cindy, is requesting a grant of 750,000 $ARB, with a matching grant of 1,350,000 $archi. The grant is intended to incentivize passive liquidity providers with ARB rewards and encourage Degen users to increase their positions and earn more interest. The grant will be distributed over a course of 4 months, with Archi Finance receiving 186.5k ARB each month. 90% of this will be distributed among six passive pools, and 10% will be rewarded to Archi stakers. The distribution mechanism is already in place, using a Merkel tree contract.

How is the community reacting?

The community's reaction to the proposal is mixed. BlockworksResearch and SEEDGov, led by the Cattin delegation, expressed their support for the proposal, albeit with reservations about the requested amount. They believe the protocol satisfies all metrics and is a native Arbitrum protocol. However, the ITU Blockchain Arbitrum Delegation Team voted against the proposal, citing concerns about the incentive not being directly based on the user base and the requested incentive amount being too high relative to the protocol's scale.

Why this is positive?

The grant application by Archi Finance is a positive development as it aims to foster growth within the Arbitrum ecosystem by enhancing the earnings of their current passive liquidity providers and attracting more investors. They also plan to direct Archi tokens towards Degen users to stimulate platform growth and increase user earnings. This could potentially lead to a significant increase in the Total Value Locked (TVL) and attract more institutions to the platform.

Why this is negative?

The negative aspect of this proposal lies in the concerns raised by some community members. The ITU Blockchain Arbitrum Delegation Team, for instance, voted against the proposal due to the incentive not being directly based on the user base and the requested incentive amount being too high relative to the protocol's scale. This indicates that while the proposal has potential benefits, it also carries risks and may not be universally accepted by the community.