RFC: Mini Season 2 of Radix Rewards during Foundation Handover

Governance Radix Community DAO
21

Radix is a defi network, the less liquidity it has the harder it is to make it move and the more starved the dapps become.

Without proper incentives to keep bluechips on radix all you can count for are pumps and dumps on the main token as unless someone charitably fills liquidity of all of our dapps on his own [instead of earning money on those elsewhere] you’re gonna be stuck with unsustainable defi stack.

You’re also fighting against this 1m weekly while the original plan was to use the entire 1B from stablecoin supply to the campaign and have each of those campaigns be worth 100m+ xrd. Unless tokenomics change is made we’ll still have funds reserved for incentives for close to 900 weeks on this cut down spendings.

3 Likes
22

Not that much. Was a lot at the start, but most bugs are out now, and to just maintain will take a couple hours tops every week.

The program should be scalable, as in we can get many more users and it should still function, but in practice limits are usually hit sooner than you think, and you need to do some optimizing to keep it running. So if we’d hit many users, that might need dev hours. That would probably be a good thing though, many users means there’s interest, which means things are probably going well :slight_smile:

4 Likes
23

My vote is to continue with a second season, but with some important changes.

Also, to be clear, the main goal of the campaign in season 2 should not be to get new users but purely to maintain or even increase TVL. If it attracts new users, great, but that shouldn’t be the main focus.

The incentive program is well-made, and with a few adjustments, it will fit perfectly for the purpose.

Season two proposal:

Reduce the categories to maximize the reward to TVL ratio. No need to push things like weekly dApp interactions or paid transaction fees.

Also, I would favor Radix Native Alt Liquidity to be removed for S2.

And remove the XRD lending incentive. (This keeps shorting at bay if less XRD is available. Let the supply/demand regulate XRD lending on its own.)

Categories to keep:

- Dex Bluechip Liquidity (BTC, etc.)

- Dex USDC/T Liquidity (but exclude stable <> stable pools; they are near 0 risk and have good returns just from the generated fees)

- Dex XRD Liquidity (exclude LSU)

- Lend Bluechips

- Lend USDC/T

Make Season 2 much shorter with a fixed end time. Three weeks, perhaps, then evaluate and adjust for the next round.

For three weeks, 2.1M XRD (100k/day).

Currently, when Season 1 ends this week, we will be at 680k XRD/day for the current season.

The reward amount and duration are, of course, subject to discussion. Perhaps 100k/day is a bit too low.

With this model, I think we would have the best results. Also, a short season keeps us flexible to apply changes according to market conditions and feedback..

9 Likes
24

Like this a lot.

Though, if you do a set amount of XRD / week, do you even need to set the season end and start date in advance? It could also be an indefinite season with x amount of XRD/week, until the Foundation winds down.

3 Likes
25

The whole point incentives where created in DeFi was to get engagement and attract TVL over a long period. Without having to payout tokens directly. It creates a dilution game where you have to keep commited over a long period of time to get the rewards. It usually benefited the project as they were able to get more tvl over a longer timeframe for less tokens. Just giving out tokens weekly over a short timespan is the opposite of this. I would just create another season that lasts 6-12 months and has another 100 mill xrd tranche if you really want to go that route. I would expect a proper vote on this though. I agree with what beam posted. I would only do this on a long time frame or not at all.

26

Why did we end season one again? Seems very short sighted. I argued to continue it. Others said it didn’t matter. And the onchain liquidity didn’t matter. Now we are worried? I would suggest if you really want to do this is to just starting season 2. Give out points. Communicate that the dao/community will decide when it ends and how much XRD it will be worth.

27

Like this a lot.

Though, if you do a set amount of XRD / week, do you even need to set the season end and start date in advance? It could also be an indefinite season with x amount of XRD/week, until the Foundation winds down.

Good point. I am trying to find arguments against it. But I can’t really think of a strong argument that would favor a multi week season over week for week mini “seasons”.
So as it stands now, I would tend to agree with you.
This is for the current market situation. I can see where down the road when prices are up, a longer season with higher rewards and perhaps more interactive tasks would be beneficial, for marketing reasons (1M$ incentive campaign sounds better then 100k for example) and perhaps as psychologically it could keep new users longer engaged (maybe?).

But at the moment it might really be better to make it weekly and be able to adjust the incentive amount way faster to adapt for a better outcome.

28

True, yet I would argue that the campaign failed at one of the purposes it was meant for: to get new users onboard and engaged. It did, however, boost TVL, mainly, at least that’s my perception, from existing Radix users. And if you ask me, the failur wasn’t because the campaign was bad. The general engagement in the cryptosphere wasn’t and still isn’t optimal, combined with a horrible chart that surely didn’t help to spark interest in the broader crypto community to engage with the incentive campaign. The fact that there wasn’t a clear end date for the incentive campaign also didn’t help to get new users aboard, in my opinion. Why engage in something unknown if you don’t even know what the rewards will be? Even though I feel like we are at the beginning of a long-term trend reversal and will see a long-term uptrend forming, I do think it’s too early to expect a different result from the campaign right now if we just redo the same 100M rewards over a long time and keep the current categories.

That’s why I advocate for a slimmed-down version with lower rewards that focuses on keeping the ecosystem liquid enough so it is attractive when new users check us out and try on-chain DeFi stuff.

3 Likes
29

Sounds good for me :+1:

2 Likes
30

It probably would have gained more users if it had been possible to get the 3rd party test coordinated around the program’s beginning.

That was (my opinion) the reason it didn’t take off as expected: lack of interest due to the expected marketing we believed would happen from a verified 3rd party test.

If we have a small one running (ongoing) then if we do garner interest based on the restructure to a true Community DAO then we might bet on a few people’s radar.

4 Likes
31

Yes, I totally agree. At that point, we were in a good position, and the chart was already starting to form the beginning of a trend reversal.

But with the tragedy that occurred, everything changed, unfortunately. It still seems unreal he isn’t with us anymore…

But yes, I do see my proposed changes to the incentive campaign as just temporary. Once the DAO/governance are set up, when there is a clear overview of available funds, and we stand strong again, a full incentive campaign like we had now is likely a good way forward.

5 Likes
32

I do see the point that the goal of RR is to attract new users, but without liquidity they will run back out as fast as they can: long time holders (as I’m assuming that’s pretty much all that’s left) keeping blue chips and stablecoins in the ecosystem is a prerequisite to have an ecosystem even remotely attractive for a new user, and investing part of the reserve to reward the people who are doing that is a fair thing to keep doing, in my opinion.

Considering how few we are and the price action of the last years, I would say that any reward coming this way is not “free money” but rather “a small token of appreciation for keeping the ecosystem alive”.

6 Likes
33

The TVL chart makes the situation fairly clear. Before incentives, TVL was flat. With incentives, TVL rises. When incentives weaken, TVL falls again. The underlying direction doesn’t really change.

It’s fair to say incentives do support dApps in the short term. Because rewards are tied to usage, people interact with dApps and some value flows back through project wallets. That helps teams stay active and keeps things running.

But that’s still support, not demand.

Short term, incentives fund activity and prevent things from breaking.

Mid term, they become maintenance, spending to keep things stable.

Long term, if usage and liquidity don’t survive without incentives, then the model isn’t pulling on its own.

The Foundation stepping back reflects a broader reality: most strategic levers have already been used and the remaining runway is limited. At that point, continuing to spend to hold numbers up becomes a cost decision, not a growth one.

High TVL without real users or revenue doesn’t attract serious investors for long. What ultimately matters isn’t whether TVL can be maintained, but whether the network and its dApps can generate demand and revenue without ongoing support.

If there’s a way forward, it’s less about extending incentives and more about finding real usage and revenue streams that stand on their own. :folded_hands:t2:

3 Likes
34

The purpose of that season 2 is for short term: to protect the little liquidity we have at the moment. At least, while the transition to the new foundation is complete and we have a clearer roadmap on what is next. then we can think mid/long term and have a model that can sustain itself (without a bootstrap via incentives)

2 Likes
35

You make very agreeable points. Where I’d push back is the framing that current spending on TVL maintenance represents a missed opportunity to spend differently in a way that would attract new users or investors instead. I’m 100% with you saying that keeping the incentives alive is not what’s going to make it or break it for Radix: we need a breakthrough to attract new users, a killer dApp, a strong investor that is willing to provide liquidity because the superior scalability enables a use case impossible elsewhere… something like that. Without that, the project is going to fade anyway, either taking the reserve with it or having distributed part of it to the people who tried to keep it alive.

If you have suggestions on how to reallocate in a more proactive direction, rewarding devs writing new dApps or something along those lines I’d be happy to hear ideas! My sense is that building a breakthrough-capable application already carries enormous inherent value and incentive “baked in” (as long as the chain is still somewhat alive), while keeping capital on a chain that is 4 years and 99,7% far from its all time high is a dirty, unglamorous work that right now needs some extra recognition. The free market has clearly denied this recognition in the past years. If we listen to it alone we’re dead already. But maybe there’s more to Radix than that… and we need to survive to see what’s on the other side.

2 Likes
36

Want to be fair…Dont a single more XRD to whales. If a account have more than 500k of token directly dont clasificate for any incentives. At least on that way they must to share his investing in a lot of accounts and work a little bit on do these.

37

So $1050 worth of XRD is now considered a whale? :rofl:
500k * $0.00209 = ~$1050

38

if you buy it at 69 cents…for sure.

39

im here for a long time and dont have these amount…ohh i wasn’t a public node runner that suck from foundation or a devel that do the same on grants. probably these is the cause i dont have more than 500k. But if any whale that suck for so long time feel bad about these he can send some tokens , my address is well know.

40

In an ecosystem where there is arguably little of interest to do, and where TVL has remained largely irrelevant in the broader DeFi landscape despite incentive programs, several questions are worth asking.

Should simply bridging a Hyperlane asset into the ecosystem not be enough to receive some rewards in the position we are in?

Should a new user be required to download a wallet, bridge an asset, deploy that asset, and purchase or borrow XRD just to begin earning rewards?

Should it be considered that some existing users deployed capital in Season 1 largely out of goodwill rather than primarily thinking in terms returns? And may not redeploy based on overall result.

Should all incentives be reviewed that can incentivize behaviour that could negatively impact the XRD price (especially with illiquid spot markets)? This seemed to have happened in season 1 and passed off as unfortunate rather than possibly linked to the incentive programme design itself.

Should a broad, clearly defined set of metrics be established to measure outcomes and inform decisions, something the foundation seemed unwilling to consider?

Are incentives at the app, activity, and asset level genuinely effective, or are they over-engineered, built on the assumption that the Foundation believed it could steer capital flows in a targeted manner? is it even it’s role?

Should an incentives programme ever be open-ended without a predefined mechanism for converting season points into XRD, and do we really think participants are not reasoning in terms of ballpark expected return on capital?

Should community consider supporting one app per category to concentrate liquidity, allowing others to fade if necessary?

Should apps ultimately be responsible for incentivizing themselves, with network rewards focused solely on incentivizing liquidity to Radix itself?

Should we save the incentive pot to be used after a fundamental review of who and how we want to incentivize in the future?

1 Like