AIP #4: Ledger Live Referral Program
Author(s): @adrien (part of the Ledger team)
Summary
A referral program to accelerate integration with the Ledger Live crypto wallet.
Abstract [What?]
Create a referral program specific to Ledger to accelerate Ledger Live integration and benefit from the unique user/liquidity flow potential, including individuals and institutions. The referral program will incentivize Ledger to include Alkemi Earn as one of the first DeFi lending protocols to integrate with Ledger Live. As part of this integration, Ledger Live users will be able to directly lend and borrow in Earn through Ledger Live’s App Catalog.
Motivation & Goals [Why?]
As of June 2021, Ledger has sold over 3 million hardware wallets. Every month, 1.5 million people use Ledger Live, the company’s software solution to manage crypto assets. The company secures around 15% of all cryptocurrency assets globally (source: Ledger raises $380 million for its crypto hardware wallet – TechCrunch).
Given Ledger’s market share and user base, the assets managed in Ledger Live are a great supply/TVL potential for Earn. Further, this referral program would incentivize Ledger to promote borrows, which is Earn’s primary revenue source. Finally, Ledger’s premise on security and enterprise offering aligns perfectly with the institution-grade value proposition of Earn. The borrow volume potential at scale from Ledger Live is expected to compensate for the proposed fee structure in this referral program.
As a precedent, Lido, a DeFi staking platform, integrated with Ledger Live in July 2021 via a similar referral program and within four months, observed over 63% growth in AUM, the majority of which resulted from this integration. While the Lido use case is different from Earn, it still speaks to a similar type of DeFi audience with encouraging results. For details, view Lido’s referral program report here: Referral Program: Six Period Review | Lido Blog
Specification & Implementation [How?]
As part of this referral program: For each borrow on Earn originating from the Ledger Live app, 20% of the protocol origination fee will be shared with Ledger.
Alkemi Earn currently collects 0.1% of the borrowed amount as origination fees once the loan is repaid. With this integration, 0.02% of borrows originating from Ledger Live would be paid to Ledger once they are repaid, to be accounted for on a monthly basis. The remaining 0.08% would be collected by the Alkemi Network DAO.
The integration will be done initially with Earn’s ‘Open’ Pool to benefit from the simplicity of permissionless user experience that does not require the KYC/AML onboarding. This will also be an opportunity to validate the value of this integration, which will justify further work to include the ‘Verified’ Pool in this integration.
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