In order to cover its expenses and reach profitability, ShapeShift needs to generate far more revenues. Although ShapeShift has numerous active revenue streams, including a growing number of Affiliate Revenue Partnerships, it has yet to attract the necessary users or volumes.
The main reasons that ShapeShift has yet to achieve profitability can be boiled down to the following:
By rewarding users who generate revenue for the DAO with FOX Tokens, ShapeShift can achieve the following:
Be objectively the best way to use any protocol or service which ShapeShift earns revenues from (from a financial perspective).
Attract users to ShapeShift that are currently using the same protocols that ShapeShift integrates on other interfaces, increasing KPIs such as active transactors, volume, and revenue
Reward users that generate revenue for the DAO proportionally with FOX tokens, evolving them into community members and providing further incentive for them to use and support ShapeShift
The long term vision for FOX Rewards is to reward users with FOX in proportion to the revenue their activity generates for the DAO as well as reward FOXy holders with FOX in proportion to the revenue generated by all user activity. FOXy is not part of the scope of this spec, which focuses specifically on rewarding users that generate revenue for the DAO with FOX.
While this program is designed to work best with affiliate revenues, enabling ShapeShift to be a more profitable way for users to use protocols such as CowSwap, Idle, and Portals vs any other interface or even interacting with the protocol directly, it’s worth noting that the same infrastructure developed by Mercle could be used to offset any feature that the community decides to add fees (or optional donations) too
Note, most of the #s in this spec are up for discussion and could be finalized by the community in the same proposal that approves the FOX budget for this experiment. Italicized #s are just 1 possible configuration.
ShapeShift Decentralization Announcement
Proof of Concept built by Mercle (imagine the placeholder NFT is a foxatar)
Note that currently, this spec assumes that a production-ready version of the above proof of concept developed by Mercle will be utilized to power the experiment. One of the main benefits of working with Mercle for FOX rewards is that the technology and experience they’ve developed is tightly integrated with the existing Fox Avatar NFTs. In addition to rewarding users with FOX for revenue generating transactions, ShapeShift can also reward users with NFT traits for any activity, such as social engagement or participating in governance. If prioritized, engineering is welcome to choose a different implementation provided it meets the acceptance criteria outlined below.
Univariate experiments on requirements to qualify for FOX Rewards