With the arrival of Paraswap V2, referral was introduced in a raw way into the concept.
It is now time to anchor it in a permanent way in Paraswap. Many users, anxious to have a protocol as close as possible to the economic and social realities of the DEFI, have therefore started discussions on the discord about the existing “Referral Program”.
It is important to understand that the Referral Program now offers the referee and the referer the possibility to accumulate 2 different boosts per Epoch.
- One at 10% for volumes achieved as a referee, the second at 20% as a referrer of an address that has done volume on Paraswap. This represents a significant increase in Paraboost and therefore in its share of the protocol’s revenues.
It is therefore necessary to identify the critical points, those that should not be in order to obtain a totally fair and attractive system.
A series of inconsistencies and nonsense emerge as follows:
- The referral link must be used for each trade for the volume of the referree to be taken into account
- It makes no difference if we refer 1 or 100 people
- It makes no difference if our referrals make $1 or $100m in volume
- An address already using Paraswap can use one link and get a boost
- An address can use several links to boost several people
- Any address, even if it has never traded on Paraswap, can offer its sponsorship and therefore a boost
- A part of the positive slippage is given to the sponsor 25% and to the sponsored person 25%.
Before we start, it is important to understand the new dynamics of Paraswap for the Stakers.
The more money the protocol makes, the more rewards the stakers will receive. It is therefore in everyone’s interest to work towards creating the most efficient protocol possible in terms of return.
At the same time, it is in everyone’s interest to design metrics around the “Paraboost” that give all stakers the rewards they deserve.
This being said, it is clear that the current referral system is no longer adapted. It favours the players, is too easy to access and does not allow to value the people using their network to bring new users.
One more reminder:
+Users=+volume=+fees+of visibility+of partners+of listings+of grants=+of revenue=+of rewards at each epoch
Sponsorship is a key element in the marketing of a company. It is therefore necessary to rethink it as a whole and in a serious manner.
Let’s find a consensus in this topic and come up with a proposal.
The new measures only affect 22 referee addresses (epoch 2) with a total referral volume of $7.7m
And 19 sponsor addresses for a total of $5.4m
It is therefore important to review the system “quickly” in order to impact as few addresses as possible. The longer we delay releasing a new version, the more users will be impacted.
Here are the main points for discussion and reflection
1) End the obligation to use the referral link every time.
We need a simple referral system. Ban the obligation to use the link every time you connect and favour a link between the sponsor’s address and that of the sponsored person.
When a sponsored friend clicks on the link of his sponsor and connects with his address, this address will be taken into account for the affiliation. From then on, he will have his sponsor linked to his address.
At each connection on Paraswap with this same address his volumes will be counted for his sponsor.
2) Blocking the possibility of having several sponsors from one address
Thanks to measure number 1, each address will be the godson of a unique sponsor. This will prevent abuse to boost several potential sponsors.
3) A dynamic boost according to the volume of referrals
A table of volume metrics should be designed
4) Return the positive slippage to the protocol
With Social Escrow, the user has a direct interest in offering his sponsorship to other users. He is rewarded with a boost that will increase his share of the protocol’s revenue.
This being said, the old system of sharing a part of the positive slippage is no longer valid.
All the protocol income should be returned to the common pot, it is therefore necessary to remove from the godchildren and the sponsor the 50% of the positive slippage provided for in the vote
5) Advantage for the godchild
The referree will get a unique boost for 1 to 3 epochs. This way, the new user is rewarded as well
Here is a basis for reflection. Nothing is exhaustive, nothing is set in stone. By providing some context and material, we hope that there will be many discussions and that this will help to better understand the possible “future system” of sponsorship