PIP 37: OP Grant Application - ParaSwap Staking Quest on Layer3

Governance Proposals
1

PIP XX: OP Grant Application - ParaSwap Staking Quest on Layer3

Abstract
Layer3 stands as a preeminent web3 education and exploration platform, offering premium content and experiences for both web3 users and developers. Our service and community of over 600,000 high-quality users have made us the preferred platform for more than 90 top web3 projects, including ParaSwap. Layer3 users participate in our immersive quests to discover and learn about Web3 applications and products in the safe and engaging environment of our platform.

Layer3ā€™s support extends across more than 15 blockchains, encompassing all major L1s, zkSync, Polygon zkEVM, and other key L2s including Arbitrum and Optimism. With users completing more than 6 million on-chain actions monthly, Layer3 contributes significantly to the web3 ecosystem growth. Our work with Optimism alone has led to over 40,000 weekly active users, 100,000 monthly active users, and facilitated over 1.5 million monthly transactions.

Layer3 is seeking an OP grant from the ParaSwap DAO to build a staking PSP Staking Quest on Optimism.

Goals & review
Layer3 is seeking an OP grant from the ParaSwap DAO to build a staking PSP Staking Quest on Optimism.

Layer3ā€™s grant application aligns with the category of ā€˜Novel applications of ParaSwapā€™. Through our Quest, Layer3 aims to empower users to actively engage with ParaSwapā€™s staking mechanism on Optimism, resulting in initial liquidity bootstrapping on the chain, new user acquisition and community education.

Our grant application strongly aligns with Optimismā€™s objectives of fostering growth within its ecosystem while promoting the use of ParaSwap to enhance dApp developersā€™ access to DeFi services.

By building the PSP Staking Quest on Optimism, Layer3 will actively contribute to the expansion of the Optimism ecosystem and the growth of the ParaSwap protocol in the chain. The Quest serves as an immersive educational tool that not only educates users about the benefits of staking PSP but also showcases the many features of ParaSwap.

Estimations of users completing the tasks are difficult to do as it depends on several conditions, some of which are under our control and others are not.

However, based on the results of the pervious Layer3 PSP staking campaign results which was done on mainnet, we can expect, at least, to reach the same amount of users completing the campaign (1,039 addresses completed the previous campaign).

If we take into consideration that mainnet gas fees are 7x higher than Optimism (source: https://l2fees.info/) and that this campaign will be incentivizing users who complete the campaign, we may aim to double the users completing the task (2,078 campaign completions).

  • Base scenario: 1,039 addresses staking at least $50 on sePSP2 on Optimism = $51k TVL and 1,039 new PSP stakers on Optimism
  • Optimistic scenario: 2,078 addresses staking at least $50 on sePSP2 on Optimism = $102k TVL and 1,039 new PSP stakers on Optimism

Means
Requested funding is $15,000 in OP + matching amount of PSP.

Of the requested amount, $7,500 will be used for covering Layer3 expenses while the rest will be used to incentivize users completing the campaign and holding sePSP2 after the end of it.

Implementation Overview
Layer3 will provide the following:

  • Quest Development & Production
    • Concept and design for ParaSwap Staking Quest
    • Creation of Quest content (e.g. copy, images, animations, videos, etc.)
    • Development of Quest functionality
    • Testing and quality assurance
  • Marketing & Promotion
    • Development and execution of a comprehensive marketing and promotion plan for the Quest
    • Creation of marketing materials (e.g. social media posts, email campaigns, banner, etc)
  • Technical Support & User Assistance
    • Ongoing technical support to ensure the Quest runs smoothly and any issues are resolved quickly
    • User assistance to help participants navigate the Quest and troubleshoot any problems
  • Reporting
    • Reporting and documentation to provide regular updates on progress and ensure transparency with the ParaSwap community
4 Likes
2

Hello,

Thank you for this proposal. Considering that the basic fees are totally null and void on optimism. What is your immediate unstake scenario?

In my opinion, it will be almost immediate.
From my point of view, campaigns like yours are unfortunately Farmer nests. But thatā€™s not the clientele PSP is looking for.
The social escrow model is complex, and attraction via a layer3 quest is bound to fail in the long term.

If you can provide me with figures on similar quests and the unstake rate within 2 months, for example. Iā€™d be delighted.

Thank you very much.

2 Likes
3

Hey Stickers, thanks for reading our proposal and sharing your thoughts!

We have 60% net new user retention across all Quests. Here are a few examples of Quests with various stake periods.

2 Likes
4

60% is clearly interesting. Thank you for your reply.
Iā€™ll leave the floor to the other DAO members.

5

A quest that educate web3 community about Paraswap and itā€™s Social Escrow Tokenomics Model is an interesting idea to explore especially if such quests promises more than 50% stakers retention.

By requesting for 15k USD in OP and PSP equivalent, you are requesting for a total of $30,000 in funding of which $7500 USD representing 25% of the budget covering Layer3 expenditures, setup, marketing and associated cost.

The proposal to deploy staking on Optimism was passed recently but itā€™s yet to be implimented. Smart contract deployment, testing and auditing is needed before staking will become available on Optimism. This entire proposal rest on the premise of staking of PSP on Optimism. Therefore, the timing is a bit off. Other than that, Iā€™m in support of any idea that bring Paraswap and PSP to the front of the web3 community which is what you are proposing.

6

Just as a heads up, the matching is not 1:1 , for this category itā€™s up to 15 PSP/OP

7

Thanks for that clarification. But, it should be explicitly stated in the proposal. Also, thereā€™s no mention of the duration of the proposed quest and associated reward distribution.

1 Like
8

Agreed with the suggestion! @brandonkumar best to clarify the final matching amount?

9

Hello and thank you for your suggestion.

I personally have the impression that most of these quests are used by farmers and that retention is very limited.

When I look at the two examples provided, the quests are quite ā€œsimplisticā€ and donā€™t have a long-term commitment.

When you mention 60% retention, what period of time are we talking about? 1 week? 1 month? 6 months?

You mention 60% retention for all quests, would you have a similar figure for quests related to staking (why not the two shown as examples).

But once again, itā€™s just a feeling and Iā€™m sure that the figures will reassure me.

What would also reassure me would be to have some idea of the number and variety of quests that would be created for this budget? Once again, the 2 examples shown are rather simplistic in my opinion.
And I think that the nature of the quests and the direction they take have a big part to play in the outcome of user behaviour and in the end, retention.
Do they know ParaSwap after the quest ? Are the quest a one shot or commitment over a certain period of time, etc

Finally, when you say that part of the budget will be used to incentivise participants, could you explain how?
Would it be possible to reward sePSP1 users (for the PSP part) to encourage retention?

Thanks in advance for your feedbacks !

EDIT: Oops, I missed that @dseeker already mentionned a few topics above!

1 Like
10

@Albist - Thanks for your feedback. As @0xYtocin mentioned, the matching criteria is already defined in a past proposal.

https://snapshot.org/#/paraswap-dao.eth/proposal/0x0f472d31cf0c37dc01452a40ace40c57b120e6d0aae936527db6d6e85b4898b1

11

Thanks, actually I was more asking following this:

If we take a picture today, $15K = 10700 $OP ish, with the 15 $PSP/$OP, it would add 160K PSP so around $5K.
A total of $20K ish => $7.5K for the service provider (you) and so $12.5K for the participants of the quest! Generous !

Iā€™m not questioning the amount requested, Iā€™m trying to distance myself from the money topic and get closer to the service provided (hence the questions in the message above, which Iā€™ll repeat):

  • How will the 12.5K be distributed to participants?
  • Can you clarify the retention rate (see previous message) ?
  • Can you give more information about the service provided: number of quests, themes (social networks, medium/long-term staking, etc.)?

Looking forward to hearing from you so you can make ParaSwap known to as many people as possible (:

Thanks in advance !

3 Likes
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Hey @Albist! Responses inline below.

How will the 12.5K be distributed to participants?

  • Layer3 received 100% of the PSP, plus enough OP to cover our fee of $7,500. The balance is given to users as rewards.

Can you clarify the retention rate (see previous message)?

  • Historically, Layer3 drives 60% net new retention over a 3-month period.

Can you give more information about the service provided: number of quests, themes (social networks, medium/long-term staking, etc.)?

  • Layer3 is seeking an OP grant from the ParaSwap DAO to build a staking PSP Staking Quest on Optimism. Layer3 will provide the following:

  • Quest Development & Production

    • Concept and design for ParaSwap Staking Quest
    • Creation of Quest content (e.g. copy, images, animations, videos, etc.)
    • Development of Quest functionality
    • Testing and quality assurance

  • Marketing & Promotion

    • Development and execution of a comprehensive marketing and promotion plan for the Quest
    • Creation of marketing materials (e.g. social media posts, email campaigns, banner, etc)

  • Technical Support & User Assistance

    • Ongoing technical support to ensure the Quest runs smoothly and any issues are resolved quickly
    • User assistance to help participants navigate the Quest and troubleshoot any problems

  • Reporting

    • Reporting and documentation to provide regular updates on progress and ensure transparency with the ParaSwap community
1 Like
13

Can you please share retention data based on Layer3 x ParaSwap quest?

It seems layer3 was able to attract 896 with the ETH mainnet quests - what is the retention for those?

Beyond retention, having more information on (I) Transaction per wallet and (II) average PSP holding per wallet would be interesting.

My fear is that Layer3 attracts low quality users that have low retention and low transaction value.

The risk is to have a growth strategy that helps ā€˜feel goodā€™ KPIs but do not help long term growth ie. sticky users that actually use the protocol and thus drive trading volume.

I am very open to have growth strategy and would love to learn more from the L3 team. Thank you

1 Like
14

Hey @0xgummy - Thank you.

  • There were 1,054 participants in our Quest titled Boost Up with ParaSwap
  • 85.56% were new users
  • There was 9.6M PSP staked by the Quest
  • Average PSP staked was 9,334 PSP
15

Thank you for this

  • can you share retention data since your quest ended?

  • what is the churn for the ParaSwap users?

  • do you have a way to show that your user base will increase if itā€™s on OP?

  • is there a risk you have already reached the maximum of your coverage

  • can you please confirm also the terms of your first engagement with ParaSwap so we can compare?

1 Like
16

Thanks for your feedback, but Iā€™m afraid you didnā€™t answer @Albist questions.

They seem clear to me.
How will the share be distributed to users? How will we be able to check that it has been distributed correctly?

What quests will be set up? Connect discord, staking and thatā€™s it? Or something else?

Remember that weā€™re looking for users who want to understand the system. Without that, retention on Optimism will be nil.
On ETH, people deposited $50 for a $25 fee. It goes without saying that forced retention appears.

On Optimismā€¦ I doubt the 60% will be there.

To do it right, youā€™d have to force a minimum PSP allocation of $250 and therefore $50 PSP. This would allow a sorting out of users and would surely lead to greater retention. And again, we should be looking at an amount that would allow newcomers to find their interest in epoch rewards.

Iā€™ve never been personally convinced by this kind of marketing. Itā€™s cheap, easy and in the air of degen airdrop.
If you donā€™t give us metrics and justifications for questions that have been properly drafted, my confidence in this system will never evolve.

Thank you in advance.

17

Weā€™re aiming to publish the proposal by next Tuesday, that way people have time for any last minute pressing questions and we can prepare for publishing on snapshot.

19

Nice opportunity for ParaSwap to attract new users, holders and stakers.
Cost per user acquisition seems in line with industry standards.
The first 2 Layer3 ParaSwap quests were a huge success in terms of user acquisition.
Looking forward to continue to work with Layer3 in that direction.
I support this proposal.

1 Like
20

Just to clarify, I have reached out to @brandonkumar and they have confirmed this as their Temp Check:

As such, please make sure to give any final comments about the proposal itself before then!

2 Likes
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What are the next steps on this? A snapshot vote?

1 Like