Thank you for the time and effort you put into this proposal. The idea of incentivizing Uniswap pools with the use of a "Quantitative Evaluation Framework", data pipelines, and simulations looks promising!

We would like to ask a few more questions, this will help us make an informed assessment of your proposal.

1. Detailed Allocation Plan : The proposal request half of the allocation (~$2m), could you provide a more detailed breakdown of how the tokens will be allocated each month? For example, can you approximate how many pools you will cover, will you rotate it every month or choose it from some criteria? What are control measures to prevent potential abuse of the incentives?
2. Performance Evaluation Metrics : Based on your key goals, 1) Optimize Incentive Budget and Allocations, 2) Drive Network Effects, and 3) Generating Sustainable Growth, could you specify the key performance indicators/metrics you will use for these areas? How will this proposal continue to add value to Uniswap's ecosystem after the program ends? Additionally, will there be any negative impacts if the incentives were to suddenly stop?
3. Timeline and Milestones : Could you clarify the milestones and timeline for this program?
4. The total cost is: 1) fixed operation cost of $300k in ARB and the incentive ARB (~ $1.7m) or 2) $300k and ~$2m?

These questions will help the community to better understand your proposal. We look forward to your response!

Thank you for the time and effort you put into this proposal. The idea of incentivizing Uniswap pools with the use of a "Quantitative Evaluation Framework", data pipelines, and simulations looks promising!

We would like to ask a few more questions, this will help us make an informed assessment of your proposal.

1. Detailed Allocation Plan : The proposal request half of the allocation (~$2m), could you provide a more detailed breakdown of how the tokens will be allocated each month? For example, can you approximate how many pools you will cover, will you rotate it every month or choose it from some criteria? What are control measures to prevent potential abuse of the incentives?
2. Performance Evaluation Metrics : Based on your key goals, 1) Optimize Incentive Budget and Allocations, 2) Drive Network Effects, and 3) Generating Sustainable Growth, could you specify the key performance indicators/metrics you will use for these areas? How will this proposal continue to add value to Uniswap's ecosystem after the program ends? Additionally, will there be any negative impacts if the incentives were to suddenly stop?
3. Timeline and Milestones : Could you clarify the milestones and timeline for this program?
4. The total cost is: 1) fixed operation cost of $300k in ARB and the incentive ARB (~ $1.7m) or 2) $300k and ~$2m?

These questions will help the community to better understand your proposal. We look forward to your response!

Gauntlet appreciates the community’s active participation and support throughout this liquidity mining campaign. As we reach the midway point, it's a great time to share an update on the program's progress.

This week, we published our midpoint retrospective, where we delve into the program's key performance indicators for incentivized pools and explore potential modeling enhancements for future iterations of liquidity mining - specifically incorporating our recent on-chain simulation tools. We encourage everyone to read through the full retrospective for a comprehensive analysis found here, or the TLDR tweet released here.

Additionally, we invite you to continue to check on the public Arbitrum Liquidity Mining Dashboard. Here, you can find detailed, daily updates on the performance of each pool, enabling you to stay informed on the latest trends and data.

Thank you once again for your commitment to our community. We look forward to the program's next half and gathering more concrete insights to inform future planning and growth.

Thanks for your questions, @TimeRows

Dashboard Questions

We’ve created dashboards for our past and current engagements - they are for internal-use at our partners’ request. For Uniswap, we will build a bespoke, external-facing dashboard focused on the metrics we’ve outlined, such as changes to TVL and volume market share on relevant Arbitrum pools and the net benefit (described below) created through this program. This will be hosted and maintained by us and globally accessible via our Dashboards page on our website.

Key Metrics Question

In our objective function optimization post we used the following objective function for Uniswap that we intend to use to optimize on Arbitrum:

Where we measure the net benefit from an incentives program as the change in the net present value of future expected protocol revenue (:small_red_triangle:PV) as well as the exogenous value of governance related to increased volume and liquidity market share (:small_red_triangle:G) minus the cost to run the program (Cost). To be conservative, Gauntlet will only consider the value of future expected protocol revenue from this program and ignore the governance value (thus setting a lower bound on net benefits from this program) against incentive spend cost.

Copied from our above response for further clarification: Although the fee switch has yet to be activated, focusing on monetization should be the long-term north star of any campaign like this. However, in the interim, we will focus on what’s tangible/achievable, such as additional LP fee generation, additional volume, and growing overall TVL. We will benchmark the program from Day 0 to the conclusion of the campaign and share the results both through our mid-point analysis as well as our final retroactive impact analysis.

Incentive-cost Breakdown Question

This is a similar question to @BristolBlockchain's question above. To reiterate, our total ask is for 2M ARB. 1.7M ARB will be spent on incentives during this 8-month campaign, and 300K ARB (from the overall 2M) will fund a dedicated team focused on instantiation (including pre-launch analysis), active management of incentive allocations (weekly updates), the external facing dashboard, and the aforementioned mid-point and final retroactive impact analyses.

Thanks for your questions, @BristolBlockchain

1. Detailed Allocation Plan

We take a quantitative approach to determining which pools should be incentivized. We use a simulation that predicts the changes in a pool’s liquidity and volume market share across competing DEXes for a given level of incentive spend. Our active management would optimize the choice of pools and incentives for each pool to maximize net protocol benefit as determined by the Uniswap Objective Function. We will integrate Uniswap V3’s Arbitrum deployment into our incentive recommendation engine, resulting in pool recommendations. Integration and analysis ensure the pools selected offer the most ROI for the incentive program.

Using a fixed distribution plan over the 8-month campaign would be suboptimal. As we’ve done for other partners, we will actively manage and dynamically update both the overall incentive budget as well as allocations. This will be done on a weekly basis. In addition to providing incentive recommendations, Gauntlet will proactively monitor the impact and usage of the incentives program via internal real-time alerting to identify and mitigate unintended use or abuse.

2. Performance Evaluation Metrics

The KPIs based on our outlined goals primarily focus on potential protocol revenue. Although the fee switch has yet to be activated, focusing on monetization should be the long-term north star of any campaign like this. However, in the interim, we will focus on what’s tangible/achievable, such as additional LP fee generation, additional volume, and growing overall TVL. We will benchmark the program from Day 0 to the conclusion of the campaign and share the results both through our mid-point analysis as well as our final retroactive impact analysis.

As we’ve identified in our recent LM Analysis, when proper bootstrapping/incentivization occurs, it has positive effects on the pools long term (liquidity and volume), even after incentives are deprecated. Our goal is to identify, attract, and retain “sticky” liquidity during this program so that the positive effects of running this incentive campaign continue beyond it. There will always be certain LPs that withdraw liquidity once they stop earning incentives. Our program seeks to mitigate this, and we will note in our final retroactive impact analysis the projected impact on incentivized pools after this campaign has ended.

3. Timelines and Milestones

Our total ask is 2M ARB. 1.7M ARB will be spent on incentives during this 8-month campaign, and 300K ARB (from the overall 2M) will fund a dedicated team focused on instantiation (including pre-launch analysis), active management of incentive allocations (weekly updates), the external facing dashboard, and the aforementioned mid-point and final retroactive impact analyses.

Our timeline is somewhat dependent on the approved governance proposal. However, here’s an illustrative timeline, including milestones, to provide further insight:

Dashboard Questions:

• Has a similar dashboard been created for other projects i.e. balancer, sushi etc.? Or is this custom built from bottom to top with this proposal in mind?

• Will the created dashboard be openly accessible to visitors/users or will it require login/gated access?

Key Metric Question:

"The key metric being the lift in the long-term net present value of cash flows to Uniswap on Arbitrum net of the incentive spend required to enable this cash flow".

• By cash flows to Uniswap this means the fee's generated to Liquidity Providers net of IL?

• Is there a calculation behind comparing an increase of long-term present value to the incentive spent to enable this cash flow?

Incentive-cost breakdown questions:

• Gauntlet is asking for 2million ARB to run and operate an 8-month incentive campaign. To clarify this 2 million arb is to be used for incentive pools, or is it just for the infographic dashboard to be developed as a tool to provide insight for future incentive campaigns?

• Is the 300k USD denominated in ARB for the dashboard?

• Not quite sure the full scope here on what the ARB is going towards. What ARB is for incentives of identified pools vs the cost purely for creation of the dashboard.

Gauntlet appreciates the community’s active participation and support throughout this liquidity mining campaign. As we reach the midway point, it's a great time to share an update on the program's progress.

This week, we published our midpoint retrospective, where we delve into the program's key performance indicators for incentivized pools and explore potential modeling enhancements for future iterations of liquidity mining - specifically incorporating our recent on-chain simulation tools. We encourage everyone to read through the full retrospective for a comprehensive analysis found here, or the TLDR tweet released here.

Additionally, we invite you to continue to check on the public Arbitrum Liquidity Mining Dashboard. Here, you can find detailed, daily updates on the performance of each pool, enabling you to stay informed on the latest trends and data.

Thank you once again for your commitment to our community. We look forward to the program's next half and gathering more concrete insights to inform future planning and growth.

Thanks for your questions, @TimeRows

Dashboard Questions

We’ve created dashboards for our past and current engagements - they are for internal-use at our partners’ request. For Uniswap, we will build a bespoke, external-facing dashboard focused on the metrics we’ve outlined, such as changes to TVL and volume market share on relevant Arbitrum pools and the net benefit (described below) created through this program. This will be hosted and maintained by us and globally accessible via our Dashboards page on our website.

Key Metrics Question

In our objective function optimization post we used the following objective function for Uniswap that we intend to use to optimize on Arbitrum:

Where we measure the net benefit from an incentives program as the change in the net present value of future expected protocol revenue (:small_red_triangle:PV) as well as the exogenous value of governance related to increased volume and liquidity market share (:small_red_triangle:G) minus the cost to run the program (Cost). To be conservative, Gauntlet will only consider the value of future expected protocol revenue from this program and ignore the governance value (thus setting a lower bound on net benefits from this program) against incentive spend cost.

Copied from our above response for further clarification: Although the fee switch has yet to be activated, focusing on monetization should be the long-term north star of any campaign like this. However, in the interim, we will focus on what’s tangible/achievable, such as additional LP fee generation, additional volume, and growing overall TVL. We will benchmark the program from Day 0 to the conclusion of the campaign and share the results both through our mid-point analysis as well as our final retroactive impact analysis.

Incentive-cost Breakdown Question

This is a similar question to @BristolBlockchain's question above. To reiterate, our total ask is for 2M ARB. 1.7M ARB will be spent on incentives during this 8-month campaign, and 300K ARB (from the overall 2M) will fund a dedicated team focused on instantiation (including pre-launch analysis), active management of incentive allocations (weekly updates), the external facing dashboard, and the aforementioned mid-point and final retroactive impact analyses.

Thanks for your questions, @BristolBlockchain

1. Detailed Allocation Plan

We take a quantitative approach to determining which pools should be incentivized. We use a simulation that predicts the changes in a pool’s liquidity and volume market share across competing DEXes for a given level of incentive spend. Our active management would optimize the choice of pools and incentives for each pool to maximize net protocol benefit as determined by the Uniswap Objective Function. We will integrate Uniswap V3’s Arbitrum deployment into our incentive recommendation engine, resulting in pool recommendations. Integration and analysis ensure the pools selected offer the most ROI for the incentive program.

Using a fixed distribution plan over the 8-month campaign would be suboptimal. As we’ve done for other partners, we will actively manage and dynamically update both the overall incentive budget as well as allocations. This will be done on a weekly basis. In addition to providing incentive recommendations, Gauntlet will proactively monitor the impact and usage of the incentives program via internal real-time alerting to identify and mitigate unintended use or abuse.

2. Performance Evaluation Metrics

The KPIs based on our outlined goals primarily focus on potential protocol revenue. Although the fee switch has yet to be activated, focusing on monetization should be the long-term north star of any campaign like this. However, in the interim, we will focus on what’s tangible/achievable, such as additional LP fee generation, additional volume, and growing overall TVL. We will benchmark the program from Day 0 to the conclusion of the campaign and share the results both through our mid-point analysis as well as our final retroactive impact analysis.

As we’ve identified in our recent LM Analysis, when proper bootstrapping/incentivization occurs, it has positive effects on the pools long term (liquidity and volume), even after incentives are deprecated. Our goal is to identify, attract, and retain “sticky” liquidity during this program so that the positive effects of running this incentive campaign continue beyond it. There will always be certain LPs that withdraw liquidity once they stop earning incentives. Our program seeks to mitigate this, and we will note in our final retroactive impact analysis the projected impact on incentivized pools after this campaign has ended.

3. Timelines and Milestones

Our total ask is 2M ARB. 1.7M ARB will be spent on incentives during this 8-month campaign, and 300K ARB (from the overall 2M) will fund a dedicated team focused on instantiation (including pre-launch analysis), active management of incentive allocations (weekly updates), the external facing dashboard, and the aforementioned mid-point and final retroactive impact analyses.

Our timeline is somewhat dependent on the approved governance proposal. However, here’s an illustrative timeline, including milestones, to provide further insight:

Dashboard Questions:

• Has a similar dashboard been created for other projects i.e. balancer, sushi etc.? Or is this custom built from bottom to top with this proposal in mind?

• Will the created dashboard be openly accessible to visitors/users or will it require login/gated access?

Key Metric Question:

"The key metric being the lift in the long-term net present value of cash flows to Uniswap on Arbitrum net of the incentive spend required to enable this cash flow".

• By cash flows to Uniswap this means the fee's generated to Liquidity Providers net of IL?

• Is there a calculation behind comparing an increase of long-term present value to the incentive spent to enable this cash flow?

Incentive-cost breakdown questions:

• Gauntlet is asking for 2million ARB to run and operate an 8-month incentive campaign. To clarify this 2 million arb is to be used for incentive pools, or is it just for the infographic dashboard to be developed as a tool to provide insight for future incentive campaigns?

• Is the 300k USD denominated in ARB for the dashboard?

• Not quite sure the full scope here on what the ARB is going towards. What ARB is for incentives of identified pools vs the cost purely for creation of the dashboard.