Defi Pulse partnership

Authors

@Etienne (CEO at Defi Pulse), with the help of @eqparenthesis and Lewi.

Summary

This proposal aims to onboard the Defi Pulse team as a strategic partner to drive the growth of Empty Set across its hundreds of partners in the DeFi space. By leveraging the Defi Pulse network, we believe that the pace of adoption for ESD can increase at a much faster rate.

Value Proposition

The Defi Pulse team is deeply rooted in the DeFi ecosystem. It has one of the largest networks of curated partners in the space and a proven track record of developing innovative metrics and products. Among others, DeFi Pulse invented the ‘Total Value Locked (TVL) Metric’ and created the Defi Pulse Index, which, with more than $200M assets under management, is the leading DeFi index.

By partnering with Defi Pulse, the Empty Set DAO will leverage the network of one of the most recognized and trusted actors in the space. This partnership will enhance the adoption of our protocol from scratch, increasing the issuance of ESD, our north star metric.

Funding

Initial allocation

As a strategic partner, the Defi Pulse team will be granted 16 500 000 ESDS as an initial allocation to start the program and become a stakeholder in the Empty Set DAO. These tokens will vest linearly for 2 years, in a revocable contract.

Defi Pulse treasury

The Empty Set DAO will bootstrap a treasury managed by the Defi Pulse business development team, which will be used to incentivize the adoption of ESD by a variety of protocols.The initial grant will be 5 000 000 ESDS. To reduce friction and increase efficiency, the Defi Pulse team will be able to provide grants to projects that are being onboarded, in an autonomous manner. Each time a protocol is successfully on-boarded by the business development team, Defi Pulse will earn $50K worth of ESDS as a success fee, directly paid from its treasury. Once capital is allocated, the Defi Pulse team will formalize a TIP to replenish its treasury through a vote.

Protocol growth program

To incentivize the adoption of ESD in the most relevant protocols, the Defi Pulse team will earn rewards for reaching TVL based milestones in each protocol that is on-boarded. At the end of each month, if a protocol has reached a TVL milestone, the DAO will reward the Defi Pulse team accordingly, with a 1% cut of that TVL.This reward will be capped to avoid large dilutions for ESDS holders, and will be vested linearly in a 2 years non revocable contract, in the same time schedule as the initial allocation (non restarting).

Below we can see the proposal for TVL milestones and rewards for protocols on-boarded by the Defi Pulse team.

ESD locked milestones Defi Pulse rewards
10M ESD $100K worth of ESDS
100M ESD $1M worth of ESDS
1B ESD $10M worth of ESDS

Each reward is capped to avoid large dilutions according to the following formula, where

Protocol ESDS valuation = (ESD TVL in protocol / Total ESD TVL) * FDV

Max Milestone reward per protocol = 1% * Protocol ESDS valuation

Performance tracking

To track the performance of the Defi Pulse business development team, the Empty Set DAO, or any dedicated team, will be in charge of creating a dashboard with a list of all protocols that are on-boarded by Defi Pulse and their respective ESD TVL. The Defi Pulse team will also track these metrics to ensure a high level of accuracy.

Every monetary reward and milestone described in this proposal will use a 7 days TWAP methodology to mitigate risks tied to markets volatility.

6 Likes

Welcome to the community @Etienne and thanks for sharing the post.

Its great to see a community so central to the DeFi ecosystem interested in working with ESD to help it get adopted. As I wrote earlier in my ESD Protocol Partnership Initiative, I’m very much for proposal that align with this and would hope that the community does as well given the recent signalling vote.

Structure

Onboarding DeFi Pulse as a partner & having them facilitate integrations makes sense as ESD doesn’t have a team/squad/etc that has a core Bizdev integration mandate.

Similarly providing DP with the autonomy over a wallet allows them to be agile and work directly with partners. Then as the TVL increases the community will vote to unlock the milestones. Looks good :ok_hand:.

Funding

I think the funding and performance milestones laid out in the post are reasonable and would strongly incentivise DP to facilitate ESD integration in the DeFi landscape.


I will have a further think incase I missed any thing but I look forward to voting on the proposal that is put forward soon.

6 Likes

Hey DP Team! Great proposal. We at Complement Capital think it would be great to have one or more teams focused on business development for ESD.

A few comments:

  • I really like the performance based incentives, tying rewards to outcomes is the way to go.
  • on that basis we are less keen on the generous upfront payment, with 1% of supply payment that is not tied to results. So we would like to see more about the reasoning behind this. This is ~ $600K at current deflated market prices, which would easily be a lot more in the coming days as V2 details are revealed, so it seems a little generous. Are there dedicated hires or other upfront costs? It might be preferable to cover some basic costs through a treasury mechanism, with some governance oversight.
  • I’d also like to see some process for how the ESD community can verify that a project that is signed up was done so based on the direct business development activities of the DP team, and not due to some other reason. As ESD V2 gains traction, we can expect to see some DeFi projects adding support for ESD collateral without the activities of DP. So how do you see this being tracked and verified? Again we may need some form of governance council or independent community oversight.
  • I’d also love to see this opened up a little so that other teams can compete. And maybe in return we could have a short window of exclusivity for DP given they are first to come up with the proposal.

But overall this a very exciting development. We very curious to see what others in the community have to say about it.

4 Likes

Thanks a lot for your support & feedbacks @lewi & @rflxvty.

Please find below my answer to some concerns raised by @rflxvty :

on that basis we are less keen on the generous upfront payment, with 1% of supply payment that is not tied to results.

We strongly believe that the protocols which will thrive in the future will be the ones that manage to partner and share ownership of their protocol with relevant third parties, to build meaningful ecosystems around their products. Furthermore, we do not consider this as an Upfront payment, because it will be vesting in a 2 years revocable contract, meaning that the DAO can decide anytime to retrieve its unvested tokens, if unsatisfied with Defi Pulse efforts.

I’d also like to see some process for how the ESD community can verify that a project that is signed up was done so based on the direct business development activities of the DP team

This is a really good point. We started discussing about this with @lewi and Eqparenthesis. We believe that weekly BD meetings driven by the Defi Pulse team will help the DAO keeping track of our efforts. To ensure transparency, we propose to publish the minutes of these weekly calls on the governance forum, so that the community can stay in the loop. I also believe that @lewi proposed to build and maintain a dashboard to keep track of the ESD locked in protocols.

I’d also love to see this opened up a little so that other teams can compete. And maybe in return we could have a short window of exclusivity for DP

Competition is healthy, most of the time. We do think though that the Empty Set DAO should first focus on having dedicated teams working on dedicated streams, with dedicated incentives. We fear that internal competition might add friction instead of increasing overall BD efficiency. In a company, we rarely see several sales team competiting with each other to sell the same product to the same customer. Nonetheless, if at some point in the future the DAO considers that Defi Pulse’s coverage isn’t sufficient enough to target all potential ESD end users, we would welcome competition as any other stakeholder in the protocol. As of today, we believe that the DeFi space is small enough to be covered by a single team, if its network of partners is large enough.

2 Likes

Thanks for the clear response. I agree that the transparency & governance oversight combined with the ability to revoke the funding if the DAO wasn’t satisfied with performance is enough to make this work. And agree a clean separation of responsibilities is more important right now than fostering inter-community competition. Let’s get this proposal passed so!

2 Likes

The snapshot vote for the proposal has been published!

Vote finishes 28th of May 1200 UTC. See it here

1 Like