[LRFC] Rewards - Add Promotional Partner Referral Tier

Lyra Request For Comment (LRFC) Rewards
1

Simple Summary

The purpose of this LRFC is to create another tier in the rebate scheme outlined in LEAP-49 designated to promotional partners.

Abstract

Referrals can be an effective growth strategy for DAOs that lack access to more conventional methods of product distribution. To further enhance this approach, I propose introducing a new verified tier exclusively for promotional partner referrers. This will help us to better target prominent Key Opinion Leaders (KOLs) and communities, thereby increasing our chances of attracting larger audiences.

Motivation

The current referral tier structure consists of four levels, each necessitating a specific amount of LYRA to be staked and an application submitted to the grantsDAO for verification. Although effective in assessing the alignment of potential referral partners that have expressed interest in being verified, requiring promotional partners outside of the community to stake over 1 million LYRA for a 50% reward kickback is a significant demand. Therefore, it is essential to develop a more appealing alternative tier tailored to promotional partners whose communities could be valuable sources of new users for the Lyra Protocol.

Below is the current referral tiers outlined in LEAP-49.

Tier Conditions Fee Rewards for Referee Multiplier for Referred Trader
I 0 stkLYRA, unverified 20% 1.2x
II 500k stkLYRA, verified 35% 1.2x
III 1m stkLYRA, verified 50% 1.2x
IV 5m stkLYRA, verified 60% 1.2x

Specification

Below is the desired additional tier (II) to offer promotional partners. With the addition of this new tier, the current tier II specified in LEAP-49 would become tier III and so on.

Tier Conditions Fee Rewards for Referee Multiplier for Referred Trader
I 0 stkLYRA, unverified 10% 1.1x
II 0 stkLYRA, verified 20% 1.2x
III 500k stkLYRA, verified 35% 1.2x
IV 1m stkLYRA, verified 50% 1.2x
V 5m stkLYRA, verified 60% 1.2x

Rationale

To emphasize the objective of this new tier, it aims to attract KOLs and communities that might not otherwise consider becoming a Lyra Referrer. By eliminating the need for referrers to stake LYRA, we address the issue of demanding financial investment before delivering value in the form of referral fee rewards, which is not enticing and could lead to unsuccessful outreach.

Promotional referral partners would be eligible for a 20% fee reward from referred traders, below that of Tier III, maintaining the incentive for the most dedicated referrers to stake LYRA for an additional kickback. Furthermore, the promotional partner can offer a 1.2x reward boost for traders onboarded to Lyra through their platform. This unique offering incentivizes their audience to participate.

In summary, this tier is designed to minimize the promotional partner’s effort while providing tangible benefits for their community. By introducing this tier, we can create a more appealing proposition for valuable referrers.

Test Cases

NIL

Copyright Waiver

All LEAPs must be in the public domain. See the bottom of this LEAP for an example copyright waiver.

2 Likes
2

Big fan of a tier for verified individual affiliates but I’d suggest a much lower rate. In past epochs the protocol has generated upwards of $50k in fees, assuming 20% or $10k are generated by referrals from verified affiliates in this tier, that’s $5k worth of rewards or 45k LYRA at time of writing over 2 weeks. This is also assuming no increase in trading activity due to the new trading rewards program.

I’d suggest inserting a Tier II and making it a permanent addition to the program.

Verified affiliates (Tier II) get 20% of referred fees as rewards and referred traders get a 1.2x boost.

Unverified affiliates (Tier I) get 10% of referred fees as rewards and referred traders get a 1.1x boost.

Anyone can verify themselves as an affiliate, but users must be approved by Grants DAO to reach higher Tiers III-V.

3 Likes
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  1. Reduce affiliate fee reward from 50% to 20%

To effectively engage KOLs and valuable communities during the initial stages, it’s essential to present a compelling offer. I suggest starting with a higher fee percentage to address the cold start issue and gradually reducing it if we distribute too much LYRA. Given that the entire protocol currently earns $50k over two weeks, it’s highly unlikely that an affiliate would reach this level early on. Assuming a KOL refers approximately 10% of all protocol fees, this would translate to $10k in LYRA monthly, a reasonable amount for influential crypto communities. To align with tier 2, I’m open to 35% as a compromise.

If KOLs and communities receive excessive LYRA from fees (a desirable issue), we can always adjust the distribution rate through governance.

  1. Lower rewards to a 1.2x multiplier and remove the 30-day time constraint.

Drawing option traders in a highly competitive market is challenging. We need a captivating offer to pique the interest of potential traders. By providing double rewards for 30 days, we can motivate traders to embark on their options trading journey and subsequently participate in our regular rewards program once their 2x bonus expires.

In summary, reducing the affiliate bonus to 35% of fees is acceptable, and I believe maintaining the double rewards for 30 days offer is advantageous.

2 Likes
4

I like the idea of a temporary boost for new integrators, but I think the max eligibility duration of the tier V needs to be explicitly set (30 days) and should include a cap on the total rewards that can be earned via that tier (Maybe 100k Lyra).

It can be expected that most integrators will apply for this tier at first and I dont think we want to be paying out 500k Lyra per month for this program. Instead it should allow small teams to jumpstart their integration and then quickly transition into the regular program.

3 Likes
6

I think the difference here is that this tier is for outbound outreach to KOLs and communities. This is a different relationship, with different requirements to that of the Lyra protocol and integrators. As such unlike the other tiers, this tier would not be accessible via application in my opinion, rather employed to attract parties who wouldn’t be motivated to work with Lyra otherwise.

I do think adding a guardrail of a maximum amount of 50k LYRA earned per 30 day epoch would remove the risk of someone earning an exorbitant reward.

1 Like
7

in general i think we should launch the current integrator/referral program and see results first, before adding more preemptive programs. also i’m in favor of more open and permissionless referral programs over preferential treatment programs. just give a referral code and go. no need for a KOL song and dance

more fundamentally, i think the question is whether these tokenomics drive sustainable long term value to the lyra token. if the answer is no, then better to rethink core tokenomics rather than different tiers in this branch

2 Likes
8

I love this proposal, I would be happy to see a permanent tier where verified integrators receive an initial boost. I agree with others that some cap, even if high is necessary and 50% might be high, I would prefer using the II tier 35%. I don’t think it’s necessary to add a 2x boost to traders though, I don’t see much added value and it further complicates an already complex program.

2 Likes
9

Hey all,

I believe there is still a need for a promotional partner tier. After taking in the above feedback I’ve modified the proposal. The new tier will fit in as Tier II.

  1. Reduce the rewards from 50% → 20% of fees
  2. Keep a 0 stkLYRA requirement
  3. Referred traders receive 1.2x boosted rewards
  4. Maintain the requirement to verify

If there are no objections I will move the proposal with these modifications forward for a vote.

3 Likes