Compound Growth Program

Summary:

AlphaGrowth proposes a Compound Growth Program dedicated to advancing the Compound Protocol through targeted Business Development, Integration, and Marketing Campaigns. The program is structured with a total budget of 7770 COMP, distributed over a 4-month period and allocated into two distinct funds: BD Fund and Growth Fund.

The BD Fund is earmarked at 2760 COMP, with a monthly allocation of 690 COMP, dedicated to supporting Business Development operations for the Compound Growth Program.

The Growth Fund totaling 5010 COMP (2760 Marketing, 2250 Reserve fund), is reserved for incentivizing external parties to engage with and promote Compound in the form of Marketing campaigns and integration funding. It's important to note that AlphaGrowth operates independently of the Growth Fund and any unused portion of this fund will be returned to the Compound treasury upon the program's completion.

The forum post for the proposal can be found here

Background

Our initial intentions were to manage the next cycle of the Compound grants program. However as we chatted with more delegates, it became clear that Compound needed a small grants program and a concurrent growth program to onboard new users with successive developments. A missing part in Compound's operations is the focus on growth/BD-related activities. Compound already has other areas covered thanks to reliable partners in analytics, grants, and security.

• Security: Entrusted to OpenZeppelin.
• Risk: Managed by Gauntlet.
• Grants: Handled by the Compound Grants Program (CGP).
• Growth: Currently unaddressed.

In many cases, ecosystems and protocols have an internal BD team to manage the growth activities. However without a dedicated team and resources to focus on growth, Compound has not been able to keep up with its competitors (like Aave). The growth program will ensure that Compound will keep up with the industry while still maintaining the conservative nature of the protocol.

Proposal

The Compound Growth program, a trial spanning over a period of 4 months will focus on key areas of growth for Compound Protocol. The Growth program has 2 main areas of focus, BD and Marketing. The AlphaGrowth team has spent the last 6 months discussing the growth requirements of Compound with various community members, delegates and other stakeholders. The program will be a trial run to identify the compatibility of a growth program for Compound. Additionally, this program will test several different strategies of sustainable growth for Compound.

Scope

Marketing

• Publicizing Compound Protocol: Increasing Compound’s presence in the DeFi space
• V3 Awareness: Increase general community awareness about V3 and its benefits over V2
• Co-marketing: For new integrations of Compound with other platforms, marketing the integration to both the communities and DeFi ecosystem at large to engage new Compound users.
• Marketing : Paid marketing campaigns to engage new audiences

Business Development

• Increase V3 reach: Many Compound integrations are not on V3; our efforts will push more integrations from V2 to V3
• Compound Markets: We will integrate Compound markets with a variety of new services. Wallets, Exchanges, custodians, etc.
• dApp integration: Increasing DeFi applications that will promote activity, users and TVL.

Operations

Over the period of 4 months, the Growth program will engage in the following activities:

Business Development Targets

• V2 to V3 updating
  • Infrastructure & Services: Applications and no code tools that ease the developer onboarding and deployment of Compound to other apps. Many of these have a V2 api/service live. Our aim will be to integrate V3 with them. Some examples include
    • Ankr
    • Covalent
• Migrate Existing Pools & Increase Integrations:
  • We will help existing integrations migrate from V2 pools to V3 Pools to increase capital efficiency
    • Argent, which uses V2 pools
    • Crypto.com
    • Pooltogether
• Integrating Compound onto Wallets & Exchanges
  • New wallet integration Opportunities: Find out wallets worth integrating, focus on wallets with regional presence
  • Integrate Centralized exchanges with Compound Markets
    • Nexo
    • OKX
    • Kucoin
• Offering Compound services to institutional custodians
  • We will connect with Custodians that provide services to high asset individuals/organizations (Typical sales cycles for custodians are 18 Months, far beyond the trial period of the program, but a successful deal will drastically increase TVL and access to institutional capital)
    • Hex Trust
    • Copper
    • Bitgo
• Structured Products/dApp Integrations
  • Facilitating new/existing web3 dApps that increase the use of Compound markets/pools. These are highly specific and targeted, typical key targets will be dApps serving to regional users
    • For example - Lemon App that caters to users in LATAM

Marketing

• Compound Content Creation & Education

  • Compound Labs (being a US-based organization) is restricted in its social media capabilities, so it cannot promote/market many activities on web3 Twitter (Apart from general information sharing through official handle). Compound as a Crypto Platform has limited presence on Social Media; No tweet storms, no widespread sharing and retweeting of information by members.
    • Our plan is to promote key updates about Compound using multiple channels on Twitter
    • Further, we’ll partner with DeFi KOLs to share information about Compound updates, spread the information about Compound in wider community

• V3 Awareness and Demand Generation

  • We’ll also facilitate steady marketing of V3. Many community members are still unaware of the V3 launch, let alone those outside of the community. We will spread the narrative of enhanced safety and other features of V3.
    • V3 Targeted ad campaigns to compound/aave/balancer follower base
    • Leveraging social media messaging to generate hype
    • Co-marketing for V3 integrations with wallets, exchanges, etc.

• Event Driven Marketing, Co-Marketing with with Partners and Integrations

  • The team will use events as a major driving factor for the Marketing campaign. Whenever a partnership or integration occurs we will lean in and shout it from the rooftops. Co-marketing grows the pie for both the partner and Compound. We will utilize both Compound’s audience and the partner’s audience to drive adoption and exposure. Some promotion-worthy events include:
    • Compound integration with a new dApp
    • New asset brought to the Compound
    • New chain integration announcement and launch
    • New pool availability
    • New markets on new platforms
  <!---->
  • Native USDC comet on Base chain - marketing extensively to Base and other L2 communities.
  • Compound launch on Linea

• Paid Campaigns

  • Running multiple campaigns through various channels to promote Compound products
    • KOL promotion: Highly targeted KOL Campaigns for DeFi users
    • AMAs: promoting conversations with high value partners
    • Content Sponsorships: i.e. DeFi edge with 24,000 newsletter readers

Timeline

The original growth program was to span for a period of 6 months. But as discussions on the proposal continued, a consensus was reached on starting first with a trail period. We plan the BD program to run for a time period of 4 months. The main goal of a trial is to test and experiment which activities attribute the most Compound Protocol.

Milestones and Deliverables

The program will focus on the following parameters to measure its success

• Discovering the of Cost of Marketing Spend to increase $1 of TVL
• Discovering the User Acquisition Cost per Persona (Whale +$100k, Shark $10k-100k, Minnow under $10k)
• Discovering the User Acquisition Cost based on Integrations (Wallet, dApp, Structured Product)
• Discovering which Integrations, Wallets, Partners drive key metrics (Fees, Transactions, Users, Volume, TVL)

Deliverables

• 1 new V3 infrastructure service provider integration
• 1 upgrade of V3 infrastructure service provider integration
• A minimum of 2 sponsored content posts to large audiences such as other DeFi platforms & newsletters
• A minimum of 5 Co-Marketing campaigns with existing and new partners
• A minimum of 3 KOL Partnerships
• A minimum of 5 AMAs organized
• Begin conversations with key exchanges on integration
• Begin conversations with at least 40 dApps for integrations
• Total at least 1,000,000 impressions for marketing campaigns
• Minimum cumulative integrated dApp users to reach 1000
• At least 2 new dApp integrations

As we embark on a program to enhance Compound’s growth in the aforementioned metrics, we will be trying out a number of strategies for success. Which makes this an exciting yet challenging task. Not all growth strategies will work, the key aim of the growth program in its trial period will focus on identifying and gathering data on different activities and their rates of success.

a) Finding out which strategies moved the needle for Compound

b) what activities had the highest ROI,

c) identifying the plans that were able to create desirable behavior among target user base.

At the end of the program, we will present this data to the community to evaluate the data. The community should be able to identify, what works, and what doesn’t. What challenges did the growth program encounter during operations?

Funding and Budget

The Compound Growth Program’s budget modeling is similar to Compound Grants Program. The funding ask of the growth program consists of two parts, Operational expenses and the Growth fund.

Operational Expenses

This covers the Growth and BD activities for the program, similar to the Program manager fees on Compound Grants program. This will also include the research activities for the program. Earlier research formed a separate component of the Growth program but after taking suggestions from community members, we included it within the BD part and reduced the scope of research.

The operational expenses for the program are 690 COMP/month

Growth Fund

The growth fund will be the primary vehicle to boost Compound’s presence in the Crypto Communities online. This is similar to the fund of CGP which will be utilized to promote growth via partners.

Why AlphaGrowth

We believe decentralization allows for meritocracy. That holds true in the Compound ecosystem as well. We have firsthand experienced the problems that chains and protocols face in their expansion and integration. Our learnings will be pivotal to identifying the risks and benefits associated in various growth strategies for Compound.

Operating since 2018, AlphaGrowth has years of experience in DeFi and Crypto BD, We have successfully facilitated business development for multiple protocols including Kava, Collab.Land, Sommelier Finance, NEAR, CORE, Aurora, and many others.

In our latest engagement with the Kava grants program, the Kava ecosystem witnessed new integration of 78 projects and a TVL increase of $80+ Million. Our strategies have shown resilience and success throughout the crypto winter. Over the past year, our BD efforts have led to the deployment of over 150 projects on various blockchains. AlphaGrowth gets deals done, even in the bear.

We have interacted with over 100 ecosystems and 2700+ projects. To facilitate BD and grant deployment, our team built a crypto-native CRM and dashboard enabling us to efficiently evaluate and score opportunities, and report progress on all BD efforts.

Where are here for the long haul, and are honored to have the opportunity to be Compound’s boots on the ground.

Impact and Transparency

At AlphaGrowth, we like doing business in public. We welcome any input or feedback from the Compound community on the proposal.

To keep the community informed on the progress, AG will implement the following tasks to guarantee transparency

• Regular reports through Community call on the progress of BD activities
• Progress reports highlighting various deals in the pipeline, successful integrations, closed deals and learnings (2 reports)
• A database that gives all the program specific information to the community so that the members can come, verify and inquire about the process.
• Post program analysis and report about spends on Development fund.

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