Use a small percent from the reclaimed Trade Rewards allocation to hold regular contests.
KIP-43 reduced Trade Rewards from 20% of inflation to 5%. It is anticipated that trade reward allocations will be further reduced. This proposal allocates some of those reclaimed tokens as a prize for a reoccurring trade contest.
Trader acquisition and retention are critical targets for the next 12 months. While we have various features in the works to draw in users, prizes are effective at attracting attention. We consistently see increased trade volumes during contests. A regular contest for a small prize could potentially generate reoccurring visits to the site, increasing likelihood that users will trade and stay. These tokens were already allocated as trade rewards, so using them to generate trade volume and assist user acquisition is appropriate.
This proposal allocates 10 $KWENTA each epoch from the reclaimed trade rewards budget, as a marketing budget to act as prizes to be distributed for promotion activities. Contests can be monthly (25 tokens each) and quarterly (40 tokens each). The intent is for these contests to be low overhead, targeting whatever initiatives or metrics we want to improve or emphasis that time period, while minimizing impact on developers. Some examples are raw PnL percent, longs only, best single trade on a specific pair, etc. Simple leaderboard adjustments are sufficient in most cases. It is also important that these contests be consistent, predictable, and accessible, so users keep coming back to participate regularly.
This proposal will require time commitments from marketingDAO, as well as CCs or devDAO. The token allocation comes to 130 tokens per quarter. If an event is held every month and every quarter, at the suggested prize values, that will consume 115 tokens each quarter. The remaining 15 tokens can be used as incentives to devDAO tickets or marketingDAO tickets to implement and advertise the contests.
The proposed token allocation comes to less than 1% of total inflation. These reward levels are sustainable for at least 2 years while staying under or around that 1% allocation. If, for some reason, a contest can not be held in a given month, the unused allocated tokens can be reallocated to other initiatives at the marketingDAO's discretion.
An initial allocation of 40 additional tokens may be needed to kickstart the contest program, while the weekly trade rewards are pending accumulation towards the necessary levels for prize pools.
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