[Draft Proposal]: KPI options program

In collaboration with @joyce

Let’s kickstart the discussion on the KPI options program.

Incentivisation mechanism: synthetic ERC-20 tokens called KPI options are airdropped to a selected list of the most active DeFi community members — thought and action leaders. The option’s redemption value is tied to an underlying Key Performance Indicator (KPI) of our protocol. Then at a certain latter date the option pays out a reward if the project’s KPI reaches a predetermined target before a given expiry date.

In short, a hypothetical scenario looks like this:

  • Some significant amount, is allocated as a frozen redemption collateral against the creation of KPI Options.
  • An appropriate KPI or a panel of KPIs and an expiry date are designated.
  • KPI options are airdropped to selected members of the DeFi community subject to past behaviours or interactions within the DeFi space.
  • At expiry options are allowed to be redeemed for $GRO on a sliding scale dependent on performance of the selected KPI. For example, if the number of integrations was chosen, and it was below some pre-set lower bound at expiry the options would be redeemable for x $GRO a piece. Conversely, if it’s above some upper bound they would redeem at 10x $GRO. Any value in between would lead to redemption determined via linear interpolation. Alternatively, they’re offered to be (partially) exchanged for the next round of KPI options on preferential terms.
  • $GRO tokens not bound for redemption are returned to the Treasury.

Suggested parameters:

KPI: Number of integrations for GRO’s DAO Treasury product (based on PWRD stablecoins)

Duration: 3 months, starting in Oct/Nov (depending on how much dev work we need to launch + vote within DAO)

Target: 10 integrations, with bonus for high deposit amount e.g., >$250k - Max rewards for all 10 integrations combined: 5-10k $GRO (throwing the numbers out here for now; we may want to see the outcome of LBP to confirm exact amount).

This approach drives interest of the most active and capable part of the DeFi community in contributing to GRO’s productive organic growth without triggering immediate dump. It also builds up a strong GRO DAO community.

Plus it could also bring nice publicity.

UMA has already tested the waters and built infrastructure for this.

Read more on KPI options:

We can also do a co-community call at Gro’s Discord server with UMA folks joining, so we can chat through what’s proposed + UMA’s own experience in using integration as KPI .

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Update: UMA said they’ve approved GRO as collateral, so they’re ready to take this forward!

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It looks very cool, for a more detailed understanding, a discord call is a great idea, there will be many questions)

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In response to Joyce’s question in the discord channel

what do you think? Would something broad like TVL or something specific like number of integrations work better?

I think either works but it really depends on the objective. I can see TVL as part of the long game that helps to make the growth rolling but we would need reasonable actions to drive that beyond just hyping things up. I would also think we would like to assess the effectiveness of the program itself. But with that said I think TVL presents a more tricky scenario since the growth may have been predominantly by external factors. Worse would be that participants contributions actually detracted from the growth, which is a possibility. So there would need to be a fine balance between high growth targeting and modeling

I see number of integrations as providing the opposite benefits/drawbacks of TVL, primarily being: easy to grasp, likely driven mostly by internal factors, increases short term outlook and potential but doesn’t necessarily lead to product market growth

These are just some quick thought pointers and for sure there are other considerations to be made

Now additionally I would also like to say that there are other potential metrics to assess by, such as:

  • Number of community driven proposals/features/products. Potentially scoped by some metric of impact depending on the initiative
  • Improvement of some kind of well-accepted third party metric such as DeFi Score | Codefi Data (apparently used by Idle) in which the community can have impact on
  • Some form of community engagement and knowledge growth

You can argue that all these metrics help direct towards higher TVL, and I agree. But the point is to adapt the sound advice of working in incremental, progressive and effective steps towards a long term goal rather than focusing on JUST the long term goal

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This seems really cool! I’m looking forward for Sushiswap particularly

This is a very good way to incentivize growth. Looking forward to seeing GRO mint options!

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Very creative; I like it.

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Think this is an awesome idea! Looking forward to the call tomorrow.

I like the idea of doing total protocol TVL as everyone has more chance to help via social etc

Doing partnerships is more targeted however so I see the benefits for that.

But in that case, how would it be best to select community members who receive the KPI Options incentive?

This is a great idea @pavel.

For how to select community members who receive the KPI Options, could it be some combination of how much the individual deposited into PWRD / VAULT + TVL brought into the protocol through referrals? Not sure how to combat sybil attacks for referrals but maybe someone has ideas? And have the rewards weighted more to TVL brought into the protocol to encourage a focus on growing the number of users.

I guess one offset to sybil attacks is that rewards need to vest and if someone tries to game the system, they need to stay around. If they leave early, they leave a portion of the gamed rewards on the table for stakers to claim.

Are Gro rewards that are in the 12 months vesting period included in total TVL? If not, it would be interesting to see the locked Gro calculated with LP and protocol.