Grant Update: PIP-45

Hello everyone. We’d like to provide some transparency updates 6 months after the execution of the PIP-45: Enable ParaSwap Foundation to facilitate $ARB and $OP incentives proposal.

On the 13th of November 2023, ParaSwap DAO passed PIP-45, which enabled the Foundation to assist with the following goals:

  • Maintenance of DexLib integrations
  • Research and Development for solutions to further Decentralize the ParasSwap Protocol
  • DAO tooling and automation solutions

After the proposal was passed, tokens were sent to the Foundation Wallets on each chain:

All transactions and activity can be found on these wallets. To this day, only 137,763 OP was used to support the ParaSwap ecosystem and improve the ParaSwap protocol.

The following is an update on the milestones accomplished since this grant was enabled.

DexLib Integrations

One of the Optimism grant’s original purposes was maintaining DexLib libraries and new integrations. As explained in PIP-45, none of the Optimism grant allocations before this one were requested for this purpose.

However, since PIP-45, several DEXes have been added using the DexLib system including:

  • Hashflow
  • Solidly
  • Wombat
  • TraderJoe
  • Swell
  • sDai
  • Velodrome
  • SpookySwap
  • Angle
  • Pharaoh
  • Ramses
  • Curve pools
  • Balancer pools
  • EtherFi
  • WooFi
  • Swaap

The full list of completed Integrations can be found here: Pull requests · paraswap/paraswap-dex-lib · GitHub

These DEX integrations have improved pricing throughout the entire ParaSwap ecosystem and increased its competitiveness significantly.

Research and Development of ParaSwap

Following PIP-45, the core team was able to devote the resources necessary to release the first set of smart contract upgrades since Augustus V5 was released in September 2021.

Thanks to the resources provided by the DAO, the team was able to research new gas improvements and features that allowed for the development of what is now the Augustus V6.1 set of smart contracts. The research done into smart contract design has resulted in a new set of innovations compared to the previous versions.

Additional costs have been associated with the development of V6, such as initial V6 contract audits and additional audits for V6.1 contracts. As this was not in the proposal’s initial scope, the Foundation utilized its own resources to fund these initiatives with no additional cost to the DAO.

In addition to Augustus V6 development and deployment, resources were allocated to increase ParaSwap API adoption with Partners. Twenty new integrations were achieved, bringing over $200M to the Protocol since the proposal’s passing.

Base expansion and Superchain integrations

In September 2023, ParaSwap officially launched on Base, a chain that would become one of the most significant in the Superchain ecosystem. Despite this, the lack of DEXes during its initial launch meant the protocol was not performing as well as expected in this chain.

As mentioned earlier, following the release of PIP-45, more resources were available for DexLib integrations, and new dApps were allowed to integrate into ParaSwap on Base.

Since the grant passed, integrations include Aerodrome, AlienBase, SwapBased, DackieSwap, RaiFinance, RocketSwap, SoSwap, SharkSwap, and ElkFinance.

Since the passing of PIP-45, this grant has facilitated ParaSwap’s volume to grow 658% from $17M in February 2024 to $129M in May 2024, establishing ParaSwap as a major aggregator also on Base.

Remaining allocation

As of now, six months after the initial proposal, the Foundation has used 66% of the initial OP grant and none of the initial ARB grant. A total of 70,237 OP and 233,150 ARB remain unused as balance.

This amount has been left unused in accordance with the conditions specified by the proposal. Neither this grant nor any other DAO expenses were used to cover the costs of operating the ParaSwap protocol. Some of these costs include expenses in infrastructure, audits, legal, and salaries which altogether amount to $150k—$300k monthly.

Instead, the DAO grant has been used strategically only for the use cases outlined in PIP-45. Were the DAO interested in rescoping the goals of this allocation, a new proposal would always be possible, but until then, these resources will be used exclusively for further integrations of DexLib, growth of the ParaSwap protocol, and research into DAO tooling and automation solutions.

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