Summary
Shapeshift DAO can make ~2% on all volume deposited into DeFi thanks to dynamic referral payments. Affiliate programs available through Cinch are standardized and generate more revenue than protocol-driven affiliate programs. This post suggests implementing a pilot program with two reputable dApps as a starting point. No resources are required from the Shapeshift DAO to move forward with this pilot program.
Abstract
Monetizing a non-custodial platform is difficult, and doing so without negatively impacting the community is even harder. Shapeshift DAO can overcome this challenge by enabling dynamic referral payments from dApps. Cinch Protocol’s smart contracts act as middleware and require no development resources to use. Cinch turns every dApp into an affiliate partner and delivers ~2% of DeFi TVL to platforms like Shapeshift.
Motivation
Monetizing a non-custodial investment platform is hard. Monetizing an investment platform that offers yield products is even harder, because users don’t transact as frequently in a year. One way to monetize is to charge users. However, charging users/community is not a sustainable way to monetize by itself. If the goal is to become sustainable, DAOs need sustainable business models.
All financial products need distribution. The most successful financial products (checking accounts; Fidelity mutual funds) are not the best performing or the cheapest - they are the products with the best distribution networks.
dApps are willing to pay for distribution. Shapeshift - as a non-custodial investment platform - is the ideal distribution partner for dApps. Cinch allows Shapeshift to generate ~2% on all volumes deployed into DeFi thanks to dynamic referral payments from decentralized applications
Specification
Decentralized applications democratize access to financial products and economic opportunity. Today, their impact is muted by a lack of distribution. Cinch’s mission is to give decentralized applications the distribution they deserve.
Our smart contract enables dynamic referral payments from any DeFi product. Our contract acts as a middleware layer so that referral payments are immediately compatible with any platform partner, including Shapeshift.
Instead of deposits going into the underlying product contract directly, deposits made through Cinch’s vault automatically trigger the programmed referral payments. This allows for dynamic referrals and customizable referral logic within the Cinch contract.
We suggest implementing a pilot program with two reputable protocols: Ribbon and Metrix (a dHedge product). Both dApps have strong reputations. Metrix also has high quality investing content that can be shared via co-marketing so that the entire Shapeshift community benefits from their addition to the platform. The pilot program would involve adding Ribbon and Metrix to Shapeshift’s Earn page somewhere below the Idle opportunities.
Benefits
- Shapeshift DAO makes ~2% on all volume deposited into these pilot program dApps
- Higher profitability without charging community members
- Shapeshift DAO gets closer to becoming sustainable
- Opportunity to greatly improve profitability by using Cinch’s infrastructure with additional dApp partners
- Standardized affiliate program reduces managerial burden on the Shapeshift team
Drawbacks
There are no known drawbacks to implementing this proposal. However, as with any new program, there may be unforeseen challenges that arise.
Vote
For - Formalizes the community is “for” implementing the pilot program with Ribbon and Metrix.
Against - Formalizes the community is “against” implementing the pilot program with Ribbon and Metrix.
Thank you all for reading this and considering this proposal.