opensource-observer
Pilot DeFi protocol specific impact metrics
Describe the feature you'd like to request
Given the importance of DeFi to current networks, we should aim for "metric parity" for indicators that are commonly tracked by DeFi protocols and used to measure the effectiveness of incentive programs. This post on the Arbitrum forum is an interesting framework that we should try to implement. Ideally we do a first stab at calculating these metrics and then surfacing the insights in the form of a report similar to the ecosystem impact vectors we made for RetroPGF.
Describe the solution you'd like
A version of the ecosystem impact vectors style analysis that measures DeFi protocols along the following vectors (copy-pasted from the proposal):
User Metrics - New DeFi users, Users from other blockchains, and Permanent users
- Identify a value for different types of users. For example, if we found all new users to the chain are worth $10 each and a project brings 100 new users, they net $1,000 of TVR
Liquidity - Acquisition and Retention
- Identify how much the liquidity is worth and does the liquidity stay on the chain after the program ends. We can break this into how much liquidity was acquired, and its stickiness to account for retention.
- For example, a project brings an average of $500k of liquidity for 90 days and an average of $100k of that liquidity remains for the 90 days after the program. We could say $1k of liquidity for 1 day = $1 of TVR. The TVR would then be calculated as follows: (500190) + (100190)= $54,000).
Volume - New Volume and Retained Volume
- We establish a baseline volume number for any project looking to optimize on this KPI, ideally using a 30-90 day average. We then measure the increase in volume over the life of the program, and the retained volume one the program closes.
- Using the baseline across all participants and looking at DAO wide goals, we set dollar values for increases in volume and retained volume, similar to Liquidity and Users.
Sequencer Fees generated by your protocol
- We believe this one is straightforward, but please confirm our understanding if we missed something. We can measure the fees generated from the protocol’s smart contracts.
- We think this would be a great spot to pull in the Treasury working group on this as they are already tasked with figuring out the most effective way to spend sequencer fees, so they should have a good starting point on valuing these fees that we can work into ROE.
Holders
- Reason to buy/hold token
- % of claimed rewards sold
- Average duration held
Describe alternatives you've considered
An alternative could be to identify a data collective member who could drive this line of inquiry and potentially come up with some additional solutions. Or we ignore it.
