As a staker on the DYDX chain, I appreciate you submitting this report.
This corroborates the perception that the various incentive campaigns do not have a clear correlation with the evolution and retention of the number of users.
Additionally, as indicated in the 2024 report, the DYDX chain generated 45M in fees and paid 63M in rewards, which represents a clear imbalance between fees and rewards and demonstrates the unsustainability of this program.
I think it is fair to conclude that, despite the acceptance and voting of its implementation by the community, there is no evidence that the investment made in the various incentive campaigns has created value for the protocol, but rather contributed to the erosion of DYDX tokens from the treasury and dumping of DYDX tokens on the open market.
Some alternatives:
- Redirect the requested funding to the staking program and reinvest the liquidity generated in USDC in Megavault in order to increase its profitability for depositors;
- Redirect the requested funding to the staking program and use the liquidity generated in UDSC to fund a rewards campaign (in USDC) reinvented from scratch, whose USDC generated by the staking program is divided by all the points generated by the campaign, completely eliminating its funding through the distribution of the DYDX token.
Suggestions for a possible new rewards campaign mechanism:
- New mechanics that reward long-term users, whether they are traders or depositors in the Megavault;
- It must include all users regardless of their contribution volume in terms of USD, valuing, above all, the duration of their interaction with the protocol.
It is absolutely necessary for the community to develop a critical and pragmatic stance on this program and its continuity.
It is also necessary to understand that the best way to capture and retain new users is the constant development of the product offered to its users.
I invite the community to participate in this discussion.