Partnership Proposal to SushiSwap

[0xWeston]

Partnership Proposal to SushiSwap DAO:

Development of Protocol Specific NFTfi applications and Marketplace on L2.

Summary

NFTs on Layer2 Ethereum present the single largest potential growing web3 protocols as of Spring 2023. The timing of emerging L2 scaling solutions, global awareness of crypto, and the ability to create frictionless UX has brought us to a pivotal moment in time for all of web3: the mass adoption moment. To a large extent, crypto has actually struggled both quantitatively in growth as measured by total market capitalization and also in the public image of potential new users. The reasons for this are myriad, but we are of the belief it comes down to 2 primary items: lack of education and cost. NFTs present the most compelling opportunity to be on the forefront to solving this, and being one of the leaders in the new wave of onboarding new users to web3 - via NFT Finance or NFTfi.

Abstract

We propose a partnership with SushiSwap to make productive use of the $ARB airdrop via a partnership with NFTEarth to build NFTfi specific solutions for Sushi users, develop a Layer2 NFT marketplace with further functionality, and formalize the Engage2Earn model to on-board significant new users to SushiSwap and the Layer2 ecosystem at large. NFTs first gained widespread popularity in the realm of digital art - this is likely to remain a major component - also likely to remain on Ethereum Mainnet. What many have not yet grasped is just how far and wide the potential application use-case is for app-specific NFTs and NFTfi - when combining things like L2 scaling solutions such as Arbitrum, and teams dedicated to building NFT-specific solutions such as NFTEarth. Without going into it too far here, it’s important to highlight just how vast the potential really is: in entertainment, Layer2 NFTs enable the ability for musicians to create music NFTs, allowing for the streaming of music and completely disrupting industries and established businesses at the scale of Spotify, Apple Music, and Amazon Music. In healthcare, biometric data such as information captured by a smartwatch, can be used by health insurance companies to analyze and build machine learning models that accurately determine correlation to chronic health conditions - and intervene early - both reducing the cost of care/creating health for millions of people worldwide. These two high level examples are just 2 of 100 more fascinating, highly creative, and large markets that NFT technology possesses the capability to disrupt.

Motivation

SushiSwap has been a leader on both L2 and NFTs for a long time, all the way back to the beginning of being the home of liquidity - which remains to this day, for $MAGIC. Nonetheless, NFT traction on L2 has not been consistently strong and Sushi stakeholders would likely stand to benefit from a novel and creative offering to find PMF and send the protocol to what its true potential is now capable of unlocking. On-boarding new users, and thus gaining market share in an already crowded market has been, and will continue to be difficult in web3. This is where the rise of Layer2 networks and NFTfi present a unique opportunity to the SushiSwap DAO. The narrative, and growth, of NFT finance (or NFTfi) is something that is expected to continue for the next several years, with 2023 being the biggest breakout of this trend. There will be some protocols that are able to move quickly and capture significant value and long-term users from doing so. It would benefit Sushi to have unique NFTs tied to user actions, used as a way to reward behaviors that encourage long-term protocol development, and align the interest of all stakeholders even further. The xSUSHI, concentrated liquidity, and other unique aspects of Sushi are a powerful way Sushi has already shown leadership here; and adding NFTfi - becoming a leader in this space presents a fantastic way for Sushi to explore new and exciting opportunities made available by ecosystems like Arbitrum. NFTEarth has plans to deploy on StarkNet, Scroll, and Linea as well, aligning well with Sushi’s strong multi-chain approach. This proposal, though broad in scope, aims to narrow it to a focus on NFTfi and deliverables in relation to this and how Sushi would be able to directly use these deliverables - Adding this would be an excellent use of the $ARB drop - creating both expanded use cases of Sushi’s already existing offerings, and partnerships with new teams building in a rapidly growing space.

Specification - Overview and Rationale

This partnership will enable new and novel use cases of DeFi for SushiSwap, opening the protocol up to an entirely new segment of users in the market, and create large potential synergies for the DAO For some good context on NFTfi, check out this blog post by ChainLink and then also review this One as well, which goes further into NFTfi application potential - ChainLink blog post. The total tokens proposed is 200,000 ARB.

An NFTfi solution is hard to conceptualize, let alone deliver. Partnering with a team that has had a laser focus on the space simply makes good business sense for the benefit of Sushi stakeholders. There are a couple components to be established via this partnership - first the NFTfi use cases that are specific to SushiSwap - ie; how a user will earn more incentives by LPing on Sushi on Arbitrum, and how using NFTs will foster greater adoption of this. Additionally, the L2 marketplace that NFTEarth has built would be enhanced to a more refined and higher functional state and include additional networks such as StarkNet, Scroll and Linea. The team has additionally developed a new concept that we are seeing playout in real-time with Ghost protocol with astounding success, however we propose a different approach called Engage2Earn - as part of our goal to be a thought leaders in NFTfi - we’ve developed a new model called Engage2Earn - where users are incentivized and rewarded for engaging with the protocol specific goals, and we are able to do this - and create dynamic and static experiences using NFTs. The potential for engagement - and growth of new users - is a large potential area to gain new awareness, thus users, and ultimately TVL.

Partnering with a team that has gone to the far ends of cloud infra providers, NFT developers and protocols, and done research into nearly all the pain points experienced by the current landscape of NFTs presents - this insight can be passed directly for the benefit of the DAO and the mutual benefit of both parties as well as the Arbitrum and the entire Ethereum ecosystem at large…a win-win-win.

Some highlights: The team proceeded to launch a multi-chain token deployment, and has an active partnership with Multichain Protocol for cross chain bridging, and has nearly 2,500 unique addresses holding the token across the 4 networks it is live on. At the peak of the first airdrop campaign, the application metrics from Cloudflare were equivalent to teams in the 500-1,000 team members category, which got the attention of Cloudflare to reach out to us to discuss our business goals and objectives, as well as potential collaborations together. The team was also selected as one of the Google Cloud for Startups recipients, earning $200,000 in Cloud Credits to be used over the next 2 years for infrastructure costs using GCP. We fully migrated to GCP from AWS last month, GCP just announced this week a massive partnership with Polygon Labs into supporting web3 startups - we think this serves as a solid demonstration of our know-how by already having landed there; choosing GCP prior to this news even being known. We learned through trial and error with all the infrastructure providers available how to build a truly globally performant application and what it will take.

A large community and social following: 10,000+ Discord community members and almost 20,000 followers on Twitter. Nearly 3,000 users engaged in the airdrop 2 leaderboard campaign - as it was beginning. We expect this number to be much higher when ready to relaunch. The long-term vision is to grow into a suite of different product lines related to NFTs, across verticals and applications, but instead of taking on OpenSea head-on, slowly, methodically, and using data-driven analysis of results, introduce new revenue stream after new revenue stream. Marketplace fees, memberships, NFT collections, DAO partnerships, token potential value capture, all combined add up to a tremendous opportunity for the earliest movers.

Looking forward to hearing the DAOs thoughts on this!

Cheers,

Weston and the NFTEarth team.

Copyright

Copyright and related rights waived via CC0.

Poll

For
Establish partnership and NFTfi solutions

• For
• Against

[Zapacheenie]

A question I have to ask is how is this going to be different than the in-house NFT exchange that Sushi originally intended on building?

See for example:

Shoyu: Sushi's NFT Platform, Dev & Management Proposal

Summary I, LevX, proposed the idea of our NFT exchange and thanks to our passionate community members, especially @FutureFund, @ayoki, Evan Keast, Zach Noble and @OmakaseBar, it evolved into a concrete project that would meet the actual needs of NFT artists & collectors. Now that contracts are complete, it’s time to develop frontend, caching layer(subgraph) and infrastructure for artworks storage. Around mid August, v0 will be released and we have gradual release plans for v1 and v2 for the ne…

Shoyu 2.0 Community Update

Introduction Due to everything at Sushi moving around recently I think a quick introduction of myself and the Shōyu team would be a great place to start this update. My name is Ryan and I started contributing at Sushi in July and I made the switch to Shōyu in August as UI/UX and general designer full time. I stepped into the role of Product Manager to keep the project moving forwards during the internal issues Sushi was facing. I think it would be fair to say that the community hasn’t yet had …

[0xWeston]

Thank you for the question @Zapacheenie as well as the space here to answer this one. It gets right to the heart of the matter!

I actually remember Shoyu being introduced, and at the time though many aspects seemed compelling, I also remember thinking it might spread Sushi a bit too thin. When drafting the above proposal, I did have Shoyu in mind in a couple spots - but was not certain where the community stood at present on the the build efforts here and so focused just on what was written. But to answer this then - I’ll be as concise as I can - but would also add I think this is an answer that could become a textbook …and so with that in mind, I’m also totally open to having further AMAs in Discord, calls with the team, etc., to flesh out some more details as needed.

In a nutshell - I would say it’s a combination of 3 things: Timing, the team’s individual unique experience over the past few months, and the focus on NFTfi on L2.

1:

• For timing, well, it is perhaps one of the most important, but to a large extent, uncontrollable variables in launching any product I think is fair to say. I think Shoyu was a bit early - and although had solid plans and roadmap - the reality of infrastructure being capable to handle a successful NFT exchange literally wasn’t there at the time.

• It is right now. So - kinda how I mentioned going all the way back to when Sushi managed the initial LP for $MAGIC and seeing the Treasure ecosystem grow so well; I think the timing is just right for another complementary NFT solution to emerge. Arbitrum in particular, by carving out a competitive moat in the DeFi space at present, while other rollups emerge, presents the best place to build NFT products that will have the chance at gaining widespread adoption.

2:

• Second is the very deep, in the trenches, experience myself as the project lead, and our team, has had in bootstrapping an NFT marketplace and hub on L2. We know just how difficult it really is to compete in the NFT space - when there are essentially a couple entrenched players; and have faced some of the most difficult challenges a protocol can face - namely trying to build initially on Optimism; engaging head-on with competitive forces + a market that proved to simply not have the demand expected, leading to the pivot to other L2s and search of a different PMF to focus on.

• Well, I believe we have found it. L2s, Arbitrum in particular, and NFTfi is the right place to be focused in NFTs right now, and adding a partnership to Sushi’s ecosystem with a team like ours could add value to the DAO many-fold back. I think here would also highlight that the reason we landed on submitting proposals to the 4 DAOs that we have recently (in addition to Sushi; Saddle, Sperax, and Arbitrum) is because we see some highly unique synergies being formed here - and this is what we’re after (synergies as a priority in partnerships) between these DAOs. While most NFT protocols - even the ones focused on NFTfi - remain focused on Mainnet and sometimes unique - but likely unsustainable niches, we understand clearly the implications of ERC-4626 and the potential value creation that tokenizing yield-bearing assets will bring to the DeFi ecosystem.

• Now add Layer2s for the low cost of transactions + the composability that is coming; and you arrive at this new narrative of NFTfi that has immense potential for unlocking additional value in the lego block system. Imagine for a moment being able to take a basket of tokens, like an Aave interest bearing stETH position, xSushi, and yETH, wrap these into an NFT on L2 for under $1.00 - and then proceed to borrow against it on Alchemix or Frax or Abracadabra - a capability unlocked by combining the utility of the tokenized vault standards…with non-fungibility.

3:

• Third - building on the last thought a bit more - this component is where things could be quite powerful I believe, and also why I intentionally left the proposal a bit open-ended…because there is still a lot to discover in the space - but NFTFi undoubtedly will play a large role in 2023 onwards.

• Myself, and the team we have bootstrapped have gone from a broad focused, marketplace first approach, to nearly the opposite now, narrowly focused on NFTfi, and plan to win a specific niche in this vertical, and then proceed to grow from there. This is where our need for partnership with an established protocol like Sushi arises, and the mutually beneficial results exist. What we need are resources (in the form of funding, devs, marketing support, etc.) - but resources that Sushi already has in a massive way.

• So not only would there be potential to tap into Sushi’s existing team/community to help with the NFT features and functionalities, but there is also the obvious past interest - and nearly complete story - that we could be here now to fulfill. We’re planning on launching our farms on SushiSwapV3 on Arbitrum (and already are underway in this process regardless of a deeper partnership here - and hopefully with some Onsen on the side to go with it) - but the NFTEarth protocol in itself will have multiple native and otherwise related yield-bearing positions to include in the mix here which is something I find very exciting. So to tie it all together here then back to the first point, the timing just seems right to me, the place seems right and the parties involved seem right.

I’m happy to answer any and all more questions/thoughts/ideas as well if this ends up further sparking some interest/catalyzing the NFT efforts on Sushi once again.

Cheers!

-Weston