PROPOSAL 6: Grant program + Incentives for node runners & hodlers

[This proposal comes from @SHHS. You can view and discuss the original proposal here: Proposal: Grant program + Incentives for node runners & hodlers.

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DESCRIPTION

There are a number of proposals that rightly aim to spread the word about hopr and facilitate its smooth adoption within cryptoworld. There are also others that rightly cater for the early adopters , mainly the hodlers and the node runners. I strongly believe that you need to implement both approaches at the same time , to ensure relevance while not eroding your base. You need to actively develop the case and the use cases for hopr, strengthen security, and prevent disruptive price drops and fluctuations, e.g. after mass sale. That is why I put forward this proposal that caters for both groups of stakeholders.

Basically, you want to maintain those who are already “in the system”.
So, a portion of the tokens should definitely be distributed to hodlers and node runners .
In addition, there should also be in place incentives that would attract others to enter this ecosystem and to build it . This can be through grants and competitions supporting the development of dApps, sites, and use cases; developing solutions to enable smooth transition into mainnet, and awareness raising about hopr and its use cases, e.g. through YouTube videos, training packages, as well as memes.
This way, you would hold on to your existing tribe and invite others in. This is especially important now, when there is not much clarity about the token, its use cases, and potential. This would provide an easy and sustainable way towards rapid adoption.

JUSTIFICATION

In order for a project to grow, there is a need to attract more people into the ecosystem. This is very important, however, it would not be as efficient if you are losing people who had joined early on. That is why you need to maintain early adopters and ensure they hold on to the tokens and/or promote its use; and you also need to make the project attractive for outsiders. There are two key reasons why one may hold on to their tokens: they see or believe in its current or future value; there are incentives in it for them. Building use cases through grants and hackathons achieves the following:

  • more use cases are built and revealed, making the token more valuable and more useful;
  • more outsiders are attracted to the project. If you do not own tokens, or are not interested in buying tokens, maybe you can earn some DAI as you develop; and
  • it advertises the project and the token more widely, facilitating adoption.
    However, this takes some time (not a lot). In such an early phase of the project, it needs to hold on to the early hodlers, node runners, and stakers. So incentives would be good for that; keeping those folks incentivized to stay in the system while it grows and gains traction. I specifically propose giving DAI, and not HOPR (at least not much), in order to prevent a strong sell pressure driving token prices downwards. Whether you use DAI to buy hopr or to do something else, this is not expected to have a negative impact on hopr price. In the meantime, your nodes are secured, the token is decentralized and staked, with less reasons to withdraw.

IMPLEMENTATION

A portion of the tokens would go to incentivize node runners, ensuring security and decentralization.This would be an airdrop divided equally among node runners. Another portion would be airdropped to incentivize stakers and hodlers. This would be distributed proportional to the amount of tokens owned. This would further stabilize token price by reducing sell pressure. Finally, the last portion would go towards a grant program. (Here I was thinking something similar to e.g. UNISWAP’s grant program, at a smaller scale for starters.) The grant program would lay down criteria for submission of proposals focused on developing use cases, awareness raising on those use cases and the ecosystem, and around social marketing. Grants vary in amount from around $5,000 to $20,000.

BUDGET

  • 40,000 DAI to node runners,
  • 40,000 DAI to stakers and hodlers, and
  • 70,000 DAI for the grant program.
    This roughly divides the DAI in half between the grant on one hand, and the node runners and stakers/hodlers on the other. Had we had more DAI, we may have split this equally three ways, but it would be good to have more tokens on the grants’ pot as this is relevant for both outsiders and insiders. It would be useful to possibly have some HOPR tokens to complement some of this for the node runners and stakers/hodlers, but it is not necessary.
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