Referral Program for Dapps and Potential Clients

Attributes

Problem

Despite the ongoing efforts to reduce the network costs and create a less volatile economic environment for node runners, a key variable has been left under emphasised: demand-side growth by brining more paid applications and clients to the network.

Currently, there is no direct incentive for community members to grow the number of relays in the network by increasing the project’s exposure in different regions; rather, the only economic incentive is to run nodes and increase the supply side of the network’s infrastructure. The community should not rely on the core team for all business development; it should take on some responsibility to develop key business areas.

Proposal

  • Creation of a Referral Program within the new Monetised Client Portal
  • 5% Commission paid to Community Members who Refer Self-Staking Clients
  • Commission paid as percentage from the Total Self-Stake Amount paid in the Portal by Applications
  • Commission is only payable if it resulted in a paid-client acquisition

Example

Alignment with App Staking Proposals

There are currently 4 options being explored to monetize the Portal, as per the Infracon presentation. We believe the commission model should be applied to the initial payment made by the application client, and not on any continuous monthly subscription arrangement made with the client. This makes it subject to the following options:

  1. B.Y.O. POKT and Stake Directly
  2. Direct on-ramping within the Portal
  3. Wrapped POKT Stake
  4. The initial month’s subscription payment.

Benefits of Proposal

  • Growth of Application Count within Pocket from Supported Chains,
  • Growth of Total Relays going through Pocket,
  • Regional Incentivization of Business Development,
  • Increased Community Engagement and Responsibility,
  • Leveraging Community Connections to grow Customer Base,
  • Increasing Business Development Outreach to new Regions,
  • Greater Distribution of Network Traffic within Applications,
  • Reduced Cost per Client Acquisition for the Network,
  • Better Reputation and Recognition in the Web3 Ecosystem.

Analysis of Counterpoints

  1. It will become more expensive for clients to onboard within Pocket.
    We believe the proposal will result in the community onboarding far more applications than the resultant loss of perspective clients arising from the additional 5% expense. This is a common business practice that we weigh as having a far greater net-positive economic impact.

  2. It adds development work to the Portal
    Yes, but we feel this is the right time to be having this conversation as the Portal is still under construction. We believe the investment from a resources point of view is minimal in relation to the potential benefits.

  3. There is no classification of lead quality within this proposal
    It is true that in this model, we fear there is no further incentive for bringing high-quality leads as opposed to just a large volume and hopping the core team can close them. In order to tackle this, we believe the referral program should have a template application that pre-qualifies the lead. The community should perform the basic workload of explaining the project’s comparative advantages, answering key questions and only bring attention to the core team once enough interest is displayed. By having a referral program document that needs to be submitted, we can outline the criteria before prospective clients are connected to the technical team.

5 Likes

I’d love to see some additional analysis from the team how these numbers play out. @JackALaing , thoughts? There’s potentially crossover with Triforce here as well.

Incentivizing demand side growth is a priority, so I support this proposal assuming the numbers work.

2 Likes

Usually I don’t post here, just read what’s happening in the community. But for this, created an account just to say that this proposal is one of the best that I’ve seen and I fully support this.

3 Likes

It’s a good idea to motivate community engagement and help the relay growth in my opinion.

3 Likes

Hey @akap , @Emil_K99 , @George11, thanks for sharing your thoughts on creating a referral program. Funny enough, Infracon spurred similar discussions internally and we concur that these are table stakes we need to focus on as we gear up for Portal monetization.

I agree with @Jinx comment above that deeper economic analysis is needed against this (and other) referral model(s) before proceeding. That being said, while I can’t guarantee that this is the version of the referral program that will be launched, we are aligned on making it happen.

I have two concerns about this proposal that I will address in more detail below.

Concern #1: Lead qualification not being incentivized or built in

Your counterpoint #3 gives me pause. That is a lot of overhead re: review, approval, attribution, measurement and distribution. I think if there is a more complex economic model and possibly layered or time bound incentives we can help ensure quality leads with higher LTV make it through the funnel. Which leads me to…

Concern #2: Taking from the app stake

Generally referral programs that are beneficial for both the referrer and the referee are the most successful. What you are proposing is to take away from the applications MaxRelays by removing it from their initial paid stake. This would potentially be one of their first interactions with Pocket Network’s services and I’m not sure it leaves the right impression.

Regardless of the model for referrers, there should probably be a commensurate incentive on the app side (e.g. x% of “free relays” or something similar). Open to any suggestions about how we can reward the referees in addition to the referrers.

As a counterproposal for referrers, rather than being rewarded from the stake immediately upon conversion, the commission can be distributed upon relay growth hitting a certain threshold and/or a certain amount of days that the app stays staked.

This model is more similar to an employee referral program where the reward is distributed based on not just the successful placement but retention of new hires.

Additionally with this type of model I believe we can more confidently layer in annuities or bonuses based on time for the former or additional paid stake for the latter which encourages referrers to refer wisely and develop a deeper relationship with the applications they help onboard with the prospect of future rewards.

It will take some time for me to organize these thoughts into a streamlined program, particularly ensuring that it can be implemented with at least a few self service elements in the MVP (e.g. form to enter referrer information, generating a referral link, and using a tool to monitor and distribute payments to wallets).

I do want to re-emphasize that a referral program is definitely necessary and will be implemented in the future but that timeline is dependent on (and technically infeasible without) the portal monetization which is expected to launch in Q3 of 2022.

In the meantime I will be working with the internal team on organizing a proposal for a referral program that incorporates versions of the elements discussed above that can be moved to a vote on a timeline that aligns with the portal monetization. Would be happy to have your feedback along the way. Thanks again for the post and validating a lot of my own thoughts!

1 Like

Thanks for joining in the discussion @JohnyAmber and congrats on your first post :slight_smile: