StakeWise New User Free Trial

Ideas
#1

Hello again friends,

I am proposing something else that will hopefully help get more people get onto the StakeWise ecosystem.

Context

The purpose of this proposal is to increase Product-Led Growth by offering free trials to first-time wallets who are looking to stake with StakeWise. With free trials:

  1. Wallets can experience the StakeWise platform.
  2. Wallets that want to deposit low amounts of ETH, such as 5 ETH, can benefit greatly for the amount they will save in protocol fees.
  3. Wallets trying to decide between staking platforms might go with a free trial because it will help them cover gas fees.

Execution

First-time Wallets

For every first-time wallet, we can give 1-2 months of no protocol fees. Staking 10 ETH at 100 GWEI gas fee, 1.75 months of free StakeWise would reimburse them for their staking gas fees. Staking 5 ETH at 100 GWEI gas fee, 3.5 months of free StakeWise would reimburse them for their staking gas gees.

ETH Staking 2.5 5 10 15 20
APY (w/ Protocol Fee Accounted For) 4.86% 4.86% 4.86% 4.86% 4.86%
Gas Fees GWEI 100 GWEI 100 GWEI 100 GWEI 100 GWEI 100 GWEI
Gas Fees ETH 0.007801 0.007801 0.007801 0.007801 0.007801
Annual Eth Earned 0.13365 0.2673 0.5346 0.8019 1.0692
Eth Earned per Month 0.0111375 0.022275 0.04455 0.066825 0.0891
Monthly Protocol Fee 0.00111375 0.0022275 0.004455 0.0066825 0.00891
Months Until Protocol Fees Pays for Gas 7.004264871 3.502132435 1.751066218 1.167377478 0.8755331089
Gas Fees Discount (2 Months Trial) 28.55% 57.11% 114.22% 171.32% 228.43%
Gas Fees Discount (1 Month Trial) 14.28% 28.55% 57.11% 85.66% 114.22%

Returning Wallets

For every time a wallet returns to stake more ETH, we can give them 1-2 months of no protocol fees to encourage loyalty of users and to attempt to increase TVL.

Test out a Free Trial

We could always test out a Free Trial program for x months and track the performance. If this doesn’t help increase TVL (like it’s purpose), we will vote to not renew the Free Trial feature in x months.

Risks

Abusing Free Trial by Creating Multiple Wallets

I think it is okay if people create multiple wallets to take advantage of the Free Trial. For the price of free StakeWise for 1-2 months, we will keep users for x months (based on the Avg Length a Staker stays with StakeWise).

Hypothetically, a wallet deposits 2,500 ETH and gets 2 months of free trial, then the DAO will lose 1.8 rETH2 in protocol fees for two months of free service. If this wallet stays on for 12 months, StakeWise DAO earns 12.2 rETH2 for the year.

Help Needed

I need analysis on what is the avg length a staker stays with StakeWise. We obviously don’t want to lose out on fees, but I think we can bear 2 months of free service to new wallets in exchange .

Number of Free Trials

  • 2 Months
  • 1 Month
  • No Free Trial

0 voters

If you vote for a free trial, then Free Trial For Who?

  • New Wallets Only
  • Returning Wallets Only
  • New and Returning Wallets

0 voters

1 Like
#2

This is very clearly well thought out, and I appreciate the analysis that has gone into it. I also appreciate the goal to increase TVL.

Unless there can be some sort of safeguard from serial staking, this sounds like a costly strategy. There are plenty of examples of free trial abuse in the marketing world.

If someone were dipping their toes in to see if they like how Stakewise works, they would probably be staking lower amounts. The Free trial should be weighted towards the smaller stakers. People with large stakes are going to cover their costs much faster anyway.

And I am not sure “Free Trial” is an accurate description of what is being proposed. It is more like “Free Gas”.

Per the chart, not charging the Monthly protocol fee for 1 or 2 months does not cover the Gas fees for stakes smaller than 20 ETH for a 1 month trial, nor does it cover the Gas fees for stakes smaller than 10 ETH for a 2 month trial.

The Gas Fee Discount values would seem to be actually incentivizing large staker churn. The fee discount should be capped at 100%. To support the smaller stakers, the number of months where the Protocol Fee is waved should be set according to the stake size. So the values in the row in the table “Months Until Protocol Fees Pays for Gas” should actually be the number of months the staker gets the protocol fee waived. This has the benefit of incentivizing retention.

Using the current Avg Length a Staker stays with Stakewise is not predictive of how long someone would stay given the Free Trial. The evaluation of whether the free trial is being abused would be if after the free trials commence, that the Avg Length a Staker stays with Stakewise drops from the historical average.

And, the Free Trial feature should be time based and need a vote to renew, instead of a vote not to renew.

3 Likes
#3

And thank you for the well thought out response @blakevh!

To support the smaller stakers, the number of months where the Protocol Fee is waved should be set according to the stake size. So the values in the row in the table “Months Until Protocol Fees Pays for Gas” should actually be the number of months the staker gets the protocol fee waived.

Interesting idea and a great way to think about the smaller stakers. I like it!

And, the Free Trial feature should be time based and need a vote to renew, instead of a vote not to renew.

Yes, agree. This is actually what I meant to say.

1 Like
#4

Interesting idea but I think trying to lure in users by offering them “free stuff” can become a hinderance over time as they will want more free stuff over time.

I think something like a raffle/giveaway for new users(small stakers only) would be cool. Pooltogether seemed like such a great idea until you learned that whales had a 1 in 3 chance of winning every time 0_0 So something focused on rewarding small stakers would be key in my mind.

1 Like
#5

As a SWISE holder, I’m primarily interested in increasing TVL.

If gas fees are preventing someone from staking, they’re probably not adding to our TVL significantly. This proposal has its heart in the right place, and that welcoming attitude is what drew me to Stakewise to begin with, so that’s valid and important!

However this proposal seems like nontrivial complexity and potential downside, with an uncertain upside. I’d prefer to concentrate on:

A) incentivizing high-value stakers somehow; gas fees are less relevant to their concerns. Maybe client/validator diversity is a bigger draw?

B) satisfying whatever prerequisites (“oracles” is what @tsudmi has said in the past) are needed to roll out on one or more L2s. This would decrease gas fees as a concern and also be a big differentiator vs other staking DAOs.

So, I like the spirit of this proposal, but I would probably vote against it in its current form; I don’t think it’s quite in line with my perception of the best interests of the DAO.

2 Likes
#6

It’s a great feeling to witness such a thoughtful discussion on a non-trivial topic. I applaud you @bZ1 @blakevh @StrangetoshiNakamanl @Athiriyya!

There is very little to add to what has already been said - it is a strong show of initiative to propose a new way to bring more people to StakeWise, but I too think the concept of a free trial is rather complex in both logic and implementation. However, I would not necessarily put all the focus on large stakers alone - while TVL is important, I believe a healthy mixture of smaller and larger accounts is best for the longevity of the protocol.

I think introducing the concept of insurance, something that the core team has considered from the beginning, would help attract both. I also have another (rather outlandish, but who knows, maybe a revolutionary!) idea to incentivise usage of the protocol for everyone involved, so let me convey both ideas in this forum and we can take it from there :slight_smile:

Otherwise, of course, it is worth continuing to ideate on alternatives to the free trial idea - I am sure collectively we will stumble upon something great!

#7

As a SWISE holder but a small ETH shrimp having gas fee reimbursement or protocol fees of that sort would help me feel a bit more at ease in staking on the protocol. It would make me feel like I would be getting more from using StakeWise compared to other liquid ETH staking services.

1 Like
#8

A bit late response from me, I am catching up on the forum, apologies if I have missed something.

I do really like the idea of making onboarding less costly for smaller stakers.
Though not sure if removing the protocol fee for 1-2 months is the best way. Primarily because it is not really visible, what people see instead is the protocol fee going up for them after the trial period.

What might be a better approach is to give people a claimable amount of Swise (or maybe rETH2) that compensates for the fee.

Problem with the Swise claim might be that unless someone participates in the LPs claiming the Swise itself would be costly - unless we compensate with double the fee, so someone basically gets some Swise in exchange for paying fees twice (one to stake and one to claim swise). Having some swise potentially encourages participation in the DAO - A good thing™

If we compensate the fee in rETH2, it seems pretty easy and straightforward, but might not be as noticeable. They’d see an rETH2 reward immediately after they stake.

With the balance of things, and considering that the tx fee is paid in ETH, getting the tx fee compensated in rETH2 (from the treasury) seems the easiest way to go.

There isn’t anything to gain from people creating multiple accounts, as they have to spend on tx fees first, and exit tx fees don’t get compensated. Only a malicious player willing to damage themselves (with a lot of tx fees to pay upon exits) could be a problem, for instance staking when the fees are really high.

To prevent this, we can institute a maximum network fee of say 150 (or even 200) Gwei and a max priority fee of 3 Gwei. Anything above that would not be compensated.

1 Like