This post follows up on the referral program discussion started earlier by @juan
It is inspired by Idle Finance referral program and aims at designing a smart mechanism for B2B referrals
- Even though organic synergies between protocols are certainly happening in DeFi, referrals schemes could be highly beneficial initiatives to both parties, fostering mStable product utilization
- Rewards would originate from the protocol fees and then be proportionally distributed to partners according to the new liquidity they deposit into Save on a monthly basis
- Referrals can be tracked on-chain by adding a referral address in the Save contract
- mStable would like to do more than just fee sharing and introduce the mStable Alliance, allocating some $MTA to bootstrap the program & offer exclusive rewards
B2B partnerships in DeFi make a lot of sense as protocols build on top of each other. mStable belongs in the infrastructure layer of DeFi with Save as its core product. Save can be used to onboard new users from a wide variety of sectors: exchanges, wallets, dApps, CeFi, DAOs
Even though organic synergies between protocols are certainly happening in DeFi, referrals schemes could be highly beneficial initiatives to both parties, fostering mStable products utilization.
Referrals provide an economic answer to initial onboarding barriers for integrators and partners
Sushi, Aave, Synthetix, Idle Finance all have undertaken such affiliate partnerships as we speak
Moreover, Save utilization rate is far from its potential judging by the quality & sustainability of its yield compared to other protocols.
A great way to attract, incentivize and reward such “building on top” behaviors would be a kickback/referral program triggered whenever an external deposit happens
This program would be an opportunity for partners to become an integrated part of the mStable ecosystem and get rewarded for deposits that are generated on their behalf. Anyone could join the program by embedding an Ethereum address as a referral when users deposit assets in Save through their own interface.
- A referral address option could be added on the Save wrapper contract to track third-party deposits on Save.
Fees would be collected, deposited into the current Balancer buyback & make pool, and paid in $MTA or mUSD in some circumstances. Every time a deposit is made on Save through a partner interface (with an embedded referral address), fees start to accrue.
Once per month, payments will be processed towards the vesting contracts. Each partner will have its own vesting contract. Tokens are vested on a linear basis over 3 months and the partner can claim them anytime.
The MTA token gets a positive effect from this program: fees are periodically routed to a buyback & make pool on Balancer, which increases pool liquidity and create some buying pressure on MTA
mStable products generate a revenue line of which 90% goes to savers and 10% to the protocol itself. Giving away between 20% and 50% of this revenue seems to be reasonable as B2B referrals could strongly increase the amount deposited into save (there is only $20m deposited into Save to date)
Collected fees are gathered & put into work which is very cash efficient for the protocol. As the mStable ecosystem will grow, B2B will be creating a new source of revenues for the protocol
Fee sharing rationale
Tiers are what determine the percentage of profit shared with the partner. They would be adjusted to Partner Deposited Assets into Save (PDAS) to value their exposure to Save
It could lead to the following structure:
* Tier 1 🥉 – PDAS < $ 1M: 20% of the fees * Tier 2 🥈$ 1M < PDAS < $ 2.5M: 25% of the fees * Tier 3 🥇 $ 2.5M < PDAS < $ 5M: 30% of the fees * Tier 4 🎖 PDAS > $ 5M: 50% of the fees
mStable DAO will be able to change those parameters as the program grows
Payment execution threshold
The minimum threshold for executing the fee-sharing: 500 $MTA accrued fee
The tier categories aforementioned could be further explored with additional rewards given as partnership depth increases
We propose to introduce the mStable alliance, access for partners to exclusive rewards
Tier 1 = Standard partner
Tier 2 = Plus partner
Tier 3 = Premium partner
Tier 4 = Metal partner
All current partners get automatically promoted to Tier 4
Please find below an overview of what the mStable Alliance program could give access to:
- Week 1: discussion
- Week 2: Snapshot vote about budget & parameters
- Week 3: Nominate a dedicated Alliance Committee to whitelist partners & execute the rewards transaction every month (this could be then automated on-chain if the program turns out to be successful)
With that in mind, mStable wonders how to structure the nature and the emission of these referrals rewards:
- Creating a gauge for B2B referral, emphasizing governance & MTA staking
- Giving away the shared fees in $MTA
- Giving away the shared fees in mUSD
- No fees sharing, all revenue goes to the protocol and then partners access revenues through staking (Stakers would get a part of protocol revenues)
- Lock-up $MTA as partners enter the mStable Alliance, unlock them as they start staking
- Initially bootstrap the program with a grant
Happy to hear your thoughts about this