We’re sharing our perspective on the incentive program that has been implemented over the past few months. I think it’s important to start with graphs that can provide an initial overview of the volume data, which is one of the main indicators of the project.
One of the first conclusions is that the project has been losing market share and has not managed to capitalize on the increase in volume in the sector, especially in 2024. Additionally, there doesn’t seem to be any significant effect that would suggest this program has been a success, as it doesn’t appear to have generated any growth. If anything, it may have only prevented a decline.
In this regard, I believe the project should be ambitious, aiming not only to grow in line with the market but ideally to surpass that growth. I don’t think we should define the program’s outcome as a success, because that would lead us to believe that repeating these results is a scenario we want to maintain.
The ranking on many days, even on high-activity days like the significant drop we had on Sunday, showed that dYdX did not lead the activity that day. However, I believe we have a strong base of activity and brand recognition that allows us to change this momentum. But to do so, we need to face the reality of the effectiveness of the actions we’ve been taking and focus on making necessary changes.
I think the feedback from the comments of @RetailTrader @CipherLabs is excellent. We’ll also try to provide our feedback.
First, it’s important to highlight that competitions tend to generate artificial trading rather than long-term activity. I believe there are real ways to support long-term profitable traders, especially those with limited capital. This can allow talent to emerge that could dedicate themselves full-time to this economic activity. For this to happen, they not only need to be profitable, but they also need sufficient capital to avoid taking excessive risks that would place them at a high probability of ruin. I don’t think competitions truly help in finding sustainable traders; on the contrary, they encourage a type of trading that is particularly risky in an attempt to rank high.
We wrote an article on this topic in the forum, and here’s the link to it.
Another approach worth exploring is leveraging our community to better communicate about dYdX. I think it would be interesting to explore ways to reward users with dYdX for comments on social media platforms like Farcaster or Lens, which could significantly increase visibility within the crypto investor community. It would also be beneficial to implement this on Telegram. This could be limited to users who are active on the platform. We’re talking about $20 million, which is a tremendous incentive to develop strategies that could even foster communities within these social networks.
On a platform like Farcaster, the dYdX group has very little activity. We’ve published some articles, and there are over 500,000 users with wallets on this network who are now very active with tokens. These users could even use dYdX to hedge their positions in such tokens. A small success in this area could have a significant impact.
Lastly, I want to emphasize a strategy that I believe would have a significant impact on TVL: incorporating other assets as collateral. Here’s the article we wrote on this topic some time ago.
I don’t think it’s productive to label the current incentive program as a success. Being objective with the statistics, doing so would mean settling for results that I believe are far from the scenario we envision for our project.