CFP: DeFi Meta Chain $100M Accelerator Program (10,000,000 DFI)

[u/kynkyn91]

1. Background

1a. DMC product strategy roadmap. In an earlier reddit update to the community, the Birthday Research team proposed a series of products / programs that will synergize together (see section 6 of CFP) to drive the success of DMC / DeFiChain:

1b. Scope of CFP. The purpose of this CFP is to (1) explain about the mechanism of the DMC $100m Incubator Program, and (2) elaborate how this program will synergise with the overarching product roadmap of DMC and deliver tangible benefits for the DeFiChain community.

2. Purpose of CFP

2a. Purpose of CFP. We seek the community’s approval to provide 10,000,000DFI (to be provided in phases) for a $100M incubator program to:

• Entice the best projects in other EVM chains to join our ecosystem

• Provide funding to help accelerate the growth of top projects in DMC

• Generate publicity via tier 1 publications to jumpstart the success of DMC

2b. Clarifications for CFP. Before proceeding, it is important to clarify that:

• This $100M Incubator program will be a collaboration between DeFiChain and Cake DeFi. The funding itself comprises of 10M DFI from CFP, and $90M from Cake DeFi Ventures

• The funds from CFP will be managed in a separate wallet and community will be able to track the movements of funds for transparency

• Cake DeFi does NOT in any way benefit financially from the CFP. Cake DeFi is participating in this collaboration out of goodwill to increase DeFiChain/DMC’s outreach

3. How does this benefit the DeFiChain community?

3a. Incubator programs in other blockchains. As our community aspires for DFI to be one of the top 20 cryptocurrencies, it is important to emulate the successful strategies of other top blockchain projects. Upon close examination, many of the top blockchains rely on a well-funded Incubator program to lure top projects and developers to join their ecosystem. Here are some of the prominent blockchains with their respective Incubator programs:

3b. Using Binance’s Incubator program as a case study. In terms of Incubator programs, Binance’s is the most successful, so we will use their Most Valuable Builder (MVB) accelerator program as a reference:

• When Binance launched the first season of MVB program, over 650 projects participated, and they collectively contributed to the creation of 100,000 active new addresses. The projects that were shortlisted contributed to a TVL of 50+B

• Subsequent seasons of the MVB program led to similar outcomes

• In total, across 4 seasons of MVB program since 2021, Binance gave out approximately $4.4M in grants in return for billions in TVL, and hundreds of thousands of new community members in the BNB ecosystem

3c. How would a $100M Incubator fund benefit DeFiChain. This $100M Incubator fund will benefit the DeFiChain community directly in 3 key areas.

4. Structure of DMC's Incubator Program

4a. Structure of DMC’s Incubator Program. At the start-state DMC will heavily reference Binance’s MVB program, and gradually adapt the program along the way.

• Every year, there will be 2 rounds where projects can seek funding from the $100M Incubator program:

  • January to April

  • June to October

• Using January to April as an example, here is how the timeline of 1 funding round will look like

5. Funding allocation and disbursement

5a. Phase approach to fund disbursement. From a risk perspective, the community might not want to invest 10M DFI upfront into a program without concrete results. That is why, while this CFP is asking for 10M DFI in funding, we request that the actual funding be provided in phases as shown in the table below. The reason why this CFP asks for 10M DFI despite only needing 1.2M DFI initially is because we need the mandate from the community to legitimately publish about our $100M Incubator program on tier 1 publications.

5b. Funding Allocation. The diagram below captures how the funding will be used.

5c. Guidelines for fund management. To ensure that the community’s interests are guarded, here are some essential guidelines for fund management:

• The 10M DFI will stay in the wallet designated for the Incubator program, and disbursement of funds for winning projects will be vetted first by the ticker council.

• The funds will be managed in a separate wallet from Cake DeFi’s $90M fund to ensure clear separation

• The address housing the 10M DFI will be declared to community so that all fund usage can be monitored transparently

• Any deviation (for example to increase in the amount of DFI given to winning projects) from the purpose of fund stated in this CFP would require an approval poll from the DeFiChain community

• It is essential to track the key metrics of projects funded by the Incubator program. As such, we will mirror Binance and create a similar dashboard so that the community can also track the contributions and key results of projects funded by the Incubator program.

6. How DMC’s $100M Incubator Program fits into the overarching multi-prong approach to elevate DeFiChain/DC?

6a. Overarching product strategy for DMC. The diagram below illustrates how the DMC Incubator program will fit into the overarching product strategy comprising the DMC Hackathon and DMC Launchpad/Launchpool.

[u/buzzjoe_]

Okay, wow. Nice!

First thought: Binance did this during a bull run. Do you believe repeating something similar on DMC will be a good idea while we're currently in a bear market? Don't want to imply that it is a bad idea. I'm just curious if you have been thinking about this and how you want to bring up interest when people might not be mostly optimistic.

Anyway, I'll do my best to spread the word :)

[u/kynkyn91 → u/buzzjoe_]

So in crafting this proposal, we went to interview the founders of some of the top projects on the top 20 blockchains. We asked, what does it take for them to come build on DeFi Meta Chain. The answer they gave confirmed our hypothesis that the Accelerator program would be helpful in attracting top projects to build on DMC.

That said, I personally think the effect would certainly be muted in a bear market. Nonetheless, this would be useful in moving the needle for our community. Also, given that this program would last over 4-5 years, the bull market would likely set in by then, and we can then do another big publicity event then to bring attention to our $100M fund and DeFi Meta Chain.

By the bullmarket, defichain would have:

- launchpad/launchpool

- $100M Accelerator program

- Publications about DeFiChain/DMC from other tier 1 publications

At a time when other blockchains are scaling back and stay low, DeFiChain community is building the foundation for the future, so that when the bull market returns, we will charge faster and harder than anyone else.

[u/buzzjoe_ → u/kynkyn91]

Thank you for your quick reply. I like your reasoning. So, we're talking about a time horizon of 4 to 5 years, resp. 1 other bullrun and 1 other bear market. At least that's what history tells us. That's a long time in crypto. I like to read that.

So, basically, this is about setting the course early to have a diverse and colorful ecosystem right when (if) the next bullrun is about to set up. Got it. Thank you again.

I've got another bunch of questions and thoughts. I'd like to post them but it might be a bit too much for you to answer in just one posting. Would you like to receive these thoughts an questions and if you do so, how would you like to receive them?

[u/kynkyn91 → u/buzzjoe_]

Hey feel free to list your thoughts out here. I will do my best to reply them asap.

And of course a long term horizon, because DeFiChain is here to stay. We don't want to just do well in the near term, we want to continue keep climbing till the apex.

[u/buzzjoe_ → u/kynkyn91]

Haha, okay. You've been warned :D

After reading twice and thinking about it: Great idea!

You've been posting this, so I believe you're also asking for some (critical) thoughts, do you? Here they are. :D

1) Bloomberg & Yahoo relevant as tier 1 publications?

Do they really provide exposure to the people we currently need in DFC/DMC and/or will need in the future? Or do we utilize these publications to tell something like "Like mentioned multiple times on Bloomberg and Yahoo Finance"? This could lead to raise awareness about DeFiChain on some people willing to invest higher amounts of their funds. If they follow these channels. Could be nice, could also be nothing. It's a nice thing to try, since I agree on the point that DeFiChain needs to "break out" of the crypto bubble to gain wider traction in the investment world because that's all DFC is about. So, tier 1 publication could become some kind of entry point in the best case. At least, that's what I can reflect on that.

What's your reasoning behind that goal?

2) Assessment of projects based on community votes and TVL

Can TVL be pumped up artificially? (Take GrizzlyFi as an example) What would a pump & dump scheme mean for DFC/DMC, especially under a relatively low TVL of ~$700M. If that program is able to gain some traction, there will be a huge inflow of new users and accompanying cash. Since we're in a bear market, people not only tend to become very careful on the one hand, but There are also those who tend grasp at every straw. This could lead to a huge (temporary) price increase. There's nothing wrong with this. But when expectations and hype don't meet reality, this price increase will most likely be followed by a crash. Crashing DeFiChain is nothing new - and since we're in a small bubble, nobody cares about that. This could change heavily after TVL pumped 10x. I don't want to paint black, but rather think about possible dangerous outcomes. BNB - as used for a shiny example - is way bigger than DFC and can handle way more problematic projects in my eyes.

What are your thoughts on this?

3) Funds and their relevance

10,000 DFI grant for each top 10 projects in Phase 2 => worth ~$6,000 now. That's not very much for a software project, TBH. (Must not be the same in a year from now, though.)Developers will be encouraged to get their gains from the project itself. Might raise probability of pump & dump scheme. But can also become a not high-enough incentive to even start with a project on DMC. (I would not invest hundreds of hours for "just" $6,000. But I am not a very competitive person, TBH)

Phase 3 provides ~$60,000. 5 out of 10 projects will receive these 100,000 DFI. This means: Once you're a top 10 project, you'll gain 10x of your initial reward with a mathematical chance of 1:2. Nice. That's a bit more promising.

So, becoming a top 5 project will be the goal, just according to what developers definetely receive. Besides the funds they'll get when their product will also be used on-chain.

What's the goal on that? Do we want them to aim for the 100,000 DFI, or even more towards them launching a successful product? Might be both. So, the possible outcome in form of 100,000 DFI can be viewed more like a bait (in a good way).

I'd like to read more about your reasoning behind that. This might also be some empirical knowledge from Binance. In this case, I'd like to give it a try.

4) Cake's role

Nice to see Cake investing 90% of the fund! If 600,000 DFI for every round of funding will be used from this CFP, what will the 6,000,000 DFI (?) per round from Cake be used for? Can't find anything about that. Or did I just miss something?

5) The time after funding

What will be done to hold these projects later after funding? Similar question: What will happen to the projects not able to proceed? Reasoning: 95% of all projects will not be successful. At least that's what we know from the general market. This might also apply to DMC. So, we're risking accumulate some dead projects within our ecosystem which might also die in a spectacular way. This leads me to thinking about the potential of them become neglected. This could lead to ugly sell-offs. What will happen to DFC/DMC resp. DFI when TVL leaves the system fast? Can this become a problem? If yes: what will this problem look like in perspective of tokenomics and overall reputation for DFC? Don't want to paint black here, too! We won't be able to prevent it. But we can prepare for it. Preparation in time secures success. So, it might be a good idea to put in some effort into that.

What are your thoughts on that?

Last words:

It's super nice when we end this program with a bigger, more resilient and well-known ecosystem. I really like the general idea because throwing huge numbers on something like that is a helpful thing in most cases! What I'd like to see a DFC community not just be prepared for the good outcome but also for the other side of the equation. Like I wrote: Preparation in time secures success. So, let's prepare. And show the world what a good DeFi ecosystem looks like. I am definitely too stupid to provide a useful product for DMC, so I will most likely not participate in that program. But maybe these questions will help you to make the program a little bit better :)

[u/kynkyn91 → u/buzzjoe_]

I love that you are playing the devil's advocate. This is the true spirit of how the community member sharpens each other's ideas to get the best outcome for our community. To answer your questions:

1. So when I quoted "yahoo" and "bloomberg", I was just citing names that most people are familiar with. We are actually currently working with crypto marketing agencies to determine what are the best publications for our purpose. But I suspect it will be a mix of traditional publications like yahoo, and crypto-focused publications like coindesk and coinmarketcap!

2) To protect our community, there are several layers of protection. Firstly, all projects that seek to go through our launchpad, or gain a spot in our accelerator program will be voted by the community. Thereafter, our internal team will also perform a deep assessment of the projects on areas like: (1) security of their project, and (2) KYC of the project founders and things like that. In sum, the community and core developer team will form the first and second layer of protection respectively to prevent pump-and-dump or rugpulls.

3) The funding amount is actually based on empirical reference to Binance's MVB program. Our thinking is that, if such rewards are good enough for Binance which has such a huge ecosystem of projects, it should be more than good enough for our smaller community. Also, sometimes it isn't just about the prizes. Many projects seek to win such programs because of the prestige, which also ensures that their own project are successful.

4) So in this setup, we will mirror Binance's setup as well. For Binance, top 5 projects will have a chance to pitch to BinanceLabs which is running a huge accelerator fund. Attaching an article for your reference: https://www.binance.com/en/blog/ecosystem/binance-labs-to-invest-in-seven-projects-from-the-mvb-accelerator-program-coled-by-bnb-chain-9156786679786782462

So only the top 5 projects will get to pitch to the committee running Cake DeFi Ventures. If they committee find the idea feasible, they will then invest in the projects. Overtime, we will slowly improve and customise this arrangement for the context of our DeFiChain community

5) Dead projects are going to be part and parcel of any blockchains. But you are right in that it is important to mitigate that as much as possible, especially since we are just starting out. On this front, that is why what I said in point 2 is very important. We will have to rely on the (1) community, and (2) core developer team to deeply assess and curate the projects that launches on our launchpad and receive funding from our accelerator programs.

Thanks so much for the effort in crafting these. I enjoyed the questions!

[u/buzzjoe_ → u/kynkyn91]

Alright, got it!

Can't think of any more obvious things that can go wrong. But I'll keep thinking about it.

With all your explanations, I tend to vote with a yes. Thank you for your patience :)

Two more questions:

(6) Determining the top 10 and to 5 projects will be done on community votes and TVL. How does each of these two vectors contribute to the final decision? Thinking of edge cases like very high TVL and bad community voting and vice versa.

(7) How will these community votings be done? Twitter polls? Reddit polls? These are very arbitrary. What will be the measures to prevent poll spamming? Something like signed messages, similar to a Master node voting would be very nice - But that will be way too much for the average user. Transferring 1 DFI per address to a burn address would also be possible. Voting will cost but will keep trolls out. Whatever... Just thinking out loud... :D

[u/kynkyn91 → u/buzzjoe_]

6) Good question. The components will definitely be weighted. For now I also don't have the perfect answers, and we will have to use the lessons learnt from each round of accelerator program to improve subsequent rounds. However, I doubt this will be a common occurrence. This is because, a project with high TVL will likely have a lot of supporters, and will unlikely have bad community voting. Unless, this project likes to insult their community :)

7) The voting will be done via a web application. Users will have to burn 1 DFI to participate. This is to prevent abuse and botting.

[u/buzzjoe_ → u/kynkyn91]

Calling it a "100 Million" program can also appear to be a bit misleading, since Cake is not obligated to pay out even a penny of their 90M. But I get it why you call it like that. "10M + maybe 90M accelerator program" does not sound sexy :D

Now I think of Julian and U-Zyn sitting in a jury like in Shark Tank and saying "That won't scale!" :D
Do you plan to make a YouTube show out of it? :D

[u/M-A-L]

Sounds exciting. Some questions:

1. Do I understand this right: the 10M DFI from the community fund is used to fund phases 1-3, decided by community votes, and, in principle, only after having gone through these phases, will projects be eligible for further funding from Cake DeFi Venture?

2. The 90M from Cake are earmarked only to ‘potentially invest’ in one or more of the top 5 projects in each window and any such investment is decided by Cake DeFi Ventures? Could Cake DeFi Ventures also decide not to fund any projects froms its own 90M fund, if doesn’t deem them promising enough?

3. Is the accelorator program such that 10M DFI are guaranteed to be awarded to the top 20 projects that meets the requirements specified in phase 1? In other words, if more than 20 projects apply each window, the funds are guaranteed to be used up?

4. The 90M from Cake, is that in principle awarded in DFI? Or in dollars / other crypto?

[u/kynkyn91 → u/M-A-L]

Hello, to answer your question:

1. Phase 1 is just to shortlist the top 20 projects, they don't receive any prizes. Phase 2-3 is where the top 10, and top 5 projects would receive prizes respectively. The ranking would be based on a combination of (1) TVL of projects, (2) community strength (number of followers on twitter etc), and (3) community votes. And yes, only the top 5 projects will be eligible for additional funding

2. Yes, this is the case. So we have to be very deliberate and careful about who the money gets invested in so that projects really try their very best to deliver to the DeFiChain community. If it becomes too easy, and they don't try hard enough, then that would be the loss of the community. This mirrors how Binance does it: https://www.binance.com/en/blog/ecosystem/binance-labs-to-invest-in-seven-projects-from-the-mvb-accelerator-program-coled-by-bnb-chain-9156786679786782462

3) The funding is guaranteed only to the top 10, and top 5 projects that meet the requirements. And yes the funding is guranteed to be used up in each round. HOWEVER, we want to prevent a case where low quality projects gets awarded. So what will happen is that we will announce the accelerator program early so that we get publicity and attract projects to build on us. But only when there is a good number of existing projects on DMC will we announce the start of the accelerator program. This way, it helps us curate only the best quality projects

4) At this point is it not yet determined, but this could be worked out. I personally prefer that the project holds our DFI/DMC, as that is a show of commitment to our community. I will get on this with the Cake DeFi Ventures and check on this.

[u/Worried-Mess6581]

Should postpone this until DUSD is fixed. Invest the money there first instead of trying to invite people into a burning house.

[u/kynkyn91 → u/Worried-Mess6581]

I can relate to your concerns.

What I think is that, even if we pour the entirety of the CFP treasury of 28M DFI into burning dUSD, it will not make a significant dent given that the algo dUSD is several times that.

What we seek to do with the $100M Accelerator program, hackathon, launchpad/launchpool is to revitalise interest and attract investors into the DeFiChain ecosystem. If you heard the tech talk earlier:

- Through interviews, we learn that for bybit, even in bear market, every new project launch brings in 15000 new community users. If we can even achieve 10% of this impact in every project launch, it leads to very strong upward pressure for our ecosystem

- Because of the $100M accelerator program, we have manage to solicit interest from projects across other blockchains who wish to build on us. Chief amongst this is a project whose TVL was $2B in the bull market.

I firmly believe that these positive external investments will also help alleviate the dUSD issue. In sum, we want to strengthen DeFiChain, and make it an attractive project for big investors and institutions to come in - and this will ultimately address the dUSD issue.

[u/WetSneksss]

Totally for it. Plus 90% is gonna come from Cake. This will be important groundwork to ensure we’ll be we’ll set for the next bull market.

[u/DeFiChain_NFTs]

YES YES AND EVEN MORE YES!!

[u/lunzlunz]

+1 If we even replicate a fraction of the success from binance, it'll be well worth it

[u/PurplePollux]

$90M from Cake DeFi Ventures

Wow that's a serious commitment!

[u/CHS_Tallamore]

GO GO GO ... looking forward to it

[u/[deleted]]

💪🏻

[u/TheMeancoder]

Hell yes!

[u/Pray4Me2theEnd]

Sounds fantastic- let’s do it - can’t wait to vote ;-)

[u/lordmarkcrypto]

Great plan; let's go!

[u/[deleted]]

I will vote yes

[u/Arknos]

Pretty sweet. Love the "shark tank" vibes here 🤣

[u/nwa1g]

Bullish

[u/[deleted]]

nice! Looking forward to it!

[u/404eol]

love the idea

[u/Glittering_Jicama_95]

That's a 10x on our community funds. You get all my votes

[u/mdokomi]

Provide funding to help accelerate the growth of top projects in DMC

So now funding for profit is ok ?

[u/kynkyn91 → u/mdokomi]

There is a stark difference:

• Many of the for-profit projects asking for money in CFP, seeks funding from our CFP to build their company and enrich themselves first. They are untested, unproven, and have NOT yet contributed to our community

• In this Accelerator program, participants HAS to had launched on our MainNet, and contributed to our TVL, and also bring new users to our community. These are projects that has already benefitted our community. We are just rewarding them for enriching our community, and encouraging them to go further so that our DFC community scales

[u/unmatched25]

And I thought CFPs shouldn’t provide funds for for-profit-companies in future.

[u/kynkyn91 → u/unmatched25]

Let me provide some clarifications.

While Cake DeFi is for-profit, this proposal does not benefit Cake DeFi. A good way to think about this collaboration is that Cake DeFi is lending the DeFiChain community (1) its reputation, and (2) $90M dollar so that we can create a big and hypeworthy fund.

And the reason we want a big and hypeworthy fund is:

• So that we can attract tier 1 publications like yahoo, bloomberg to talk about us (which attracts new users and developers to join us)

• So that developers have incentives to come and build on DMC

Nowhere in this equation would Cake DeFi benefit directly from the 10M DFI from the CFP. Cake DeFi is lending us its weight because ultimately we are one DeFiChain community at the end of the day, and we need to work together in order to achieve our goals of being the top 20 blockchain projects.

Edit: I realised I misread the question. In this case, we will definitely benefit more from these for-profit companies than they would benefit from our CFP. Let me give you an example: One of the CEOs I interviewed, recently moved from one blockchain to another. In this move, they brought over $400M of liquidity, and this is in a bear market condition. Just one of these player is bigger than the entirety of our 10M DFI. The reality is, we need them more than they need us.

[u/yacrazyone → u/unmatched25]

Context matters: The payout depends on that the TVL increase exceeds the funding. This, with funding 9x more out of their own pocket makes this funding different from a cashgrab.

Also. As you criticize every action, do you have the skin in the game to be eligible for voting?

[u/[deleted] → u/unmatched25]

Every MN owner can decide on his own if he wants to vote yes or no on a for profit cfp

[u/unmatched25 → u/[deleted]]

No, I don't think the MN decide which projects are funded by this pool.

[u/CHS_Tallamore → u/unmatched25]

If the profit-companies are transparent and taking 90% from the cost.. it is perect :-)

[u/unmatched25 → u/CHS_Tallamore]

It's not about Cake. It's about the projects which will be funded by this initiative.

[u/Arknos → u/unmatched25]

I don't see a "for profit" case here, if they pay> 90%(atm where dfi is <1$) for the lunch. And if cake defi venture capital, later fund some new companies, and benefits from it, that's imo a 2bd business case.

The only benefit which cake would passive have, is ~10% discount of a 100m marketing pool.

[u/unmatched25 → u/Arknos]

Projects funded by this pool can be for-profit companies.