Arbitrum DAO’s incentive Programs Face Criticism for User Retention
Arbitrum DAO has invested millions in incentives to attract users. Though,thes efforts may not be paying off in the long run. Pink Brains, a Web3 marketing studio, highlighted this issue on April 4.
Arbitrum’s incentive programs, like STIP and LTIPP, aimed to boost user numbers, total value locked (TVL), and trading volume. Yet, the results were short-lived. Metrics dropped soon after the campaigns ended.
Pink Brains identified several problems. These include a lack of off-chain marketing, poor tracking of key performance metrics, and minimal ROI analysis. A survey by the agency found that only 21% of protocols knew their customer acquisition cost. Even worse, none knew their users’ lifetime value.
To improve, Pink Brains suggests setting clear performance indicators. This would help identify effective incentives and measure ROI.These measures were part of a recent Arbitrum DAO proposal that didn’t pass.
Arbitrum first launched a short-term incentive program in January 2024. It distributed 50 million ARB to active projects. Later,holders approved a long-term incentives pilot program.
Despite these efforts, Arbitrum’s total value locked has dropped from $3.454 billion to $2.422 billion.The ARB token is also down 86.94% since its all-time high of $2.40 on January 12.
