[Non-constitutional][RFC] ARB Incentives: User Acquisition for dApps & Protocols

Proposals
20

Hey @Amira, thanks :raised_hands: These are very in-depth questions, let me answer below:

  1. Based on LTIPP example - in my opinion it’s natural that if you push $15m into user incentives in a 3-month timeframe you’re going to see “some results”. I think that everyone agreed afterwards that such temporary results weren’t satisfactory (hence incentive detox proposed by L2Beat) and to make these programs at least partially sustainable, we need to start calculating ROI (= LTV - CAC) on these campaigns, as well as, focus less on airdropping users with free $ARBs to not gather mercenary capital that will flow out once incentives end. We therefore analyzed strategies that worked well in LTIPP (which was discussed during ARB Liquidity Incentives call here) and implemented them into this proposal along with upgrades based on insights gathered directly from protocols.
    There are multiple challenges in web3, including UI - which is partially solved by ERC-4337 standard that is also being encouraged by our team (and can be covered within this program). Regarding use case - it’s not for us to judge but data says that 90% of the web3 volume is still generated in the DeFi sector so we keep on to that. I think there are other programs for projects to experiment with other use cases - this program is focused on improving user acquisition for existing ones.

  1. As you mentioned here - CAC and especially on-chain LTV are difficult to calculate. That’s why I think we’re proposing a substantial value-add. Web3 might have changed the game, but the rule of positive ROI is still valid. You might agree that it’s better to have important & accurate metrics rather than a pool of hundreds of metrics that aren’t decisive.

  2. None of these tools provide information about CAC and LTV for web3 protocols - because of the same technical difficulty you mentioned. This is the exact reason for the proposed budget. Of course, any web3 protocol can set up HubSpot or 3RM but none of these tools will answer the question:

“How do I acquire this wallet segment that generates positive ROI for my dApp?”

Unfortunately, most of web2-focused tools aren’t designed for web3 complexity - I can get into more technical details if needed. And I really appreciated answering these questions! :handshake: