Great to see Instadapp on the DeFi leaderboard this morning. We’re writing up a brief request for proposal to discuss an obviously interesting question for the community: what is InstaDapp’s revenue model?
Quick disclaimer: This is our first request for a proposal. If we’ve missed something, please feel free to flag.
At the time of writing, Instadapp has $7.8B of liquidity locked up. This number will likely go up as DeFi gets more sophisticated. It is clear that the innovation will not stop at traditional financial primitives (like lending, derivatives etc.). We’ll see entirely new DeFi-native products emerge in this Cambrian explosion. This means hundreds and possibly thousands of protocols?
Instadapp’s advantages in this world are promising:
- Bootstrap users/liquidity for new protocols.
- Simplify usage for users.
- Make integrations easy for developers.
This is an opportunity to discuss what Instadapp’s revenue channels should be. The question of revenue is not about extracting fees as much as it is about coming up with a framework for making the right product tradeoffs. For example, if a protocol wants to advertise to Instadapp users – should we allow it? (especially as the userbase grows beyond DeFi natives who can independently judge protocols, risks etc)
Admittedly, these are difficult, fact-specific choices but we’ve seen how marketplace businesses in Web2 (like Uber and Instacart) can get quickly messy if this philosophical grounding is not established early. Ultimately, InstaDapp’s monetisation model will reflect these choices.
Our options would be to pick from one or more of the following:
1. Fees from protocols. Consider this example - a derivatives protocol wants to fast track bootstrapping liquidity and attracting users. They could partner with Instadapp, pay to be on a featured section, offer enhanced liquidity mining incentives directly to Instadapp users etc. As DeFi grows, Instadapp could tap into opportunities to monetise with new protocols and dapps while helping them bootstrap their first billion users/dollars.
2. Fees from users. This is straightforward. Instadapp could charge a fee from users to make various types of transactions that are native to Instadapp – such as for – swap transactions, flashloans, lending interest rates etc.
3. Fees from developers/dapps. Instadapp could monetise products built exclusively for developers. This feels early, but could be opportunities here as developer tools build out over time? For instance, you could imagine enterprise DeFi smart accounts with additional functionality.
Looking forward to hearing + learning from the community!
On behalf of Superpumped
Delegation address: 0xbB644A48De45C840B84AdEEfd873e837d6B131A3