B2B Affiliate Program Kickoff

Co-authored with @Davide

Summary

Thanks to its design, Idle is able to provide interoperability among DeFi protocols while adding capital management and yield optimization functionalities – integration partners’ teams don’t need to stitch together disparate systems and protocols or spend months managing every single integration.

The ability to provide users with a simple way to know they are allocating their capital efficiently is extremely powerful. However, we would like to make this value proposition even stronger. To foster Idle protocol’s growth, and reduce the initial onboarding barriers for these partners, we would like to propose a referral program for B2B partners.

Rationale

Idle is an open protocol that can integrate with either decentralized and centralized platforms. It allows third-parties to securely access the entire Ethereum lending ecosystem with a single, reliable integration.

Despite the fact there are some direct (attractive yields/rewards) and indirect (fewer maintenance costs and increased capital resiliency) benefits, we observed that adding an affiliate program would enhance new B2B integrations.

Prospective partners have different needs, but they all share a common goal: a sustainable protocol/product/business. Evaluating the benefits reported above might be complex, and this represents a barrier to incentivize Idle protocol integration across DeFi and crypto platforms.

Implementation

Lead protocols like Aave and Synthetix launched referral/affiliate programs, using different approaches (e.g. B2C on-chain or B2B off-chain distributions). The goal of this proposal is to set up an initial B2B off-chain mechanism powered by the Pilot League to reward integrators. The aim is then to upgrade this program into an on-chain automated solution.

How it works

During phase 1, the Pilot League committee would collect a list of integration partners and track the Partner Deposited Assets (PDA) along the time. Candidates will fill out a form to be selected for the program or the committee can directly propose getting in touch with key integration partners.

Profit-sharing is triggered when a withdrawal event happens on partner funds, allowing the protocol to claim the accrued fees. This will limit the protocol’s risks of going out of funds or cash-flow inefficiencies. There will be a minimum threshold for payment execution.

The Pilot League shares the profits in $IDLE tokens, at the conversion rate available on the market. The program will run for 3 months to test the parameters and collect feedback, and it will be officialized into an automated on-chain program.

The referral levels are tailored to the current size of the DeFi and CeFi markets, as the program is designed for industry leaders.

Program Parameters:

* Program Budget: 50,000 $IDLE
* Program Manager: Pilot League committee
* Minimum threshold to execute the fee sharing: 500 $IDLE
* Vesting period: linear unlock in 3 months

Referral levels adjusted to Partner Deposited Assets (PDA):

* Tier 1 – PDA < $ 100M: 20% of the fees
* Tier 2 – $ 100M < PDA < $ 250M: 25% of the fees
* Tier 3 – $ 250M < PDA < $ 500M: 30% of the fees
* Tier 4 – $ 500M < PDA < $ 1,000M: 35% of the fees
* Tier 5 – PDA > $ 1,000M: 50% of the fees

Benefits

The clearest outcome would be the TVL increase, which gives more exposure to Idle and improves the performance fee streams. Synthetix allocated up to $500k/month incentive for this program, so setting the 3-month budget up to 50k $IDLE would be aligned with the industry standards.

The proposed budget, if entirely deployed, could potentially lead Idle between top15 DeFi protocols.

The $IDLE token gets a positive effect from this program: fees are periodically routed to the Smart Treasury, which increases pool liquidity. This would consequently boost revenue streams coming from Balancer (more pool fees and $BAL rewards). Side benefits would come from the direct and indirect visibility across the DeFi ecosystem, on social media, and in the B2B landscape.

As a reference, in the following 3-month scenario we suppose a $900M TVL increase represented by partners that contribute to protocol’s growth at different tiers.

3-Months $900M TVL Increase Scenario

Program Tier Number of partners Av. TVL (M$) Shared Fee Exp. $IDLE to partners/month
Tier 1 7 20 20.00% 1’944
Tier 2 4 120 25.00% 8’333
Tier 3 1 300 30.00% 6’250

Total distributed $IDLE: 49’583

With the above scenario, the ratio between $IDLE tokens collected by the Smart Treasury and the $IDLE issued to integration partners would be +310% (the ratio varies from 160% up to 400%). If the program reaches the hard cap of 50k $IDLE shared to partners, the Smart Treasury would improve its liquidity by 184k $IDLE (and the committee can eventually propose re-finance the referral program budget if an on-chain solution isn’t in place yet).

Part of this liquidity can be routed back to the Referral Program, triggering a self-sustainable loop. The Ecosystem Fund can be used only for the initialization of phase 1 of this program, preserving the funds owned by the Governance for future community initiatives.

Next Steps

This proposal is open to comments from our community.

Depending on the vesting contract structure, this proposal might require some work to set up a tailored smart contracts (which would be likely similar to the Idle team vesting contracts, which have been already audited).

Once the discussion phase gets to an end, this initiative can be formalized on-chain by the Pilot League, which can work off-chain to reach potential partners.

16 Likes

I really like this. Great way to incentivise further integrations and encourage expansion leading to TVL growth.

We should get this on a community snapshot and accelerate its implementation via the league committee.

Great overview above. Not sure why no one has responded to this yet. Bullish for TVL, LFG :fire:

8 Likes

Excellent analysis here @Davide, implementing such a program will bring a big boost to TVL. I think such a program will help in capturing and incentivising new partners to build upon idle, which is awesome. I am wondering how we can also incentivise partners retention, that is how to we keep the partners we already have?

Some ideas (which would be exclusive to the B2B affiliate program):

  • Partners could boost their profit-sharing % by also holding certain amounts of $IDLE
  • Partners who maintain a certain tier level for extended periods also receive a boost

The point is that it’s dually important to capture TVL, and to retain it.

7 Likes

Thanks @8bitporkchop, good points.

Retention is crucial in DeFi and Idle should incentive long-term liquidity provision over short-term ones.
The B2B Referral Program brings elements from retention strategies, as current partners like Harvest or Yearn can also apply. This means that Idle can create a stronger relationship with integration partners that are already providing most of the TVL in Idle.

It’d be probably better to keep this manual program simple and direct, and implement your improvements in the on-chain version.

Your second suggested idea (boost for extended periods) is pretty cool and the Pilot League could manage it.
Even if we add this feature later, we can create retention since the beginning by considering retroactive reference periods. Let’s say Idle launches this boost feature in May and requires 6-months of liquidity provision to unlock the first multiplier cliff. Early adopters that joined the program in March would reduce the timeframe by 2 months, and in September would already enter the boosting phase.

8 Likes

Snapshot vote time? Feels like an opportunity we should get rolling through the governance process!

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Yeah @Coinballers, it’s snapshot time!

The snapshot poll has been launched here: LINK

Vote “In favor”, if you agree to kick off this Affiliate Program.

Vote “Against”, if you don’t agree to kick off this Affiliate Program.

Vote “Discuss more”, if you have concerns about the implementation approach.

Snapshot is an off-chain solution to cast a vote by signature, no gas spent.

7 Likes

Reporting here the conclusion of the snapshot poll regarding this B2B Affiliate Program:

Screenshot 2021-03-10 at 19.38.28

:white_check_mark: With 100% in favor, this program has been officially kicked off. The Pilot League will now start operations and communications with prospective partners.

7 Likes

Is it possible to get an update on the B2B affiliate program from @Salome @emixprime

Would be great to know if we have a list or engagement plan with complimentary Defi partners and also if the community can play a role in helping.

This feels like a major catalyst for idle so be great to understand the progress we are making from the league committee

4 Likes

@Coinballers We are finalizing the landing page where potential partners will see the benefits of the B2B Affiliate Program and related information specific to it.

Although we have decided to go the “openness” way instead of having a “whitelist” of potential partners, there are some crypto realities (DeFi and not) with whom we are already in contact or that we will contact as soon as the landing page is completed :white_check_mark:

We will use this discussion to share the final landing page with you, getting some feedback from the community, and giving updates related to the B2B Affiliate Program :rocket:

5 Likes

Following. I think incentivising TVL is a win.

Here’s the B2B Landing Page for the Affiliate Program! :grinning:

As I said, we are going to talk with the potential partners we had on the list, and from now on, any partner can contact us through the page if it is interested in the proposal of the B2B Affiliate Program.

What do you think about the landing page?
Do you think that the program is clearly explained?

If you see some parts on the landing page where we can improve or explain better, please let us know :ok_hand:

6 Likes

Hi @emixprime

I think this explains the program very well. Clear communication, concise and easy to navigate.

As we already know this initiative has unanimous support from the previous vote, so we should be keen to get this live and engaging partners.

Looks good :fire:

5 Likes