We would like to incentivise liquidity on a borrowing and lending platform Ruler protocol by sponsoring a DPI listing.
This will campaign will provide the following benifits:
Create a extrinsic productivity opportunity for DPI helping with unit retention
Enable DPI holders to earn INDEX and RULER rewards by providing liquidity
Allow DPI holder borrow stablecoins against their DPI with no liquidation risk during a loan period
Context
Following the forum post to list DPI on Ruler protocol. We have been engaging with the Ruler team to on a way to move forward with the listing. We were presented with two options launch a snapshot vote on Ruler to list DPI or sponsor the listing with incentives for a period of 6 weeks. If we were to sponsor the listing it will cost us $8 000 worth of INDEX per week totalling $48 000. If we were to proceed with the option the Ruler team would co-incentivise the liquidity pool with 75 Ruler per week.
Ruler protocol is a lending and borrowing platform that allows user to take out ānon-liquidatableā loans on their crypto assets. The collateral can only be liquidated at the end of the loan period if the borrower decides to to pay back the loan or not. This means that regardless of the price movements in crypto your loan cannot be liquidated during the loan period. The protocol is popular in DeFi because of this unique value proposition and has attracted partners with leading DeFi protocols like Badger, Alchemix and Harvest finance.
We believe this will be a good partnership to pursue for Index Coop as it will create another extrinsic productivity opportunity for DPI. Users will be able to stake their DPI token as liquidity and earn rewards in INDEX and RULER. Furthermore, it will allow users to borrow stable coins against their DPI position to create a CDP. As mentioned in the DeFi Partnerships and Integrations Q2 and beyond this is one of the target partnerships we would like to pursue this quarter and we are excited to bring more productivity opportunities following the interest from this tweet.
Analytics Requirements:
KPIs:
DPI liquidity on Ruler protocol
Stable coins loan value
Targets:
$1 million DPI liquidity
$500 000 worth of stable coin loan value
Marketing Requirements:
Social media announcement about the campaign through both partiesā media channels
Article and twitter thread about how to borrow against DPI on Ruler protocol
We will put up a poll to gauge whether to proceed with the sponsorship or not after initial feedback.
Way forward:
After forum feedback create IIP to request funds from treasury
Work with Ruler team to set up DPI vault on Ruler protocol
I voted against, I appreciate the initiative but I think we need to be more disciplined with our spending.
I would ask what our hypothesis is for needing another DPI lending integration when the couple lower tier ones we have donāt have much traction? I acknowledge no liquidation is an interesting feature but Iām not convinced it moves the needle to get people to activate or retain as customers relative to CREAM and Kashi.
I think the market is signalling that they prefer tier-1 or nothing.
Great effort pulling this together.
It is awesome to see ideas being presented on the forum
Do we have any data that indicates how this will help us achieve our KPIs ?
I understand the narrative, the cost which is very nicely presented. Iām wanting to see a data driven statement, that shows what upside we can expect from this opportunity. Like is Rulerās TVL jumping with each new integration. How do we expect number units of DPI units in circulation to be influenced by this integration.
It does seem like an easy way to create a leverage DPI position. But to @LemonadeAlphaās point, Tier 1 protocols gain the most traction in the market. If there was a way to do this without the capital investment then that is definitely worth exploring.
Another great effort by the team, and again led by yourself @Mringz.
Have to agree with the comments above though, paying for this without any discernible benefit in terms of āmore holders, holding moreā seems like we should give this one a miss.
I spoke to @BigSky7 about this briefly but more generally think the BD team needs to narrow down focus a little, and put forward some key partnerships to target, rather than taking a more scattergun approach. With the sheer amount of energy and capability in the team focused on the right partners, I think thatāll be more impactful for the Coop overall.
Agree with the overall sentiment of the comments. We should target partnerships that if achieved can be game changers. Some other partnerships are still possible but should not be targeted/icentivized directly.
@LemonadeAlpha Thank you for your feedback. I definitely understand where you are coming from. Looking at the current data we do have low utilization rates on borrowing platforms - (CREAM: 5% & Kashi: 26%). I believe achieving higher APYās on these platforms could draw better retention and unit supply rates. However this is only possible if we incentivise borrowing which is something difficult to do or create awareness around these opportunities (something which I am also prioritizing). The last option is use one of these platforms to build a leveraged product. That will increase borrowing demand and should result in more retention. I believe @Matthew_Graham efforts to get DPI and the DPI/ETH LP listed on AAVE are really important in regards to this, could make it easier to remove LM incentives as holders can earn good yield on other platforms without INDEX incentives.
At the moment no, the assumption is that the more extrinsic productivity opportunities in the eco-system the more unit retention. But those extrinsic productivity opportunities need to yield good returns in order to be used as investors Alpha Homara V2 is a good example of this with $10 million in liquidity across the DPI/ETH LPās with average yield of about 35%.
Thank you for this point @DarkForestCapital definitely something I will think about. The way I have been approaching the DeFi partnerships is to pursue as many opportunities in the eco-system while we are pushing through partnerships that take time to get through like AAVE and Maker. However I can shift focus to prioritizing a major oneās. @DefiJesus presented the idea of a yearn vault for DPI which I believe could be very valuable for the Coop. And we have had a BADGER integrations in the pipeline for a while that I also believe could be valuable.
Thanks @Mringz and the other authors for pushing this forward!
Iām really torn between the two options here. Iām all for increasing our relationships and integrations with other protocols. And 48k is on the lower end, compared to other expenses.
On the other hand, I share the concerns raised above. There are many opportunities for partnerships and other lending protocols to integrate DPI. I donāt yet see a compelling reason why this partnership is a must-have, or what benefit can be expected for the Coop.
