xGov 202: Pact Stableswap Retroactive Grant

Governance xGov Proposals
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id: 202
period: 4
title: Pact.Fi Retroactive Stableswaps
author: Andrew Kotulak
GitHub: xgov-202 Pact.fi Retroactive Stableswaps by temptemp3 · Pull Request #202 · algorandfoundation/xGov · GitHub
company_name: Pact
category: dApps
focus_area: Dex
open_source: Yes (upon approval)
amount_requested: 135000
status: Final

Abstract

This proposal focuses on retroactive funding for Stable Swaps, and to open source the code. Stableswaps are key to any DeFi ecosystem, and Pact is currently the only dApp to offer these.

Team

Lukasz Ptak: Blockchain developer
Mateusz Walczak: Blockchain developer
Mateusz Tomczyk: Tech lead
Patryk Grzyb: Frontend dev

Experience with Algorand

Pact has emerged as one of the most user-friendly Algorand dApps, offering deep liquidity and low transaction fees. Leveraging Algorand’s speed and scalability, Pact provides accessible smart contract functionality, making transactions available to users of all levels of wealth and experience.

Present Proposal

This proposal is for retroactive funding for Pacts StableSwap Pools. StableSwaps are very important, and a cornerstone to DeFi across all chains. We are proud to have brought this product to market and are the only Algorand DEX with this feature.

Stable swaps are a type of cryptocurrency exchange mechanism designed primarily for trading between stablecoins or other assets with low price volatility. They were first introduced by the protocol Curve Finance. The primary aim of stable swaps is to allow users to trade between different stablecoins (like USD Coin, Tether, Dai, etc.) efficiently, with minimal slippage and lower fees compared to traditional exchange mechanisms used for more volatile cryptocurrencies.

Deliverables:
Open source Stableswap Code

Benefits for the community

Increased Awareness to Algorand & Pact:

Having tools like Stable Swaps is very important both for Algorand & Pact as it signals to new potential users that we have a robust DeFi landscape and can be competitive with other chains. These futures are, but not limited to:

Low Slippage: Slippage refers to the difference between the expected price of a trade and the price at which the trade is executed. Stable swaps are optimized for assets whose values are supposed to remain constant or nearly constant, thus reducing slippage even during large trades.

Efficient Use of Liquidity: These swaps utilize specialized mathematical formulas (like the StableSwap invariant from Curve) that require less liquidity to achieve the same level of slippage compared to traditional Automated Market Makers (AMMs) used for more volatile cryptocurrencies.

Lower Fees: Because these trades involve lower risk and volatility, the transaction fees are lower than those for trading highly volatile crypto assets.

Focused on Stablecoins: While traditional AMMs can handle a wide range of cryptocurrencies, stable swaps are specifically designed for stablecoins or similarly behaving assets, providing a more tailored and effective solution for these types of trades.

Arbitrage Opportunities: Despite the primary focus on stablecoins, price discrepancies can still occur, and stable swaps provide opportunities for arbitrage, allowing traders to profit from differences in pricing between different stablecoins.

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Pact got an investment by VCs why should people now pay for the same code just to be open sourced when there is an open sourced stableswap out there already by algofi?

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Hey Lobo, how are you?

Pact has raised money in the past that helped us build out the most robust DeFi sweet on Algorand, with many additional features over our competitors. To be straightforward, VC interest in Algorand has essentially vanished and from a business standpoint it becomes difficult to operate and push new features when the revenue streams are just not sustainable. Obtaining this grant would help us to continue building out things like our Governance platform (which we were rejected from applying for this quarter and are only allowed retroactive).

Additionally, while I have looked through some of AlgoFis source code, there are many elements that seem to not fully be there/disjointed. We would ensure something that people really could pick up and run with should they feel fit, and build up Algorands open source repository for new interested parties.

Not wanting to support the projects further is a choice for all xGovs but it will have real impacts on the direction and are ability to continue to execute and how we allocate our time/resources. We are 100% committed to Algorand, but we also run a business and personally, id like to focus more on building us up here, rather than going full guns on crosschain as others in the eco have begun.

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would be great if you could be a bit more precise since from my perspective my vote would depend on the other OS solution out there being not easy to use for new devs coming in

tbf if you wouldnt have asked an absurd amount for marketing instead of new exciting features of the platform and it passing because your VCs voted for you i would be more likely to vote for you and care about pact

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I can give a further scope of on what the code would entail from a high level but let me engage with the dev that would be responsible.

As far as the Marketing grant goes. I can understand where one may not be thrilled around this and while Marketing is important, we have a shift in priority and for future requests, of which would revolve around product dev/audits and things of that sort, as I agree that this is pertinent at the moment.

To my knowledge, no VC voted for us - or if they did they not let me know, though I dont know if that really should matter as we are all equal participants as xGovs. If we could easily secure VC votes, that would be great but I wouldnt bank on it :sweat_smile:and Id like it to be community supported.

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What is the rationale for only open sourcing one specific piece of code (ie StableSwaps)? Are their portions of the StableSwal code that are dependent on or require pieces of the normal AMM swap code to function properly?

I am not a dev, so forgive me if the questions seem stupid. But it seems like code that pertains only to StableSwaps is less likely to be used in isolation as part of (or as an starting
Point for) another project.

I would love to hear feedback from some of the more technical folks in the forum about this. But it seems like an odd request to me.

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Hey Ghost,

That’s a good question. Of course stable swap code by itself would be dependent on other things to actually function (UI, other infrastructure, wallet connect w/e) but it is still a valuable “piece of code” that would eliminate/or decrease the process for builders who are looking to build a DEX (or already have one).

The crux of this request is largely around retroactive funding for features that we brought to Algorand that help us be competitive in the DeFi landscape and to continue pushing out needed features and leading the way as the most diverse DeFi product on Algorand. The money (if received) wouldn’t just be used to give ourselves bonuses or throw parties - but it goes straight to our runway and allows us to continue to push out meaningful products. The Open sourcing really isn’t the “beef” of the request, however we felt it would only make sense if we requested retroactive funding for this.

The way xGov is set up is we are not allowed to push grants for new products if we have an open grant (Pact passed a marketing xgov grant last quarter that is in the works - hindsight we should have had this focused on more specific products rather than marketing IMO, but Marketing does play a key role and we do believe we will find good success with the programs we are working to bring), so the ability to utilize xgovs is very diminished and slow because of this change. However, they do allow one retroactive grant as well per period, so this helps us continue product building.

I believe Pact has proved itself thus far, as I mentioned we have the largest product offering of any DEX on Algorand (stableswaps, zaps, gov eligible per block farms, variable fee pools, etc.) Its bias to say of course, but I think its best to push products who have delivered and who will continue to deliver.

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@Adri, is this true? I thought this rule was a per period limit, not something that prohibits requests based on prior proposals.

If it is the latter, then there would seem to be several current xGov requests that would be DQ.

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You guys got funding last proposal passed by one person just for marketing. There has been ZERO push for marketing and ZERO push for brand awareness. Multiple investments and TDR.

Why does Algorand have to pay for every single thing you guys do? This is suppose to be your business, unless AF is getting a percentage of the business then it doesn’t make sense.

Pact use to be a strong and seemed to be pushing forward, but the last year and half Pact has fell off completely by turning into a shadow that relies on people just falling into their lap through boosted incentives. Getting more handouts does not seem to be a good idea. You guys just RT other Folks Finance when partnerships happen or TDR rewards (your not the only one, seems to be in the defi cabal playbook)

Is there another place where you market your product? Not too mention a new person putting the proposal up it’s their first time here, where is the last guy?

It will be interesting if one person passes your vote through again. @Adri @StephaneBarroso can we make note of this voting style where 1 person is pushing products through.

Side note from complaining: you guys already have a good platform with good features but not brand awareness, or marketing. I don’t think you need to keep building out features, the market share of the community is there just push your product. If you need help marketing, let me know I am down to help create some awareness for the brand. Your response to lobo about crosschain. I believe you guys should reach out crosschain. You’re a business you need to attack all ways to make money, applying for grants all the time, fund raising and TDR is not sustainable.

I see lack of effort more than I see lack of features as the problem here.

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Hey Rich,

To start, I appreciate your concern and active involvement in the community. I can understand frustrations that can arise.

The marketing proposal we haven’t executed on yet (actually we haven’t received grant as we work with AF to execute our proposal and with an external marketing agency). We are excited to share full details as soon we can :slight_smile:

a ~26K request is far from a “pay for every single thing we do”. While we have gotten some grants, We have various investments from many parties and its not free money, as most investments are satisfied with SAFTS and/or SAFEs. I think you have a misunderstanding of the amount of costs it takes for developers, marketers, operational costs, legal costs, etc. The cost to dev and audit SS was far more than 26k. We are a business, there are grants that can be sought to help supplement cash burn and allow us to continue to build and function in an ecosystem that simply isn’t very possible. As you have mentioned we provide a great product, its actually the most build out DEX on Algorand. I have placed a focus on revenue generation and have a multitude of upcoming things to get to our min cash burn (which we have greatly reduced so we can stay around) - both with new products/revenue structure & expansion. To be honest, I very much do not like seeking VC investment or grants, my top priority right now is hitting our min burn.

As you know, the team has seen a (much longer than anticipated) transition and this has opened up to a lower presence felt, particularly around marketing, as we bring on a new team to fill those roles. Its unfortunate, but I assure you things are moving behind the scenes and as soon as we can we will share with everyone. Its frustrating for myself (not to your fault).

As far as one or many wallets passing a proposal, of course I would (as I think most of algofam) would push back as that is not only impossible to enforce (outside KYC), its also inherently just unfair. All govs are entitled to their vote big or small.

For your side note, I appreciate it. Its not me vs you or whoever, just to be clear. I do appreciate your feedback and think a good portion of it is valid, and I look forward to not just talk but showing you action. As for marketing with you or anyone, we are always open for discussions and love & appreciate community action to help market things.

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Thanks for the reply.

Do you think creating minimal marketing material for twitter should require a marketing agency?

If you acquiring a marketing agency which I think is a little overkill unless they are targeting web2 users outside of crypto and hosting events. Is there a plan to engage outside of twitter and dressing up SEO?

Twitter engagement and crosschain connections is not a hard task. Is the platform running at a loss if you take out labor?

If so then there are more issues than back pay for stable swaps, which I’m not sure the demand is even there. With most defi platforms struggling except for a few. CompX is also asking for back pay but they don’t have enough users and the xUSD is depegged.

I’m sure I don’t have the whole picture on everything but with what you guys offer you should be out there in the trenches with planned post to ease time management, contacting other defi platforms creating relationships plus many other things.

I hope that you guys are cooking with marketing announcements. My biggest complaint from most platforms in xGov is take money and then they are rarely active, relying on txn fees to fall into their lap. Rinse and repeat. We have way too much talent and amazing dAPPS to not shout it out in the world.

Again offering my FREE services to help with engagement and content creation.

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While we should probably keep this specific forum to the stableswap grant, I will still address the marketing outreach.

To make a few twitter posts, no. But that’s not the scope of it lol.

There are plans for many things like SEO optimization, KOL outreach, Articles, Cross chain spaces, marketing assets, analytics etc. and these things cost money if you’re engaging with professionals. An example (which we are not doing btw because in our opinion poor ROI) is things like this, here is the 2022 rate card for Coindesk.

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Costs to operate even taking out labor (and btw our rates are much lower than the median pay, and our small team wears many hats), is still expensive and costs will be higher if you want any sort of development.

There is not demand for stable swaps, or are you saying for the will to back pay them? because stable swaps are def extremely important lol. I wont comment on other DeFis cash positions but I can tell you as one of the larger protocols, its very difficult. Its a start up, I don’t expect it to be easy and we are definitely not just sitting back collecting funds or paying some crazy salaries.

We engage with just about every single DeFi project out there like Folks, Vestige, xBacked, Algomint, Compx, Cometa (Nikita knows me very well), and even the other DEXs Tinyman & Humble to name a few. Recently we joined Rxlems which we are looking to expand, and also have other things that may, or may not pan out with other projects.

I can understand the frustration and impatience, especially when we have seen projects in the past take money and run. We are here, and we have no plans of giving up.

As mentioned were always open to community marketing initiatives - it actually helps as often there are regulatory reqs. on what we can and cant do in marketing but communities, well they can do as they please lol.

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Appreciate the feedback and extensive response. I think after hearing your side I believe we disagree on the importance of stable swaps and the team outsourcing marketing as a reason things can’t get done now.

Glad you guys are sticking around but there is opportunity right now to increase revenue stream and brand awareness. You either want to put the time into your business for it to grow or you don’t.

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That was part of the latest community review round.
As I understand it, a new application can be submitted by the same proposer if the grant is related to a subsequent milestone of a grant that is being open.
This only apply for proactive grants.
For retroactive grants, the work has been done and if the community sees value in the code delivered and want to approve it, they should be able vote for it.

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I would very much suggest you look deeper into stable swaps. Grants aside, these are very key to any DeFi ecosystem. We have alot of things in the works, but Rich id love to jump on a space with you and lets chat DeFi, Pact, Algorand and all the fun things to clear up some air.

We are on the same team, and I respect your initiative in wanting to see success. May is very crazy for us - so maybe around the turn of the month? Also, will you be at Decipher?

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Unfortunately I won’t be going to decipher and I would love to jump on a space. This def a good idea. After the 10th I will be available. I will DM pact account with some dates and go from there. Thanks for the communication.

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Cool we will follow up later this month in DM on twitter :slight_smile: