Method Finance: Retrospective & The Road Ahead
It will soon be 5 months since we officially kicked off Method Finance with our first post. In it, we stated our desire to leverage the Universal Vault Standard, to unlock a new and innovative use case for DeFi.
The WHY behind our project’s inception was very compelling. Almost every member of our founding team had at one point been burned by some sort of rug pull or contract vulnerability while participating in a liquidity mining program. The Universal Vault Standard, helped solve this by introducing a new technology that would allow users to retain custody of their LP tokens while still earning reward tokens as part of liquidity mining programs.
While our team found this use case to be compelling internally, we wanted to confirm that there was strong support for this solution in the wider DeFi ecosystem. To test our hypothesis, we put together an initial app/website and allowed users to mint a Method NFT that functioned as an “NFT Vault” to allow for safe participation in liquidity mining programs.
We were blown away by the initial support, as thousands of people minted NFTs, joined our community and even drove us as high as #36 on the OpenSea rankings during a historically bullish NFT market. Suddenly our hypothesis was confirmed and we were motivated to build out the functionality necessary to deliver on the hype.
Below is a recap of what has happened in the time since, both the accomplishments and the opportunities for improvement, as well as a look at what is ahead for Method Finance.
What Has Gone Well
We’ve remained focused on our initial use case & users
Let’s lead off by recapping what has gone well for Method Finance, since there is a lot for our community to be proud of.
For starters, the Method Finance team actually stuck to delivering on our initial proposed solution. It’s important to point out that there were other projects leveraging the Universal Vault Standard, and promising to solve the same problem as Method. However, many of these other protocols pivoted off this initial goal to focus on other solutions.
Regardless of whether or not those pivots were the right decision, the fact is that Method has remained hyper-focused on solving this important use case before moving on to anything else.
We also continued to listen to the community, and when we began to receive complaints about exorbitant gas fees preventing some members from participating, we made the decision to build our protocol to be cross-chain compatible, by launching on Polygon. This enabled our users to experience faster speeds and negligible gas fees while using our app and Method NFT Vault to participate in liquidity mining programs.
We shipped our initial roadmap
Another thing that our team prides ourselves on is that we actually shipped a lot of code. There have been many cases of DeFi protocols talking a big game but never actually delivering any tangible code/features.
With Method, we were able to build out an entire suite of features including the Method App, the Method NFT Vaults, the Method Unistaker and the Method Unitracker. All of these features are live in production on both Ethereum mainnet and Matic mainnet (Polygon).
We put our features in action
Lastly, it’s worth noting that we were able to put our entire feature suite into action. With the launch of the liquidity mining program with Blackswap, we were able to release our features out into the wild to be leveraged by partners and users.
The Blackswap team leveraged our Unistaker rewards contracts + Unitracker LP analytics API to launch the liquidity mining program, and Method users leveraged their Method NFTs on Polygon to participate in the program.
With the exception of a few minor bugs the feature suite worked as expected, and proved out the potential for what the future of liquidity mining could look like with this new paradigm.
What Could be Improved
The Method Finance team and community had a lot of momentum with the launch of our feature suite as part of the Blackswap partnership, but that’s when we began to encounter some head winds.
To be specific and transparent, we’ve found that while there has been strong user interest for the NFT Vault use case, other protocols have been less inclined to partner with us and leverage the feature suite.
A few of the reasons we’ve heard from partners that find difficulty in leveraging our solution are as follows:
1) It adds more friction to their liquidity mining programs by including additional steps. Some protocols believe that making their users mint an NFT, and learn about staking/unstaking to the vault and unlocking their rewards is too complicated. To be fair, many DeFi apps are still far from as user friendly as mainstream Web 2.0 apps, so it may be reasonable for these protocols to be wary of adding even 1 or 2 new actions into their user flows.
2) The Unistaker contract did not provide protocols with much leverage. Protocols told us that setting up a staking rewards contract was somewhat trivial, so they didn’t get much value from leveraging our “out-of-the-box” Unistaker contract. Furthermore, some protocols pointed out that they wouldn’t be able to get all of their users to mint Method NFT Vaults, so they would still need to spin up a staking rewards contract regardless.
3) There is a catch-22 surrounding the incentives for protocols to leverage our feature suite. While the end user benefit is obvious, the benefit to protocols is less obvious. Let’s consider 2 separate scenarios to prove this point:
Scenario A: A protocol with bad intentions wants to launch a liquidity mining program in order to perform a rug pull and steal participants’ LP tokens. In this case, the protocol will not want to leverage the Method feature suite, because it is designed to prevent the very thing that these bad actors want to do.
Scenario B: A legitimate and respected protocol wants to launch a liquidity mining program. These protocols have confidence that their programs will run smoothly since their contracts have likely been audited and written by top tier developers. In their eyes, working with a new protocol like Method could possibly insert unnecessary risks from a technical and/or reputation standpoint.
All of the above points bring us to the overarching theme, which is that so far we have struggled to land the larger partnerships we need to help turn this into the new standard for liquidity mining.
The Path Ahead
The Method team has taken some time to regroup, and we have come up with the following plan to move forward.
Method Finance Will Have to Pivot
While this is a tough pill to swallow, it’s become clear that our protocol needs to pivot to some degree in order to succeed. We will keep our existing contracts live in production for partners that may want to work with us in the future, but for now we are planning to pivot to a core strategy that does not rely as heavily on partner involvement.
That being said, pivots are extremely commonplace in the world of traditional software startups. Take for instance Slack, which originally started as a gaming company and was able to pivot into a billion dollar business communication platform.
The good news is that we still have a lot of solid foundational pieces to work with. This includes a strong core team that is ready to keep building and has shown itself capable of launching secure and scalable features to production.
We also have a strong core community, especially our early adopters who have stayed with us since the beginning. There are many paths we can go next, and we believe that is is highly likely that Method NFTs will be a central component of whichever direction we go next.
The Method DAO
If WHAT we need to do is to execute a pivot, then it is important to also state HOW we plan to do it.
Moving forward we plan to convert Method Finance into a DAO. We believe this will allow us to better leverage the energy and skill sets of our community, and allow us to move faster together.
We will also continue to lean into decentralized governance to help drive the decisions of the protocol moving forward. As we’ve said from the beginning, MTHD is a governance token, and that means formalizing/evangelizing the process for the community to create proposals and for MTHD holders to vote on them. We want to highlight that our community can suggest and vote on features here.
We will continue to take suggestions for 1 week from today before putting the top suggestions on snapshot for a community vote.
Keep an eye out for a future article in which we will lay out the details of our DAO and how it will operate.
We’d like to end by just level setting on expectations moving forward. At times over the past few months, we have operated in ways that are not sustainable. Building a successful DeFi protocol is a marathon, not a sprint, and we want to adjust our operating mechanisms and communication cadence accordingly.
As a result, we will be shifting from tops down, schedule-based communications to community-driven and event-based communications. This means pausing the weekly updates and at times the core team being less active on social channels. However, our Discord and Telegram admins are still active and we will make sure they have what they need to keep the community informed.
We want to focus on helping the community drive the protocol forward and leveraging our key channels for communications around the most significant updates or releases.
We thank you all for your continued support as we navigate this transition and we look forward to entering the next chapter of Method Finance with all of you.
Keep an eye out
- Medium article laying out details of the Method DAO
- Community feature suggestions (lasting 1 week from today)
- Community roadmap voting on snapshot (i.e. What features will be built next)
- Announcement of next feature