Application for Risk Member Seat
- Name: TAU Labs
- Telegram Handles: Pixel2904, TauKatana, gm_0xKepler, OxCypherPeak, RogerTennis1
- Email Addresses: vladt@628labs.xyz 0xkepler@628labs.xyz Katherine Long alexander.zahnd@gmail.com rogger@628labs.xyz
- The role being applied for: Risk Working Member
- Hourly Rate (in USDC):
$125/hr for access to the entire TAU Labs team
Summary
TAU Labs is a Tokenomics and Data Science Lab that has been helping 15+ clients with token engineering, incentive design, and economic modeling, with a focus on DeFi protocols.
Our team is made up of data scientists, chartered financial analysts and DeFi experts. We’re experienced in building a wide spectrum of highly detailed risk models and stress parameters, including monte carlo simulations to create resilient protocol and incentivization mechanics.
We particularly excel at incentive-based user acquisition and therefore would like to create further macro and micro level optimizations to the DAOs incentive programs.
Throughout the term, TAU will be at the DAO’s disposal to work on other tasks the Supervisory Council puts forward. Given our expertise in protocol design, tokenomics, and economic modeling, we are flexible and can work on any relevant task.
We cover all bases needed to design a comprehensive crypto-economic system with:
- Resilient products with PMF (protocol design),
- Incentive-based user acquisition mechanics providing long-term retention & positive ROI, and
- Value-based tokenomics,
to build a thriving, value-driven ecosystem.
Background & Skills
TAU Labs is a Tokenomics and Data Science Lab, specialized in providing comprehensive token and incentive engineering, financial modeling, economic simulation, and mechanism design.
We’ve worked with 15+ clients in the past year, focusing mostly on DeFi projects. Some of the most relevant projects to the work needed by the DAO include:
- MORE Markets (Borrow/Lending): Token Engineering, Incentive Design, Structured Product modeling and risk parameterization, treasury management, in-depth fee-discount research, airdrop modeling.
- Rain.Fi (Borrow/Lending): Token Engineering, Incentive Design, Structured Product modeling and risk parameterization, airdrop modeling.
- YieldNest (Restaking): Token Architecture and Design, in-depth Points structuring, documentation and research, Quantitative OTC deal structuring and negotiations, airdrop modeling.
- Vest Exchange (Perp Dex) - Token Architecture and mechanism design consulting.
- Opsin (Spot DEX) - Token design and mechanism consultation, points incentive and utility design, airdrop modeling.
- Mendi.finance V2 protocol, name not yet public (Borrow.lending) - Token Engineering, Incentive Design, Structured Product modeling and risk parameterization, in-depth fee-discount research, airdrop modeling.
We make use of Monte Carlo simulations and rigorous stress testing to ensure resilient risk management. We provide public Machinations models and custom-built Python dashboards that allow all stakeholders in the protocol to understand our research and recommendations.
Our team is made up of data scientists, chartered financial analysts and experts in DeFi and the broader Ethereum ecosystem.
Our focus on DeFi has naturally led us to Arbitrum as the main L2 for DeFi. TAU’s team members have been early supporters of leading Arbitrum-native protocols such as GMX.
TAU’s previous experience in protocol design, economic modeling, and token engineering aligns with the risk member’s responsibilities and required skills in the ARDC.
Motivation
We aim to bring a systematic and data-driven approach to risk evaluation, supporting protocol design, tokenomics updates and incentive campaigns. Through this, we aim to build a more resilient DeFi and crypto ecosystem which creates value for its users that can be captured via tokens.
We cover all bases needed to design a comprehensive crypto-economic system with:
- Resilient products with PMF (through protocol design),
- Incentive-based user acquisition mechanics providing long-term retention & positive ROI
- Value-based tokenomics built with balance in mind between all shareholders
to build a thriving, value-driven crypto ecosystem rather than purely resorting to speculative token use cases, particularly through long-term incentives.
TAU is perfectly set up for data-driven user acquisition; our team has previously worked in performance-driven user acquisition for 4 years, combining crypto-native skills with traditional UA expertise. We would like to use this expertise in particular to help build a strong successor to the STIP and LITPP programs. Please refer to our articles about points and incentives for more info.
Risk-related Experience
TAU Labs has extensive experience in data science and economic modeling, having built a wide spectrum of highly detailed risk models and stress parameters for a number of DeFi protocols.
Due to our quantitative background, we naturally gravitate towards rigorously understanding the limits of every module we build. For each project where we have created a utility or incentive model, we have built accompanying models that stress test the limits of the initial models. For example:
For a choice-to-claim airdrop model, we built a detailed sell-pressure scenario dashboard. A small part of it can be seen below:
We are always up-to-date on DeFi strategies and how yield dynamics shift every day. To this end, we work with projects as in-house quantitative analysts and treasury managers to ensure that every capital allocation is as efficient as possible.
Project Management & Collaboration
We have a structured approach to project management which has been battle-tested with our 15+ clients.
Our comprehensive workflow starts with a consultation and exploration phase, collecting information on stakeholders through primary and secondary research. This follows a research phase where we ideate and design multiple variations for each major part of the project, i.e. incentive or mechanism design.
This is then presented at both the strategic and the tactical level, which will help the team zero in on the best solution in an iterative process, incorporating feedback from clients and stakeholders. We then create detailed models and simulations to fine-tune parameters.
We collaborate closely with our clients end-to-end, from ideation to strategy, modeling, design, and implementation. Thus, we have experience working with different groups, such as company leadership, developers, and marketing teams throughout the collaboration lifecycle.
Our collaborations are designed for the long-term, including a multi-year collaboration agreement which we currently have with at least one client.
Scope of Work
Given the success of the STIP and LTIPP programs, we would like to continue to explore data-driven incentive distribution to boost TVL and trading volumes for DeFi protocols, as well as the usage of Arbitrum apps more generally.
Strategically allocating incentives based on pre-determined goals such as liquidity and market share has proven effective as a macro level optimization.
We believe further optimizations are possible on a micro, per-user level. By utilizing onchain (and potentially offchain data), we can further segment users by expected lifetime value and related metrics such as retention, wallet net worth, etc.
One-third of the 6-month term would be dedicated to build upon the existing analysis of LTIPP and STIP programs to push improvements at the macro level. Additionally, TAU Labs will provide the DAO a range of suggestions for incentive designs and micro level optimizations.
- Summarize key findings from existing LTIPP and STIP analysis and foster it with secondary research. Fill gaps with primary research
- Identify room for optimization on the macro level
- Ideate micro level optimizations through user segmentation. Discuss tradeoffs and feasibility with the DAO, then plan, budget, and execute experiments for multiple promising approaches to generate insights
- Provide a final report with key learnings
Throughout the term, TAU will be at the DAO’s disposal to work on other tasks the Supervisory Council puts forward. Given our expertise in protocol design, tokenomics, and economic modeling, we are flexible enough to work on any relevant task.
Conflict of Interest
At the time of writing, no conflicts of interest exist. We’re happy to work with Arbitrum as our only ecosystem client for the full period of ARDC V2. In the case that unexpected conflicts of interest arise, these will immediately be reported to the Supervisory Council to resolve in collaboration as quickly as possible