Summary
DFX team decided to distribute KPI options to incentivize community activities to meet a common goal (in our case TVL).
At a high level, we decided to distribute 50% of KPI options to community members and other 50% to external communities to incentivize growth.
This topic (part 1/2) focusses exclusively on distribution to community members. There will be a separate thread to discuss and ideate distribution to external communities (part 2/2)
Criterion
Based on discussions so far, here is suggested criterion for distribution of KPI options to community members
Of the 50% allocated to DFX community,
Distribute 35% to active community members
25% to unique addresses who voted in either DIP-1 or DIP-2 or DIP-3
7.5% to level 3 (or above) ranked discord members (based on DFX bot)
2.5% to UMA KPI call attendance (based on poap) —EXCLUDED as POAP data is not reliable
Distribute 15% to DFX holders and liquidity providers
10% to liquidity providers (stablecoin pools or DFX-ETH pool) for 2+ months
5% to current DFX token holders (in wallet and also unclaimed), holding >= 20 DFX
Additional Considerations
All allocations are additive in nature. So an address can qualify in more than 1 category
All activities are measured retrospectively (as of Sep 17, 9 PM UTC), so this cannot be gamed in future
Instead of putting this together for a vote, please share your feedback (and if found valuable), we can make updates to this criterion accordingly. Please provide your inputs prior to Sep 24, 9 PM UTC
So poap is like a participation badge that is given to confirm attendance or presence in a event or an activity.
A poap code is given out at a random time during the call, and you use that to claim the event specific poap (think of it as a NFT) added to your wallet address.
Note: If we can figure out a way to identify attendees (who attended, but could not claim poap), we can manually add them to the list.
The 35% to active community and 15% to LPs seems reversed to me. For example, 2.5% of the allocated amount just for being on one call? And 25% just for voting once? And only 10% for providing liquidity?
For this KPI activity, we want to identify user engagement in community, which is slightly different from other active stakeholders who LP/hold tokens.
I strongly believe weight we allocate for engaged users (who vote on protocols, active on discord, provide feedback on forums, take time to join community calls to brainstorm ideas) should be far higher than users who provide liquidity and/or hodl tokens.
Voting in 3 protocols is a very important proxy for engagement and is our most quantitative metric. We are struggling to meet quorum in most votes (including current vote that is live). A whale with a big LP position but does not take 2 mins to vote on important proposals is not our target audience with these KPIs.
So i strongly advocate for the higher split (35% - 15%) compared to LP/token holders. This also sets the expectations/precedent for future KPI distribution activities.
On a separate note - i doubt 180 people attended the community call yesterday to claim a POAP, so if folks agree, we can remove call attendance from the split - until we are confident of the data.
With consideration to the above discussion, I would propose a shift away from percentages and rather favour a specific point value to be attributed to a given contribution. This strikes me as an easier way to compare/ weight specific contributions for each individual participant without a particular category being skewed towards overly high or low KPI rewards due to high or low numbers of participants in that category (i.e. while very important, if voting got 25% of community KPIs with only 30 some odd voting participants this perhaps risks skewing these rewards higher compared to what I would consider equally important contributions such as providing liquidity to pools). I respectfully propose the following as an alternative for further discussion:
Contributing to Core Elements of DFX Protocol in Early Stage
Voters (unique addresses who voted in either DIP-1 or DIP-2 or DIP-3) (100 points)
Liquidity providers (stablecoin pools or DFX-ETH pool) for 2+ months (100 points)
*Filter out mercenary capital LPs (only include those that still hold >= 75% of farmed tokens). Liquidity provision began Feb 24, 2021 so just under 7 months (i.e. not long). The KPI goal is to encourage long term contributors and I would posit that selling much within this relatively brief time frame seems counter to this goal.
Rationale: Both activities are core elements of the protocol and seem difficult to objectively value one over the other
Contributing to Protocol Discussions
3) Discord level 3 or above (based on DFX bot) (75 points)
4) Forum participants (actively contributed to governance discussions/ proposals) (75 points)
Rationale: While perhaps not as foundational as the core elements above, active participation in discussions remains incredibly important in helping the protocol evolve. Suggest equal weighting as while Discord level 3 or above suggests more “total engagement,” the nature of participating in forum discussions for governance reasons seems particularly important.
Part of Larger DFX Community (more passive in nature)
5) DFX token holders (20 DFX or more) (10 points)
Rationale: DFX holders likely see the value in DFX by nature of acquiring the tokens, but perhaps maintain a passive role that could be shifted towards active contributions with the right incentives.
Note: I’d be in favour of not including participation in the UMA KPI call (despite being a participant) for the following reasons:
Discrepancy between POAPs and number of actual participants there appeared to be
Risk of gamification (it’s a call re: KPIs so more likely to draw participation in hopes of earning KPIs at this point)
Single event in time that was passive for most (just listening) and not tied to a true core element of the protocol like governance votes
*Agree with additive nature of allocations
*Agree with retrospective snapshot to prevent gamification
Can someone please explain the reasoning behind incentivizing past actions instead of stimulating required behavior in the future? Don’t we want to incentivize “good” behavior in the future? Or what we’re trying to achieve here? Sorry, I’m a bit confused.
From what i understood from the discussions, we are trying to find a bunch of engaged people who are willing to invest their time/efforts to grow DFX metrics.
One of the easiest ways to find this group of people is to rely on those individuals within our community who exhibited this behavior based on past actions without any incentives.
Note that this criterion is probably only used for KPI distribution -1 for a small time period (say 3 months). Future distributions will likely build on this criterion where we can model future behavior for those distributions.
Also its important to understand this is not a free airdrop to decentralize governance. This is a KPI distribution to find active and engaged members to work towards a common goal. Hence looking at past behavior is one of powerful tools we have in place
Hi - Whether we do this as % or points, the idea is 50% of total KPI rewards are allocated to community. Your points add up to 100+100+75+75+10 = 360 points. Can you ensure these points add up to 500…so its numerically easier to allocate when actual KPI points are live.
So, we can define 2 types of contribution:
A. capital (by being an LP and/or by buying DFX from the market).
B. work (by building stuff, sharing ideas and promoting the protocol)
Is it fair to say that the KPI option program should be designed to incentivize B (work) to attract A (capital)?
I imagine this program is particularly useful for bringing in people without capital. Am I correct in understanding the value proposition of the KPI option program in comparison with a common incentive program?
I am also in favor of this…with a slight twist. I suggested filtering out participants who had a history of multiple (or recurring) sales of farmed tokens.
But implementing any such idea comes with a lot of complexity…
Final v1 version was not live from Feb 24, folks to had to make trading decisions to move funds around pools, move funds between chains (Eth to polygon). There are folks who consolidated rewards when gas was low, others jumped pools 3 times etc…
So i think its too early to keep a >75% threshold for KPI metric. To start with, just length of staying in pool may be sufficient to find the biggest audience.
As @Mikhail nicely words it in his post, I tried to distinguish 2 activities - work related activities (engagement) and capital related activities (LP/holding) as i decided my 2 top level categories.
If you are in alignment, i’d like to stick to this framework to message our overall plan.
Ok, thanks for the clarifications @tanman. Now it all makes sense for me and I personally 100% agree with the program proposed by @thecryptoforager. I also support excluding mercenary capital.
While I am aware of and support the proposed 50% allocation to community / 50% allocation to other strategic communities having the points add up to 500 doesn’t actually work as each category has a different number of participants so it’s not as easy as just adding up the total points.
It seems to me we’re missing two important metrics that might help us confidently agree on how to allocate for DFX community participants.
Number of eligible participants for each proposed category of inclusion
Specifics regarding the total proposed KPI option disbursement #s for the DFX community (which I presume will be separated categorically based on TVL thresholds).
That way we can actually crunch out some numbers based on proposed KPI allocations and look see if our incentive breakdown even makes sense such that if you were a voter vs an LP vs a holder, etc, would receiving “x” amount of KPI options be adequate to incentivize or do we need to rework the numbers…
Regarding the mercenary capital, based on what is proposed, jumping around pools wouldn’t exclude any LPs assuming they had a “cumulative” participation of the proposed 2 months. So if you were in CADC for 1/2 month, then jumped to EURS for 1/2 month and then again jumped to XSGD for 1 month, you would still qualify. The exclusion I was referencing comes down to actually selling DFX tokens. While I acknowledge all of us as individuals may have certain strategies of participation, I think it’s important to have a metric that while imperfect is as objective as possible to achieve the desired goal. Objectively I am not able to see an argument whereby selling DFX demonstrates a long term commitment (even though I’m sure there are some long term participants that likely did for specific reasons). Rather I would say that the strongest argument is that LPs that held despite market fluctuations/ drawdowns is much more suggestive of faith in DFX long term.
As for the categories, I personally don’t think the categorical labels are necessarily that important. From my perspective, so long as each specific activity is weighted appropriately based on a consensus of their value, then I’m fine with it being organized differently.
I was thinking in even simpler terms with a focus on LPs. So proposed criteria being:
2+ months LPing in any pools combined
Retain 75% or more of farmed tokens
I don’t see the utility of including tokens that are simply bought/ sold as that strikes me as a different category. In my opinion the mercenary capital focuses on people that in theory specifically come to farm DFX tokens with the intent of selling.