The sCoop - Contributor Newsletter - 2022.03.16 Wednesday

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Fresh Owlpha, curated daily. This is @HOWweDAO . (previous issue )

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Who said DAOs don’t ship?! Today, Owls heard about BASIS-ETH in yet another product Community Call. Then, they talked results of the vote the Council and analytics in the newly transformed Leadership Forum.

Tomorrow, we keep it simple: Growth Nest at 20:00 UTC. See you there.

Announcements:

Meta-Governance:

  • [Compound-90] Risk Parameter Updates for ZRX, MKR, and SUSHI
  • [Compound-91] Should Compound governance contribute funding to the Nomic Foundation?

Product:

Governance | Finance:

Stop! In the name of high yields

Basis Trading Community Call (11 attendees) slides | recording available shortly on the GDrive

Are you hungry for yields? @afromac (sans afro) is here with a feast.

DeFi investors are continuously seeking higher yield. DAO treasuries in particular are eager for price-neutral yield in order to avoid correlation with their native token and to meet their operational costs irrespective of market cycle.There are many strategies available in DeFi today that generate stablecoin yield through protocol incentives and short lived farming opportunities. This leaves investors moving from farm to farm as they chase new yield. BASIS-ETH is an opportunity to create a sustainable source of yield that generates return by utilizing a proven trading strategy that requires no farming or incentives. It is the first in a new range of high yield-generating products by Index Coop.

The ETH perpetual futures market on perp.fi uses a funding rate to incentivize traders to arb the derivative price back to market price. Long traders pay this funding rate to short traders over time. BASIS-ETH token holders can earn 15-20% APY by providing capital to a strategy that exploits pricing inefficiencies to earn this funding rate. By taking a fully hedged position, the product has no net asset price exposure.

BASIS-ETH will be built on Set Protocol’s Optimism deployment, using the integration with Perpetual Protocol to create the short position. Perpetual Protocol’s ETH-USD short perpetuals are battle-tested, have deep liquidity, and tend to have high APR. The product will employ an optimized strategy that creates a delta neutral (no price risk) position by take a 50% position in -1x short ETH and a 50% spot ETH. The funding rate is paid every 8 hours, and any returns are auto-compounded.

Wanna learn more? Check out the forum post.

Eureka! We’ve struck gold in the form of marketing analytics.

Leadership Forum (29 attendees) slides

Firstly, poll results from Index Council v2 are here. The next step is nominations for v2 council (all 7 members), which will hit the forum before week’s end.

The Leadership Forum will run differently than it has in the past. Its focus is now on business growth, and topics should directly relate to this (ex: increasing TVL, profit, marketing impact, etc.). On this link, nominate yourself or a colleague to present a topic. The forum organizer will schedule items through this link. You can also upvote/downvote topics you think we should prioritize.

This week’s topic: Marketing Analytics.

Net volume flow: it’s like net dollar flow but with one caveat, it doesn’t count arbitrage trades ( NvF = Buying Volume ($) - Selling Volume ($) with arbitrage trades excluded). NvF has been flat since December (graphics available on the slides). That means that for the past 4 months, we have not been executing. We are trying to understand why this is happening across our entire product suite.

Analytics Pod lead @anthonyb.eth has graphs on graphs on graphs (on graphs) comparing date to NvF. To gain insights from these analytics, there are 3 steps:

  1. Find the spikes.
  2. Search Twitter for relevant events immediately before the spike.
  3. Rank likelihood of events causing spikes.

Let’s run through an example of how we follow these steps to gain insights from the below graph (it’s for DPI).

  1. First spike on October 6, 2020.
  2. Use Twitter Advanced Search to find potential events.
    a. First DPI Rebalance
    b. David Hoffman Tweet
    c. Yam Finance Purchase Proposal
    d. Bankless Podcast w/ Felix
  3. Rank likelihood of events causing spikes

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Spikes in NvF are caused by events, meaning events are what drive new users. These events can be broken down into several categories:

  • Partnerships that increase Utility & Yield
    • Ex: Aave, Cream
  • Partnerships that increase Accessibility
    • Ex: Zerion, Dharma
  • Validation from Trusted Sources
    • Ex: Protocols (Fei, Yam) and Personalities (CLG, DC Investor, Defi Dad, Kris Kay, Mike Demaris, Regan Bozman, Sassal, David Hoffman)
  • External Events
    • Price Action
      • Seems to be really important for timing FLI content
    • FLIs
      • EIP-1559 & BTC ETF seem to be important events which drove adoption
    • Web2 Validation
      • Ex: Mark Zuckerberg’s announcement of Meta tied to Metaverse NvF increase

So, does an event equal a spike? It makes a lot of sense that these types of events drive retail adoption, but it’s not clear that this drives the smart/big money. A careful analysis shows that spikes in number of buys often doesn’t coincide with spikes in $ of net buying volume!

Next steps:

  1. Continue to Build Out Marketing Analysis Tool
  2. Test Key Events To See What Works
  3. Focus Marketing Efforts Based on Data

Thursday Meetings: (UTC/1-hr, UON)
2000 - Growth Nest

Daily Owlpha: “My biggest tip for DAOs is stop talking about the work and do the work.” - @duartedao

Hoot Hoot!

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