Overview
In November 2023, Boost Studios secured 1M ARB through the Arbitrum DAO’s STIP backfunding proposal. The objective of the grant was to accelerate the growth of the Arbitrum ecosystem by driving overall transaction volume and revenue fees. We achieved and surpassed all KPI targets by effectively distributing ARB incentives to users through Boost Protocol.
Boost is a highly versatile and neutral protocol. Anyone can use Boost for any use case or objective. For this STIP program, we explored various use cases with Boost Protocol, such as new user acquisition, competitor conquesting and driving mints for creators. All of these approaches and use cases contributed to driving overall participation in the Arbitrum ecosystem.
By consecutively deploying incentives over a three-month period, Boost Protocol consistently ranked #1 as the top Arbitrum project based on contract usage and successfully hit key KPIs. As the STIP program comes to a close, we’d like to take the opportunity to highlight the key ways we successfully used Boost Protocol to drive growth for Arbitrum and why continuously incentivizing users is the most effective way to drive sustainable activity for protocols.
Distribution Methodology
To hit our KPI targets proposed to the Abirtrum DAO, we established a pacing strategy that divided the distribution of funds into three phases, each 31 days. This allowed us to easily adjust daily reward budgets based on external changing factors such as completion costs. This includes:
- Gas fees:
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Action Transaction Fee: transaction fee(s) associated with completing the action.
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Protocol Fee: protocol fees associated with completing the transaction.
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Claim Transaction Fee: the transaction fee required to claim the reward from the boost.
- Fee and reward token prices:
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ETH price: impacts the $ cost required to complete a boost.
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ARB price: impacts the reward size relative to the costs associated with completion.
By closely monitoring these dynamic market factors, we made daily adjustments to our distribution strategy to ensure that we always maximize the use of the funds in the most efficient way possible.
Key Highlights
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Total ARB distributed: 1,000,000
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Total Boosts deployed: 445
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Total Boost completions: 2,386,557
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Total unique addresses: 150,041
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Total fees generated: $996,273
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New Arbitrum Users: 147,292
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Top Contract usage over three months (Blockworks Dashboard)
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Consistently claiming 30-50% of contract usage on Arbitrum throughout STIP
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Boost’s QuestFactory contract was one of the most used contracts on Arbitrum throughout the STIP program.
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What’s more impressive is that most Boost transactions require a preliminary external transaction, which this 30-50% doesn’t account for. This implies that Boost’s transaction share on Arbitrum was much higher than 50%.
KPI Overview
| Phase 1 (Experiment) | Phase 2 (Iterate) | Phase 3 (Scale) | Overall | |||||
|---|---|---|---|---|---|---|---|---|
| KPI | Month 1 (projected) | Month 1 (Actual) | Month 2 (projected) | Month 2 (Actual) | Month 3 (projected) | Month 3 (Actual) | Total (Projected) | Total (Actual) |
| Transactions or Actions Driven | 500,000 | 1,100,893 | 750,000 | 1,370,720 | 1,500,000 | 1,740,040 | 2,750,000 | 4,211,653 |
| Monthly Unique Addresses | 50,000 | 53,674 | 100,000 | 52,094 | 200,000 | 161,099 | 200,000 | 161,099 |
| New Arbitrum Addresses | 25,000 | 42,592 | 50,000 | 4,459 | 100,000 | 110,880 | 175,000 | 157,931 |
| Reactivated Users | 25,000 | 1,848 | 50,000 | 2,683 | 100,000 | 617 | 175,000 | 5,148 |
| Avg CPA | 0.5 ARB | 0.22 ARB | 0.33 ARB | 0.25 ARB | 0.33 ARB | 0.185 | 0.364 ARB (AVG) | 0.22 ARB (AVG) |
| ARB Distributed | 250,000 | 243,057 | 250,000 | 343,181 | 500,000 | 341,966 | 1,000,000 | 1,000,000 |
| Estimated Network Fees | $100,000 | $307,749 | $150,000 | $357,591 | $300,000 | $330,933 | $550,000 | $996,273 |
As part of our pacing strategy, we divided our KPI targets into three phases, each progressively increasing in distribution volume. Taking a phased approach allowed us to carefully experiment and iterate to find the optimal strategy before scaling distribution in the final month of the STIP program.
Month 1: Experiment
The first month was focused on testing various distribution strategies to find the optimal completion cost. This served as the foundation for our distribution process and strategy and established the necessary benchmark data.
| Phase 1 (Experiment) | |
|---|---|
| KPI | Month 1 (Projected) |
| Transactions/Actions Driven | 500,000 |
| Monthly Unique Addresses | 50,000 |
| New Arbitrum Addresses | 25,000 |
| Reactivated Users | 25,000 |
| Avg CPA | 0.5 ARB |
| ARB Distributed | 250,000 |
| Estimated Network Fees | $100,000 |
During the experimental phase of the program, we surpassed nearly all of our KPI targets, except for the amount of ARB distributed. We achieved more than double our projected transaction volume at less than half of our estimated cost per action (CPA). As a result, we distributed less ARB than initially planned (243k/250k), highlighting the efficiency of our methods.
Month 2: Iterate
After a successful initial phase, the second phase of our STIP distribution focused on iteration. We focused on the most effective initiatives and refined our strategies with the insights gained.
However, the second phase presented substantial challenges. The increase in ETH and gas prices, alongside a stable ARB price led us to adjust our original budgeting plan and targets.
The chart above indicates that the value of 1 ARB, when measured in ETH, decreased by approximately 25% from the start to the end of phase 2. To maintain the completion of boosts and sustain activity, we chose to raise the daily budget to cover the costs for users.
| Phase 2 (Iterate) | |
|---|---|
| KPI | Month 2 (Projected) |
| Transactions/Actions Driven | 750,000 |
| Monthly Unique Addresses | 100,000 |
| New Arbitrum Addresses | 50,000 |
| Reactivated Users | 50,000 |
| Avg CPA | 0.33 ARB |
| ARB Distributed | 250,000 |
| Estimated Network Fees | $150,000 |
Despite facing challenges, we still successfully drove over 1.3M transactions, surpassing our target of 750K. The average cost per action (CPA) during Phase 2 was approximately 0.25 ARB, which was also lower than anticipated.
Month 3: Scale\
In the final phase of our STIP distribution, we leveraged insights from the past two months to maximize growth on Arbitrum. We anticipated using a smaller portion of our planned budget due to adjustments in distribution amounts made during the previous phase.
Despite the continued decline in the ARB/ETH price into the third phase, the EIP 4844 upgrade emerged as a significant positive development. The upgrade slashed the transaction costs on rollups like Arbitrum by ~90%, reducing the average completion cost for users from to approximately $0.25.
| Phase 3 (Scale) | |
|---|---|
| KPI | Month 3 (Projected) |
| Transactions/Actions Driven | 1,500,000 |
| Monthly Unique Addresses | 200,000 |
| New Arbitrum Addresses | 100,000 |
| Reactivated Users | 100,000 |
| Avg CPA | 0.33 ARB |
| ARB Distributed | 500,000 |
| Estimated Network Fees | $300,000 |
Despite deploying fewer incentives than initially planned, we successfully hit all our KPIs. Users generated over $590K in transaction fees, significantly surpassing our KPI of $300K. Most importantly, we saw a consistent month-over-month increase in transaction volume, a crucial indicator of growth for Arbitrum.
The third month also marked notable achievements in new user acquisition. While the launch of Boost Inbox and corresponding marketing efforts contributed to this success, the reduction in fees likely played a crucial role in attracting new participants.
Overall, we are exceedingly proud of the STIP distribution results and believe we have established ourselves as the leading incentive distribution mechanism. In addition to these accomplishments, we’re excited to share some of the innovative ways we used Boost Protocol to distribute incentives to drive network activity.
Case Studies
Boost is a highly versatile and neutral protocol. With Boost, anyone can target and incentivize any wallet to perform an onchain action. This is possible because every boost is a smart contract that is customizable by action type, reward amount, and target wallets. You can learn more about the Boost features here.
This flexibility enables the creation of an unlimited number of custom boosts, each tailored for specific use cases or objectives. In the STIP program, we collaborated with various Arbitrum projects to explore diverse use cases, all contributing to our KPI goals and the overarching objective of expanding the Arbitrum ecosystem.
Trading Volume Growth
While our primary goal for the STIP program was to drive transaction volume on Arbitrum, we also acknowledge that transaction value holds equal importance for many issuers. Therefore, we launched boosts to evaluate the protocol’s effectiveness in facilitating higher-value transactions.
Boosting Trading Volume on Camelot
Objective: Increase swaps on Camelot, emphasizing increasing swap volume.
Method: Setting action parameters to a minimum of 100 USDC swapped on Camelot.
Boosts:
Data:
In January, we successfully tested the protocol’s ability to drive transaction value. Our case study was split into three boosts, each with varying completion slots and boost parameters.
| Boost 1 | Boost 2 | Boost 3 | |
|---|---|---|---|
| Completion Slots | 100 | 1,000 | 1,000 |
| Completions | 100 | 1,000 | 14 |
| Reward/Completion | 1 | 1 | 1 |
| Reward/Completion ($USD) | $1.57 | $1.57 | $1.57 |
| Min. Swap Amount | $100 | $100 | $1,000 |
| Completion % | 100% | 100% | 1.4% |
| Volume Driven | $22,791 | $109,926 | $22,243 |
| Total Cost | $157 | $1,570 | $21.98 |
| Volume/$ Spent | $145 | $70 | $1,012 |
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The first boost deployed was limited to 100 completions and required each participant to swap at least $100 on Camelot.
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Despite the minimum swap amount being set at $100, participants averaged $227.91 in swap volume, generating over $22K in total swap volume on Camelot.
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This boost generated $145 in volume per $1 spent on rewards.
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Following the success of the first boost, we deployed another that required participants to swap $100 on Camelot, increasing the completion slots to 1,000.
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We noticed that with a larger number of potential completions, the average size of the swap amount decreased from $227.91 to $109.92.
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This boost was the most successful in terms of the overall volume generated ($109K) but was the least efficient in terms of volume/rewards—$70 per $1 spent on rewards.
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The final boost we tested kept to 1,000 completion slots, but raised the minimum swap amount to $1,000.
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While only 14 individuals completed the boost, we optimized reward effectiveness by generating $1,012 in volume per $1 spent on rewards.
Governance Participation
A major challenge protocols encounter in decentralizing operations is ensuring participation. This is particularly reflected in the low percentage of governance tokens used. To tackle this, we partnered with Tally to incentivize token delegation and drive governance participation.
Boosting Delegation on Tally
Objective: Increase the number of delegated ARB.
Method: Create an allowlist of users with a specified balance of ARB who have never delegated.
Boosts:
Data:
| Boost 1 | Boost 2 | |
|---|---|---|
| Completions | 142 | 387 |
| Min. Arb Balance | 5 | 1 |
| Reward/Completion | 1.5 | 1 |
| Reward/Completion ($USD) | $2.57 | $1.74 |
| Completion % | 6% | 77% |
| Delegation Driven (ARB) | 13,571 | 2,850 |
| Total Cost | $365 | $654 |
| Delegated ARB/ARB Spent | 63.71 | 7.36 |
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To begin this case study, we were aware that some minimum delegation amount would be required for it to have an impact. The first boost deployed required individuals to hold over 5 ARB.
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While the first boost had fewer completions – 142 individuals – it had the largest sum of ARB delegated,13,571 ARB.
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The first boost was the most effective, increasing the votable ARB supply by 63 with each ARB spent in rewards.
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37 ARB delegated per $1 spent on rewards.
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Radiant Capital was the most popular delegate choice, receiving 3,964 (29%) of the ARB delegated.
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For the second boost, we wanted to see how different minimum balances impacted the outcome.
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Our follow-up case study resulted in more completions but much less ARB delegated.
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The second boost increased the ARB votable supply by 7 for every ARB spent on rewards.
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Through this, we learned that lower volume longer-term boosts (1+ week) were the most effective route to increasing delegation supply.
User Targeting
Boost offers the flexibility to target and incentivize any wallet to perform any onchain action. This includes the ability to target users from competing or similar projects and drive activity to your target network instead.
GMX Conquest
Objective: Attract similar users from alternative ecosystems to use platforms in the Arbitrum ecosystem.
Method: Create an allowlist targeting historical traders on Optimism
Boosts: GMX Conquest Boost
Data: GMX conquest perp/swap volume query
The GMX conquest was a targeted user onboarding campaign to onboard OP perps traders (via perpetuals.trade Spell) to GMX. The campaign lasted 10 days and incentivized 250 traders on either Synthetix (+ its frontends: Polynomial & Kwenta), Perpetual Protocol, or Pika with 5 OP to complete a trade on GMX.
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Throughout the conquest boost, we attracted 209 users of perp protocols in the Optimism ecosystem to use the GMX protocol.
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We believe that this boost represents a
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After the boost ended, 42% of the attracted users continued to use GMX.
User Engagement
The Zora plugin on Boost enables creators to promote their work and boost engagement on the Zora platform. One of the very interesting features of this plugin is the creators’ ability to launch ‘free mints’ and earn rewards. However, we noticed that the problem creators faced with this became more around curation and attracting an audience amongst a large number of free mints.
Boosting Creators on Zora
Objective: Boost organic Zora mints
Method: Incentivize a collection to trend on Zora, resulting in organic mints from Zora’s Trending page.
Boosts:
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Collection: Boost: With Llama
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Collection: Boost <3 Blobs
Data:
| Collection | Boost <3 Blobs | Boost: With Llama | Totals |
|---|---|---|---|
| Boosts | 4 | 2 | 6 |
| Boost Completions | 2,365 | 3,551 | 5,916 |
| Reward/completion (ARB) | 1 | 1 | - |
| Total Rewards (ARB) | 2,365 | 3,551 | 5,916 |
| Total Rewards (USD) | $4,592.19 | $7,156.01 | $11,748.20 |
| Zora Unique Minters | 3,066 | 3,590 | 6,656 |
| Mints | 4,010 | 4,715 | 8,725 |
| Organic Mints | 1,645 | 1,164 | 2,809 |
| Zora Creator Earnings (ETH) | 3.07 | 2.09 | 5.16 |
| Estimated Earnings from Organic Mints (ETH) | 1.26 | 0.52 | 1.78 |
Estimated Earnings from Organic Mints (ETH) = (Organic Mints / Mints) * Zora Creator Earnings (ETH)
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Boosts offer an incredible tool for creator discovery on Zora, as the trending page can be utilized to surface any creator’s Collection and increase mints. Accounting for the fees that Zora returns to creators, boost deployers essentially earn a rebate on the incentives deployed.
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To maximize organic mints by remaining on the Trending page for as long as possible, we found that deploying boosts with a reward around the cost of completion (0.000777 ETH + gas fees) over a longer period (1-2 weeks) to be the most effective.
Conclusion
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As the STIP program concludes, we’d like to thank the Arbitrum DAO for the opportunity to contribute to the ecosystem’s expansion. The STIP journey has provided us with invaluable insights and experiences, greatly enhancing our understanding of incentive distribution and reward optimization at the network level. This knowledge will undoubtedly shape our future strategies and approach.
Looking forward, Boost Studios is excited to further develop the partnerships and connections we’ve established with some of Arbitrum’s leading teams. Working closely with these protocols has not only deepened our understanding of the DAO’s priorities but also showcased the unique capabilities of Boost to meet various specific and complex business needs.
As we reflect on the STIP program’s successes, we identified a few areas that we are eager to explore further in future grants and initiatives:
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Deeper user retention: We’d love to explore user retention by leveraging deep user segmentation, in-depth user profiling, and action-driven retention strategies to engage and retain users within the Arbitrum ecosystem.
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User Acquisition: Further optimizing customer acquisition costs (CAC) for both conquest campaigns, such as GMX, and more novel onchain use cases, such as Knights of the Ether, with the primary goal of driving natural user growth.
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Asset-driven campaigns: We see great potential in supporting asset volume on platforms like Camelot and facilitating the bridging of specific assets to the Arbitrum ecosystem. This includes focusing on native assets, native-minted assets, and strategic assets such as stablecoins or LST/LRTs.
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Minting and Creator Use Cases: The success of our Zora use case has inspired us to explore creator-focused verticals further. Boost Protocol can play a vital role in helping creators gain visibility for their art and empower them to reach new audiences through targeted incentive campaigns.
The STIP program has been a transformative experience for the Boost Protocol, and we’re incredibly excited about the opportunities ahead. Boost remains dedicated to pushing the boundaries of what is possible with incentive distribution and optimization, and we look forward to continued collaboration with the Arbitrum DAO!