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

posted 1 year ago

edited 1 year ago

Hey @pedrob - huge thanks for your positive vote and an actual in-depth feedback which we really appreciate :pray:

Marketing for the DAO I agree that the DAO's image should change. The aim of this program is to acquire and identify users segments that have positive ROI for the ecosystem which means generating sequencer revenue. I believe that supporting builders with programs like this speaks for itself, especially in difficult market conditions.
Account Abstraction I fully agree - ERC4337 is a UX breakthrough and that's why we included it in the most important strategies (eg. for Bridges). Arbitrum could gain a competitive advantage over networks that don't utilize it enough (eg. Optimism Superchain) because the adoption is faster here:

Hey @pedrob - huge thanks for your positive vote and an actual in-depth feedback which we really appreciate :pray:

Marketing for the DAO I agree that the DAO's image should change. The aim of this program is to acquire and identify users segments that have positive ROI for the ecosystem which means generating sequencer revenue. I believe that supporting builders with programs like this speaks for itself, especially in difficult market conditions.
Account Abstraction I fully agree - ERC4337 is a UX breakthrough and that's why we included it in the most important strategies (eg. for Bridges). Arbitrum could gain a competitive advantage over networks that don't utilize it enough (eg. Optimism Superchain) because the adoption is faster here:

Our aim was not to spend another $12m in next iteration but to identify wallet segments with positive ROI and focus marketing the spending on these - whether it's going to be $1m or $5m. Patterns costs are fixed and not dependant on the budget size therefore we prefer to spend less and get better ROI.

Hey @CastleCapital - I already answered @maxlomu's comment and proposed a smaller budget with an explanation.:

1. Proposed a $1m budget which in our opinion is the minimum - we're open to discussing it. 2. I understand your point of view however the main goal of user acquisition is for the user to convert in the dApp (= generating fees), not gain visibility of Arbitrum. If you want to combine PR and user acquisition then user acquisition will most probably fail. 3. This would be possible but Arbitrum Foundation's aim was to also discover small projects with potential that usually have no marketing budget and this is why we kept it this way.

We will work on explaining the path to maturity further as it seems that it's not clear now. Thanks! :handshake:

Best, Kamil

posted 1 year ago

edited 1 year ago

Hey @Entropy, thanks for your feedback - let me answer in order:

Marketing guidance and campaign design (re comments from @jameskbh @karpatkey) Not sure if that was noticed but we changed this in the last iteration of proposal and added consultations with a Marketing Expert to guide teams while building their campaigns.
Metrics - absolute metrics allow to calculate the unit cost, eg. value of volume per $1 spent so indirect ROI - that's why we used them.
Retention - the aim of this program is to acquire new wallets and calculate their LTV ('lifetime value') which is the overall amount of revenue a wallet generates to the ecosystem and to the dApp. At the same time, we calculate CAC (this wallet's acquisition cost) from a campaign. If the LTV is higher than CAC then the acquisition of such wallet already paid itself off (= ecosystem / dApp made profit on it). The only thing left is to acquire more wallets of such type. There's no similarity to programs like zkSync Ignite because we don't reward users directly so there's no incentive for mercenary capital. Would anyone stop using a product because it's ads are no longer showing up on Twitter?

Hey @Entropy, thanks for your feedback - let me answer in order:

Marketing guidance and campaign design (re comments from @jameskbh @karpatkey) Not sure if that was noticed but we changed this in the last iteration of proposal and added consultations with a Marketing Expert to guide teams while building their campaigns.
Metrics - absolute metrics allow to calculate the unit cost, eg. value of volume per $1 spent so indirect ROI - that's why we used them.
Retention - the aim of this program is to acquire new wallets and calculate their LTV ('lifetime value') which is the overall amount of revenue a wallet generates to the ecosystem and to the dApp. At the same time, we calculate CAC (this wallet's acquisition cost) from a campaign. If the LTV is higher than CAC then the acquisition of such wallet already paid itself off (= ecosystem / dApp made profit on it). The only thing left is to acquire more wallets of such type. There's no similarity to programs like zkSync Ignite because we don't reward users directly so there's no incentive for mercenary capital. Would anyone stop using a product because it's ads are no longer showing up on Twitter?

Quoted from Entropy

When it comes to capital allocation, one possible avenue through which the DAO could create a structural shock in an already well-established vertical is by funneling sequencer profits back as incentives to that vertical—an idea we think should be seriously considered in the future as the DAO’s overall profitability continues increasing.

jump to post →

:raised_hands: That is exactly what we're trying to accomplish here - create a sustainable program that allows to funnel sequencer revenues to acquire wallet segments with positive ROI (LTV > CAC) through dApps - so that it produces even more revenue. Is there any other way to discover such segments other than running an almost ecosystem-wide LTV & CAC measurement?

Best, Kamil

posted 1 year ago

Hey @Bruce, thanks for your comments! :raised_hands:

What kind of service do you have in mind when saying "independent audit mechanism to verify declared KPIs"? We listed all accepted 3rd party apps to share KPIs in the application - which are Dune, Tokenterminal, DefiLlama, Flipsyde & Patterns. Dune, Flipsyde & DefiLlama metric queries are open-source and are fully verifiable. Do you maybe have in mind an anti-sybil verification?
I guess that by hybrid economics you mean that some conversions happen off-chain. In such case, the dApp doesn't generate sequencer fees, hence, revenue for the ecosystem. Do you have any example of Arbitrum-based dApp that has such mechanism?

Hey @Bruce, thanks for your comments! :raised_hands:

What kind of service do you have in mind when saying "independent audit mechanism to verify declared KPIs"? We listed all accepted 3rd party apps to share KPIs in the application - which are Dune, Tokenterminal, DefiLlama, Flipsyde & Patterns. Dune, Flipsyde & DefiLlama metric queries are open-source and are fully verifiable. Do you maybe have in mind an anti-sybil verification?
I guess that by hybrid economics you mean that some conversions happen off-chain. In such case, the dApp doesn't generate sequencer fees, hence, revenue for the ecosystem. Do you have any example of Arbitrum-based dApp that has such mechanism?

@Zeptimus - thanks for your vote and feedback! :handshake:

Can you please share what existing grant programs you have in mind?
Regarding mission and vision - both of these are usually high-level and long-term goals of organizations. As long as we accept the fact that sequencer fees are an important revenue stream for Arbitrum, we believe that acquiring users to grow this revenue stream aligns with Arbitrum's current goal. Scope of the project was consulted with Arbitrum Foundation which I believe confirms this line of thinking - we're super happy to adjust this proposal however. Can you share some details on this?

Thanks and best! Kamil

posted 1 year ago

edited 1 year ago

Hey @pedrob - huge thanks for your positive vote and an actual in-depth feedback which we really appreciate :pray:

Marketing for the DAO I agree that the DAO's image should change. The aim of this program is to acquire and identify users segments that have positive ROI for the ecosystem which means generating sequencer revenue. I believe that supporting builders with programs like this speaks for itself, especially in difficult market conditions.
Account Abstraction I fully agree - ERC4337 is a UX breakthrough and that's why we included it in the most important strategies (eg. for Bridges). Arbitrum could gain a competitive advantage over networks that don't utilize it enough (eg. Optimism Superchain) because the adoption is faster here:

Hey @pedrob - huge thanks for your positive vote and an actual in-depth feedback which we really appreciate :pray:

Marketing for the DAO I agree that the DAO's image should change. The aim of this program is to acquire and identify users segments that have positive ROI for the ecosystem which means generating sequencer revenue. I believe that supporting builders with programs like this speaks for itself, especially in difficult market conditions.
Account Abstraction I fully agree - ERC4337 is a UX breakthrough and that's why we included it in the most important strategies (eg. for Bridges). Arbitrum could gain a competitive advantage over networks that don't utilize it enough (eg. Optimism Superchain) because the adoption is faster here:

Hey @CastleCapital - I already answered @maxlomu's comment and proposed a smaller budget with an explanation.:

We will work on explaining the path to maturity further as it seems that it's not clear now. Thanks! :handshake:

Best, Kamil

posted 1 year ago

edited 1 year ago

Hey @Entropy, thanks for your feedback - let me answer in order:

Marketing guidance and campaign design (re comments from @jameskbh @karpatkey) Not sure if that was noticed but we changed this in the last iteration of proposal and added consultations with a Marketing Expert to guide teams while building their campaigns.
Metrics - absolute metrics allow to calculate the unit cost, eg. value of volume per $1 spent so indirect ROI - that's why we used them.
Retention - the aim of this program is to acquire new wallets and calculate their LTV ('lifetime value') which is the overall amount of revenue a wallet generates to the ecosystem and to the dApp. At the same time, we calculate CAC (this wallet's acquisition cost) from a campaign. If the LTV is higher than CAC then the acquisition of such wallet already paid itself off (= ecosystem / dApp made profit on it). The only thing left is to acquire more wallets of such type. There's no similarity to programs like zkSync Ignite because we don't reward users directly so there's no incentive for mercenary capital. Would anyone stop using a product because it's ads are no longer showing up on Twitter?

Hey @Entropy, thanks for your feedback - let me answer in order:

Marketing guidance and campaign design (re comments from @jameskbh @karpatkey) Not sure if that was noticed but we changed this in the last iteration of proposal and added consultations with a Marketing Expert to guide teams while building their campaigns.
Metrics - absolute metrics allow to calculate the unit cost, eg. value of volume per $1 spent so indirect ROI - that's why we used them.
Retention - the aim of this program is to acquire new wallets and calculate their LTV ('lifetime value') which is the overall amount of revenue a wallet generates to the ecosystem and to the dApp. At the same time, we calculate CAC (this wallet's acquisition cost) from a campaign. If the LTV is higher than CAC then the acquisition of such wallet already paid itself off (= ecosystem / dApp made profit on it). The only thing left is to acquire more wallets of such type. There's no similarity to programs like zkSync Ignite because we don't reward users directly so there's no incentive for mercenary capital. Would anyone stop using a product because it's ads are no longer showing up on Twitter?

Quoted from Entropy

jump to post →

Best, Kamil

posted 1 year ago

Hey @Bruce, thanks for your comments! :raised_hands:

What kind of service do you have in mind when saying "independent audit mechanism to verify declared KPIs"? We listed all accepted 3rd party apps to share KPIs in the application - which are Dune, Tokenterminal, DefiLlama, Flipsyde & Patterns. Dune, Flipsyde & DefiLlama metric queries are open-source and are fully verifiable. Do you maybe have in mind an anti-sybil verification?
I guess that by hybrid economics you mean that some conversions happen off-chain. In such case, the dApp doesn't generate sequencer fees, hence, revenue for the ecosystem. Do you have any example of Arbitrum-based dApp that has such mechanism?

Hey @Bruce, thanks for your comments! :raised_hands:

What kind of service do you have in mind when saying "independent audit mechanism to verify declared KPIs"? We listed all accepted 3rd party apps to share KPIs in the application - which are Dune, Tokenterminal, DefiLlama, Flipsyde & Patterns. Dune, Flipsyde & DefiLlama metric queries are open-source and are fully verifiable. Do you maybe have in mind an anti-sybil verification?
I guess that by hybrid economics you mean that some conversions happen off-chain. In such case, the dApp doesn't generate sequencer fees, hence, revenue for the ecosystem. Do you have any example of Arbitrum-based dApp that has such mechanism?

@Zeptimus - thanks for your vote and feedback! :handshake:

Can you please share what existing grant programs you have in mind?
Regarding mission and vision - both of these are usually high-level and long-term goals of organizations. As long as we accept the fact that sequencer fees are an important revenue stream for Arbitrum, we believe that acquiring users to grow this revenue stream aligns with Arbitrum's current goal. Scope of the project was consulted with Arbitrum Foundation which I believe confirms this line of thinking - we're super happy to adjust this proposal however. Can you share some details on this?

Thanks and best! Kamil

Hey @maxlomu, thanks for your comments. Let us align with your line of thinking:

Limiting apps choice to the ones that found PMF (= generate revenue / profit) makes perfect sense :raised_hands:
I don't believe that a universal workbook would work for all dApps in the ecosystem - in order to run a successful marketing campaign you need to define your USP, your audience and how to attract that audience - which is different for every app. I'm aware that most teams are very technical (=developers) but giving them a false feeling of security (because they read a playbook) would just do damage.
CAC is going to be different for every dApp because the dApp LTV is different. In DeFi segment you may pay > $100 CAC for acquiring a user and it still pays off, in Gaming you'll be targeting $10-20 CAC.

Quoted from maxlomu

Using incentives to attract existing onchain users is easy IMO - But how do we increase the pie? How do we bring net new users onchain? This should be the goal.

jump to post →

Our goal is exactly as you mentioned - to acquire new users. Running incentives is an optional type of campaign which still needs to be supplemented with an off-chain marketing campaign (min. 50% of budget).

Quoted from maxlomu

We should then start with a drastically lower budget. $100k range.

jump to post →

We could run a smaller pilot but $100k range will just set Arbitrum back and give no actionable results. I'd say that $1m would be possible with limiting the program to around 10 dApps that have PMF and smaller budgets. If you focus on 2-3 dApps you're going to have very mixed results, if you limit the budget to $5-10k per dApp - you're not going to attract successful dApps (overhead costs) and if you limit the program time - you're not going to have enough iterations (3 months is minimum IMO).

Let me kindly know what you think.

Best, Kamil

posted 1 year ago

edited 1 year ago

Hey @mcfly, huge thanks for your positive words! :fire: Yes, we've been working on this proposal since the inception of ARB Liquidity Incentives calls so basically +6 months now - also incorporating takeaways from LTIPP :handshake:

Budget breakdown Average $150k / project / 3 months means an average budget of $50k per month. With a survey-declared CAC of $50 per user (which we plan do decrease x2) this means acquiring 1000 - 2000 users per project. For big DeFis like GMX this would mean getting their DAU / MAU back to numbers as it was 1 year ago: Followed by a similar growth in sequencer fees generated for Arbitrum: Please note these are 1-week data points; source: https://patterns.build/app/gmx/charts?period=last+year&blockchain+breakdown=false&blockchains=arbitrum-one For multichain dApps & bridges like Across this would mean moving a chunk of their TVL into the Arbitrum ecosystem (that's why we're incentivizing positive net inflow into $ARB only). The userbase is there: For smaller protocols it's a chance to gain wider adoption and as we discussed with Arbitrum Foundation - one of the goals of this program is to identify such rising stars. This doesn't necessarily mean that $150k will be granted to every applicant - ROI is the leading metric here. In case of both small and big projects, the overarching goal is to increase sequencer revenues by showcasing sustainable (= positive ROI) strategies to acquire new users.
Committee selection OCL & Arbitrum Foundation representatives will be appointed by them, DAO Representative & Marketing Consultant will be selected from open applications shared here on the DAO forum but also from our direct outreach. We do have some high quality potential candidates already but we want to get the most experienced people possible so ones with the best track records win.
Sustainability Plan Retention metrics will be calculated during campaigns and after they're finished but more importantly - CAC & wallet LTVs will be calculated continuously along the program. Retention is important but other than in case of LTV-focused programs, our aim is to find user segments with positive ROI. This boils down to understanding which user segment has ecosystem LTV (= sequencer fees) + dApp LTV (= dApp fees) higher than its CAC. Once such segments are found, the 2nd iteration will be started to focus on these segments only. We were encouraged to plan for the future and increase the budget of this program to $10m to start the 2nd iteration instantly but we're aware of what's happening on the market and want to plan accordingly, saving money for the DAO (also returning unused funds in case of this program).

Budget breakdown Average $150k / project / 3 months means an average budget of $50k per month. With a survey-declared CAC of $50 per user (which we plan do decrease x2) this means acquiring 1000 - 2000 users per project. For big DeFis like GMX this would mean getting their DAU / MAU back to numbers as it was 1 year ago: Followed by a similar growth in sequencer fees generated for Arbitrum: Please note these are 1-week data points; source: https://patterns.build/app/gmx/charts?period=last+year&blockchain+breakdown=false&blockchains=arbitrum-one For multichain dApps & bridges like Across this would mean moving a chunk of their TVL into the Arbitrum ecosystem (that's why we're incentivizing positive net inflow into $ARB only). The userbase is there: For smaller protocols it's a chance to gain wider adoption and as we discussed with Arbitrum Foundation - one of the goals of this program is to identify such rising stars. This doesn't necessarily mean that $150k will be granted to every applicant - ROI is the leading metric here. In case of both small and big projects, the overarching goal is to increase sequencer revenues by showcasing sustainable (= positive ROI) strategies to acquire new users.
Committee selection OCL & Arbitrum Foundation representatives will be appointed by them, DAO Representative & Marketing Consultant will be selected from open applications shared here on the DAO forum but also from our direct outreach. We do have some high quality potential candidates already but we want to get the most experienced people possible so ones with the best track records win.
Sustainability Plan Retention metrics will be calculated during campaigns and after they're finished but more importantly - CAC & wallet LTVs will be calculated continuously along the program. Retention is important but other than in case of LTV-focused programs, our aim is to find user segments with positive ROI. This boils down to understanding which user segment has ecosystem LTV (= sequencer fees) + dApp LTV (= dApp fees) higher than its CAC. Once such segments are found, the 2nd iteration will be started to focus on these segments only. We were encouraged to plan for the future and increase the budget of this program to $10m to start the 2nd iteration instantly but we're aware of what's happening on the market and want to plan accordingly, saving money for the DAO (also returning unused funds in case of this program).

I hope these answers clarify, happy to continue the discussion! :raised_hands:

Best, Kamil

Hey @maxlomu, thanks for your comments. Let us align with your line of thinking:

Limiting apps choice to the ones that found PMF (= generate revenue / profit) makes perfect sense :raised_hands:
I don't believe that a universal workbook would work for all dApps in the ecosystem - in order to run a successful marketing campaign you need to define your USP, your audience and how to attract that audience - which is different for every app. I'm aware that most teams are very technical (=developers) but giving them a false feeling of security (because they read a playbook) would just do damage.
CAC is going to be different for every dApp because the dApp LTV is different. In DeFi segment you may pay > $100 CAC for acquiring a user and it still pays off, in Gaming you'll be targeting $10-20 CAC.

Quoted from maxlomu

Using incentives to attract existing onchain users is easy IMO - But how do we increase the pie? How do we bring net new users onchain? This should be the goal.

jump to post →

Quoted from maxlomu

We should then start with a drastically lower budget. $100k range.

jump to post →

Let me kindly know what you think.

Best, Kamil

posted 1 year ago

edited 1 year ago

Budget breakdown Average $150k / project / 3 months means an average budget of $50k per month. With a survey-declared CAC of $50 per user (which we plan do decrease x2) this means acquiring 1000 - 2000 users per project. For big DeFis like GMX this would mean getting their DAU / MAU back to numbers as it was 1 year ago: Followed by a similar growth in sequencer fees generated for Arbitrum: Please note these are 1-week data points; source: https://patterns.build/app/gmx/charts?period=last+year&blockchain+breakdown=false&blockchains=arbitrum-one For multichain dApps & bridges like Across this would mean moving a chunk of their TVL into the Arbitrum ecosystem (that's why we're incentivizing positive net inflow into $ARB only). The userbase is there: For smaller protocols it's a chance to gain wider adoption and as we discussed with Arbitrum Foundation - one of the goals of this program is to identify such rising stars. This doesn't necessarily mean that $150k will be granted to every applicant - ROI is the leading metric here. In case of both small and big projects, the overarching goal is to increase sequencer revenues by showcasing sustainable (= positive ROI) strategies to acquire new users.
Committee selection OCL & Arbitrum Foundation representatives will be appointed by them, DAO Representative & Marketing Consultant will be selected from open applications shared here on the DAO forum but also from our direct outreach. We do have some high quality potential candidates already but we want to get the most experienced people possible so ones with the best track records win.
Sustainability Plan Retention metrics will be calculated during campaigns and after they're finished but more importantly - CAC & wallet LTVs will be calculated continuously along the program. Retention is important but other than in case of LTV-focused programs, our aim is to find user segments with positive ROI. This boils down to understanding which user segment has ecosystem LTV (= sequencer fees) + dApp LTV (= dApp fees) higher than its CAC. Once such segments are found, the 2nd iteration will be started to focus on these segments only. We were encouraged to plan for the future and increase the budget of this program to $10m to start the 2nd iteration instantly but we're aware of what's happening on the market and want to plan accordingly, saving money for the DAO (also returning unused funds in case of this program).

Budget breakdown Average $150k / project / 3 months means an average budget of $50k per month. With a survey-declared CAC of $50 per user (which we plan do decrease x2) this means acquiring 1000 - 2000 users per project. For big DeFis like GMX this would mean getting their DAU / MAU back to numbers as it was 1 year ago: Followed by a similar growth in sequencer fees generated for Arbitrum: Please note these are 1-week data points; source: https://patterns.build/app/gmx/charts?period=last+year&blockchain+breakdown=false&blockchains=arbitrum-one For multichain dApps & bridges like Across this would mean moving a chunk of their TVL into the Arbitrum ecosystem (that's why we're incentivizing positive net inflow into $ARB only). The userbase is there: For smaller protocols it's a chance to gain wider adoption and as we discussed with Arbitrum Foundation - one of the goals of this program is to identify such rising stars. This doesn't necessarily mean that $150k will be granted to every applicant - ROI is the leading metric here. In case of both small and big projects, the overarching goal is to increase sequencer revenues by showcasing sustainable (= positive ROI) strategies to acquire new users.
Committee selection OCL & Arbitrum Foundation representatives will be appointed by them, DAO Representative & Marketing Consultant will be selected from open applications shared here on the DAO forum but also from our direct outreach. We do have some high quality potential candidates already but we want to get the most experienced people possible so ones with the best track records win.
Sustainability Plan Retention metrics will be calculated during campaigns and after they're finished but more importantly - CAC & wallet LTVs will be calculated continuously along the program. Retention is important but other than in case of LTV-focused programs, our aim is to find user segments with positive ROI. This boils down to understanding which user segment has ecosystem LTV (= sequencer fees) + dApp LTV (= dApp fees) higher than its CAC. Once such segments are found, the 2nd iteration will be started to focus on these segments only. We were encouraged to plan for the future and increase the budget of this program to $10m to start the 2nd iteration instantly but we're aware of what's happening on the market and want to plan accordingly, saving money for the DAO (also returning unused funds in case of this program).

I hope these answers clarify, happy to continue the discussion! :raised_hands:

Best, Kamil

posted 1 year ago

Hey @BlockworksResearch, thanks so much for these comments :handshake: Your opinion is extremely important to us. Let me answer in order:

General opinion. As it was discussed with @danielo - dApp users generate sequencer gas fees which are an important revenue stream for the ecosystem. With CAC levels of ~$50 declared by some protocols in the survey, it's doable to achieve a positive ROI for the ecosystem for some dApps and / or campaigns but requires experimentation - which this program is designed for. At the same time - this program has the lowest budget of all incentive / rewarding / airdrop programs proposed.
On Selection and Strategy. We've added “Application assessment”, “Application requirements” & “List of acceptable strategies” sections . The KPIs have to be measured for Arbitrum chain only.
On Operations. It's only Patterns analysts and Marketing Expert that are required to work full-time. Other positions were consulted with OCL & AF (the DAO representative is a paid position) and are not required to be engaged full-time. This bi-weekly model is used in other proposals and seems to be widely accepted. We'd be excited for Blockworks join as well :handshake:
On KPIs. NFT & Gaming categories were exchanged with "Other" category, limited to only 5 projects to accommodate for high quality projects that don't fit anywhere else and potentially include the AI narrative. The KPIs were changed to non-gameable ones - including only the number of converting users and the volume of transactions.

Hey @BlockworksResearch, thanks so much for these comments :handshake: Your opinion is extremely important to us. Let me answer in order:

General opinion. As it was discussed with @danielo - dApp users generate sequencer gas fees which are an important revenue stream for the ecosystem. With CAC levels of ~$50 declared by some protocols in the survey, it's doable to achieve a positive ROI for the ecosystem for some dApps and / or campaigns but requires experimentation - which this program is designed for. At the same time - this program has the lowest budget of all incentive / rewarding / airdrop programs proposed.
On Selection and Strategy. We've added “Application assessment”, “Application requirements” & “List of acceptable strategies” sections . The KPIs have to be measured for Arbitrum chain only.
On Operations. It's only Patterns analysts and Marketing Expert that are required to work full-time. Other positions were consulted with OCL & AF (the DAO representative is a paid position) and are not required to be engaged full-time. This bi-weekly model is used in other proposals and seems to be widely accepted. We'd be excited for Blockworks join as well :handshake:
On KPIs. NFT & Gaming categories were exchanged with "Other" category, limited to only 5 projects to accommodate for high quality projects that don't fit anywhere else and potentially include the AI narrative. The KPIs were changed to non-gameable ones - including only the number of converting users and the volume of transactions.

@gauntlet - thank you for the comments here and on Telegram. We very much appreciate it :clap: Regarding your comment:

We removed NFT & Gaming categories, exchanged it for "Others" and limited to 5 projects only to accommodate for any project that doesn't belong to Bridge or DeFi category. As of our current knowledge, there are currently ~20 projects with more than 1k MAU operating on Arbitrum (including OpenSea, Treasure DAO, zkPass, etc.). However, if the Committee decides to not accept these based on proposed KPIs - we won't be pushing this category and basically return the funds to the DAO.
Optimisation will be based on Marketing Expert working full-time to improve the campaigns (increasing conversion and minimizing CAC) and Patterns analyst tracking the on-chain LTV of newly acquired users to understand ROI for different channels.

Thanks :handshake: Kamil

posted 1 year ago

edited 1 year ago

Hey @TodayInDeFi, thanks for your comments! :raised_hands:

Regarding ROI - as explained in comments above, no campaigns measured ROI so far, this will be the first one. So there's nothing to compare to and we can safely assume that due to the lack of retention and focus on TVL, LTIPP had a negative ROI for $ARB (of course it was still needed to learn from). However with a $50 CAC declared in our survey it gives a potential for positive ROI with fees from acquired wallets :fire:
The 3-month slot was discussed during ARB Liquidity Incentive calls as an optimum. Most experienced projects have their own marketing teams and if the program works well, we will be able to run another iteration afterwards. This is in initial run only with a small budget.

Hey @TodayInDeFi, thanks for your comments! :raised_hands:

Regarding ROI - as explained in comments above, no campaigns measured ROI so far, this will be the first one. So there's nothing to compare to and we can safely assume that due to the lack of retention and focus on TVL, LTIPP had a negative ROI for $ARB (of course it was still needed to learn from). However with a $50 CAC declared in our survey it gives a potential for positive ROI with fees from acquired wallets :fire:
The 3-month slot was discussed during ARB Liquidity Incentive calls as an optimum. Most experienced projects have their own marketing teams and if the program works well, we will be able to run another iteration afterwards. This is in initial run only with a small budget.

Hope this answers your concerns!

Hey @cp0x, we detailed the budget and methodology of measuring on-chain metrics but if that's not enough then sorry, we might have misunderstood the level of details you were expecting. We'll try to put some more details - DAO representative & marketing specialist are going to be paid positions and it's included in the proposal already. And yes, Arbitrum Foundation and Off-Chain Labs waived their remuneration for the presence in the Committee :handshake:

Deelabs

posted 1 year ago

We find this proposal to be exceptionally well-structured and particularly exciting in its user-centric, data-driven approach to ecosystem growth. It's genuinely refreshing to see such a comprehensive framework that addresses the fundamental challenges of user acquisition in crypto, backed by concrete data and clear methodologies.

The analysis of previous LTIPP results is particularly insightful, highlighting critical gaps in current approaches - notably that only 21% of protocols know their CAC and none track user LTV. This empirical foundation is yet another testament to the strong justification underlying the proposed solution.

The recent update effectively addresses any leftover concerns, as the addition of a diverse committee structure ensures proper oversight, the inclusion of retention KPIs addresses long-term sustainability concerns and the clear methodology for measuring CAC, LTV, and ROI enables proper evaluation.

What makes this proposal truly worthwile is its emphasis on measurable outcomes and iterative improvement. The combination of off-chain marketing support with on-chain performance tracking could hopefully set and reinforce a new standard for how projects approach user acquisition and retention.

We're particularly supportive of the proposal's emphasis on helping smaller projects through dedicated marketing expertise while providing flexibility for larger protocols to leverage their existing capabilities. This balanced approach should help foster broader ecosystem growth.

Overall, we strongly support this initiative as it represents a crucial step toward more sophisticated, data-driven ecosystem development. The focus on measurable outcomes and user retention could provide valuable insights for future growth initiatives across the entire space.

posted 1 year ago

Hey @BlockworksResearch, thanks so much for these comments :handshake: Your opinion is extremely important to us. Let me answer in order:

General opinion. As it was discussed with @danielo - dApp users generate sequencer gas fees which are an important revenue stream for the ecosystem. With CAC levels of ~$50 declared by some protocols in the survey, it's doable to achieve a positive ROI for the ecosystem for some dApps and / or campaigns but requires experimentation - which this program is designed for. At the same time - this program has the lowest budget of all incentive / rewarding / airdrop programs proposed.
On Selection and Strategy. We've added “Application assessment”, “Application requirements” & “List of acceptable strategies” sections . The KPIs have to be measured for Arbitrum chain only.
On Operations. It's only Patterns analysts and Marketing Expert that are required to work full-time. Other positions were consulted with OCL & AF (the DAO representative is a paid position) and are not required to be engaged full-time. This bi-weekly model is used in other proposals and seems to be widely accepted. We'd be excited for Blockworks join as well :handshake:
On KPIs. NFT & Gaming categories were exchanged with "Other" category, limited to only 5 projects to accommodate for high quality projects that don't fit anywhere else and potentially include the AI narrative. The KPIs were changed to non-gameable ones - including only the number of converting users and the volume of transactions.

Hey @BlockworksResearch, thanks so much for these comments :handshake: Your opinion is extremely important to us. Let me answer in order:

General opinion. As it was discussed with @danielo - dApp users generate sequencer gas fees which are an important revenue stream for the ecosystem. With CAC levels of ~$50 declared by some protocols in the survey, it's doable to achieve a positive ROI for the ecosystem for some dApps and / or campaigns but requires experimentation - which this program is designed for. At the same time - this program has the lowest budget of all incentive / rewarding / airdrop programs proposed.
On Selection and Strategy. We've added “Application assessment”, “Application requirements” & “List of acceptable strategies” sections . The KPIs have to be measured for Arbitrum chain only.
On Operations. It's only Patterns analysts and Marketing Expert that are required to work full-time. Other positions were consulted with OCL & AF (the DAO representative is a paid position) and are not required to be engaged full-time. This bi-weekly model is used in other proposals and seems to be widely accepted. We'd be excited for Blockworks join as well :handshake:
On KPIs. NFT & Gaming categories were exchanged with "Other" category, limited to only 5 projects to accommodate for high quality projects that don't fit anywhere else and potentially include the AI narrative. The KPIs were changed to non-gameable ones - including only the number of converting users and the volume of transactions.

@gauntlet - thank you for the comments here and on Telegram. We very much appreciate it :clap: Regarding your comment:

We removed NFT & Gaming categories, exchanged it for "Others" and limited to 5 projects only to accommodate for any project that doesn't belong to Bridge or DeFi category. As of our current knowledge, there are currently ~20 projects with more than 1k MAU operating on Arbitrum (including OpenSea, Treasure DAO, zkPass, etc.). However, if the Committee decides to not accept these based on proposed KPIs - we won't be pushing this category and basically return the funds to the DAO.
Optimisation will be based on Marketing Expert working full-time to improve the campaigns (increasing conversion and minimizing CAC) and Patterns analyst tracking the on-chain LTV of newly acquired users to understand ROI for different channels.

Thanks :handshake: Kamil

posted 1 year ago

edited 1 year ago

Hey @TodayInDeFi, thanks for your comments! :raised_hands:

Regarding ROI - as explained in comments above, no campaigns measured ROI so far, this will be the first one. So there's nothing to compare to and we can safely assume that due to the lack of retention and focus on TVL, LTIPP had a negative ROI for $ARB (of course it was still needed to learn from). However with a $50 CAC declared in our survey it gives a potential for positive ROI with fees from acquired wallets :fire:
The 3-month slot was discussed during ARB Liquidity Incentive calls as an optimum. Most experienced projects have their own marketing teams and if the program works well, we will be able to run another iteration afterwards. This is in initial run only with a small budget.

Hey @TodayInDeFi, thanks for your comments! :raised_hands:

Regarding ROI - as explained in comments above, no campaigns measured ROI so far, this will be the first one. So there's nothing to compare to and we can safely assume that due to the lack of retention and focus on TVL, LTIPP had a negative ROI for $ARB (of course it was still needed to learn from). However with a $50 CAC declared in our survey it gives a potential for positive ROI with fees from acquired wallets :fire:
The 3-month slot was discussed during ARB Liquidity Incentive calls as an optimum. Most experienced projects have their own marketing teams and if the program works well, we will be able to run another iteration afterwards. This is in initial run only with a small budget.

Hope this answers your concerns!

Deelabs

posted 1 year ago

posted 1 year ago

edited 1 year ago

Hey @Saurabh, thanks for your insights! Let me answer questions first:

The most important safeguard is the fact that funds will be disbursed based on the KPI achievement level. If 60% of the KPI is achieved, only 60% of the budget will be refunded.
As above - partial funding up to the level that the previously declared KPIs are actually achieved.
CAC will be measured based on off / on-chain marketing channels used. LTV will be displayed in Patterns app for every wallet and measured separately for:

Hey @Saurabh, thanks for your insights! Let me answer questions first:

The most important safeguard is the fact that funds will be disbursed based on the KPI achievement level. If 60% of the KPI is achieved, only 60% of the budget will be refunded.
As above - partial funding up to the level that the previously declared KPIs are actually achieved.
CAC will be measured based on off / on-chain marketing channels used. LTV will be displayed in Patterns app for every wallet and measured separately for:

Arbitrum ecosystem - sum of all network fees generated by the wallet acquired,
dApps & Protocols - sum of all in-protocol fees generated by the wallet acquired. This means translating smart contract ABI events into conversions and summing up all their values expressed in a common denominator ($ARB, $ETH or $USD).

Since we're not focusing specifically on incentivizing wallets with airdrops, we assume the retention for acquired wallets to be similar to the users already existing in the network since there's no farming / mercenary incentives. To strenghten this effect however, we're planning to add some retention-related KPIs as you already mentioned.
We will be updated all KPIs, CAC & LTV metrics for the community once a month.

Ideas:

Yes, we plan to include that.
Yes, that's already sealed.
Can you please explain how this would differ from the existing model?
That would highly depend on the type of campaigns that protocols come up with. For on-chain incentives we can use LTIPP infra as many members mentioned above, for off-chain different infra tools will be needed.
We planned to increase the budget in such a way that if the initial $3m run is successful, we can move on with the campaign without another proposal. Would this be a good solution in your opinion?

Hey @CastleCapital, thanks for your insights! I reached out to Atomist on TG to consult about the KPIs :raised_hands: Answering your feedback:

That's a tricky subject. As you can see above, some believe this budget is not enough, some that it's excessive. If we focus on the most experienced protocols (as its suggested), a $50k budget per month (assuming the our baseline CAC is $50) will actually not be enough. There's no other option to gain the know-how than experimenting with different off-chain strategies. Infrastructure in this case is already built in this budget - ad networks, newsletter tools, cold-mailing tools, etc. have their own infra to run the outreach.
We don't think centralization of marketing will work in this case. Each protocol should know its userbase best and it's up to the team to design a strategy to target this audience effectively. DAO should supervise the program but not organize the campaigns for protocols. Infra is already there, it doesn't need to be organized.
You're perfectly right, we're working with the Incentive Workgroup on improving these KPIs with retention in mind.
Would you please explain how you'd envision this? We believe that Gaming users require a completely different approach that DeFi or NFT users. Even in every segment, like DeFi, there are different products targeting other type of users (eg. DeX and prediction markets). How would one, centralized campaign target all these different types of users?

Looking forward to the discussion!

posted 1 year ago

edited 1 year ago

Hey @Saurabh, thanks for your insights! Let me answer questions first:

The most important safeguard is the fact that funds will be disbursed based on the KPI achievement level. If 60% of the KPI is achieved, only 60% of the budget will be refunded.
As above - partial funding up to the level that the previously declared KPIs are actually achieved.
CAC will be measured based on off / on-chain marketing channels used. LTV will be displayed in Patterns app for every wallet and measured separately for:

Hey @Saurabh, thanks for your insights! Let me answer questions first:

The most important safeguard is the fact that funds will be disbursed based on the KPI achievement level. If 60% of the KPI is achieved, only 60% of the budget will be refunded.
As above - partial funding up to the level that the previously declared KPIs are actually achieved.
CAC will be measured based on off / on-chain marketing channels used. LTV will be displayed in Patterns app for every wallet and measured separately for:

Arbitrum ecosystem - sum of all network fees generated by the wallet acquired,
dApps & Protocols - sum of all in-protocol fees generated by the wallet acquired. This means translating smart contract ABI events into conversions and summing up all their values expressed in a common denominator ($ARB, $ETH or $USD).

Since we're not focusing specifically on incentivizing wallets with airdrops, we assume the retention for acquired wallets to be similar to the users already existing in the network since there's no farming / mercenary incentives. To strenghten this effect however, we're planning to add some retention-related KPIs as you already mentioned.
We will be updated all KPIs, CAC & LTV metrics for the community once a month.

Ideas:

Yes, we plan to include that.
Yes, that's already sealed.
Can you please explain how this would differ from the existing model?
That would highly depend on the type of campaigns that protocols come up with. For on-chain incentives we can use LTIPP infra as many members mentioned above, for off-chain different infra tools will be needed.
We planned to increase the budget in such a way that if the initial $3m run is successful, we can move on with the campaign without another proposal. Would this be a good solution in your opinion?

Hey @CastleCapital, thanks for your insights! I reached out to Atomist on TG to consult about the KPIs :raised_hands: Answering your feedback:

That's a tricky subject. As you can see above, some believe this budget is not enough, some that it's excessive. If we focus on the most experienced protocols (as its suggested), a $50k budget per month (assuming the our baseline CAC is $50) will actually not be enough. There's no other option to gain the know-how than experimenting with different off-chain strategies. Infrastructure in this case is already built in this budget - ad networks, newsletter tools, cold-mailing tools, etc. have their own infra to run the outreach.
We don't think centralization of marketing will work in this case. Each protocol should know its userbase best and it's up to the team to design a strategy to target this audience effectively. DAO should supervise the program but not organize the campaigns for protocols. Infra is already there, it doesn't need to be organized.
You're perfectly right, we're working with the Incentive Workgroup on improving these KPIs with retention in mind.
Would you please explain how you'd envision this? We believe that Gaming users require a completely different approach that DeFi or NFT users. Even in every segment, like DeFi, there are different products targeting other type of users (eg. DeX and prediction markets). How would one, centralized campaign target all these different types of users?

Looking forward to the discussion!

posted 1 year ago

edited 1 year ago

Hey @kuiclub, thank you :raised_hands: Let me answer your questions:

So for LTV calculation we'll be calculating LTV for the ecosystem (gas fees) and LTV for the dApp itself (revenue from fees) for every wallet. At the same time, we'll be calculating CAC from both off & on-chain campaigns. On-chain is pretty simple to calculate but off-chain may be much more complex because of multiple tools that may be used - so every traffic source will be registered separately and have its own CAC.
During ARB Liquidity Incentive calls we agreed 20 protocols is an optimal number as a pilot - 5 per category, 2-3 big, 2-3 medium & small. As stated above, with assumption of CAC = $50 the budget fits well. This budget is also multiple times smaller than IOSG proposal ($100m) and Merkl's (around $40m) which I believe will be voted in the same batch.
Thanks! Yes, I totally agree :clap:

Hey @kuiclub, thank you :raised_hands: Let me answer your questions:

So for LTV calculation we'll be calculating LTV for the ecosystem (gas fees) and LTV for the dApp itself (revenue from fees) for every wallet. At the same time, we'll be calculating CAC from both off & on-chain campaigns. On-chain is pretty simple to calculate but off-chain may be much more complex because of multiple tools that may be used - so every traffic source will be registered separately and have its own CAC.
During ARB Liquidity Incentive calls we agreed 20 protocols is an optimal number as a pilot - 5 per category, 2-3 big, 2-3 medium & small. As stated above, with assumption of CAC = $50 the budget fits well. This budget is also multiple times smaller than IOSG proposal ($100m) and Merkl's (around $40m) which I believe will be voted in the same batch.
Thanks! Yes, I totally agree :clap:

We're trying to listen as much as possible, that's why we started working on this proposal with surveys and outreaching to protocols.

Thanks @Zeptimus, really appreciate this :pray: I think in order to be objective, we need to have all 4 categories included and be able to test it with smaller / bigger projects. Time is of big importance here. Also, since this is a DAO proposal, it needs to be quite neutral so I'm not sure we should be cherry-picking only selected projects.

posted 1 year ago

edited 1 year ago

GM @danielo!

Yes, EOA <> EOA transactions on L2s are very cheap (as you said, $0.02 - 0.05 per TXs) but EOA <> SC are much more expensive because of the processing power needed to run them. It's hard to calculate an average because every smart contract is designed differently (eg. swapping tokens on GMX right now costs around $0.24 in network fees), on L2fees.info you can find some comparisons between L2s based on L2Beat data. Just to give you a quick overview of differences between dApps: This is Mux dApp data for Arbitrum One during last week - as you can see, it had 65 wallets that generated $61 in gas fees for Arbitrum. That's $4 per wallet per month, $48 per year. Of course, you'll find protocols that have 5x less or 5x more. Regarding your bridging example - there are different types of bridges (decentralized / centralized) and I believe many native bridges cover the gas fees for user with ERC4337 for the same reason we're also including covering gas fees for bridges into this program - once the funds are inside an ecosystem, they generate further revenue & fees. So this exact case may not be the most representative.
We're talking about DeFi user demographic when it comes to DeFi category we've outlined in the proposal. Please consider that gaming / social protocols have very low volume but at the same time they generate a lot of interactions with the network - also generating fees :slightly_smiling_face:
I agree with your perspective and think the answer to this is not going to be one-sided - meaning Arbitrum will have to experiment with different business models to be sustainable - including gas fees, RaaS (rollup as a service), etc. I think at some later stage ecosystem's business model will be similar to current cloud providers models (AWS, Google Cloud, Azure). They do also offer free credits & additional programs to help their clients.

GM @danielo!

Yes, EOA <> EOA transactions on L2s are very cheap (as you said, $0.02 - 0.05 per TXs) but EOA <> SC are much more expensive because of the processing power needed to run them. It's hard to calculate an average because every smart contract is designed differently (eg. swapping tokens on GMX right now costs around $0.24 in network fees), on L2fees.info you can find some comparisons between L2s based on L2Beat data. Just to give you a quick overview of differences between dApps: This is Mux dApp data for Arbitrum One during last week - as you can see, it had 65 wallets that generated $61 in gas fees for Arbitrum. That's $4 per wallet per month, $48 per year. Of course, you'll find protocols that have 5x less or 5x more. Regarding your bridging example - there are different types of bridges (decentralized / centralized) and I believe many native bridges cover the gas fees for user with ERC4337 for the same reason we're also including covering gas fees for bridges into this program - once the funds are inside an ecosystem, they generate further revenue & fees. So this exact case may not be the most representative.
We're talking about DeFi user demographic when it comes to DeFi category we've outlined in the proposal. Please consider that gaming / social protocols have very low volume but at the same time they generate a lot of interactions with the network - also generating fees :slightly_smiling_face:
I agree with your perspective and think the answer to this is not going to be one-sided - meaning Arbitrum will have to experiment with different business models to be sustainable - including gas fees, RaaS (rollup as a service), etc. I think at some later stage ecosystem's business model will be similar to current cloud providers models (AWS, Google Cloud, Azure). They do also offer free credits & additional programs to help their clients.

I really appreciate this thoughts exchange here! :raised_hands:

posted 1 year ago

Hey @duokongcrypto, thanks for your thoughts! Let me answer your questions below:

The framework here is designed as self-balancing - by requiring ambitious goals (in order to get accepted) and making projects responsible for their results (in order to receive a full refund). Other than that, we'll be calculating CAC, LTV & ROI to do the balance math if that's what you're asking :slightly_smiling_face:
We have nothing against integrating with STIP / LTIPP but honestly, I don't see much framework we could integrate. It's great that we have plenty of Dune dashboards - this can be reused for tracking KPIs. What else would you see integrated?
Patterns tool is basically a wallet CRM for dApps & Protocols - that's the main advantage. This means that we can actually calculate LTV for wallets interacting with Arbitrum dApps, which is very complex (requiring converting ABI events from all contracts into human readable conversions) and not possible with other tools. And yes, we can verify KPIs in our tool.

Hey @duokongcrypto, thanks for your thoughts! Let me answer your questions below:

The framework here is designed as self-balancing - by requiring ambitious goals (in order to get accepted) and making projects responsible for their results (in order to receive a full refund). Other than that, we'll be calculating CAC, LTV & ROI to do the balance math if that's what you're asking :slightly_smiling_face:
We have nothing against integrating with STIP / LTIPP but honestly, I don't see much framework we could integrate. It's great that we have plenty of Dune dashboards - this can be reused for tracking KPIs. What else would you see integrated?
Patterns tool is basically a wallet CRM for dApps & Protocols - that's the main advantage. This means that we can actually calculate LTV for wallets interacting with Arbitrum dApps, which is very complex (requiring converting ABI events from all contracts into human readable conversions) and not possible with other tools. And yes, we can verify KPIs in our tool.

@EzR3aL, thanks for your comments!

The choice of strategy will belong to the dApp / Protocol and we're perfectly fine with promotion in mobile apps - that sounds like a good idea if the target audience is similar!
That's around $50k budget per month per applicant - assuming $50 CAC mentioned above, it's 1000 users / month. I wouldn't say that's a lot for a big or medium-sized app.

posted 1 year ago

Hey @Ignas, thanks for your support of the idea!

As previously mentioned, we're going to aim at ~20 protocols with an average budget of $50k / month. This is not much looking at the biggest protocols out there and for each of these we'll be calculating ROI based on CAC (for each channel x project) & LTV (for each project & ecosystem).
The exact reason we decided to do it this way was to not limit flexibility but there are some participants of the discussion above who prefer 3rd parties engaging more into campaign creation. Tracking & optimizing is the bare minimum and doesn't limit campaigns in any way. We're still deciding how campaign creation is going to look like - whether 3rd parties should engage or not.
Patterns is an analytics tool, not a marketing agency - we don't run marketing campaigns for the same reason you mentioned in question 2. If we were an agency, we wouldn't be objective and probably acquire most of the budget which wouldn't make sense from DAO perspective - it's projects that need to start building their own campaigns. We cooperate with Optimism Foundation, Polkadot, Bifrost, Aleph Zero and other projects.
Our Twitter is available here and we're active on Telegram where we need to be active. We don't have a token so we can limit ourselves to exchanging important and meaningful information, rather than shilling :grin: Feel free to join the ARB Liquidity Incentives group - it's open for anyone.

Hey @Ignas, thanks for your support of the idea!

As previously mentioned, we're going to aim at ~20 protocols with an average budget of $50k / month. This is not much looking at the biggest protocols out there and for each of these we'll be calculating ROI based on CAC (for each channel x project) & LTV (for each project & ecosystem).
The exact reason we decided to do it this way was to not limit flexibility but there are some participants of the discussion above who prefer 3rd parties engaging more into campaign creation. Tracking & optimizing is the bare minimum and doesn't limit campaigns in any way. We're still deciding how campaign creation is going to look like - whether 3rd parties should engage or not.
Patterns is an analytics tool, not a marketing agency - we don't run marketing campaigns for the same reason you mentioned in question 2. If we were an agency, we wouldn't be objective and probably acquire most of the budget which wouldn't make sense from DAO perspective - it's projects that need to start building their own campaigns. We cooperate with Optimism Foundation, Polkadot, Bifrost, Aleph Zero and other projects.
Our Twitter is available here and we're active on Telegram where we need to be active. We don't have a token so we can limit ourselves to exchanging important and meaningful information, rather than shilling :grin: Feel free to join the ARB Liquidity Incentives group - it's open for anyone.

Thanks @danielo for your support - I know you're experienced in DAO economics & P&Ls so your opinion is very valuable for us. I'm excited to push this discussion further once we have some initial insights! :fire:

posted 1 year ago

edited 1 year ago

Hey @kuiclub, thank you :raised_hands: Let me answer your questions:

So for LTV calculation we'll be calculating LTV for the ecosystem (gas fees) and LTV for the dApp itself (revenue from fees) for every wallet. At the same time, we'll be calculating CAC from both off & on-chain campaigns. On-chain is pretty simple to calculate but off-chain may be much more complex because of multiple tools that may be used - so every traffic source will be registered separately and have its own CAC.
During ARB Liquidity Incentive calls we agreed 20 protocols is an optimal number as a pilot - 5 per category, 2-3 big, 2-3 medium & small. As stated above, with assumption of CAC = $50 the budget fits well. This budget is also multiple times smaller than IOSG proposal ($100m) and Merkl's (around $40m) which I believe will be voted in the same batch.
Thanks! Yes, I totally agree :clap:

Hey @kuiclub, thank you :raised_hands: Let me answer your questions:

So for LTV calculation we'll be calculating LTV for the ecosystem (gas fees) and LTV for the dApp itself (revenue from fees) for every wallet. At the same time, we'll be calculating CAC from both off & on-chain campaigns. On-chain is pretty simple to calculate but off-chain may be much more complex because of multiple tools that may be used - so every traffic source will be registered separately and have its own CAC.
During ARB Liquidity Incentive calls we agreed 20 protocols is an optimal number as a pilot - 5 per category, 2-3 big, 2-3 medium & small. As stated above, with assumption of CAC = $50 the budget fits well. This budget is also multiple times smaller than IOSG proposal ($100m) and Merkl's (around $40m) which I believe will be voted in the same batch.
Thanks! Yes, I totally agree :clap:

We're trying to listen as much as possible, that's why we started working on this proposal with surveys and outreaching to protocols.

posted 1 year ago

edited 1 year ago

GM @danielo!

Yes, EOA <> EOA transactions on L2s are very cheap (as you said, $0.02 - 0.05 per TXs) but EOA <> SC are much more expensive because of the processing power needed to run them. It's hard to calculate an average because every smart contract is designed differently (eg. swapping tokens on GMX right now costs around $0.24 in network fees), on L2fees.info you can find some comparisons between L2s based on L2Beat data. Just to give you a quick overview of differences between dApps: This is Mux dApp data for Arbitrum One during last week - as you can see, it had 65 wallets that generated $61 in gas fees for Arbitrum. That's $4 per wallet per month, $48 per year. Of course, you'll find protocols that have 5x less or 5x more. Regarding your bridging example - there are different types of bridges (decentralized / centralized) and I believe many native bridges cover the gas fees for user with ERC4337 for the same reason we're also including covering gas fees for bridges into this program - once the funds are inside an ecosystem, they generate further revenue & fees. So this exact case may not be the most representative.
We're talking about DeFi user demographic when it comes to DeFi category we've outlined in the proposal. Please consider that gaming / social protocols have very low volume but at the same time they generate a lot of interactions with the network - also generating fees :slightly_smiling_face:
I agree with your perspective and think the answer to this is not going to be one-sided - meaning Arbitrum will have to experiment with different business models to be sustainable - including gas fees, RaaS (rollup as a service), etc. I think at some later stage ecosystem's business model will be similar to current cloud providers models (AWS, Google Cloud, Azure). They do also offer free credits & additional programs to help their clients.

GM @danielo!

Yes, EOA <> EOA transactions on L2s are very cheap (as you said, $0.02 - 0.05 per TXs) but EOA <> SC are much more expensive because of the processing power needed to run them. It's hard to calculate an average because every smart contract is designed differently (eg. swapping tokens on GMX right now costs around $0.24 in network fees), on L2fees.info you can find some comparisons between L2s based on L2Beat data. Just to give you a quick overview of differences between dApps: This is Mux dApp data for Arbitrum One during last week - as you can see, it had 65 wallets that generated $61 in gas fees for Arbitrum. That's $4 per wallet per month, $48 per year. Of course, you'll find protocols that have 5x less or 5x more. Regarding your bridging example - there are different types of bridges (decentralized / centralized) and I believe many native bridges cover the gas fees for user with ERC4337 for the same reason we're also including covering gas fees for bridges into this program - once the funds are inside an ecosystem, they generate further revenue & fees. So this exact case may not be the most representative.
We're talking about DeFi user demographic when it comes to DeFi category we've outlined in the proposal. Please consider that gaming / social protocols have very low volume but at the same time they generate a lot of interactions with the network - also generating fees :slightly_smiling_face:
I agree with your perspective and think the answer to this is not going to be one-sided - meaning Arbitrum will have to experiment with different business models to be sustainable - including gas fees, RaaS (rollup as a service), etc. I think at some later stage ecosystem's business model will be similar to current cloud providers models (AWS, Google Cloud, Azure). They do also offer free credits & additional programs to help their clients.

I really appreciate this thoughts exchange here! :raised_hands:

posted 1 year ago

Hey @duokongcrypto, thanks for your thoughts! Let me answer your questions below:

The framework here is designed as self-balancing - by requiring ambitious goals (in order to get accepted) and making projects responsible for their results (in order to receive a full refund). Other than that, we'll be calculating CAC, LTV & ROI to do the balance math if that's what you're asking :slightly_smiling_face:
We have nothing against integrating with STIP / LTIPP but honestly, I don't see much framework we could integrate. It's great that we have plenty of Dune dashboards - this can be reused for tracking KPIs. What else would you see integrated?
Patterns tool is basically a wallet CRM for dApps & Protocols - that's the main advantage. This means that we can actually calculate LTV for wallets interacting with Arbitrum dApps, which is very complex (requiring converting ABI events from all contracts into human readable conversions) and not possible with other tools. And yes, we can verify KPIs in our tool.

Hey @duokongcrypto, thanks for your thoughts! Let me answer your questions below:

The framework here is designed as self-balancing - by requiring ambitious goals (in order to get accepted) and making projects responsible for their results (in order to receive a full refund). Other than that, we'll be calculating CAC, LTV & ROI to do the balance math if that's what you're asking :slightly_smiling_face:
We have nothing against integrating with STIP / LTIPP but honestly, I don't see much framework we could integrate. It's great that we have plenty of Dune dashboards - this can be reused for tracking KPIs. What else would you see integrated?
Patterns tool is basically a wallet CRM for dApps & Protocols - that's the main advantage. This means that we can actually calculate LTV for wallets interacting with Arbitrum dApps, which is very complex (requiring converting ABI events from all contracts into human readable conversions) and not possible with other tools. And yes, we can verify KPIs in our tool.

@EzR3aL, thanks for your comments!

The choice of strategy will belong to the dApp / Protocol and we're perfectly fine with promotion in mobile apps - that sounds like a good idea if the target audience is similar!
That's around $50k budget per month per applicant - assuming $50 CAC mentioned above, it's 1000 users / month. I wouldn't say that's a lot for a big or medium-sized app.

posted 1 year ago

Hey @Ignas, thanks for your support of the idea!

As previously mentioned, we're going to aim at ~20 protocols with an average budget of $50k / month. This is not much looking at the biggest protocols out there and for each of these we'll be calculating ROI based on CAC (for each channel x project) & LTV (for each project & ecosystem).
The exact reason we decided to do it this way was to not limit flexibility but there are some participants of the discussion above who prefer 3rd parties engaging more into campaign creation. Tracking & optimizing is the bare minimum and doesn't limit campaigns in any way. We're still deciding how campaign creation is going to look like - whether 3rd parties should engage or not.
Patterns is an analytics tool, not a marketing agency - we don't run marketing campaigns for the same reason you mentioned in question 2. If we were an agency, we wouldn't be objective and probably acquire most of the budget which wouldn't make sense from DAO perspective - it's projects that need to start building their own campaigns. We cooperate with Optimism Foundation, Polkadot, Bifrost, Aleph Zero and other projects.
Our Twitter is available here and we're active on Telegram where we need to be active. We don't have a token so we can limit ourselves to exchanging important and meaningful information, rather than shilling :grin: Feel free to join the ARB Liquidity Incentives group - it's open for anyone.

Hey @Ignas, thanks for your support of the idea!

As previously mentioned, we're going to aim at ~20 protocols with an average budget of $50k / month. This is not much looking at the biggest protocols out there and for each of these we'll be calculating ROI based on CAC (for each channel x project) & LTV (for each project & ecosystem).
The exact reason we decided to do it this way was to not limit flexibility but there are some participants of the discussion above who prefer 3rd parties engaging more into campaign creation. Tracking & optimizing is the bare minimum and doesn't limit campaigns in any way. We're still deciding how campaign creation is going to look like - whether 3rd parties should engage or not.
Patterns is an analytics tool, not a marketing agency - we don't run marketing campaigns for the same reason you mentioned in question 2. If we were an agency, we wouldn't be objective and probably acquire most of the budget which wouldn't make sense from DAO perspective - it's projects that need to start building their own campaigns. We cooperate with Optimism Foundation, Polkadot, Bifrost, Aleph Zero and other projects.
Our Twitter is available here and we're active on Telegram where we need to be active. We don't have a token so we can limit ourselves to exchanging important and meaningful information, rather than shilling :grin: Feel free to join the ARB Liquidity Incentives group - it's open for anyone.

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

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.

Quoted from Amira

I really liked the idea of tracking CAC and LTV—these are fundamental for any org. But onchain apps have completely changed the game. And now it is relatively difficult to track these accurately.

jump to post →

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.
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:

posted 1 year ago

Hey @tamara - these are great insights, thank you very much for this :raised_hands:

This overlaps up to some point with the answers we got in a survery - the most efficient off-chain strategies mentioned by protocols were "Social Media Ads" and "Newsletters". This confirms that regular ecom platforms such as GAds or Meta (with FB and Insta rarely being used in web3) don't give results.
This is currently the essence of our discussion - how to cater for needs of different-sized protocols, some of which have experience in marketing and some of which have none & need external help. Our team has seen Polkadot ecosystem spend around $4m budget on multiple agencies, none of which measured their results. We assume that measuring campaigns real-time should cut down on overcharging but I'm more than happy to hear your take 🤝 Let me reach out to you directly to exchange views!
You're right - that's why we also asked about ERC-4337 adoption. In our opinion it's a UX game-changer in web3, although being a long-term solution.

Hey @tamara - these are great insights, thank you very much for this :raised_hands:

This overlaps up to some point with the answers we got in a survery - the most efficient off-chain strategies mentioned by protocols were "Social Media Ads" and "Newsletters". This confirms that regular ecom platforms such as GAds or Meta (with FB and Insta rarely being used in web3) don't give results.
This is currently the essence of our discussion - how to cater for needs of different-sized protocols, some of which have experience in marketing and some of which have none & need external help. Our team has seen Polkadot ecosystem spend around $4m budget on multiple agencies, none of which measured their results. We assume that measuring campaigns real-time should cut down on overcharging but I'm more than happy to hear your take 🤝 Let me reach out to you directly to exchange views!
You're right - that's why we also asked about ERC-4337 adoption. In our opinion it's a UX game-changer in web3, although being a long-term solution.

Hey @BristolBlockchain - thanks so much for your kind words! Let me answer your concerns:

Yes, this was discussed above - the non-financial metrics can be artificially boosted. We're going to propose a better version of this framework next week.
The final choice of the analysts & consultants along with external members will also be included in the upgraded proposal. We're aware of the fact that external experts need to be included here.

Regarding the KPIs being too low or too high - with limited budget, we expect some level of competition between participants. At the same time, they will be responsible for delivering their results, risking budget loss if not delivered. However, an additional mechanism is being created here. Thanks for your support! :clap:

posted 1 year ago

edited 1 year ago

Hey @paulofonseca, thanks for the question and bringing this product up. I think it's somehow similar to Merkl, which is also working on its ARB Incentive proposal simultaneously.

I perceive platforms like Royco more or less as a farming solution for users who are looking for the highest yield within multiple ecosystems. It allows to seamlessly move funds between protocol X in ecosystem A to protocol Y in ecosystem B and probably works great from a user perspective (as long as these protocols are secure). Protocols start to compete for the highest APY and eventually, they start offering additional incentives for users to end up higher in the ranking :money_with_wings:

Hey @paulofonseca, thanks for the question and bringing this product up. I think it's somehow similar to Merkl, which is also working on its ARB Incentive proposal simultaneously.

And it's all great unless these incentives are financed by ecosystems because then you may have an inflow of tens of protocols into the platform with multi-million USD budget which is basically spent within a short period of 3-6 months on competing with other multi-million USD ecosystem budget.

The result is that existing loyal ecosystem users start using this platform, searching for the highest APY and farm incentives. Once budget is depleted, they do exactly the same thing that happened after LTIPP - move to another ecosystem with highest incentives. It works great for the platform and users (as long as there's budget to spend) but not necessarily for the ecosystem (which probably lost a % of its loyal users to the platform).

Summing up, I believe that platforms like these can be useful for single protocols to enhance specific liquidity pools or token pairs and that's what they're doing great. But they might be dangerous for ecosystem retention if you start competing with treasury-funded incentives at a large scale.

posted 1 year ago

Hey @cp0x, thanks for your questions!

Depends on how you perceive Arbitrum's business model. Each wallet, each transaction generates sequencer fees which are one of the most important revenue sources. On every strategy that has positive ROI and will be continued (since it's economically feasible) Arbitrum will make long-term revenue once the program ends.
OK, we will add details to the upgraded proposal version.
We will also explain what this amount covers exactly.
$7500 each.
This proposal is a result of ARB Liqudity Incentives discussions that were happening for the last few months and we agreed to run a first iteration of this program to see the results and modify it accordingly. Hopefully at some point we will be able to scale it to the whole ecosystem!

Hey @cp0x, thanks for your questions!

Depends on how you perceive Arbitrum's business model. Each wallet, each transaction generates sequencer fees which are one of the most important revenue sources. On every strategy that has positive ROI and will be continued (since it's economically feasible) Arbitrum will make long-term revenue once the program ends.
OK, we will add details to the upgraded proposal version.
We will also explain what this amount covers exactly.
$7500 each.
This proposal is a result of ARB Liqudity Incentives discussions that were happening for the last few months and we agreed to run a first iteration of this program to see the results and modify it accordingly. Hopefully at some point we will be able to scale it to the whole ecosystem!

Your insights are always very welcome @danielo! Regarding ROI - as outlined above, the assumption is that strategies with positive ROI (or close to positive) would be continued after the program ends, bringing in new wallets that Arbitrum genereates revenue from. If we assume that sequencer fees are the core part of Arbitrum's revenue stream, then successful user acquisition through dApps & Protocols is crucial. I think that exchanging this budget to ownership would be unjustified as acquiring new users through protocols means also acquiring new Arbitrum wallets - this isn't one-sided promotional activity.

posted 1 year ago

Hey @Euphoria, thanks for your thoughts, I really appreciate your input in this and former proposals (including LTIPP):

You're right that in case of gaming / NFT projects it's easier to artificially boost metrics. In order to counteract such actions, Patterns team is going to cross-check on-chain data with off-chain trackers that will be required. Additionally, we could include revenue / fee related metrics into these 2 categories - happy to hear your thoughts!
That makes sense and as it was mentioned in comments above, we'll probably go for a mixed set of metrics - absolute and relative.
This is currently being discussed with teams, please bear with us until we propose a solution. Some kind of external validation will be included, it's not yet decided what kind though.
On Patterns side it's going to be me and our data analysts who analyzed LTIPP - we'll share more personal details with the upgraded proposal version :handshake:

Hey @Euphoria, thanks for your thoughts, I really appreciate your input in this and former proposals (including LTIPP):

You're right that in case of gaming / NFT projects it's easier to artificially boost metrics. In order to counteract such actions, Patterns team is going to cross-check on-chain data with off-chain trackers that will be required. Additionally, we could include revenue / fee related metrics into these 2 categories - happy to hear your thoughts!
That makes sense and as it was mentioned in comments above, we'll probably go for a mixed set of metrics - absolute and relative.
This is currently being discussed with teams, please bear with us until we propose a solution. Some kind of external validation will be included, it's not yet decided what kind though.
On Patterns side it's going to be me and our data analysts who analyzed LTIPP - we'll share more personal details with the upgraded proposal version :handshake:

Hey @Tekr0x.eth, thanks for bringing this up! First of all, on average the budgets should oscillate around $150k. Secondly, we expect that being responsible for the KPI deliveries, teams will not overpromise or overspend without being sure about the results they're going to deliver. Otherwise, it could end up with them not getting reimbursed with the full amount they've spent. I think such potential loss is enough of a security measure but if you think otherwise - happy to understand your line of thinking.

@karpatkey, great to see you here! Yes, some of your considerations are already being worked on:

It's already decided that additional guidance will be delivered - currently discussing what this guidance is going to be.
Judging from our conversations with teams, this varies significantly. Bigger teams have their own marketing specialists & designers and prefer to run such campaigns in-house. Smaller teams may not have this advantage and we're discussing currently what the perfect solution would be here.
This is correct, the idea was that smaller projects would run a campaing with a smaller budget. Let us think if we can find a solution to this! :raised_hands:

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

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.

Quoted from Amira

I really liked the idea of tracking CAC and LTV—these are fundamental for any org. But onchain apps have completely changed the game. And now it is relatively difficult to track these accurately.

jump to post →

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.
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:

posted 1 year ago

Hey @tamara - these are great insights, thank you very much for this :raised_hands:

This overlaps up to some point with the answers we got in a survery - the most efficient off-chain strategies mentioned by protocols were "Social Media Ads" and "Newsletters". This confirms that regular ecom platforms such as GAds or Meta (with FB and Insta rarely being used in web3) don't give results.
This is currently the essence of our discussion - how to cater for needs of different-sized protocols, some of which have experience in marketing and some of which have none & need external help. Our team has seen Polkadot ecosystem spend around $4m budget on multiple agencies, none of which measured their results. We assume that measuring campaigns real-time should cut down on overcharging but I'm more than happy to hear your take 🤝 Let me reach out to you directly to exchange views!
You're right - that's why we also asked about ERC-4337 adoption. In our opinion it's a UX game-changer in web3, although being a long-term solution.

Hey @tamara - these are great insights, thank you very much for this :raised_hands:

This overlaps up to some point with the answers we got in a survery - the most efficient off-chain strategies mentioned by protocols were "Social Media Ads" and "Newsletters". This confirms that regular ecom platforms such as GAds or Meta (with FB and Insta rarely being used in web3) don't give results.
This is currently the essence of our discussion - how to cater for needs of different-sized protocols, some of which have experience in marketing and some of which have none & need external help. Our team has seen Polkadot ecosystem spend around $4m budget on multiple agencies, none of which measured their results. We assume that measuring campaigns real-time should cut down on overcharging but I'm more than happy to hear your take 🤝 Let me reach out to you directly to exchange views!
You're right - that's why we also asked about ERC-4337 adoption. In our opinion it's a UX game-changer in web3, although being a long-term solution.

Hey @BristolBlockchain - thanks so much for your kind words! Let me answer your concerns:

Yes, this was discussed above - the non-financial metrics can be artificially boosted. We're going to propose a better version of this framework next week.
The final choice of the analysts & consultants along with external members will also be included in the upgraded proposal. We're aware of the fact that external experts need to be included here.

posted 1 year ago

edited 1 year ago

Hey @paulofonseca, thanks for the question and bringing this product up. I think it's somehow similar to Merkl, which is also working on its ARB Incentive proposal simultaneously.

posted 1 year ago

Hey @cp0x, thanks for your questions!

Depends on how you perceive Arbitrum's business model. Each wallet, each transaction generates sequencer fees which are one of the most important revenue sources. On every strategy that has positive ROI and will be continued (since it's economically feasible) Arbitrum will make long-term revenue once the program ends.
OK, we will add details to the upgraded proposal version.
We will also explain what this amount covers exactly.
$7500 each.
This proposal is a result of ARB Liqudity Incentives discussions that were happening for the last few months and we agreed to run a first iteration of this program to see the results and modify it accordingly. Hopefully at some point we will be able to scale it to the whole ecosystem!

Hey @cp0x, thanks for your questions!

Depends on how you perceive Arbitrum's business model. Each wallet, each transaction generates sequencer fees which are one of the most important revenue sources. On every strategy that has positive ROI and will be continued (since it's economically feasible) Arbitrum will make long-term revenue once the program ends.
OK, we will add details to the upgraded proposal version.
We will also explain what this amount covers exactly.
$7500 each.
This proposal is a result of ARB Liqudity Incentives discussions that were happening for the last few months and we agreed to run a first iteration of this program to see the results and modify it accordingly. Hopefully at some point we will be able to scale it to the whole ecosystem!

posted 1 year ago

Hey @Euphoria, thanks for your thoughts, I really appreciate your input in this and former proposals (including LTIPP):

You're right that in case of gaming / NFT projects it's easier to artificially boost metrics. In order to counteract such actions, Patterns team is going to cross-check on-chain data with off-chain trackers that will be required. Additionally, we could include revenue / fee related metrics into these 2 categories - happy to hear your thoughts!
That makes sense and as it was mentioned in comments above, we'll probably go for a mixed set of metrics - absolute and relative.
This is currently being discussed with teams, please bear with us until we propose a solution. Some kind of external validation will be included, it's not yet decided what kind though.
On Patterns side it's going to be me and our data analysts who analyzed LTIPP - we'll share more personal details with the upgraded proposal version :handshake:

Hey @Euphoria, thanks for your thoughts, I really appreciate your input in this and former proposals (including LTIPP):

You're right that in case of gaming / NFT projects it's easier to artificially boost metrics. In order to counteract such actions, Patterns team is going to cross-check on-chain data with off-chain trackers that will be required. Additionally, we could include revenue / fee related metrics into these 2 categories - happy to hear your thoughts!
That makes sense and as it was mentioned in comments above, we'll probably go for a mixed set of metrics - absolute and relative.
This is currently being discussed with teams, please bear with us until we propose a solution. Some kind of external validation will be included, it's not yet decided what kind though.
On Patterns side it's going to be me and our data analysts who analyzed LTIPP - we'll share more personal details with the upgraded proposal version :handshake:

@karpatkey, great to see you here! Yes, some of your considerations are already being worked on:

It's already decided that additional guidance will be delivered - currently discussing what this guidance is going to be.
Judging from our conversations with teams, this varies significantly. Bigger teams have their own marketing specialists & designers and prefer to run such campaigns in-house. Smaller teams may not have this advantage and we're discussing currently what the perfect solution would be here.
This is correct, the idea was that smaller projects would run a campaing with a smaller budget. Let us think if we can find a solution to this! :raised_hands:

posted 1 year ago

edited 1 year ago

The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.

We appreciate the effort put in by the Patterns team to bring this proposal forward. The absence of an incentive program has been a concern for many builders in the ecosystem. While we support the idea of an incentive program, we do not believe this proposal is the ideal approach.

The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.

The concept of driving growth through off-chain marketing is valuable, but starting with a $3 million budget introduces significant risk. Additionally, the program does not improve upon previous incentive initiatives such as STIP and LTIPP. More importantly, most Arbitrum protocols are not yet set up for optimal off-chain user acquisition both in terms of protocol readiness and the necessary staffing to oversee a large-scale campaign efficiently. This lack of preparedness would likely lead to inefficient budget utilization.

Even for well-capitalized and well-staffed projects like GMX, a large off-chain user acquisition campaign would not be practical at this stage. Capacity is limited, bigger priorities exist in the coming months, and the current onboarding flow for mainstream users is not yet optimal. If this is the case for GMX, it is likely even more so for other involved protocols.

A more effective approach would be to position this as a marketing initiative supporting a future incentives program. Past programs struggled with visibility, and a focused marketing effort could help bridge that gap. Such a campaign would be far more impactful once essential Web2-friendly solutions like wallet abstraction, passkeys, and email logins are readily available on Arbitrum. Until then, we believe a smaller, more targeted grant for marketing would be a more sustainable and effective approach.

For this reasons we would be voting against the proposal.

pedrob from pedrobreuer.eth

posted 1 year ago

edited 1 year ago

The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.

For this reasons we would be voting against the proposal.

581.3K TOKEN

posted 1 year ago

edited 1 year ago

First of all, I want to thank you for the tremendous effort put into this proposal—gathering and incorporating feedback from multiple delegates and stakeholders over the course of months. A lot of hard work went into it, and it truly shows in the quality of the final text.

I like this proposal; it suggests a metric-based approach to marketing, which is essential for developing a long-term strategy and refining it as we learn what works and what doesn’t.

I also appreciate the inclusion of off-chain marketing, as it targets a different type of user we want to attract to Arbitrum.

I like the idea of allowing protocols to propose their own KPIs and, with the help of a marketing expert, design the best strategies based on their products.

Now, here’s my concern regarding execution:

If we’re going to spend $3M on a three-month program for the DAO to showcase Arbitrum applications, how do we ensure continuity in implementing this strategy without the DAO having to allocate $12M per year to marketing for protocols? Would there be a commitment on their side to maintain continuity if it proves successful? Or do you think that’s a reasonable amount for the DAO to spend annually? Or do you believe that running a three-month campaign every certain period is an effective tool?

I believe this proposal can be implemented with a more concrete objective in two ways:

Marketing for the DAO itself as an entity aligned with Arbitrum and the success of its protocols—raising awareness of all its initiatives. The DAO's image is not at its best right now, and that needs to change. We need to attract users and builders to the DAO. In this regard, since Entropy mentioned the upcoming proposal on DeFi Renaissance, it would be interesting to explore how this proposal could align with the next incentive program. One of the failures during LTIPP and STIP (as you correctly identified) was the lack of alignment between a marketing proposal and the program's execution.
Given the imminent Pectra upgrade and the implementation of EIP-7702, which represents a potential massive UX improvement, it’s worth considering how to leverage this opportunity. (see) You recognized there's a lack of intention to implement Account Abstraction. We could build momentum for this upgrade (Arbitrum is getting ready) and implement a program that incentivizes the use of Smart Accounts, combined with an off-chain marketing campaign to attract new users. Considering that off-chain campaigns will target users who are not necessarily familiar with EOAs and the complex onboarding processes, this could be an interesting opportunity to explore.

For these reasons, I will vote FOR in the temp check, although my vote on Tally is conditional on gaining more clarity on the mentioned points and seeing a strategy with more concrete objectives.

https://forum.arbitrum.foundation/t/non-constitutional-rfc-arb-incentives-user-acquisition-for-dapps-protocols/28291/48?u=castlecapital

posted 1 year ago

Hi @kamilgorski, we have voted Against the proposal on Snapshot. We still stand by our earlier response.

Hi @kamilgorski, we have voted Against the proposal on Snapshot. We still stand by our earlier response.

https://forum.arbitrum.foundation/t/non-constitutional-rfc-arb-incentives-user-acquisition-for-dapps-protocols/28291/48?u=castlecapital

The proposal in our point of view lacks proper consideration on how the program proposed can be extended further than the allocated budget. As we’ve mentioned before:

• The budget is too large for an undetermined result. There’s a reason the DAO decided on a period of abstaining from new incentive programs. If the objective of the program is to be an experiment, why not starting with a smaller ask for a pilot program open to limited protocols.

• In the current structure protocols are incentivized to spending because they will be reimbursed, misaligning incentives on efficient expenses. We’d prefer as mentioned before if the individual protocol campaigns were encapsulated by a larger campaign. So that if the results returned poor, at least Arbitrum still obtained visibility during the campaign period.

• Utilize a matching grant approach, this helps Arbitrum achieve the best returns on capital spend and ensures participating protocols have sufficient skin in the game.

We also agree with @maxlomu’s comments

Quoted from maxlomu

I am in favor of a study to define how to efficiently attract users to apps that found PMF.
The goal should be building a playbook that works for the next 12-24 months that the DAO / Arbitrum Foundation can help when new builders come onboard.
The study should start from very specific and narrow use cases. Ex: onboarding new users to consumar apps (games, SocialFi, …) from various offchain sources.

jump to post →

Currently this proposal seems angled where the DAO supports the program financially over a set period. There is nothing mentioned in the proposal what the path to maturity looks like. This would be important as this would not be a program that is funded in perpetuity.

cp0x from cp0x.eth

211.4K TOKEN

posted 1 year ago

Thanks Kamil for answering all the questions in great detail. After reading the latest version of the proposal again, I vote FOR this proposal

Pros:

Thanks Kamil for answering all the questions in great detail. After reading the latest version of the proposal again, I vote FOR this proposal

Pros:

New approach to incentives Considering that the previous LTIPP and STIP initiatives, to put it mildly, did not achieve their goal, a new approach to attracting and retaining users was needed
Control of parameters and KPIs A great idea to summarize the results not only at the end of the program, but also periodically every month. This will give us a specific assessment of the correctness of the distribution of funds, project efforts, and we will be able to adjust the course of the program continuation. It is also worth noting the breakdown of projects by category, so that each has its own evaluation parameters
Duration of the program Three months is a good time to see the main results, based on which the DAO can decide to continue the program, suspend or adjust
Cost of the program A completely adequate estimate of $ 3 million is certainly not a small amount, but compared to other similar Arbitrum projects in the past, this is a small amount. Also, operating expenses of about 10% are quite acceptable given the large team for monitoring the parameters. It is also nice that there are detailed files with a breakdown of costs by position, where there are no inflated salary amounts

Cons:

Results We do not know what the result will be, since this initiative will be implemented for the first time, so it is quite possible that there will be a zero result and we must be prepared for this
Lack of pressure on projects in the process Despite the fact that marketing specialists are included in the budget, there is no certainty that the projects will follow their recommendations. As far as I understand, there is no procedure for withdrawing funds from projects if they work poorly under this program
Duration of the program On the one hand, three months is good, but on the other hand, in previous programs there were moments when, due to the long passage of KYC and some other formal procedures, all projects started the program at different time and when one project was already finishing, another could only just start. I hope that the initiators of the proposal will take this into account in this program

Considering the pros and cons, it seems to me that the pros outweigh the cons

pedrob from pedrobreuer.eth

581.3K TOKEN

posted 1 year ago

edited 1 year ago

I like this proposal; it suggests a metric-based approach to marketing, which is essential for developing a long-term strategy and refining it as we learn what works and what doesn’t.

I also appreciate the inclusion of off-chain marketing, as it targets a different type of user we want to attract to Arbitrum.

I like the idea of allowing protocols to propose their own KPIs and, with the help of a marketing expert, design the best strategies based on their products.

Now, here’s my concern regarding execution:

I believe this proposal can be implemented with a more concrete objective in two ways:

Marketing for the DAO itself as an entity aligned with Arbitrum and the success of its protocols—raising awareness of all its initiatives. The DAO's image is not at its best right now, and that needs to change. We need to attract users and builders to the DAO. In this regard, since Entropy mentioned the upcoming proposal on DeFi Renaissance, it would be interesting to explore how this proposal could align with the next incentive program. One of the failures during LTIPP and STIP (as you correctly identified) was the lack of alignment between a marketing proposal and the program's execution.
Given the imminent Pectra upgrade and the implementation of EIP-7702, which represents a potential massive UX improvement, it’s worth considering how to leverage this opportunity. (see) You recognized there's a lack of intention to implement Account Abstraction. We could build momentum for this upgrade (Arbitrum is getting ready) and implement a program that incentivizes the use of Smart Accounts, combined with an off-chain marketing campaign to attract new users. Considering that off-chain campaigns will target users who are not necessarily familiar with EOAs and the complex onboarding processes, this could be an interesting opportunity to explore.

For these reasons, I will vote FOR in the temp check, although my vote on Tally is conditional on gaining more clarity on the mentioned points and seeing a strategy with more concrete objectives.

https://forum.arbitrum.foundation/t/non-constitutional-rfc-arb-incentives-user-acquisition-for-dapps-protocols/28291/48?u=castlecapital

posted 1 year ago

Hi @kamilgorski, we have voted Against the proposal on Snapshot. We still stand by our earlier response.

Hi @kamilgorski, we have voted Against the proposal on Snapshot. We still stand by our earlier response.

https://forum.arbitrum.foundation/t/non-constitutional-rfc-arb-incentives-user-acquisition-for-dapps-protocols/28291/48?u=castlecapital

The proposal in our point of view lacks proper consideration on how the program proposed can be extended further than the allocated budget. As we’ve mentioned before:

• Utilize a matching grant approach, this helps Arbitrum achieve the best returns on capital spend and ensures participating protocols have sufficient skin in the game.

We also agree with @maxlomu’s comments

Quoted from maxlomu

I am in favor of a study to define how to efficiently attract users to apps that found PMF.
The goal should be building a playbook that works for the next 12-24 months that the DAO / Arbitrum Foundation can help when new builders come onboard.
The study should start from very specific and narrow use cases. Ex: onboarding new users to consumar apps (games, SocialFi, …) from various offchain sources.

jump to post →

cp0x from cp0x.eth

211.4K TOKEN

posted 1 year ago

Thanks Kamil for answering all the questions in great detail. After reading the latest version of the proposal again, I vote FOR this proposal

Pros:

Thanks Kamil for answering all the questions in great detail. After reading the latest version of the proposal again, I vote FOR this proposal

Pros:

New approach to incentives Considering that the previous LTIPP and STIP initiatives, to put it mildly, did not achieve their goal, a new approach to attracting and retaining users was needed
Control of parameters and KPIs A great idea to summarize the results not only at the end of the program, but also periodically every month. This will give us a specific assessment of the correctness of the distribution of funds, project efforts, and we will be able to adjust the course of the program continuation. It is also worth noting the breakdown of projects by category, so that each has its own evaluation parameters
Duration of the program Three months is a good time to see the main results, based on which the DAO can decide to continue the program, suspend or adjust
Cost of the program A completely adequate estimate of $ 3 million is certainly not a small amount, but compared to other similar Arbitrum projects in the past, this is a small amount. Also, operating expenses of about 10% are quite acceptable given the large team for monitoring the parameters. It is also nice that there are detailed files with a breakdown of costs by position, where there are no inflated salary amounts

Cons:

Results We do not know what the result will be, since this initiative will be implemented for the first time, so it is quite possible that there will be a zero result and we must be prepared for this
Lack of pressure on projects in the process Despite the fact that marketing specialists are included in the budget, there is no certainty that the projects will follow their recommendations. As far as I understand, there is no procedure for withdrawing funds from projects if they work poorly under this program
Duration of the program On the one hand, three months is good, but on the other hand, in previous programs there were moments when, due to the long passage of KYC and some other formal procedures, all projects started the program at different time and when one project was already finishing, another could only just start. I hope that the initiators of the proposal will take this into account in this program

Considering the pros and cons, it seems to me that the pros outweigh the cons

Entropy will be voting AGAINST this proposal. Before diving into our rationale, we would like to state that Entropy has a conflict of interest in that we have designed and authored a separate incentive program, which hasn’t been posted to the forum yet. Additionally, we’d like to acknowledge the amount of time and effort that the Patterns team has put into this proposal. Their interviews identified key insights regarding LTIPP projects’ level of knowledge about onchain user acquisition funnels and ability to calculate metrics like CAC and LTV. The proposed analytics tools and structures (enabling participants to work out core marketing metrics), as well as the ongoing reporting structure, additionally seem robust.

However, despite the recent changes, we are still not confident that this program is a significant improvement to LTIPP and STIP, and we fear that the DAO would be repeating several of those programs’ mistakes. For a program that is based on predefined measurable goals, the listed KPIs for the DeFi category in particular raise cause for concern, as metrics such as volume and number of trades can both be easily gamed. We fear that the program fails to incorporate the learnings of previous ARDC research work. For example, this is what Blockworks Research stated about optimizing for TVL in the lending category:

Quoted from BlockworksResearch

While top-line TVL is an attractive vanity metric to optimize, the utilization of that capital is what ultimately determines the efficacy and success of lending protocols.

jump to post →

Furthermore, as we see it, analyzing absolute metrics instead of relative figures (e.g., total market share change) is flawed, since the absolute metrics are largely driven by current market conditions. When it comes to the program’s high-level structure, we foresee that the application and selection process will again put a lot of pressure on the projects, similar to previous programs. We’re especially concerned about projects having to design their own incentive and marketing structures, KPIs, as well as having to distribute incentives themselves(?). This concern is shared by other delegates:

Quoted from karpatkey

The requirement for teams to specify KPIs and measurable outcomes assumes they have prior experience in running such campaigns. It may be more effective to provide direct guidance in defining these elements rather than expecting them to figure it out on their own.

jump to post →

Quoted from jameskbh

I don’t see explicit actions in the proposal to help the applicants tailor their proposals to achieve the best outcome possible BEFORE being accepted into the program. If they don’t know how to market their campaigns properly and measure their results, what are we doing differently in this program to onboard them?

jump to post →

As we have seen in the past, placing a majority of the responsibility for the campaign design with the projects, especially those that are smaller/newer teams, is likely to lead to subpar results. Taking into consideration that LTIPP saw over 170 applications, we expect the proposed program to see 100+ applications at minimum, which is more than the current committee structure can realistically help revise before selections. Thus, in the current design, the DAO would once again be selecting a small number of projects to run “experiments”.

Our team echoes several of the concerns @CastleCapital raised. It is our belief that generalized programs that include so many different types of projects make it impossible to evaluate and iterate upon. Having a large number of separate, project-specific campaigns creates fragmentation, lowering the overall impact and efficiency. Based on previous incentives research done within the Arbitrum DAO, as well as looking at the retention performance of concluded incentive programs run within other L2 ecosystems, e.g., ZKsync, it’s clear that generalized programs cause an increase in high-level market share metrics for incentivized actions, but this market share gain quickly reverts to the old, organic level once the programs end. Although the program proposed here differs from the conventional structure by focusing on marketing more heavily, it isn’t targeted enough on the demand side in our opinion, and we foresee that all increases in relative activity will revert within 90 days of the program.

Our overall view on incentive programs is that they should be extremely targeted, focusing on bootstrapping new products/markets that emerge from within the ecosystem, thus amplifying the effect deriving from natural product-market fit, as well as encouraging prospective verticals to develop by driving native as well as non-native projects to offer products within those verticals. In short, our belief is that once a vertical within an ecosystem reaches an organic market share and stabilizes, a structural or exogenous shock (such as efficiency gains from a new DEX model built on Arbitrum or an Arbitrum competitor’s sequencer experiencing prolonged downtime) is required for organic market share growth to materialize. When it comes to capital allocation, one possible avenue through which the DAO could create a structural shock in an already well-established vertical is by funneling sequencer profits back as incentives to that vertical—an idea we think should be seriously considered in the future as the DAO’s overall profitability continues increasing.

posted 1 year ago

Hello! It is nice to see how much the initial proposal has evolved, and that you guys feel it is ready to vote. I have a few comments/questions left from my initial interaction:

TL;DR: We should help the protocols to prepare their proposals

You mention this at the beginning of the proposal:

Hello! It is nice to see how much the initial proposal has evolved, and that you guys feel it is ready to vote. I have a few comments/questions left from my initial interaction:

TL;DR: We should help the protocols to prepare their proposals

You mention this at the beginning of the proposal:

Quoted from kamilgorski

Patterns team (f.k.a. Tokenguard) analyzed projects that took part in the LTIPP program and identified multiple reasons of this and similar programs not achieving long-term results that were expected:

No off-chain marketing - most protocols didn’t communicate rewarding to new users in other ways than using existing SM channels such as Twitter and Telegram.
Lack of knowledge of on-chain user acquisition funnels - only 37% of protocols have off-chain tracking tools installed for marketing purposes, which makes it impossible to run successful user acquisition campaigns.
No consideration for ROI and over-expenditure on non-performing projects - as discussed during ARB Liquidity Incentive calls, most teams don’t have any active marketing & growth teams that would take care of CAC & LTV ratios for their marketing campaigns.

And then one of the goals is to:

Quoted from kamilgorski

Budget will be spent on helping these projects achieve predefined measurable goals through all the steps of the above user acquisition funnel:

I don't see explicit actions in the proposal to help the applicants tailor their proposals to achieve the best outcome possible BEFORE being accepted into the program. If they don't know how to market their campaigns properly and measure their results, what are we doing differently in this program to onboard them? A predefined form won't be enough IMO.

Quoted from kamilgorski

Application process:

Arbitrum dApps & Protocols apply to the program by filling out a predefined form, where they specify: 1.1. KPIs they declare to achieve every 1 month as well as Retention KPIs after the campaign. 1.2. Requested budget with expected items & costs 1.3. Tools used for running and off-chain measurement of the campaign * All activities must be measurable and Patterns will receive access to tools used (eg. Google Analytics, Mixpanel, Meta Ads, etc.). If activities include KOLs, paid content creation, SEO - all of these need to be fully measurable.

Assuming that most projects are comprised of builders (dev-oriented), the applications will have the same issues as before.

Team assistance

We have the committee that will evaluate the proposals, but there are other professionals mentioned in the current version that could help the protocols to build their proposals, like happened in the LTIPP, with the "advisors" role. For example:

Quoted from kamilgorski

$7.5k * 2 / month will be spent on 2 dedicated data analysts from Patterns to facilitate and help dApps & Protocols achieve their goals. Specialist requirements:

Min. 5 years of experience in web3 analytics
Min. 2 years of experience in Solidity & smart contracts

Quoted from kamilgorski

$7.5k / month will be spent on 1 external marketing specialist to help set up marketing campaigns.

Min. 5 years of experience in web2 performance marketing
Being responsible for ad budgets of at least $1m

The success of this program lies in setting realistic goals based on good data and proper campaign planning. As we assume (or know) that the protocols themselves are not well-equipped to tackle this, why not help them build their proposals?

I hope you guys reconsider this point of the proposal.

Hawheik

posted 1 year ago

edited 1 year ago

Quoted from EzR3aL

Should funds for example be used to like promote Arbitrum Dapps in a mobile app like Rabby or Family wallet? Cause I think the best way to get off-chain user on-chain is by focusing on mobile initiatives. Everyone has a phone nowadays and apps are the best way to engage with.

jump to post →

Quoted from EzR3aL

jump to post →

This comment resonates with me. I look at the funnel-graphic in the original post and all I see is marketing seemingly aimed at cannibalizing existing users from other chains onto Arbitrum, which are users that will by definition be "flighty" and the quickest to depart as soon as another shiny thing comes along. The top of the funnel when it comes to "off-chain ads" includes Twitter and Telegram, really? Telegram is almost the first thing that comes to mind when I think of "marketing-to-existing-crypto-users", and Twitter isn't far off either.

Is the goal to increase acquisition of "new users", or increase acquisition of "users new to arbitrum"?

I would like to see another layer added on top of the funnel aimed at capturing "new users". That's going to be by definition the hardest type of user to acquire, but also the most valuable kind of user, both to Arbitrum and to the entire EVM-based ecosystem as a whole

On the other hand "users new to arbitrum" just require some juicy incentives and they're on their way from whatever other chain, but that ends up being the kind of mercenary capital that I think we broadly recognize isn't worth paying for.

Quoted from kamilgorski

9. Insights & takeaways are collected and if results are satisfactory for the Arbitrum Foundation, the program runs with a second iteration.

Quoted from kamilgorski

Results (KPIs: 3rd month & Retention KPIs): Results of the whole program will be published, along with the information about KPIs, CAC & LTV achieved by each campaign financed within it.

I want to recognize this part in the original post, and I wish it could get some more focus as part of the overall proposal. If as described in the original post, projects have a hard time engaging effectively with marketing in the places that matter, I think producing a well-researched (through this program) and easy-to-understand (for the aforementioned projects that lack this expertise, thus causing them to make aforementioned mistakes) template for how to efficiently market, perhaps in a "How to market yourself The Arbitrum Way" or something similar, could be really valuable output!

Speaking from personal experience, such an summary coupled with guidance for where to start, what spend is worth versus what is a waste of time, would be immensely helpful to me, a marketing novice, and could make for a great seed around which later to germinate a second iteration of this proposal.

Quoted from BlockworksResearch

While top-line TVL is an attractive vanity metric to optimize, the utilization of that capital is what ultimately determines the efficacy and success of lending protocols.

jump to post →

Quoted from karpatkey

jump to post →

Quoted from jameskbh

jump to post →

TodayInDeFi from tidresearch.eth

posted 1 year ago

Hello! It is nice to see how much the initial proposal has evolved, and that you guys feel it is ready to vote. I have a few comments/questions left from my initial interaction:

TL;DR: We should help the protocols to prepare their proposals

You mention this at the beginning of the proposal:

Hello! It is nice to see how much the initial proposal has evolved, and that you guys feel it is ready to vote. I have a few comments/questions left from my initial interaction:

TL;DR: We should help the protocols to prepare their proposals

You mention this at the beginning of the proposal:

Quoted from kamilgorski

No off-chain marketing - most protocols didn’t communicate rewarding to new users in other ways than using existing SM channels such as Twitter and Telegram.
Lack of knowledge of on-chain user acquisition funnels - only 37% of protocols have off-chain tracking tools installed for marketing purposes, which makes it impossible to run successful user acquisition campaigns.
No consideration for ROI and over-expenditure on non-performing projects - as discussed during ARB Liquidity Incentive calls, most teams don’t have any active marketing & growth teams that would take care of CAC & LTV ratios for their marketing campaigns.

And then one of the goals is to:

Quoted from kamilgorski

Budget will be spent on helping these projects achieve predefined measurable goals through all the steps of the above user acquisition funnel:

Quoted from kamilgorski

Application process:

Arbitrum dApps & Protocols apply to the program by filling out a predefined form, where they specify: 1.1. KPIs they declare to achieve every 1 month as well as Retention KPIs after the campaign. 1.2. Requested budget with expected items & costs 1.3. Tools used for running and off-chain measurement of the campaign * All activities must be measurable and Patterns will receive access to tools used (eg. Google Analytics, Mixpanel, Meta Ads, etc.). If activities include KOLs, paid content creation, SEO - all of these need to be fully measurable.

Assuming that most projects are comprised of builders (dev-oriented), the applications will have the same issues as before.

Team assistance

Quoted from kamilgorski

$7.5k * 2 / month will be spent on 2 dedicated data analysts from Patterns to facilitate and help dApps & Protocols achieve their goals. Specialist requirements:

Min. 5 years of experience in web3 analytics
Min. 2 years of experience in Solidity & smart contracts

Quoted from kamilgorski

$7.5k / month will be spent on 1 external marketing specialist to help set up marketing campaigns.

Min. 5 years of experience in web2 performance marketing
Being responsible for ad budgets of at least $1m

I hope you guys reconsider this point of the proposal.

Hawheik

posted 1 year ago

edited 1 year ago

Quoted from EzR3aL

jump to post →

Quoted from EzR3aL

jump to post →

Is the goal to increase acquisition of "new users", or increase acquisition of "users new to arbitrum"?

Quoted from kamilgorski

9. Insights & takeaways are collected and if results are satisfactory for the Arbitrum Foundation, the program runs with a second iteration.

Quoted from kamilgorski

Results (KPIs: 3rd month & Retention KPIs): Results of the whole program will be published, along with the information about KPIs, CAC & LTV achieved by each campaign financed within it.

General Opinion Directionally speaking, we're leaning against this proposal because it seems as though the DAO is leaning back into old habits after the incentive embargo—approving an expensive pilot program in the name of bolstering the ecosystem and trying something new. Is acquisition marketing truly Arbitrum’s main challenge? Given that most users actively seek out DeFi protocols, visibility may not be the core issue.

We encourage delegates to view the survey results as one perspective rather than a definitive guide. With only 19 protocol participants, the findings may not fully capture the ecosystem's needs. If these protocols are struggling with user acquisition, their recommendations may not always align with the best strategies.

On Selection and Strategy This proposal does not give an opinionated take on protocol selection or strategy selection. In the application process it outlines:

Quoted from kamilgorski

All activities must be measurable and Patterns will receive access to tools used (eg. Google Analytics, Mixpanel, Meta Ads, etc.). If activities include KOLs, paid content creation, SEO - all of these need to be fully measurable.

The proposal would benefit from clearer guidelines on acceptable tools and funding strategies. Additionally, a more defined selection process for protocol incentives would enhance effectiveness. For example, this doesn't outline whether protocols should only explicitly create ads that promote explicitly Arbitrum, it is easy to imagine a protocol using this budget to advertise their multichain offering. Furthermore, we need to have some scrutiny in what we consider to be a user acquisition policy for prospective protocols in this proposal. Candidly, we've seen protocols in STIP and LTIPP toe a fine line on what incentives could be used for, and thus it’s best to outline criteria for the acquisition methods and have pre-approval. It is easily imaginable that a protocol could reason its way into using user acquisition incentives for a ‘long-term airdrop,’ which may not be the most sticky method for user retention.

On Operations The committee structure may be overly complex. Bi-weekly meetings with multiple organizations, along with additional monitoring responsibilities is a hefty ask for folks working on a full-time basis. There's also the need to establish arbitration criteria, in previous programs we have had managers ask protocols to return funds with the DAO voting on whether these protocols could have an extension to use the remaining. There should be a delineated path for protocols to negotiate a possible extension with remaining funds or have it explicitly outlined and denied that this will not be the process.

More details on the proposal’s reporting standards would be helpful. If approved, refining the operational structure, timeline, and reporting process could improve execution. The expectation for most of this work to be done by teams is a difficult assumption, especially when in former incentive programs, reporting was found to be an issue with some protocols unable to finish reporting in a timely manner.

On KPIs On a side note, as others have noted Gaming, Social, and NFTs all have very gameable metrics. For G&S, the monthly KPIs alone could be satisfied with wash activity, and the retention KPIs are a bit unclear. For the NFT category, floor price manipulation is possible as well.

While we recognize the intent behind this proposal, we remain unconvinced that this is the best approach for Arbitrum at this time. Candidly though, the Account Abstraction infrastructure push here makes sense, and perhaps should be revisited post EOA account code implementation.

1.0M TOKEN

posted 1 year ago

I think the proposal has some solid ideas, especially around marketing and PR. It actually values off-chain marketing—something a lot of protocols overlook. Things like paid ads and newsletters have been shown to work for user acquisition, and it’s nice to see that recognized.

I also like how the proposal sets clear goals with measurable metrics like KPIs and CAC/LTV, which makes it easier to track success and avoid wasting money. Plus, it directly tackles the big question: “How do we get more users?” There’s even a plan for the Arbitrum Foundation’s marketing team to provide a starter kit for projects to boost their marketing efforts.

But there are concerns too. What is the ROI for the DAO—will this $3M really pay off? It may be smarter to start smaller and scale up if it works. There’s also the risk of projects manipulating KPIs to secure funding.

The short three-month timeframe feels rushed, especially since marketing takes time to optimize. Plus, many projects don’t have experienced marketing teams, and calculating long-term metrics like LTV over such a short period is tricky. And, of course, market volatility could mess with KPIs.

Overall, it’s a solid idea with a strong focus on user acquisition and measurable marketing, but concerns around ROI, scale, KPI manipulation, and support need more thought before moving forward.

On Selection and Strategy This proposal does not give an opinionated take on protocol selection or strategy selection. In the application process it outlines:

Quoted from kamilgorski

All activities must be measurable and Patterns will receive access to tools used (eg. Google Analytics, Mixpanel, Meta Ads, etc.). If activities include KOLs, paid content creation, SEO - all of these need to be fully measurable.

TodayInDeFi from tidresearch.eth

1.0M TOKEN

posted 1 year ago

Overall, it’s a solid idea with a strong focus on user acquisition and measurable marketing, but concerns around ROI, scale, KPI manipulation, and support need more thought before moving forward.

posted 1 year ago

Simply having the right tools doesn’t guarantee strong campaign performance, which is common sense. With the budget you’re requesting, how exactly are you ensuring the best ROI for Arbitrum?
Yes, protocols generally know their own userbase best. The question is, how do we ensure their marketing efforts actually benefit the wider Arbitrum ecosystem rather than just their individual interests?

Simply having the right tools doesn’t guarantee strong campaign performance, which is common sense. With the budget you’re requesting, how exactly are you ensuring the best ROI for Arbitrum?
Yes, protocols generally know their own userbase best. The question is, how do we ensure their marketing efforts actually benefit the wider Arbitrum ecosystem rather than just their individual interests?

You’re basically asking the DAO to fund this, but what’s your baseline to gauge success or failure here? This directly ties into the issues you highlighted earlier about LTIPP and KPIs you mentioned in your post below. Would consider some hard targets rather than an arbitrary goal:

Quoted from kamilgorski

Goals KPIs (1st iteration) Bridges & on-ramps - Maximize inflow of new funds into $ARB ecosystem; - Minimize outflow of funds out of $ARB ecosystem - Net inflow balance ($inflow - $outflow) DeFi - Maximize number & value of trades; - Steady TVL growth; - Increase TVL & trade volume on assets available only in $ARB - Number & volume of trades; - TVL Gaming & Social - Maximizing number of interactions; - Maximizing stickiness; - Increasing value of NFTs - Number of interactions per user; - Stickiness (DAU / MAU) NFT - Maximizing number of collections; - Maximize collections and single NFT trade value - Number of collections; - Floor price increase

:+1:
What we’re proposing is a “master” campaign like Arbitrum’s “Enter the Odyssey” run by Arbitrum itself, with each project contributing under that overarching framework based on Arbitrum’s KPIs. This kind of unified approach could make a far bigger splash than piecemeal efforts by individual projects.

Projects would still tailor their marketing to fit their own audience, but they’d need to stick to the primary goals of Arbitrum’s overall campaign. That way, everything stays consistent, aligned with Arbitrum, and easier to amplify.

Hope the above helps clarify things more.

posted 1 year ago

The proposal's focus on structured, metrics-driven user acquisition is a step in the right direction. However, several critical concerns need to be addressed:

Budget Justification: The $3M budget seems excessive given that protocols currently lack the expertise for off-chain marketing. If most teams don't have the know-how, why isn’t infrastructure being provided instead of expecting them to manage $50K/month in ad spend?
Lack of Shared Infrastructure: Many projects don’t have the capacity to execute these campaigns effectively. Shouldn’t the DAO be organizing infra/tools rather than relying on protocols to figure it out independently?
Retention & Long-Term Impact: The focus is on acquisition, but without retention strategies, this risks being another short-term spike in activity. More emphasis is needed on sustained engagement.
Arbitrum-Led, Chain-Wide Approach: Instead of fragmented, protocol-specific campaigns, we prefer a coordinated Arbitrum-led initiative with a clear, aligned goal that protocols can plug into, ensuring better efficiency and impact.

The proposal's focus on structured, metrics-driven user acquisition is a step in the right direction. However, several critical concerns need to be addressed:

Budget Justification: The $3M budget seems excessive given that protocols currently lack the expertise for off-chain marketing. If most teams don't have the know-how, why isn’t infrastructure being provided instead of expecting them to manage $50K/month in ad spend?
Lack of Shared Infrastructure: Many projects don’t have the capacity to execute these campaigns effectively. Shouldn’t the DAO be organizing infra/tools rather than relying on protocols to figure it out independently?
Retention & Long-Term Impact: The focus is on acquisition, but without retention strategies, this risks being another short-term spike in activity. More emphasis is needed on sustained engagement.
Arbitrum-Led, Chain-Wide Approach: Instead of fragmented, protocol-specific campaigns, we prefer a coordinated Arbitrum-led initiative with a clear, aligned goal that protocols can plug into, ensuring better efficiency and impact.

While the goal of fostering Web3-native acquisition strategies is commendable, this approach raises serious questions about execution, fund allocation, and long-term effectiveness.

posted 1 year ago

edited 1 year ago

We had a chance to have a chat with Kamil regarding the proposal and he was able to answer most of our questions. We still have a few more questions it would be great if Kamil can address them! . What safeguards are in place to ensure funds are used efficiently, especially since only 21% of protocols currently track CAC? . What happens if a project fails to meet its KPIs? Will there be partial funding or no funding at all? . How will Patterns measure and verify the LTV of users, given that 0% of protocols currently track this metric? . How will Patterns ensure that the user acquisition campaigns lead to long-term retention and not just short-term spikes in activity? . How frequently will updates be provided to the Arbitrum community during the campaign period? During STIP and LTIPP, the applicants used to do bi-weekly reporting.

Here are some ideas on how the program could be improved . Include retention-focused KPIs (e.g., DAU/MAU ratio, repeat transactions) in addition to acquisition metrics to ensure that campaigns lead to long-term user engagement. . Involve few Arbitrum community members in the selection process by allowing them to vote on or provide feedback on the proposed campaigns. This would increase transparency and community buy-in. . Introduce a tiered funding model where dApps/protocols receive incremental funding based on achieving specific milestones (e.g., 50% funding for 50% of KPIs achieved). This would ensure accountability and reduce the risk of funds being wasted. . A lot of these protocols wouldn't have the infrastructure built to run incentives, and due to the budget being small, it would be ideal if you could provide the infrastructure for these projects to run incentives. . $3 million seems to be a really small amount for incentives do you plan to increase the budget if needed?

The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members

posted 1 year ago

Simply having the right tools doesn’t guarantee strong campaign performance, which is common sense. With the budget you’re requesting, how exactly are you ensuring the best ROI for Arbitrum?
Yes, protocols generally know their own userbase best. The question is, how do we ensure their marketing efforts actually benefit the wider Arbitrum ecosystem rather than just their individual interests?

Simply having the right tools doesn’t guarantee strong campaign performance, which is common sense. With the budget you’re requesting, how exactly are you ensuring the best ROI for Arbitrum?
Yes, protocols generally know their own userbase best. The question is, how do we ensure their marketing efforts actually benefit the wider Arbitrum ecosystem rather than just their individual interests?

Quoted from kamilgorski

:+1:
What we’re proposing is a “master” campaign like Arbitrum’s “Enter the Odyssey” run by Arbitrum itself, with each project contributing under that overarching framework based on Arbitrum’s KPIs. This kind of unified approach could make a far bigger splash than piecemeal efforts by individual projects.

Hope the above helps clarify things more.

posted 1 year ago

The proposal's focus on structured, metrics-driven user acquisition is a step in the right direction. However, several critical concerns need to be addressed:

Budget Justification: The $3M budget seems excessive given that protocols currently lack the expertise for off-chain marketing. If most teams don't have the know-how, why isn’t infrastructure being provided instead of expecting them to manage $50K/month in ad spend?
Lack of Shared Infrastructure: Many projects don’t have the capacity to execute these campaigns effectively. Shouldn’t the DAO be organizing infra/tools rather than relying on protocols to figure it out independently?
Retention & Long-Term Impact: The focus is on acquisition, but without retention strategies, this risks being another short-term spike in activity. More emphasis is needed on sustained engagement.
Arbitrum-Led, Chain-Wide Approach: Instead of fragmented, protocol-specific campaigns, we prefer a coordinated Arbitrum-led initiative with a clear, aligned goal that protocols can plug into, ensuring better efficiency and impact.

The proposal's focus on structured, metrics-driven user acquisition is a step in the right direction. However, several critical concerns need to be addressed:

Budget Justification: The $3M budget seems excessive given that protocols currently lack the expertise for off-chain marketing. If most teams don't have the know-how, why isn’t infrastructure being provided instead of expecting them to manage $50K/month in ad spend?
Lack of Shared Infrastructure: Many projects don’t have the capacity to execute these campaigns effectively. Shouldn’t the DAO be organizing infra/tools rather than relying on protocols to figure it out independently?
Retention & Long-Term Impact: The focus is on acquisition, but without retention strategies, this risks being another short-term spike in activity. More emphasis is needed on sustained engagement.
Arbitrum-Led, Chain-Wide Approach: Instead of fragmented, protocol-specific campaigns, we prefer a coordinated Arbitrum-led initiative with a clear, aligned goal that protocols can plug into, ensuring better efficiency and impact.

While the goal of fostering Web3-native acquisition strategies is commendable, this approach raises serious questions about execution, fund allocation, and long-term effectiveness.

danielo from mrjackalop.eth

posted 1 year ago

edited 1 year ago

The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members

kuiclub from kuiclub.eth

676.13 TOKEN

posted 1 year ago

I think this proposal is quite thoughtful.

Off-chain ads and content campaigns are really a good user acquisition strategy, but many dApps and protocols don't do enough in this area, especially the lack of CAC and LTV calculation, which is like “blind men feeling the elephant”, and it's hard to evaluate the effect. Can you provide more details here?
The program proposed by Patterns places special emphasis on “measurability” and “return on investment”, which is important. However, a budget of $3 million is a bit large, and we need to make sure that every penny is well spent. It is suggested that we could start with a small pilot and see how it works before deciding whether to expand. Would you consider phasing in the program?

I think this proposal is quite thoughtful.

Off-chain ads and content campaigns are really a good user acquisition strategy, but many dApps and protocols don't do enough in this area, especially the lack of CAC and LTV calculation, which is like “blind men feeling the elephant”, and it's hard to evaluate the effect. Can you provide more details here?
The program proposed by Patterns places special emphasis on “measurability” and “return on investment”, which is important. However, a budget of $3 million is a bit large, and we need to make sure that every penny is well spent. It is suggested that we could start with a small pilot and see how it works before deciding whether to expand. Would you consider phasing in the program?

3, I think we can strengthen the on-chain incentives a bit, such as lowering the user threshold through account abstraction and subsidizing the gas fee, so it's easier for new users to come in. Also, the popularization of off-chain tracking tools is crucial, without data support, it's hard to assess the effectiveness of the campaign. I hope the Patterns team will listen more to the community, especially those dApps and protocols that are already doing user acquisition, their experience is invaluable.

0.00 TOKEN

posted 1 year ago

edited 1 year ago

Thanks for the reply!

Quoted from kamilgorski

. Let me firstly answer the user acquisition argument because the reality doesn’t look as bad as one could imagine:

Thanks for the reply!

Quoted from kamilgorski

. Let me firstly answer the user acquisition argument because the reality doesn’t look as bad as one could imagine:

The lowest CAC we have seen in 3 surveyed protocols that actually calculated it was $50 (declared by middle-sized DeFi). This is roughly equal to 0,02 ETH. I personally believe it’s possible to cut down this number by two but it requires a lot of experimentation.
In order to generate 0,02 ETH in gas fees a wallet needs to make around 100 interactions with dApps / Protocols.
100 interactions translate on average to 40-60 transactions (each transaction can trigger multiple interactions between smart contracts which can be tracked by traces).

40-60 transactions is an achievable threshold for dApps & Protocols, that’s why we focus on them in this proposal. This is of course ROI calculation for the ecosystem, we don’t calculate additional revenues / fees for protocols themselves.

jump to post →

This sounds great although I'm not sure it matches my (anecdotal and limited) experience. Most transactions are now $0.01-$0.05 even bridging funds across protocols is relatively cheap. I see plausibility in what you're saying but I'm not yet convinced. Could you maybe provide some references for the sort of protocol interactions you're talking about?

And I guess we're specifically talking about a heavy DeFi user demographic? No problem if so, but would be important to characterise them properly to understand. e.g. I'm a crypto native and use some DEXes etc but I'm not a trader nor degen, so clearly understanding whether I should be counted or not within this users you suggest would help me understand the business case better. (as the question is also where these specific users would come from: other ecosystems or new users, or a mix).

Quoted from kamilgorski

Second part of what you said is that you think protocol fees as a business model are not sustainable. We’re aware of Arbitrum experimenting with Orbit so a multi-chain model similar to OP but this is also covered by other programs.

What other business models do you have in mind that could be developed in order to make the ecosystem profitable and sustainable?

jump to post →

I believe investments as a business model should be VERY seriously considered. This following Mariana Mazzucato's (a famous economist) thesis on the entrepreneurial state and all our research on ecosystem development and future-proof organisation design plus pain points around projects migrating to other ecosystems and otherwise outsized value capture by grant recipients vs ecosystem.

EzR3aL from ezr3al.eth

22.3K TOKEN

posted 1 year ago

Quoted from kamilgorski

DeFi - this segment is characterized by high to medium value transactions and wallets. Its main purpose is to generate as many high volume trades as possible to keep users’ capital engaged in the ecosystem for as long as possible. Additionally, offering assets available only on ARB would be highly appreciated.

Quoted from kamilgorski

Just as an example to get a better understanding. Should funds for example be used to like promote Arbitrum Dapps in a mobile app like Rabby or Family wallet? Cause I think the best way to get off-chain user on-chain is by focusing on mobile initiatives. Everyone has a phone nowadays and apps are the best way to engage with.

Quoted from kamilgorski

DeFi - Maximize number & value of trades; - Steady TVL growth; - Increase TVL & trade volume on assets available only in $ARB - Number & volume of trades; - TVL

Would also be in line with this

Quoted from kamilgorski

$2.85m will be disbursed to dApps & Protocols after achieving their previously set KPIs. All unused funds will be returned to the Arbitrum Treasury. We expect to support 10-20 applicants with this budget.

I think the amount is very high compared to the applicants number. 10-20 only? Thats a lot money per applicant.

duokongcrypto from kuiqian.eth

107.4K TOKEN

posted 1 year ago

edited 1 year ago

I'm very interested in this proposal, which wants to optimize user acquisition strategies and improve the growth efficiency of the ecosystem.

Previously, IOSG proposed a growth framework, which I strongly agree with: The proposed growth framework operates as a self-reinforcing system, beginning with comprehensive user analysis and service optimization. This foundation attracts high-calibre projects to the ecosystem, fostering healthy competition in serving user needs. As these projects optimize their offerings, they generate sustainable MEV through organic user activity, creating a virtuous cycle where enhanced user retention drives ecosystem value. This increased value, in turn, attracts both additional users and innovative projects, perpetuating the growth cycle and strengthening Arbitrum’s network effects. https://forum.arbitrum.foundation/t/arbs-wake-up-call-a-critical-pivot-is-necessary/27706

I'm very interested in this proposal, which wants to optimize user acquisition strategies and improve the growth efficiency of the ecosystem.

The proposal is based on this core idea, and on that basis, some personal questions

This proposal is worth trying in many places, after doing it first, you can iterate to see how effective it is, how to do the balance here with so many projects allocated for the 3 million dollar program?
Why not integrate it with LTIPP/STIP instead of creating a separate program?
- Arbitrum DAO already has LTIPP and STIP to facilitate ecosystem development, increase TVL and acquire users. While these programs have not been very effective and have encountered some problems, why not refine their frameworks instead of introducing a completely separate program? 3, It is mentioned here that the true effectiveness of these campaigns is measured through kpi and then data tracking and analytics. does the tool provided by Patterns have an advantage over the existing data analytics tools? These on-chain data tools already provide a lot of analytics capabilities, where is the value-added that Patterns provides? And it costs $15,000 to hire 2 full-time staff. All funds are honored according to KPIs, but what if the project falsely declares KPIs? Is there a strict verification mechanism?

my opinion consider combining with LTIPP / STIP or extending the program to improve overall governance efficiency, need more detailed LTV / CAC calculation methodology and impact tracking program.

Amira

27.5K TOKEN

posted 1 year ago

Thanks for sharing this! Some great insights here. From the first look, it seems like you’re focused on keeping things as transparent as possible, which I really appreciate.

I really liked the idea of tracking CAC and LTV—these are fundamental for any org. But onchain apps have completely changed the game. And now it is relatively difficult to track these accurately.

Thanks for sharing this! Some great insights here. From the first look, it seems like you’re focused on keeping things as transparent as possible, which I really appreciate.

I really liked the idea of tracking CAC and LTV—these are fundamental for any org. But onchain apps have completely changed the game. And now it is relatively difficult to track these accurately.

That said, I have a few questions:

Quoted from kamilgorski

Even though the budgets for these programs are increasing, their results are temporary and most metrics fall back to their baselines right after the program is finished, which is underlined by many ecosystem stakeholders, including IOSG in their latest proposal

If dApps are seeing results—though temporary—doesn’t that mean user acquisition isn’t necessarily the issue? Could it be a problem with UI or the use case itself? How would increasing the budget for user acquisition solve this?

Quoted from kamilgorski

User acquisition campaigns start and are independently run by dApp & Protocols teams.
Patterns monitors and optimizes campaigns, delivering on-chain reports & insights about users acquired - including LTV value of users.

If campaigns are being run independently, and Patterns is mainly optimizing and tracking metrics, don’t you think this is a relatively small value-add?

Quoted from kamilgorski

$100k will be spent on Patterns KPI off & on-chain LTV tracking for all participating dApps & Protocols as well as setting up required external tooling - GA, Mixpanel, etc.
$15k / month will be spent on 2 dedicated data analysts from Patterns to facilitate and help dApps & Protocols achieve their goals.

How do you justify this budget? If a web2 project runs its own campaign and uses a CRM tool, how much do you think it would cost them? Most of those tools provide deeper insights than what’s being proposed here.

Lastly, I appreciate that you’ve included data from LTIPP participants, but 19/40 is a pretty small sample size.

GensDAO

posted 1 year ago

We particularly appreciate the focus on measurable metrics (KPIs, CAC/LTV), as this is something we always emphasize. To further strengthen the proposal, we would like to share some thoughts and questions from our perspective:

1. Validation of Self-Declared KPIs

Allowing projects to define their own KPIs carries the risk of setting overly conservative goals (to ensure full funding) or unrealistic targets (without execution capacity).

How will you ensure that the KPIs proposed by projects are both ambitious and achievable? Would you consider setting minimum/maximum ranges per category (e.g., minimum TVL for DeFi) based on Arbitrum's historical data? Is there an option to publish a reference framework with suggested KPIs for each category (Bridges, DeFi, etc.)?

2. LTV Calculation in Short Timeframes

LTV depends on long-term retention, but the program lasts only three months.

How will you calculate the LTV of acquired users if, for example, a Gaming project only has two months of data? Will you include predictive models or extend post-campaign tracking?

LTV Attribution in the Ecosystem

If a user is attracted by a Bridge but generates value in DeFi, how will their LTV be attributed without distorting incentives? Will you implement a multi-touch attribution model (e.g., the Bridge receives 30% of the LTV generated in DeFi), or will only the acquiring project be considered?

4. Program Duration vs. Market Cycles

Over three months, external factors (e.g., market volatility, war, and other political issues I will avoid mentioning) could impact KPIs such as TVL or trading volume, distorting results How will you isolate the real impact of the campaigns from external variables? For instance, if ARB or ETH rises by 50% during the period, will you adjust expected metrics accordingly? Would it be possible to include a correlation analysis in the reports? (e.g., "TVL increased by X%, but the global market rose by Y%, so the net impact is Z%").

Once again, we appreciate the proposal and its emphasis on transparency and measurable results, thank you

kuiclub from kuiclub.eth

676.13 TOKEN

posted 1 year ago

I think this proposal is quite thoughtful.

Off-chain ads and content campaigns are really a good user acquisition strategy, but many dApps and protocols don't do enough in this area, especially the lack of CAC and LTV calculation, which is like “blind men feeling the elephant”, and it's hard to evaluate the effect. Can you provide more details here?
The program proposed by Patterns places special emphasis on “measurability” and “return on investment”, which is important. However, a budget of $3 million is a bit large, and we need to make sure that every penny is well spent. It is suggested that we could start with a small pilot and see how it works before deciding whether to expand. Would you consider phasing in the program?

I think this proposal is quite thoughtful.

Off-chain ads and content campaigns are really a good user acquisition strategy, but many dApps and protocols don't do enough in this area, especially the lack of CAC and LTV calculation, which is like “blind men feeling the elephant”, and it's hard to evaluate the effect. Can you provide more details here?
The program proposed by Patterns places special emphasis on “measurability” and “return on investment”, which is important. However, a budget of $3 million is a bit large, and we need to make sure that every penny is well spent. It is suggested that we could start with a small pilot and see how it works before deciding whether to expand. Would you consider phasing in the program?

danielo from mrjackalop.eth

0.00 TOKEN

posted 1 year ago

edited 1 year ago

Thanks for the reply!

Quoted from kamilgorski

. Let me firstly answer the user acquisition argument because the reality doesn’t look as bad as one could imagine:

Thanks for the reply!

Quoted from kamilgorski

. Let me firstly answer the user acquisition argument because the reality doesn’t look as bad as one could imagine:

The lowest CAC we have seen in 3 surveyed protocols that actually calculated it was $50 (declared by middle-sized DeFi). This is roughly equal to 0,02 ETH. I personally believe it’s possible to cut down this number by two but it requires a lot of experimentation.
In order to generate 0,02 ETH in gas fees a wallet needs to make around 100 interactions with dApps / Protocols.
100 interactions translate on average to 40-60 transactions (each transaction can trigger multiple interactions between smart contracts which can be tracked by traces).

jump to post →

Quoted from kamilgorski

What other business models do you have in mind that could be developed in order to make the ecosystem profitable and sustainable?

jump to post →

EzR3aL from ezr3al.eth

22.3K TOKEN

posted 1 year ago

Quoted from kamilgorski

DeFi - Maximize number & value of trades; - Steady TVL growth; - Increase TVL & trade volume on assets available only in $ARB - Number & volume of trades; - TVL

Would also be in line with this

Quoted from kamilgorski

I think the amount is very high compared to the applicants number. 10-20 only? Thats a lot money per applicant.

duokongcrypto from kuiqian.eth

107.4K TOKEN

posted 1 year ago

edited 1 year ago

I'm very interested in this proposal, which wants to optimize user acquisition strategies and improve the growth efficiency of the ecosystem.

The proposal is based on this core idea, and on that basis, some personal questions

This proposal is worth trying in many places, after doing it first, you can iterate to see how effective it is, how to do the balance here with so many projects allocated for the 3 million dollar program?
Why not integrate it with LTIPP/STIP instead of creating a separate program?
- Arbitrum DAO already has LTIPP and STIP to facilitate ecosystem development, increase TVL and acquire users. While these programs have not been very effective and have encountered some problems, why not refine their frameworks instead of introducing a completely separate program? 3, It is mentioned here that the true effectiveness of these campaigns is measured through kpi and then data tracking and analytics. does the tool provided by Patterns have an advantage over the existing data analytics tools? These on-chain data tools already provide a lot of analytics capabilities, where is the value-added that Patterns provides? And it costs $15,000 to hire 2 full-time staff. All funds are honored according to KPIs, but what if the project falsely declares KPIs? Is there a strict verification mechanism?

my opinion consider combining with LTIPP / STIP or extending the program to improve overall governance efficiency, need more detailed LTV / CAC calculation methodology and impact tracking program.

Amira

27.5K TOKEN

posted 1 year ago

Thanks for sharing this! Some great insights here. From the first look, it seems like you’re focused on keeping things as transparent as possible, which I really appreciate.

I really liked the idea of tracking CAC and LTV—these are fundamental for any org. But onchain apps have completely changed the game. And now it is relatively difficult to track these accurately.

Thanks for sharing this! Some great insights here. From the first look, it seems like you’re focused on keeping things as transparent as possible, which I really appreciate.

I really liked the idea of tracking CAC and LTV—these are fundamental for any org. But onchain apps have completely changed the game. And now it is relatively difficult to track these accurately.

That said, I have a few questions:

Quoted from kamilgorski

User acquisition campaigns start and are independently run by dApp & Protocols teams.
Patterns monitors and optimizes campaigns, delivering on-chain reports & insights about users acquired - including LTV value of users.

If campaigns are being run independently, and Patterns is mainly optimizing and tracking metrics, don’t you think this is a relatively small value-add?

Quoted from kamilgorski

$100k will be spent on Patterns KPI off & on-chain LTV tracking for all participating dApps & Protocols as well as setting up required external tooling - GA, Mixpanel, etc.
$15k / month will be spent on 2 dedicated data analysts from Patterns to facilitate and help dApps & Protocols achieve their goals.

Lastly, I appreciate that you’ve included data from LTIPP participants, but 19/40 is a pretty small sample size.

GensDAO

posted 1 year ago

1. Validation of Self-Declared KPIs

Allowing projects to define their own KPIs carries the risk of setting overly conservative goals (to ensure full funding) or unrealistic targets (without execution capacity).

2. LTV Calculation in Short Timeframes

LTV depends on long-term retention, but the program lasts only three months.

How will you calculate the LTV of acquired users if, for example, a Gaming project only has two months of data? Will you include predictive models or extend post-campaign tracking?

LTV Attribution in the Ecosystem

4. Program Duration vs. Market Cycles

Once again, we appreciate the proposal and its emphasis on transparency and measurable results, thank you

We appreciate the initiative and overall support of the focus on improving user acquisition through both on-chain and off-chain strategies. Encouraging protocols to run simultaneous off-chain marketing campaigns is indeed a valuable approach to match on-chain incentives.

However, one key aspect that should be explored further is why many protocols are not already implementing these off-chain strategies. It could be that they lack the expertise, resources, or guidance to execute such campaigns effectively. Simply requiring projects to define KPIs, budgets, and measurement tools (sections 1.2, 1.3, and 1.4) in their applications without addressing potential blockers might not yield the best results. Understanding these limitations could help structure a more effective support system rather than just mandating compliance.

For instance:

The requirement for teams to specify KPIs and measurable outcomes assumes they have prior experience in running such campaigns. It may be more effective to provide direct guidance in defining these elements rather than expecting them to figure it out on their own.
User acquisition campaigns are expected to be independently run by dApps and protocol teams. However, if teams lack the knowledge of how to design and execute these effectively, the program should incorporate hands-on support.
Funding is provided after the campaigns, but some projects may not have the initial capital to execute these off-chain initiatives upfront. This could be a major bottleneck preventing participation.

Given the $3M budget, we believe a portion should be allocated to actively assisting teams in overcoming these challenges, rather than structuring the program in a way that assumes compliance will automatically lead to success. By helping protocols address their specific gaps—whether educational, strategic, or financial—the initiative could achieve much stronger and more sustainable results.

Do you think these considerations could be added to the proposed framework?

Euphoria from lamprosdao.eth

218.3K TOKEN

posted 1 year ago

The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.

Thank you for putting forward this detailed proposal.

The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.

Thank you for putting forward this detailed proposal.

This proposal takes an interesting approach to tackling user acquisition by combining off-chain marketing with measurable on-chain incentives. The performance-based funding model ensures that funds are used efficiently, and the focus on tracking CAC and LTV is a necessary shift for long-term ecosystem growth.

Similar problems were highlighted in our LTIPP Research Bounty reports, which also indicate that short-term user boosts from reward increases show that rewards alone are insufficient to sustain long-term user engagement.

There are a few areas where further clarification would help understand how this will be implemented effectively.

Quoted from kamilgorski

Funds are paid out according to the level of KPIs achieved - meaning that if 60% of the KPIs was achieved, 60% of the agreed budget is paid out.

Since funding is directly linked to KPI achievements, how will the Patterns team verify the accuracy of these metrics? Will there be measures in place to prevent projects from inflating their numbers artificially? For instance, certain metrics like DAU/MAU ratios or on-chain interactions could be gamed through non-organic activity.

Quoted from kamilgorski

After all applications are collected, Patterns team assesses all applications and chooses ones that offer the highest KPI to budget ratio.

If selection is based purely on KPI-to-budget efficiency, larger protocols with existing user bases may have a significant advantage over newer projects. We suggest incorporating percentage-based growth metrics instead of absolute numbers to ensure fair participation for smaller dApps. Ensuring a mix of both well-established and emerging protocols could provide deeper insights into what works best for different segments of the ecosystem.

Quoted from kamilgorski

most teams don’t have any active marketing & growth teams that would take care of CAC & LTV ratios for their marketing campaigns.

We echo with other delegates as many early-stage projects lack dedicated marketing teams, will this program offer any guidance or resources to help them structure their campaigns effectively? While providing funding is crucial, teams with limited marketing experience may struggle to execute high-ROI campaigns.

In LTIPP, application advisors assisted projects in refining their proposals. Will there be a similar support mechanism here to ensure that protocols make the most of the funding they receive?

Quoted from kamilgorski

After all applications are collected, Patterns team assesses all applications and chooses ones that offer the highest KPI to budget ratio.

Who are the team members from Patterns that will be assessing these applications? Can you please share the evaluation process which will be used to assess the applications?

Overall, this proposal presents a structured and results-oriented framework for funding user acquisition in Arbitrum, which is a much-needed evolution from previous broad-based incentive models. However, ensuring that KPIs are not manipulated, tracking long-term retention, and supporting smaller teams will be critical factors in making this a truly impactful program.

Looking forward to hearing more details on these aspects.

Tekr0x.eth from tekrox.eth

posted 1 year ago

Thanks for your proposal. It helps to answer a part of the "how to get more users" question that was not dealt with by the DAO yet.

I have a few questions:

101

Thanks for your proposal. It helps to answer a part of the "how to get more users" question that was not dealt with by the DAO yet.

I have a few questions:

Quoted from kamilgorski

Patterns would like to propose an iterative program, complimentary to the one proposed by IOSG, that would solve these challenges by helping protocols run and measure their off & on-chain user acquisition campaigns.

When the DAO is trying to provide an answer to "how to get more users", IMO it does not make sense to tackle only one part of the issue. As you mentioned that the proposals are complimentary, why not present it together and provide a complete answer to it?

Without having this "holistic" approach, as a standalone proposal, it helps to get more insight and see how this approach would work, but does not solves the issue.

Quoted from kamilgorski

After all applications are collected, Patterns team assesses all applications and chooses ones that offer the highest KPI to budget ratio.

By laying down the metrics like this, what happens when 2 protocols of the same category, but with different sizes, apply to the program? Larger protocols would get an advantage in the way the KPIs are presented:

Quoted from kamilgorski

	Goals	KPIs (1st iteration)
Bridges & on-ramps	- Maximize inflow of new funds into $ARB ecosystem; - Minimize outflow of funds out of $ARB ecosystem	- Net inflow balance ($inflow - $outflow)
DeFi	- Maximize number & value of trades; - Steady TVL growth; - Increase TVL & trade volume on assets available only in $ARB	- Number & volume of trades; - TVL
Gaming & Social	- Maximizing number of interactions; - Maximizing stickiness; - Increasing value of NFTs	- Number of interactions per user; - Stickiness (DAU / MAU)
NFT	- Maximizing number of collections; - Maximize collections and single NFT trade value	- Number of collections; - Floor price increase
back to top ↑

For example, for DeFi, I would suggest to introduce a % increase instead of only absolute numbers. It is usually the smaller and newer protocols that need more help with user acquisition.

Still regarding this point:

Quoted from kamilgorski

After all applications are collected, Patterns team assesses all applications and chooses ones that offer the highest KPI to budget ratio.

It would be interesting to see a more diverse set of actors judging this, to provide additional context regarding Arbitrum and Web3 in general.

Regarding this point:

Quoted from kamilgorski

Budget will be spent on helping these projects achieve predefined measurable goals through all the steps of the above user acquisition funnel:

As it is today, it is a little bit the other way around, no? If the protocols, by their own means (including money), achieve the KPIs they proposed, then the "Incentive" is paid (looks more like a rebate system). If, by our survey, they don't do it, or don't know how to measure, how can them apply for the incentive program with correct/realistic KPIs? How is the program helping them to enhance their strategies? What I see here is a well-defined tracking proposal that will reward protocols that perform well by themselves.

On LTIPP, for example, there were teams (facilitators) helping the protocols to define/enhance their proposals. Is this going to happen here?

Quoted from kamilgorski

Arbitrum dApps & Protocols apply to the program by filling out a predefined form, where they specify: 1.2. KPIs levels they declare to achieve within a timeframe 1.3. Requested budget with expected items & costs 1.4. Tools used for running and off-chain measurement of the campaign. *All activities must be measurable and Patterns will receive access to tools used (eg. Google Analytics, Mixpanel, Meta Ads, etc.). If activities include KOLs, paid content creation, SEO - all of these need to be fully measurable.

Thanks in advance!

101

17.7K TOKEN

posted 1 year ago

My background is in sales and marketing, so I was intrigued when I read this proposal. I think it's great and a nice, fresh approach brought into this space. :raised_hands: Here are my thoughts:

I think this proposal addresses the issue of bringing new users (non-crypto) on-chain. Since you are using channels like Google Ads, etc., I think this is the awesome. To incentivize crypto projects to go for non-crypto users.
I like that the whole proposal is very metric-driven. I think this is the only way to approach this. In case the proposal would pass, I expect strict metrics for all participating projects.

109

My background is in sales and marketing, so I was intrigued when I read this proposal. I think it's great and a nice, fresh approach brought into this space. :raised_hands: Here are my thoughts:

I think this proposal addresses the issue of bringing new users (non-crypto) on-chain. Since you are using channels like Google Ads, etc., I think this is the awesome. To incentivize crypto projects to go for non-crypto users.
I like that the whole proposal is very metric-driven. I think this is the only way to approach this. In case the proposal would pass, I expect strict metrics for all participating projects.

I do have a few questions:

From the project perspective, this initiative makes sense. They get funds (budget) to run these campaigns. The issue might be that currently, projects have small marketing teams (sometimes even no marketing team at all). Who will pick up the workload? It might be an issue since the project would have to hire new people. What would be a solution here? Offer services by outside marketing agency?
You mentioned you contacted 40 protocols to fill out the survey, and 19 filled the survey. Which protocols shared interest? Did you pitch them this idea already? What was the feedback? Can you name the protocols that showed interest?
With a $3M budget, you expect to serve 10-20 projects. So, a $150k-$300k budget per project. How long would the experiment take before you could do the analysis and show results?

109

For instance:

The requirement for teams to specify KPIs and measurable outcomes assumes they have prior experience in running such campaigns. It may be more effective to provide direct guidance in defining these elements rather than expecting them to figure it out on their own.
User acquisition campaigns are expected to be independently run by dApps and protocol teams. However, if teams lack the knowledge of how to design and execute these effectively, the program should incorporate hands-on support.
Funding is provided after the campaigns, but some projects may not have the initial capital to execute these off-chain initiatives upfront. This could be a major bottleneck preventing participation.

Do you think these considerations could be added to the proposed framework?

Euphoria from lamprosdao.eth

218.3K TOKEN

posted 1 year ago

The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.

Thank you for putting forward this detailed proposal.

The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.

Thank you for putting forward this detailed proposal.

There are a few areas where further clarification would help understand how this will be implemented effectively.

Quoted from kamilgorski

Funds are paid out according to the level of KPIs achieved - meaning that if 60% of the KPIs was achieved, 60% of the agreed budget is paid out.

Quoted from kamilgorski

After all applications are collected, Patterns team assesses all applications and chooses ones that offer the highest KPI to budget ratio.

Quoted from kamilgorski

most teams don’t have any active marketing & growth teams that would take care of CAC & LTV ratios for their marketing campaigns.

In LTIPP, application advisors assisted projects in refining their proposals. Will there be a similar support mechanism here to ensure that protocols make the most of the funding they receive?

Quoted from kamilgorski

After all applications are collected, Patterns team assesses all applications and chooses ones that offer the highest KPI to budget ratio.

Who are the team members from Patterns that will be assessing these applications? Can you please share the evaluation process which will be used to assess the applications?

Looking forward to hearing more details on these aspects.