Idle debit card & app

🗂 Proposals 💡 Ideas & Improvements
21

Hey Idal, you can find my opinion and feedback on the Idle card idea here: Idle debit card & app - #12 by wlamhk :smile:

3 Likes
22

This is what makes me say a big no. Idle is and must remain a decentralized platform. No to legal structures, no risky points of centralization, no deductions that can be used against the platform by the “fiat system” and Governments.

For those who want this, it is already possible to do it on the current platform, using external partners.

3 Likes
23

Thank you @idal for the tag :slight_smile:

I think that here the discussion to do is first about the vision that Idle has (at this moment) and that it wants to maintain in the future: making a decision about the adoption of a CaaS (as in this case Swipe) is not easy, it would change many key aspects in the ecosystem that, until now, had remained unchanged.

As @unicorn, @FedeCrypto, and @Salome have already correctly pointed out, the use of a KYC system (even if managed totally externally) will show in the crypto field a “change of the way” by Idle, since you will interface with centralized entities and systems, and this will surely affect the reputation.

Another thing to add is the issues related to “contingencies” that cannot be managed directly by Idle (but by third parties in this case), as @Davide said, bad behavior around Idle will damage the protocol itself.

That said, this is a topic that interests me a lot, and in case there will be a decision in the future to adopt such a solution, I definitely see as positives things:

  1. The idea of a Referal Program, the incentive (be it of any nature) always works and moves people to invite others;
  2. The Cashback reward program, which is essential mainly for “non-crypto” users, because using and spending their funds on services that are used every day shows Idle as something to accumulate;
  3. Third-party legal management, certainly eliminates effort and commitment on the operations side for Idle;
  4. Mobile friendly, I know it may seem obvious but having something mobile makes you reach more users, especially in a field like crypto is an essential thing to involve more and more users.

Probably, for now, a moderate solution would be to partner with services that are already known in the field (MCO cards for example) so with this choice, you would be able to reach more users, without having direct or indirect connections with legal issues, but again, in my opinion, it’s all about Idle’s vision.

6 Likes
24

Hey @idal - Thanks for proposing this (and thanks to @Falcone for the proposal and continued effort to improve Idle). Here are my thoughts:

Early in the life of a company or network/protocol, there is a high opportunity cost of both time and capital. Decisions on where to allocate these resources must be made relative to other opportunities and in the context of driving long-term value.

For Idle, the highest priorities are increasing Users, TVL, and $IDLE value (specifically for the purpose of increasing yield). This creates an incentive loop - more users drive a higher TVL, more TVL ‘generally’ signals to the market the protocol is providing value and increases the token price, which increases yield, which incentivizes more users and capital, completing the incentive loop.

When I look at what Idle needs to do in the short term to reach these goals, I think there are higher-impact uses of time and capital, specifically:

  • Finalizing the Smart Treasury implementation (capital and time) [side note: glad to see IIP-2 pass!]
  • Adding non-stable assets to Idle (time)
  • Incentivizing developers to build on Idle through grants and companies to integrate Idle through fee sharing (capital)
  • Designing and implementing the Long-Term LPs program (time)

On this basis, I would advise we don’t pursue the card at this time.

Further, I tend to agree with some of the problems others have stated: legal structure, KYC, introduction of trust and brand risk, etc.

I would also bring up a few other points that led me to my conclusion:

  • The absolute cost is fairy high for a protocol this early (~1000 users): $25k setup fee or staking (300k SXP = ~$400k USD), 2.5% processing fees (1% if staking, has to be paid in SXP), and card issuance fees. This only makes sense at scale and for certain business models
  • This is only possible after $IDLE becomes collateral in Maker, which may take a long time given the early nature of the Idle Protocol (and volatility in $IDLE)
  • Assuming $IDLE is added as collateral to Maker, this requires users of the card to create debt and puts them at risk of liquidation. Liquidation is not only a bad user experience, but can also cause downwards price pressure on $IDLE and impact yields (especially in cases of cascading liquidations)

I’d like to note that this doesn’t mean the recommendation wasn’t valuable, nor that this can’t be explored later as credit systems evolve and Idle builds a larger community and treasury (making new use cases viable), so thanks again for your involvement and proposing this @Falcone

9 Likes
25

Slightly off topic - but how was dydx able to be integrated natively with coinbase wallet? Coinbase wallet only supports 2 protocols natively - dydx and compound. dydx only has 200M TVL (#19 on defipulse vs idle @ #22). If this is just a matter of fee sharing what needs to be done to implement this (is the the referral program we’ve been discussing?)

26

Following up on the topic of incorporating (legal structures) for DAOs:

TLDR: DAO are LLCs

5 Likes