Perpetual ecosystem growth

Marketing ╰ Funding | Staging
61

I’m all for getting liquidity + volume, I want this to be very clear. My experience simply happens to be that traction comes from marketing, retention from utility, volume from buyers and sellers and liquidity from incentivizing liquidity providers.

If what you’re saying were to be true, then we should already have liquidity + volume on STEX and it should’ve been there on Pancake Swap too.

That’s not the case, so what you’re saying must be incomplete.

Orbital is about to start, which will attract liquidity. Also, during the campaign, the rewards will be higher than ever, so it will likely attract even more liquidity.

For current ZNN holders there are 2 reasons to use wZNN:

  1. providing liquidity - and this case is even incentivized
  2. selling wZNN - which will happen if the price and/or liquidity are better than STEX

Now for the 2nd case, which is valid if the price and/or liquidity are better than STEX. That is likely to happen for the following reasons:

  • buying from Uniswap, 1inch or other DEXs doesn’t require the user to trust and deposit the funds on a CEX
  • the referral program will incentivize affiliate marketers to promote wZNN
  • Orbital program incentivizes liquidity providers if they lock their liquidity over a period of time, which means that wZNN will likely have a deep liquidity pool

The problem is not the shortage of funds, but the lack of a mechanism that accurately rewards marketers who actually bring added value to the ecosystem.

Sure we can go ahead and reward social interactions, onchain activity, wallet downloads and whatnot, but in the end, if we were to try and measure the success of these, we’d still look at how well we’re doing in terms of: price, liquidity and volume.

Why?

  • Success in terms of price means the price is getting higher, which happens when someone buys.
  • Success in terms of liquidity means we have as much ETH in the AMM pool as possible, which again happens when liquidity is added (already taken care by Orbital) or someone buys.
  • Volume is the only metric that benefits from both buyers and sellers.

So the one common factor that measures the success of these 3 metrics is how much “buy” a marketer brings.

Well then why don’t we use the same mechanism but a different funding source?

  • We could, but they wouldn’t be as sustainable as this one.
  • We could, but if we used another funding source, it would incentivize current holders to cheat the mechanism.
  • We could, but any other available funding source would penalize the holders and/or buyers instead of the sellers.

Orbital already does that and it’s not clear to me how a 3% fee would harm liquidity and volume.

  • A seller won’t sell anymore because of the 3% fee? I’d say that’s a win.
  • A liquidity provider won’t provide liquidity because of the 3% fee? But it gets refunded when the LP returns to the ecosystem.
  • A buyer won’t buy anymore because of the 3% fee? Buyers actually receive a 1% bonus to swap from wZNN to ZNN, that’s pretty much all they’ll know at that point.

Conclusion

We could continue to argue or we could give it a try and see how it goes for a few months. If later we decide to lower the fee, we can do that, but if we lowered it from the start, we actually shoot ourselves in the foot because we won’t ever be able to increase the fee beyond that amount for the referral program.

62

This fee proposal is very different than a standard swap fee. I think we all have experience with those fees, and paying 3% to swap ERCs would be a nonstarter. I can tell you first hand the swap fees on THORchain are a big obstacle to adoption.

If you buy wZNN and then trade it on uniswap, you only pay swap fees on the CEX. This 3% fee will not impact trading in any way on Ethereum. The fee only impacts people who are exiting.

This is a novel approach to marketing that we have not seen before. Setting the fee too low will not give us the opportunity to test any price levels. And initially it will only impact LPs who will get it back upon repatriation.

Why run an experiment with no room to experiment? I voted for 3% but think it could be even higher - maybe 5%. Also, think about the incentives for the people responding here. If someone wants out, they want the fee as low as possible. And for those who want to experiment with the novel approach, setting a higher number likely makes sense so we can test.

Also wanted to point out that if you buy 100 wZNN and move it to ZNN you now have 101 ZNN. When you move it back to Ethereum you have about 98 wZNN (assuming no natural price movement). The net fee is 2% doing a round trip from ETH > ZNN > ETH.

1 Like
63

Thanks for the explanations. I’m not dismissing anything. Just challenging some thoughts. A critical discourse should be acceptable either case. I am still supporting this, it doesnt mean I can’t question design decisions.

64

That was a general mention, it was not directed at you. Sorry if it seemed so.

Indeed, this is NOT a trading fee, nor a transfer fee. It only applies to swaps from ZNN to wZNN.

That’s right.

3 Likes
65

Wrong assumption at the begining. You get liquidity with PA and good incentives. AKA you market a clear and competitive APR. Stex is unknown and there’s 0 real trader going there. You only took what suit your views from what I said. Here’s the complete ELI5:

  • Outrageous fee will get you rekt

Why ?

  • Deep liquidity allows OI which allows a good PA people can actually trade and that’s your best marketing because THEY TALK. Some might even MM your asset.

Guess what ?

  • Zenon has non of those because it NEVER found a good way to incentive liquidity. No vampire campaign, no APR marketed on except on a bridge people that broke ridiculously on a chain which is perceived as the fruit farm one.

  • Here you have a way to do real marketing and not Twitter campaigns funded by the community money, campaigns that resulted so far with 0 effects. I guess being in a bear market should be an important information in decision making here.

66

If you don’t fuck around, you will never find out.

2 Likes
68

I am excited. Can wait for bridge to go live.

2 Likes
69

Interesting idea to use the fee only as incentive to attract potential zAliens. Personally I would be willing to pay 3% to convert ZNN to wZNN as it would be logical to enlarge the ZNN network. Although one could say being feeless is one of the pillars of ZNN. And it still is, just the bridge has a incentive fee. Good job guys ^^

2 Likes
70

The feeless property applies only when you’re within the ecosystem. The interaction with the embedded contract is indeed feeless: you can do PoW to send your ZNN to the embedded bridge. The actual conversion of ZNN to wZNN is an action that signals the intention of exiting the ecosystem, so the feeless property doesn’t apply anymore.

3 Likes
71

You are absolutely right, and I think that’s fair to ask for a fee to help the ecosystem. Thanks for the clarification!

1 Like
72

Agree, worst thing that happens is people complain about the fee, this doesnt work, and we scrap it. Best thing is it gains traction and attracts people to ZNN. So seems like v little potential downside for v much potential upside. Dont see why we wouldnt try it.

6 Likes
73

Thanks for taking the time to visit the forum and reply!
It does seem great at least on paper and we’re very curious how things will turn out once it’s live.

3 Likes
74

We could write a “liquidity black hole” article.

https://twitter.com/Rewkang/status/1272631205263900672?s=20

We should coin our own term.

Perpetual Marketing Machine
Perpetual Community Engagement
Perpetual Marketing Theory

Ideas / Suggestions?

75

None of those.

76

So what your idea?

77

Positive feedback loops are powerful, they can create exponential results.
Luckily this concept is integrated in our mindset so it becomes part of what we build.

2 Likes
78

Perpetual Network Marketing Theory?
Perpetual Multi Level Marketing Theory?

79

@mehowbrainz remember when that post came out for THORchain…

80

How did it go?

81

Worked wonders, but Kang had an audience as well…

1 Like