Referral and affiliate marketing is a significantly underutilized growth channel in the web3 ecosystem. This post aims to illustrate the potential impact of referral marketing on decentralized finance (DeFi) platforms by analyzing six DeFi projects. The data collected showcases the effectiveness of referral programs in generating trading volume and revenue for these platforms.
Lido Finance
Lido Finance's referral program generated an impressive 1,552,458 staked ETH from referrals, which accounts for approximately 30% of the total staked ETH. Over the past 18 months, Lido has distributed $13 million in rewards to its affiliates.
You can find data about Lido's referral program here:
https://dune.com/LidoAnalytical/Lido-Referral-Program
GMX
GMX's referral program resulted in $11 billion in trading volume, equating to around $11 million in revenue. This represents approximately 14% of the platform's total trading volume. Over the past nine months, GMX has distributed $1.6 million in rewards to affiliates and referrals. For every $1 spent, the platform generated $10 in revenue.
You can find data about GMX's referral program here:
https://stats.gmx.io/referrals/arbitrum
InsurAce.io
InsurAce.io's referral program generated more than $180 million in insurance coverage sold, collecting approximately $1.2 million in premiums. This constitutes around 48% of the platform's total coverage sold. Over the past five months, InsurAce.io has distributed $224,000 in rewards to affiliates and referrals. For every $1 spent, the platform generated $5 in revenue.
You can find data about InsurAce.io's referral program here:
https://data.insurace.io/referral
RealT Platform
RealT Platform's referral program generated $95 million in purchase volume. Over the past 13 months, the platform has distributed $1.9 million in rewards to its affiliates.
You can find data about RealT's referral program here:
https://dune.com/datablob/REALT-Rent-and-Affiliate-Payouts
DeBridge Finance
DeBridge Finance saw $14.9 million in referral trading volume, or approximately 16% of its total volume. Meanwhile,
CowSwap
CowSwap generated $954 million in referral trading volume, which constitutes around 5% of its total volume.
The Impact of Referral Programs on DeFi Platforms
Based on the examples above, referral programs can bring DeFi platforms anywhere from 5% to 40% of their total trading volume. During the current bear market, DeFi has a monthly volume of $65 billion. Assuming an average fee of 0.25% and a referral-generated volume of 5% to 15%, referral marketing spending is estimated to be between $97 million and $292 million annually.
Referral Marketing in a Bull Market
During a bull market, DeFi's monthly volume could reach up to $200 billion. Using the same parameters, annual referral marketing spending could range from $300 million to $900 million.
Conclusion
Referral marketing has the potential to be a powerful tool in the web3 space, driving significant volume and revenue for DeFi platforms. As demonstrated by the analysis of six DeFi protocols, referral programs can greatly contribute to the growth of these platforms.
In the past, launching a referral program was not a simple task, especially for a web3 product. It involved development, product and strategy work and weeks or months of works eventually led to a very basic referral program. Today, DeFi teams can launch a web3 native referral program in minutes sharemint.xyz.
As the web3 ecosystem continues to evolve, it is crucial for projects to explore and implement referral and affiliate marketing strategies to maximize their potential.