The emphasis I was making here is if this is meant to be a step toward an iterative rewards suite, I’d suggest we consider how we envision rewards to look more wholistically and step toward that
I don’t understand what you mean by this
If we are planning to build in a way to reward various future behavior types, it would be worth talking about what a “reward” more generally means to wallet user. The success of this proposal feels heavily dependent on how it is integrated with Valora and other wallets, so would love to see what has been proposed/designed for reward introduction/education, expectation setting, reward retrieval, ect.
If we consider future rewards, what consistencies will there be among them so that the user quickly understands (eg. my suggestion was making this a more completable objective or set of objectives rather than an ongoing “yield”). But maybe I’m jumping the gun here and thinking too far out prior to any learnings.
I’d like to share a couple of observations from interviews in a number of different countries. We ran ~10 interviews per country in Argentina, Brazil, Colombia, India, Turkey and Uganda recently and a number of key insights came from it. Our interviews covered a range of genders, education levels, experiences with inflation, level of banking savvyness and crypto understanding.
That said, the profile of the crypto-curious is unsurprising: middle-upper class with disposable income,
- Positioning a product as a crypto product does not contain a value proposition in of itself. People want it to solve a specific problem or provide them a greater return than simply inflation hedging.
- Savings is for suckers. If you’re going to do something with your money you need to see a benefit.
- cUSD in it’s current form is in an awkward risk/return place. Most cryptodollars in fact are perceived as more risky than a bank account and miss out on the return of blue-chip bitcoin.
- People in high inflation environments (often) do not discount for inflation. This group considers 0% on USD to be worse than 7% on domestic currency when inflation is expected to be >12%
- The return on capital for people in the lower-middle class is way too high to win them over with an interest rate.
People are way more broadly crypto curious than we thought, but they need a clearer reason to take the first step. I am transparently biased towards this demographic. It’s huge. In emerging economies, most crypto users are either gambling on small coins or true bitcoin believers. The population of crypto curious is WAY larger. What do they want? A clear value proposition and a risk/reward profile that pulls this into the “medium risk” basket of their portfolio. The short hits of DeFi don’t do it for them. The roller coaster all or nothing of bitcoin isn’t great for normies either. They want to be able to sit down with their spouse and say “this is better than a bank account” without their spouse threatening divorce.
I’m really into this idea because I see it as achievable. USDC on Ledn is providing 10.5% right now. BlockFi is also in the high single digits. cUSD playing a meaningful role in the cryptodollar market means that there will be borrowers. Borrowers means that there will be an interest rate that can be passed onto retail investors. If this proposal is a short hit, it’s not particularly interesting, but if there’s a way to connect it with a long term, low, reliable return the global middle class is ready to give Celo a shot.
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^ also worth noting that beefing up other use cases decreases the need to answer this question. Put people in a position where cUSD lets them cross borders easier, or send them remittances in it or issue a loan in it etc etc and the burden of action is reversed. No longer “why buy?” but, “why sell?” I’m looking at savings/investment behavior in isolation.
^ I think many of these findings highlight why I don’t think the value prop of an “interest-like” reward alone is very strong. It sounds like the percent would need to be very high (>10%) for it to be convincing on its own (and much higher for lower-middle class users). We would be competing against speculative investment crypto-currencies with our artificial (unsustainable) yield.
The value prop to me is more around initially incentivizing cUSD market penetration and Valora downloads in preparation for a shift toward rewarding what cUSD was created for (or at least what I understand as what it was created for): as a means of exchange and transaction. I think originally we had also thought cUSD would be valuable as a store of value, but the research @downer shared shows otherwise.
Thus, could be worth taking a book from credit cards/banks playbook – format the reward to the user as one time larger reward for holding X dollars in an account for Y amount of time. Don’t even bother trying to enter in the competitive world of perceived ongoing yield-farming. Then after that time period, users will have learned to trust that cUSD holds its value and would be interested in participating on other reward gaining activities.
The only reason to keep the one-time reward % based is so that users can participate even with low amounts.
I think it’s premature to say that it needs to be >10% or that SoV is DoA. We know some things but this research was absolutely very early stage.
- My gut is that we should be talking about the crypto curious. Lower middle class is a much bigger cultural leap (for savings). Is that what you (and others) are thinking?
- Imo, the research isn’t conclusive on store of value, but we do know that cryptodollars are WAY less used by normies than Payoneer, Zelle, Paypal etc and given network effects of those tools, cUSD should offer something.
- Any non-zero return would be an incentive, especially as we’re looking at a non-crypto crowd that doesn’t want the hassle of Ledn or Blockfi.
My maxim here is really the spouse question haha. People don’t want to be gambling on yield farming, they want a small nudge towards something they already know is good financial planning (dollars). Med risk med reward.
The opportunity to be paragons of responsibility in a field of yolo profiteering is large. For me for me, I’m only behind this because stable yields from responsible custodians won’t be that far away.
Don’t even bother trying to enter in the competitive world of perceived yield-farming
This is not at all what is being proposed, I feel like we’re having very different conversations…
I appreciate all the discussions about the value of yield on cUSD but I feel this is a separate conversation from what’s being proposed here
I’m not saying it is. I’m responding to the research that was posted that shows that a % based reward will not make it worth it to users to adopt cUSD who compare it with their other yield opportunities.
But mostly was trying to clarify why that is not the motivation of proposal.
Ah gotcha, thanks and sorry for the misunderstanding.
@aslawson, Clarification about the research; crypto curious people would absolutely be incentivized by a % yield in the range being discussed. 5-8% is slightly preferential, but any non-zero modest amount is positive.
The individuals we talked to who would be interested in sky high yields are either a) better suited by speculating on BTC, ETH, CELO or b) are challenging to reach with a USD product because they spend almost all of what they earn.
I’m sharing this link about the Google Pay referral program because it is going viral on WeChat right now. I think a simple give away (of cUSD) that emulates this mechanism would drive lots of new users to Valora. Also, worth noting is the quantity of ‘deal hunting’ websites that come up when you search ‘Google Pay referral’. Would be good to make sure these sorts of sites are aware of any Valora promotion.
@asa where are we with the official proposal to reward early users? When is it going to happen?
Patrick brings up a great industry standard way on adopting users.
Since we want international worldwide adoption hopefully someone in Celo is experience to have a successful reward program going on.
Hello there! I wanted to share an update on this project.
Following the suggestions made above, we updated the proposal to fund a minimum viable initiative for this program and delegate the exact distribution strategy to a 2 out of 3 multisig with 3 key-holders who would act on behalf of the community. We will update this thread with our proposed strategies to gather feedback from the community as we iterate (we’ve also thought a lot about the distribution strategy since this thread was last active, and I will share more soon).
We believe it is better to delegate initial distribution strategy to a multi-sig because:
- It is a better user experience to distribute funds on a daily or weekly basis. It would bring significant overhead if we needed to run a community proposal for each of these distributions.
- It enables the key-holders of the multi-sig to agree on short-term iterations to the distribution strategy (e.g. increase or decrease rewards amounts) based on initial reception of the rewards, without having to go through a governance proposal for each of them. Being nimble in our approach will be key to the success of this rewards program. We’ve observed that other token distribution programs launched by other communities usually iterate a couple of times before landing on the right rewards structure
We discussed these changes in 2 governance calls:
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In December
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And 2 days ago in the January call (and subsequent conversation in the forum)
We also submitted a PR for this in late December to give everyone a chance to see the details of how we wanted to implement this.
Now the proposal is up and ready to be submitted to a vote. Please let me know if you have any further feedback on the approach!
@jbsibille can you verify the deployed multisig smart contract here: Contract 0x7BDee323f5227F214EDFC3aE4BD4eBC032B59c82 - Celo Explorer ?
I think it would be better for transparency if all such contracts are verified on explorer.
Thanks for the suggestion. We’re working on it.
Hello! For transparency, we wanted to update you on the initial rewards structure we are thinking about for the first distribution. As a reminder, we’re hoping this program will be attractive to crypto-curious people who understand the advantage of having an early stake in a network such as CELO but aren’t necessarily very crypto-savvy. We believe these people will best position to seed network effects moving forward.
Eligibility will be based on the following criteria:
- The address has done the 3 attestations
- Initial reward is targeted to be distributed on Jan 28th, 2021. It will be based on the average address balance in the period from Jan 21st, 2021 to Jan 28th, 2021:
- Under 20 cUSD: no rewards
- 20-99 cUSD: 1 CELO
- 100-499 cUSD: 5 CELO
- 500+ cUSD: 10 CELO
- “Average balance” definition: The average over all the blocks validated during the qualifying period (1 week in this case) of the cUSD balance of a given address (Should be the average across ~120k values for each address, assuming a 5s average block time)
- We will limit rewards in the first week to 20k CELO.
- We don’t expect to reach that threshold in the first week (it would mean that we get at least $400k in additional cUSD liquidity in verified accounts).
- In case we do reach the limit though, we’ll distribute to addresses based on when they completed attestations in order to favor rewarding early users (first come first serve)
Based on traction in the first week, we will re-assess qualifying balances and rewards moving forward. We expect rewards might be lower in the future but favored this initial distribution strategy for the sake of simplicity (CELO is about financial inclusion, we figured these bins were easier to understand than APY or other methods we evaluated) and meaningfulness (receiving a whole CELO feels like a meaningful reward).
In the future, we are considering other eligibility criteria, based for instance on invitations and qualifying criteria, based for instance on a lottery system (would allow us to distribute bigger amounts to fewer people) or APY.
Please let me know if you have any questions or feedback!
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Hi there! Quick updates on this:
- we ran into a couple of delays related to the communication on this program and are expecting things to kick in a few days later than mentioned in the above post: we are starting the program Monday, Jan 25th, and the first reward is expected to be distributed on Monday, Feb 1st.
- we are initially reducing the rewards compared to what was mentioned above to get more runway and potential for iterations with the initial grant.
We’ll keep the forum updated as we move forward.
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We just announced the program: Earn rewards on your cUSD balance! | by cLabs | The Celo Blog | Jan, 2021 | Medium! Thanks everyone for your help and feedback getting this started, we’re really excited to see where it leads us!
Hi @thezviad , we looked into this a fair amount last week and realized that the contract verification tool in explorer.celo.org is broken right now. We have on our roadmap to fix it but in the meantime, we’ll be publishing the relevant code so that anyone can verify the bytecode from blockscout.