How do we use incentives to drive product growth?

[Thomas_Hepner]

Hey @LemonadeAlpha - totally appreciate your points and value your opinion greatly, but want to clarify a few points you made that I think are unfair or incorrect.

@LemonadeAlpha

• Structurally inequipped to handle high throughput growth program (staking) due to outdated DEX architecture choice
• Liquidity mining on that older architecture is wasteful to the end of liquidity
• Liquidity mining on v3 would be a fine but hilarious use of the funds (and if we’re moving to PCL, what’s the point?)

We launched DATA on Sushiswap because they were offering incentives via Onsen and Index Coop and Uniswap were not. We did not know what the incentives were until AFTER the product launched (we were never told by Sushi team pre-launch despite requesting this information multiple times). We had to make a judgement call and I thought having incentives was better than no incentives with greater capital efficiency (UNI-V3.), especially given that were putting our own capital at risk of impermanent loss, and given that IC provided no seed liquidity for DATA either.

To be clear - We are not in favor of launching an LM program for DATA on vanilla Sushi or UNI V2. If we were to do a program like this, we would want it to do it on something like Visor + UNI-V3 or Gelato + Sushi Trident.

@LemonadeAlpha

at $2m AUM, the product earns $13,300/yr for the Coop before costs, making back $400k seems pretty tough.

This was true of both DPI and MVI before incentives were started.

@LemonadeAlpha

DATA’s case uses appeals based on DPI and MVI but fails to recognize that another composite product, $BED (why no retroactive rewards for BED?) is performing better in AUM and users despite $0 in incentives. Part of this has to do with dex choice, ofc.

Some of my response here will sound spicy, but I promise this is not my intention!

Firstly, I don’t think AUM is the right metric. DATA is generating ~2.5x daily revenue of BED for Index Coop.

Secondly, for fairness sake, if we are doing these kind of analysis, we should be doing cohort analysis. BED has been around twice as long as DATA (launched 2 months before DATA on 7/21) and at the bottom of the bear market when BTC closed at $32k and ETH at ~$1.9k, so BED is getting a 2x in TVL vs DATA just off capital gains growth alone. DATA top holdings would have all benefited from similar gains if it had launched on same day (7/21); LINK was ~$15 (now $25), GRT was $0.56 (now $0.92), and FIL was $46.5 vs $53.5 now. BAT did a 3x over that time period and LPT a ~4.5x. Just from that very biased launched day, DATA’s TVL would likely be ~2x greater due to appreciation alone.

@LemonadeAlpha

Part of this has to do with dex choice, ofc.

No disagreement here! Per this post, users can purchase $30k of BED vs. just $8k of DATA at 1% slippage. Would be more than happy to discuss moving DATA to a Visor + UNI V3 style liquidity solution for improved capital efficiency!