Apologies for the delay on posting the last 2 recordings. Publishing them in a batch in this comment.
Below is the recording of the sixth and seventh call, the calls’ transcripts, and the chat logs. You will also find notes on the topics/questions we discussed in each call and a summary of the views expressed.
6th Call
For the 6th call, we had Darius from Vertex (perp DEX) offer their perspective on incentives as a protocol that received incentives. We also had Coinflip from GMX briefly share their perspective.
Recording - Liquidity Incentives Call #6 (2.10.2024)
Transcript - Liquidity Incentives Call #6 (2.10.2024)
Chat Log - Liquidity Incentives Call #6 (2.10.2024)
Summary
The things that were discussed were:
- Vertex’s initial proposal aimed to cut fees and use ARB tokens as collateral for market
makers to build liquidity. The proposal was modified due to structural constraints, leading to a less effective version that focused on volume-based incentives. - It was suggested that protocols should have more flexibility in structuring their proposals
to better align with DAO goals. - The initial STIP allocation was influenced by the timing and strategy of other protocols,
leading to a more adversarial environment. - The execution of the STIP program was generally fair, but the lack of clear DAO
objectives made it difficult to compare results across different protocols. - It was suggested that a top-down prioritization from the DAO level could have provided
clearer objectives and made the process more efficient. - In Vertex’s case, Darius explained that trading firm integrations were key to long-term stickiness, as these firms tend to trade frequently and pay trading fees. Retail users were less sticky, but incentives contributed significantly to Vertex’s TVL growth.
- The value of STIP rewards declined over time due to the decrease in ARB token value,
affecting the overall impact of the incentives. - GMX’s program included a budget for supporting other protocols, helping them present
their case to the DAO and become part of the Arbitrum ecosystem. - The success of GMX’s program was partly due to the reduction in available funds for subsequent rounds, indicating a maturing ecosystem.
- The integration of large traders and the multiplier effect of their activities were crucial for growth and liquidity.
- Less developed ecosystems face significant challenges in attracting capital and liquidity.
- The issue of aligning incentives with DAO objectives and the complexity of the current process was raised. There is a challenge in matching the DAO’s goals with the specific needs of protocols, making it difficult to design effective incentive programs.
- There’s a need for better coordination and signaling from the DAO to guide market demand and support infrastructure development.
In terms of ideas for future programs:
- The importance of clear DAO objectives and more autonomy for protocols to design effective strategies was emphasised.
- A blended approach with both clear DAO directives and open competitions could balance
the need for alignment with the flexibility for innovative strategies - Infrastructure improvements, such as support for native assets and better custodial
services, are essential for attracting and retaining liquidity.
7th Call
For the 7th call, we had Kamil from TokenGuard, which focuses on analyzing user behavior and conversion in blockchain systems, present their insights from LTIPP.
Recording - Liquidity Incentives Call #7 (9.10.2024)
Transcript - Liquidity Incentives Call #7 (9.10.2024)
Chat Log - Liquidity Incentives Call #7 (9.10.2024)
Summary
The things that were discussed were:
- Kamil shared his screen and presented an overview of the metrics from two protocols (Across and Delta Prime) that received incentives during LTIPP.
- There was a 15% increase in stablecoin inflow to Arbitrum One through Across during LTIPP.
- The number of users using Across to move funds from other blockchains to Arbitrum
grew eightfold, with interactions increasing threefold. - The average deposit value in Across lowered during LTIP compared to pre-LTIP, resulting in a
significant increase in the number of users but a decrease in the average deposit value. - Users acquired through Across were extremely active within the Arbitrum ecosystem, using multiple applications.
- The number of unique users and interactions on Delta Prime increased dramatically by 400%, but returned to baseline after the incentive period ended.
- The number of deposits in Delta Prime increased threefold, and the average value of a deposit grew by
39%. - Delta Prime’s TVL increased 300% during LTIP but dropped to 150% of its baseline before the
program. - Kamil summarized that Across had a better impact on the Arbitrum ecosystem compared to Delta Prime. Across spent 200k ARB, resulting in a direct ROI of 0.1, while Delta Prime spent 400k ARB, resulting in a direct ROI of 0.01. ROI is calculated based on the amount of money invested and the fees generated.
In terms of ideas for future programs:
- The importance of measuring claimable rewards to understand which users know about the program was brought up.
- Setting long-term goals and segmenting products to design specific rewarding mechanisms for different user groups was discussed.
- Brainstorming sample KPIs and goals for future incentive programs was encouraged.
- The importance of setting North Stars to define KPIs and judge progress was also mentioned.
For the next call:
As with previous calls, we encourage participants to prepare for the next one and share their visions and lessons earned with the rest of the working group. If you have an analysis, a report, or other findings to present during one of the upcoming calls, please contact Sinkas on Telegram