The Algofi DAO should offer grants to projects that implement Algofi as a part of their payment process. Users of a Dapp (ex nf.domains) would be able to pay for services in whichever ASA they please, with Algofi being used to facilitate swaps from the user’s chosen currency to the Dapp’s prefered payment ASA.
- Incentivizing projects to implement this will automatically expand the places STBL2 can be used, expanding demand
- Integrating directly with applications will increase transaction volumes and therefore attract more liquidity to pools
- Incentivizing projects with BANK will facilitate new, valuable, incentive aligned, long term BANK holders
- This requires no changes to the core protocol or variables around the core protocol.
Supply Side vs Demand Side
Algofi is already one of the most attractive Dapps to put liquidity due to its innovative lending pools which allow participation in both lending and liquidity pooling at the same time. To fully leverage this advantage over other AMMs, maximizing the demand side of the equation is next.
STBL2 Dapp Support
There has also been previous discussion on how to get more of the ecosystem transacting in STBL2. In my opinion, it is a hard sell to convince projects to complete engineering work to accept STBL2 as payment. Given there is no CEX support, and therefore no ability to materialize STBL2 liquidity off chain, projects accepting STBL2 will always have to swap to USDCa or ALGO. It is a much easier sell to convince developer teams to do work that allows their users to utilize any ASA and they still receive payment in their preferred
Uniswap, in the Ethereum ecosystem, has recently rolled out similar functionality around NFTs. While this is somewhat of an appeal to authority, Uniswap has nearly $1B in daily transaction volume and clearly sees this kind of functionality as a means of growth.
Getting projects directly integrated with Algofi and holding BANK will solidfy Algofi’s market lead in the Algorand ecosystem. Projects holding BANK gives them a direct incentive to prefer integrating with Algofi when possible over alternatives. Now I’ve been very vocally against proposals that exist solely to increase the value of the BANK ASA. But for those of you who are solely motivated by that, this proposal is not counter your goals. Projects that are integrated with Algofi have the highest incentive to participate in governance, as changes to the protocol can directly effect their product. These holders would be less incentivized to sell than lenders/traders. Lenders and traders factor BANK rewards into their yields and as we’ve seen in practice will sell a large amount of the BANK they earn to lock in their yields.
I imagine these grants would be in the size of $10K to $20K. Projects would be approved for the grant via a governance vote and would not receive funds until the feature is live on Mainnet. Grants would be denominated in some combination of BANK and STBL2 (imo 70/30 is my gut instinct here). Projects that seem like good targets include but are not limited to:
I’d love to know any other projects that people think would be good fits for something like this.
I haven’t played much with the JS SDKs (only Python) so I’m not super aware of how difficult this is to implement with what currently exists. Therefore, it might make sense to offer a bounty of around $10K (in BANK) to anyone who can put together a library, sample application, and documentation that projects can use to implement a “Universal Routing” capability.
The treasury should have enough money to cover some initial grants even though we haven’t hit the first 1 year cliff. I don’t know how treasury assets are broken down right now between ASAs so it might require some rebalancing.
If the program is succesful, expanding it to projects implementing a “Cash Out” functionality would also work. Using NF Domains as an example, a user who sells a domain would be able to select an ASA to have their earnings cashed out into, facilitated by composed Algofi swaps.
- Yes, $10K -$20K grants sounds right
- Yes, but higher grant value
- Yes, but lower grant value
- Yes, but other tweak
- No, better uses of funds
- No, not a good idea
- No, other reason