Growth Working Group - Season 1 Proposal

1. Summary

Proposal for Inverse Finance DAO to cover operations of the Growth Working Group (GWG) in Season 1, running for 6 months October 1st 2023 to March 31st 2024.

2. The Growth Working Group

The GWG manages a wide portfolio of responsibilities including business development, marketing, and capital raising. In addition, the GWG engages in day-to-day risk-related activities including serving on Fed Chair and Policy multisigs. Going forward, the GWG is led by @patb who joined Inverse as head of growth in 2021 bringing deep experience in enterprise and consumer software marketing, business development, product development, and operations, including previous web3 marketing & business development experience at Index Coop.

3. 2022-23 Lookback

Since summer 2022, we’ve successfully re-casted the DAO’s go-to-market strategy around FiRM, where the GWG took the concept of rights-based borrowing and drafted product requirements, authored the FiRM whitepaper, developed and executed a launch strategy, created new copy and brand assets, designed a new homepage, and worked hand-in-hand with other working groups and community members to bring it all live in December 2022.

FiRM was initially slow to gain market traction. In 1:1 interviews with potential users, we learned that the freshness of the concept of borrowing rights combined with a “wait and see” attitude was largely to blame, however the addition of CRV and yield-bearing collateral helped us jumpstart borrowing and today FiRM boasts over $50MM in TVL with borrow demand currently outstripping our lending capacity. Since launching FiRM, the GWG has worked to promote new markets, spread the vision of FiRM, expanded and promoted our roster of liquidity partners, and pursued new strategic opportunities for the DAO.

It is important to note that since April 2022 the GWG has minimized discretionary spending in favor of a hyper-lean mode that emphasizes passion and perseverance through some very challenging market conditions. This spend level should continue in Season 1 and is prudent as we continue to solidfy product-market fit for FiRM and especially as we seek to preserve the DAO’s treasury during a sideways market.

Alas, not everything the GWG did over the last year went as expected. Despite best efforts, our lack of a legal entity and other factors made efforts to sell significant amounts of DBR to repay bad DOLA debt largely unsuccessful. Our market making partnership with DWF was paused pending improved reporting from them, reducing the expected bad debt repayment from their OTC buys. Also, multiple new “ve3,3” DEX partners struggled to attract meaningful TVL in 2023. We continue to try new things, move quickly, and learn from our past mistakes.

4. 180-Day GWG Objectives

The DAO’s 12-month objectives are outlined in this post and center on our primary north star objective of reducing bad DOLA debt, which is essential to returning greater value to INV tokenholders. The GWG directly impacts three of the four success levers mentioned in that document:

  1. Increase product adoption
  2. Increase product profitability; and
  3. Raise external capital;

In support of these three levers, the GWG has identified 180-day objectives across its functional areas of responsibility - business development, marketing, and capital raising. Where possible, GWG deliverables are reduced to measurable objectives.

Business Development Objectives

To improve product adoption and product profitability, the GWG’s business development function is emphasizing two themes in Season 1:

  1. Liquidity partnerships, and

  2. Strategic growth initiatives;

Liquidity Partnerships.

Liquidity partnerships help create demand for DOLA, expand lending capacity, generate treasury ops revenue when Feds are deployed, manage the DOLA peg, and can reduce our reliance on INV for liquidity incentives. Driven in collaboration with TWG and RWG, our ability to be responsive to new opportunities on multiple chains combined with attractive incentives for DOLA LP’s is making Inverse a go-to partner for new DEX projects as well as stablecoin projects seeking a partner for co-incentivized pools. DEX partners like Velodrome have proven particularly valuable and replicating that relationship is of high-value to the DAO. Specifically, the GWG will pursue liquidity partnerships on:

  • BASE. Base represents an opportunity to grow liquidity through our close collaboration with Aerodrome (Velodrome) but also through other emerging DEX partners. We expect Base TVL to grow dramatically over the next 12-24 months as Coinbase onboards more of their CEX users to Base. Season 1 objective: close a minimum of two new DEX partnerships on Base.
  • Other L2 Chains. New liquidity partnerships on Arbitrum, Polygon, opBNB, and potentially other emerging L2’s represent liquidity opportunities for the DAO as DEX partners often provide incentives at no cost to Inverse. Season 1 objective: close a minimum of two new DEX partnerships on other L2 chains.
  • CEX. Our policy of paying zero fees for CEX listings has limited our roster of new CEX partners, however we remain in discussions with a top tier exchange that if green-lighted would justify a governance vote on a listing fee. Season 1 objective: close a minimum of one new CEX partner.
  • Grants. Multiple L2’s have existing or planned grants programs to attract new deployments to their chains. We are currently focusing on an OP grant pending FiRM deployment on OP mainnet but exploring others for Arbitrum, Base, and potentially opBNB. Additionally, application-layer protocols provide an additional avenue for grant opportunities.** Season 1 objective: close a minimum of one grant worth > $100K.
  • Fiat On-Ramp. Due to a lack of legal entity Inverse has been without a dedicated fiat on/off ramp to FiRM. The addition of a legal entity facilitates this. Season 1 objective: close a minimum of one fiat on-ramp partner, assuming we have a legal entity during Season 1.
  • Other Partnerships. While not directly driving liquidity, DOLA farming opportunities promoted by yield aggregators like Beefy drive demand for DOLA. As our presence on new chains expands, we will engage more YA’s, bringing an expanding array of options for DOLA farmers. Season 1 objective: close a minimum of two new yield aggregator partners.

Strategic Growth Initiatives.

Strategic growth initiatives (SGI’s) represent partner-driven new product, distribution, or business model opportunities designed to catapult Inverse forward in our industry. SGI’s are ideally partner-driven and leverage partner ecosystems or installed bases, where the GWG provides leadership in drafting requirements documents, business model analysis, proposal development, or in the case of DAO treasuries, outbound business development.

  • DOLA “Sinks.” A high priority for the DAO is the creation of organic and ideally un-incentivized demand for DOLA. For example, we are informally exploring concepts for new DOLA “sinks” or vaults in collaboration with partners, to encourage users to hold DOLA over longer time periods.
  • DAO Treasuries. Diversification of DAO treasuries into DOLA represents an excellent opportunity for increasing DOLA demand that has to-date proven challenging. Recent borrowing in the DAI DSR market suggests an alternative approach to addressing the DAO treasury opportunity.
  • New business model concepts. Other SGI’s may include formulating and analyzing longer-term business model concepts and which may require longer incubation timelines. For example, the GWG recently put forward the concept of an Inverse Federation, to address the issue of faster cross-chain expansion.
  • Variable rate lending. We will explore co-marketing opportunities with one or more variable rate lenders seeking to list DOLA. While there are no plans to implement a DOLA fed in a lending market and therefore limited current direct revenue upside, variable rate lenders can create additional awareness for DOLA on multiple chains at minimal opportunity cost for the DAO while addressing those users who prefer a variable rate loan. NB: DOLA currently is without a Chainlink oracle which historically has complicated this objective.
  • Season 1 SGI objectives: GWG will put forward a minimum of two new strategic growth proposals during Season 1 and close a minimum of one DAO treasury transaction with a value of >$500K.

Marketing Objectives

The GWG is also responsible for various marketing and communications functions for the DAO, with primary goals of driving awareness of DOLA, FiRM, and the INV token as well as to increase rates of trial and long-term adoption.

To improve results in awareness and trial:

Market research.

  • In Q2, the GWG engaged in 1:1 interviews with FiRM users to better understand demographics, attitudes, and impediments to adoption. Such research is time-intensive but our expansion to a new L2 in the next 180 days merits additional exploration of attitudes of L2 users in order to tune our go-to-market plans. Relatedly, the CWG recently implemented which along with upcoming features in Inverse Watch provide us with improved ability to sharpen our market segmentation but also improve our installed base marketing through a better understanding of existing FiRM users and INV holders and their attitudes. GWG will deliver a revised customer segmentation and targeting plan in Season 1.

Increasing Awareness.

  • Building awareness for Inverse products with a bare-metal marketing spend requires us to focus our efforts on Twitter (X) as our primary channel for reaching potential users. Where resources permit we employ visual media to improve reach and where possible coordinate with partners. We are still adjusting to changes in the Twitter algorithm and have recently moved to a new social media tool, Buffer, after our Tweetdeck access was deprecated. Where appropriate, we employ multi-day campaigns to raise awareness and anticipation for upcoming product launches. Key to our campaigns is the crafting of stories and narratives that help convey the power of FiRM. With the recent enablement of Twitter spaces in our Inverse Finance twitter account, we can reliably add events (e.g. AMA’s, product launches, etc.) to our awareness raising and partner co-marketing efforts.
  • Given the DAO’s limited marketing resources, we seek wherever possible to leverage partner awareness-raising capabilities when launching new markets or products.
  • The GWG will continue to create and support blog and newsletter content which today are low-traffic properties for the DAO but nonetheless - in the case of blog posts - provide useful due diligence tools for users and potential partners. In Season 1 we will experiment with more frequent newsletter distribution using a “light” content model using Twitter content.

Increasing Trial.

  • Launching FiRM on an L2 in Season 1 will provide us with the opportunity to test borrowing on a lower-cost platform, likely making FiRM more accessible to a greater number of triers. FiRM’s launch on an L2 will constitute a major campaign for the GWG during Season 1.
  • In 2023 we have seen instances of a new FiRM market receiving high levels of social media visibility but low rates of trial. One lever for inducing trial is the use of borrow-side incentives funded through a third party grant on an L2. FiRM’s launch on an L2 will likely coincide with our first test of borrow-side incentives, led by the GWG.
  • While rates of trial are impacted by DBR prices, lending capacity, and other factors driven from outside of the GWG. As DBR prices become more competitive, the GWG has multi-day or multi-week campaigns planned to encourage users of other protocols to switch to FiRM and refinance their variable rate or fixed rate loans.

Increasing Retention.

  • As part of the analysis in the market research section above, as FiRM becomes more mature and TVL grows, we will begin to measure retention rates of FiRM borrowers and begin to analyze factors that might lead users to borrow for longer time periods, at higher amounts, or factors that might lead users to switch to another lender. Working in collaboration with the Analytics Working Group, in Season 1 we can establish baseline retention metrics as well as provide basic cohort and funnel analysis.

Other communications.

  • The DAO requires ongoing communications leadership both for routine DAO communications but also during unusual events (e.g. USDC/SVB depeg) and the GWG continues to work to ensure a high level of professionalism in all our outbound communications. For Inverse this function is particularly important as in addition to the DAO’s commitment to transparency, the DAO’s bad debt adds extra importance on trust building within the community. High transparency, high impact communications are essential to strengthening the Inverse brand.

Capital Raising

OTC Sales.

  • As the traction of FiRM continues to build, Inverse presents an attractive opportunity for those seeking to build a large position in a cutting-edge fixed rate lending protocol with 100% of proceeds allocated to reducing bad DOLA debt. Capital raising at scale requires creation of investor presentations, pro forma financials, and other due diligence materials. GWG will close a minimum of $500K via OTC sales during Season 1 assuming an Inverse legal entity is live in 2023.

  • Inverse legal entity. The GWG is available to provide support to outside counsel regarding a potential legal entity for Inverse, which can assist us in a variety of activities including fiat on-ramps, CEX listings, certain market making and other partnerships, as well as OTC sales. Any legal entity formation is subject to DAO governance vote. GWG will continue to be available to provide support in the formation of an Inverse legal entity in Season 1.

Other GWG Activities

Fed Chair.

  • Like other Fed chair members, @patb is on standby 24 hours per day, seven days per week as part of the enhanced security policies put forward by our Risk Working Group.

  • LPolicy Committee.**

5. Budget

GWG Contributors to be paid at the following rates:

Name FTE Band Pro Rata Monthly Salary Total For Season 1
patb 1.0 A 14,500 87,000

Ad Hoc Expenses

The GWG has 51,220 DOLA and 196 INV remaining in its multisig from its Q2 2022 budget proposal and therefore requests no additional ad hoc authorization. Our monthly ad hoc spend is typically below 1,000 DOLA and is used for expenses like subscriptions, stock video footage, or rewards for content creators who help us amplify a marketing campaign or theme via a blog post. We are prepared to offer bounties of up to 5,000 DOLA for members who help us close no-fee CEX listings.

Expense Type Estimated Monthly Expense Budget Request
Ad hoc $1,000 0

Budget Summary

Expense Total Season 1
Salaries 87,000
Ad Hoc 0
Total 87,000

Updated awareness, grants, design, and budget sections.

Updated design & salary band per feedback