{"signature": "0x862858a83c23ec8322fa1c5b2de4df905f2cd9513dde83845594981c8a1345c20f924696ef8354e700ad1fd15fcbcbc83883a768446540acecf8b3f826cc76cd1c", "application": {"round": "0x6142eedc06d80f3b362ce43b4ac52fad679dc850", "answers": [{"type": "email", "hidden": true, "question": "Email Address", "questionId": 0, "encryptedAnswer": {"ciphertext": "gOs+lOPD0CKEGTb507i91mqFvcOCIakXFLvex0L5Ioy/KZPurHG4vzsbbvE/zxK7", "encryptedSymmetricKey": "94ee8c21c79d323a7a0b7444ddeab7ff382c1ef69521cd673196defa8fae4a39a832e22e5096cbefafe77b237443d61272dbdce56c2a5fefbfe23f88e5abb049148c7b79b7044c5999b0efc7e7664344c633b77192dd0d2a8a9848cee31c2d8319aec7e8121bb04c0c1c305fb6f1f202e16711bdf96d626866eafbdf740963d100000000000000200a94e36159ea17e9d395b3032a2e7230b36987e57171b98b8384f2ab7cf14c39cd23d5bece60334d593ab6664e6d00ba"}}, {"type": "paragraph", "answer": "Pesto enables users to create independent short and long positions in a single transaction.\n\nThree examples of positions that can be created with Pesto are: (1) a stable short, (2) a spread short, and (3) a stable long.\n\nA stable short position is most similar to traditional short-selling, where users borrow the asset they want to short, and sell it for a stable asset. For example, if you\u2019re bearish on BTC, you could supply USDC as collateral to borrow WBTC, and swap for USDC. If WBTC's value drops, less USDC is required to buy the WBTC to repay the loan. The remaining USDC is profit.\n\nA spread short position is a more complex strategy, where users choose to borrow the asset they want to short, and swap it for a non-stable asset. The aim of such a strategy is to profit from the favorable spread between the short asset and the long asset. For example, if you\u2019re bullish on ETH and bearish on BTC, you could supply USDC as collateral to borrow WBTC, and swap for WETH. This means you could profit from WETH's rise and WBTC's fall.\n\nA stable long position involves borrowing a stable asset and swapping it for a non-stable asset to hold. For example, if you\u2019re bullish on ETH, you could supply WETH as collateral to borrow DAI, and swap for more WETH. If ETH's value rises, you swap it for more DAI than you borrowed, and keep the difference as profit.\n\nThe Pesto protocol employs two mechanisms to mitigate liquidation risk across different positions. The first one is the architecture design of Pesto positions. Each Pesto position is an independent smart contract owned by the user. This means that users can have as many different positions as they wish, and the risk from one of their positions does not affect others. The second mechanism is the fact that all the assets backing a particular position are supplied to Aave as collateral, allowing users to earn additional interest and improving the health factor of their position\u2019s loan on Aave.\n\nUsers have full freedom to withdraw the assets backing a position from Aave. For example, if users observe opportunities to earn a higher yield elsewhere, they could withdraw some of the collateral backing one of their Pesto positions, without closing the position, and take advantage of said opportunity. \n\nFurthermore, users can use some of the collateral backing a Pesto position to add leverage to the position. This process can be repeated multiple times, increasing their exposure.\n\nThe core Pesto protocol is immutable, operates without governance, and incentivizes decentralized frontends. The Pesto protocol consists of three primary smart contracts: two core and one periphery.\n\nThe core contracts are the PositionFactory and the Position contract. The PositionFactory contract is responsible for creating Position contracts. The Position contract represents one position of an individual user. A single user can own multiple Position contracts, each representing a different combination of tokens.\n\nThe only periphery contract at present is the FeeCollector contract, which is responsible for collecting and allocating protocol fees. A small protocol fee is charged when users increase a position's size and when they add leverage to a position. A portion of this fee goes to the protocol and another portion is allocated to frontend operators. Frontend operators can also choose to offer users of their frontend a discount on the protocol fee, which incentivizes users to use their frontend.", "hidden": false, "question": "Application detail", "questionId": 1}, {"type": "number", "answer": "250000", "hidden": true, "question": "Amount requested (in $)", "questionId": 2}, {"type": "dropdown", "answer": "ARB", "hidden": true, "question": "Payout token", "questionId": 3}, {"type": "short-answer", "answer": "Funds will held in a Safe multi-sig contract. All transactions that can be on-chain will be on-chain. Off-chain transactions, like legal fees, will be recorded in an Excel spreadsheet and receipts will be stored.", "hidden": true, "question": "How do you account for this fund request?", "questionId": 4}, {"type": "paragraph", "answer": "The grant money will be used to fund legal infrastructure, smart contract audits, and development of a frontend for the protocol.\n\n- $60k for 1st smart contract audit\n- $60k for 2nd smart contract audit\n- $50k for a code4rena smart contract audit\n- $30k for corporate structure setup\n- $50k for the development of the frontend\n", "hidden": false, "question": "How will you use these funds? Please make a detailed plan for expenditures.", "questionId": 5}, {"type": "dropdown", "answer": "Uniswap on Arbitrum Ecosystem tools or products", "hidden": false, "question": "Which RFP is this project covering? ", "questionId": 6}, {"type": "short-answer", "answer": "Pesto exclusively uses Uniswap for token swaps, which happen each time a position is added to or closed.", "hidden": false, "question": "How do you think this project fits in with Uniswap?", "questionId": 7}, {"type": "paragraph", "answer": "Pesto will drive more transactions through Uniswap on Arbitrum, as Uniswap is used each time users add, close, or add leverage to positions.", "hidden": false, "question": "What benefits will this project bring to Uniswap in the Arbitrum ecosystem?", "questionId": 8}, {"type": "short-answer", "answer": "The project has not undergone a security audit yet. Funding is necessary to pay for multiple security audits of the project.", "hidden": true, "question": "Has this project undergone a security audit? If not, are you planning to undergo it?", "questionId": 9}, {"type": "short-answer", "answer": "Yes: https://github.com/chainrule-labs/pesto-contracts", "hidden": false, "question": "Is this project open-source? (If yes, share the repository link).", "questionId": 10}, {"type": "paragraph", "answer": "Contributions are submitted in the form of PRs, which are thoroughly reviewed prior to merging.\n\nThe smart contracts were developed in Solidity, using Foundry as the primary development tool. The smart contracts have been thoroughly unit-tested and integration-tested. There is currently 100% testing coverage.\n\nThe frontend will be built using Next.js, TypeScript, TailwindCSS, Viem, Wagmi, and Jest.\n\nAll code repositories follow Conventional Commits guidelines through an automated CI with GitHub actions, Husky, Commitizen, and commitlint.\n", "hidden": true, "question": "What is the workflow chosen for this project? (You can mention development practices, tools, programming languages, etc.)", "questionId": 11}, {"type": "short-answer", "answer": "https://www.youtube.com/watch?v=UbQkOEaokGg", "hidden": true, "question": "Does this project have a demo? If yes, share a public link.", "questionId": 12}, {"type": "short-answer", "answer": "The target audience for this project is risk-averse DeFi users who don't necessarily need 50x leverage on their positions, but are interested in lower risk, 2-5x leveraged positions.", "hidden": true, "question": "What is the target audience for this project? (Mention if there is a market launch plan).", "questionId": 13}, {"type": "paragraph", "answer": "Adam Cuculich: www.linkedin.com/in/adamcuculich\nErnesto Ramirez: https://ernestor.xyz/\nMarvin Arnold: https://marvin.geeky.rocks/", "hidden": false, "question": "Who are the members of the team?", "questionId": 14}, {"type": "paragraph", "answer": "Adam and Ernesto have been working together since 2020 and have been building in the DeFi space since 2022. Each can contribute across the entire tech stack, but Adam has more backend experience and Ernesto has more frontend experience. One of the most significant projects they've built together is a cross-chain stablecoin (https://ax.finance). They both led all engineering efforts for the project, while other team members led marketing and business development.\n\nErnesto and Adam met Marvin at a hackathon in New York, and hacked together at EthDenver. Marvin was most recently the CTO of Omo (https://omo.so), which was a consumer P2P crypto payments application that processed over $44M of on-platform payment volume and over $300M of off-platform transaction volume. Previously, he was the VP of Engineering at Nebra (https://nebra.com).\n\nAt present, Ernesto and Adam lead engineering efforts, while Marvin leads business development.", "hidden": true, "question": "Describe team members' experience and current roles for this project.", "questionId": 15}, {"type": "paragraph", "answer": "Project milestones:\n\n1. Set up necessary corporate structure for risk mitigation\n2. Get smart contracts audited\n2. Deploy smart contracts to Arbitrum\n3. Create and deploy NFT collection as part of a community marketing campaign, leveraging Farcaster frames\n4. Develop and deploy a frontend that interacts with the smart contracts\n\nAll work is being tracked through ZenHub, where it is organized into weekly sprints and tasks are assigned to relevant team members. All work is open-source and can be viewed on GitHub.", "hidden": false, "question": "What are the Project Milestones? (Be very specific and write a roadmap highlighting critical deliverables of the project; mention how you will ensure to supervise and track them).", "questionId": 16}, {"type": "paragraph", "answer": "The milestones are all within the control of the three team members building Pesto.\n\nProtocol smart contract development is complete.\n\nThe team has ample experience developing smart contracts, so remaining contract work pertaining to the NTF campaign is feasible.\n\nThe team has sufficient experience building frontends, so the frontend development is entirely feasible in-house.\n\nEach member on the team has no other commitments at the moment, which ensures enough time will be allocated to finishing work necessary to achieve the aforementioned milestones.", "hidden": false, "question": "How do you plan to reach these milestones? (Explain the project feasibility).", "questionId": 17}, {"type": "multiple-choice", "answer": "No", "hidden": true, "question": "Has this project already been funded by other Grant Programs?", "questionId": 18}, {"type": "checkbox", "answer": ["I confirm."], "hidden": true, "question": "I confirm that I have read the Code of Conduct and that I have filled out this form correctly and truthfully.", "questionId": 19}, {"type": "checkbox", "answer": ["I understand."], "hidden": true, "question": "I understand that I will be required to provide KYC information by the UAGP team in case my application is accepted.", "questionId": 20}, {"type": "short-answer", "answer": "We googled DeFi grants on Arbitrum", "hidden": true, "question": "How did you find out about UAGP?", "questionId": 21}, {"type": "paragraph", "answer": "N/A", "hidden": true, "question": "Additional information", "questionId": 22}, {"type": "short-answer", "answer": "N/A", "hidden": true, "question": "Special requests", "questionId": 23}], "project": {"id": "0x950af31224d5fde61b570384bb354a48f55c4ec76a5ddb7023a03a8ee8400754", "title": "Pesto", "logoImg": "bafkreiaxrfcmdoazfmdzltwlvfsektemh4xmr6i5xvsgrgvjf4dxrcbfp4", "metaPtr": {"pointer": "bafkreifhycvn4ss4h2yazoxrzyr6lwo2geq55pd4tg6n2v467fcfaqgo5m", "protocol": "undefined"}, "website": "https://pesto.finance", "bannerImg": "bafkreidl2sg6dijichyxjq2juewg6yvnvbl2hskvptjgxb27wb3zbgufsu", "createdAt": 1711410541572, "userGithub": "cucupac", "credentials": {"twitter": {"type": ["VerifiableCredential"], "proof": {"jws": "eyJhbGciOiJFZERTQSIsImNyaXQiOlsiYjY0Il0sImI2NCI6ZmFsc2V9..2LZwn_ArTEeSI11NFlwpFq2jPlX7qElBO7IRrg_GpVUNVqg8zw5q_vcS18-LnTSE_Ozh4fa4gFNlAICjOQw1Cw", "type": "Ed25519Signature2018", "created": "2024-03-25T23:48:25.526Z", "proofPurpose": "assertionMethod", "verificationMethod": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC#z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC"}, "issuer": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC", "@context": ["https://www.w3.org/2018/credentials/v1"], "issuanceDate": "2024-03-25T23:48:25.526Z", "expirationDate": "2024-06-23T23:48:25.526Z", "credentialSubject": {"id": "did:pkh:eip155:1:0xA0714a841adBf1ae5a4a1D1F823F97C6ff1B9dc8", "hash": "v0.0.0:qtQxifgsdF6Doc10gAE9Ro1No8DM1DaoF9RJM1J0+s8=", "@context": [{"hash": "https://schema.org/Text", "provider": "https://schema.org/Text"}], "provider": "ClearTextTwitter#pestofinance"}}}, "description": "Pesto is a DeFi protocol that enables users to create independent short and long positions in a single transaction. Varying degrees of exposure and hedging strategies are possible through Pesto, including leveraged positions.\n\nMany protocols require starting liquidity pools from scratch, which results in fragmented, shallow liquidity. To solve this, Pesto aims to provide competitive DeFi capabilities, built on top of two of the most robust DeFi protocols, Aave and Uniswap. By leveraging existing liquidity, Pesto circumvents the need to initially fund liquidity pools and avoids contributing to liquidity fragmentation.\n\nPesto also introduces a new position primitive, called a spread short, which involves simultaneously longing and shorting two different assets in the same position. Opening similar positions on existing protocols requires twice the amount of collateral for the same exposure.\n\nEach Pesto position is independent and has its own Aave account. This means that liquidation risk from one position does not affect other positions. Furthermore, the protocol keeps all funds backing users\u2019 positions on Aave as collateral, lowering liquidation risk and earning interest for users.\n\nLastly, Pesto features a decentralized frontend incentive, where frontend operators receive a portion of the protocol fees. This increases protocol decentralization, lowers legal risks, and creates competition among frontend operators to enhance user experience.\n", "lastUpdated": 0, "projectGithub": "chainrule-labs", "projectTwitter": "pestofinance"}, "recipient": "0xDFc829581F7f879d1D4020B731c24d391d627415"}}