The INST token had a successful launch on June 17, 2021. Instadapp launched an aggressive liquidity mining program with the launch of INST token & governance. The liquidity mining program had two components:
- Incentivising users that import and manage their positions to the InstaDapp DSA v2 from Aave, Compound, Maker.
- Providers of liquidity to the INST-ETH pair on Uniswap using G-UNI pools.
The TVL has increased since launch - now stands at > $12 billion. Further, the DSA layer offers strong utility in the form of ability to earn yield, refinance loans, and use multiple strategies on the platform. However, the INST token has been trading between $5-9 at approx. $90-$160M circulating market cap.
Strong value discovery of the Instadapp token has the following important strategic levers:
Continue providing further connectors & utility within the DSA layer - this involves adding new DeFi protocols. InstaDapp has added Liquity, Reflexer finance recently. InstaDapp is also going to launch new features such as stable coin Dex limit orders, flash loans etc. Further, the platform also launched integration with Uniswap v3 combined with multiple strategies for LPs. There is also potential to add fees/further revenue lines for new value added features that InstaDapp will launch.
Become leading multi-chain Defi platform - This would involve significant investment in building bridges to multiple layer 1 chains as well as layer 2 chains. This path would have the highest ROI for value accrual for the InstaDapp platform but would also involve significant investment of resources & need for further incentives. This might need some bold bets including going beyond the aggregation/automation play of InstaDapp.
Reduce sell pressure from existing liquidity mining programs. As we know, the existing liquidity incentives are distributed every week on Aave, Compound, Maker and Liquity positions managed on DSA v2. This program has been extended till Jan 15, 2022. This would involve a cost of $15M at today’s price, apart from creating constant token dumping by the farmers.
I propose the current liquidity incentives on Aave, Maker, Compound to be reduced as it has already met its initial objectives of widely distributing the InstaDapp token to core Defi users, and incentivising adoptions of DSA v2.
It is time that the same resources should be diverted to a more strategic, long term direction of building a multi-chain Defi platform. The token incentives could be used to drive multi-chain adoption & further, Instadapp could be used as a native token in the multi-chain layer leading to attractive value accrual for the token.
This step is important to achieve the long term vision of the InstaDapp platform & improve value accrual for the InstaDapp token.