Proposal to grow revenue by maximizing referral payments from protocols

Proposals
1

Summary

Instadapp can make ~2% on all volumes thanks to dynamic referral payments from dApps in Cinch’s referral marketplace. This post suggests implementing an initial pilot program with two products. No additional resources are required from Instadapp to move forward with this pilot program.

Abstract

Monetizing a non-custodial platform is difficult. Monetizing a non-custodial platform without negatively impacting the user experience is even harder. Instadapp can overcome this challenge by maximizing referral payments from dApps. Cinch turns every dApp into an affiliate partner and delivers ~2% of TVL to distribution platforms like Instadapp. Cinch’s vaults act as middleware and require no development resources to use.

Motivation

One way to monetize yield products is to charge users. The problem is that charging users is zero sum: Instadapp profit comes at the expense of user profit. This creates a strong incentive for users to disintermediate Instadapp and interact with the underlying protocol directly.

A more sustainable way to monetize is to charge dApps for distribution.

All financial products need distribution, and dApps are no exception. dApps are willing to pay for distribution, and Instadapp is the ideal distribution partner. Instadapp can generate ~2% on all volumes deployed into DeFi thanks to dynamic referral payments from dApps.

Specification

Cinch enables dynamic referral payments from any DeFi product. Referral payments are immediately compatible with any platform partner, including Instadapp.

Receiving maximized referral payments from dApps requires no additional integration work from Instadapp. It only requires that deposits be made through Cinch’s vault.

This post suggests implementing a pilot program with two products on Cinch’s marketplace: Ribbon EARN stETH and Ribbon EARN USDC.

Benefits

  • Instadapp makes ~2% on all volume deposited into these products
  • Sizeable new revenue stream directed to the DAO treasury
  • Higher profitability and longer runway
  • No negative impact to user profits
  • Opportunity to improve profitability by using Cinch’s marketplace for additional dApp integrations
  • Add two best-in-class yield products from a protocol with a great reputation

Drawbacks

There are no known drawbacks to implementing this proposal. However, as with any new program, there may be unforeseen challenges that arise.

2

More on Cinch because I was capped at 2 links: https://www.cinchprotocol.io/

3

Hi @habs4lyfe I don’t fully understand the premise here, how are DApps integrated and what vaults need to be used? How does this referral program relate to our current offerings like Avocado.

I think this proposal should be discussed more informally perhaps on Discord and then you can re-submit this as a proposal.

4

Thanks @Seb_EthMonk

Happy to have a more informal conversation before re-submitting a proposal.

In terms of follow-up to your comment on the post:

→ Cinch enables on-chain referral payments from dApps
→ We support Ribbon’s EARN products (among others)
→ Any deposits into these products from Instadapp would trigger referral payments of ~1-2% of TVL
→ Referral payments can become the most profitable source of revenue for the DAO

Easy illustrative example:

–2.5% of Instadapp TVL deposited into products = 2.5% * $2bn = $50MM
–$50M * 1-2% = $500k-$1,000k
–$500k-$1,000k of ARR generated by adding products that are willing to pay for distribution

Happy to elaborate and/or answer any questions!

5

I have to agree with @Seb_EthMonk here, this looks like InstadApp’s TVL going into other dApp actually.

6

@Doo_StableLab thank you for the feedback. Appreciate you and @Seb_EthMonk taking the time to read this post until the end, and apologies for not being more clear.

Cinch provides a middleware contract that automates referral payments on chain.

dApps are willing to pay Instadapp to get integrated into Instadapp’s UI and to make their products available to Instadapp users.

If Instadapp were to integrate Ribbon into the Instadapp UI, 1-2% of all deposits made into Ribbon from the Instadapp UI would flow back to Instadapp as payment.

Does that make sense?

All good if it’s not a fit for now!

7

Hey @habs4lyfe I appreciate you posting this, however this doesn’t really fit and doesn’t make sense with Instadapp as it stands today.