Don’t expect to retain capital after an incentive campaign ends unless you have product-market fit and a real reason for users to stay: a strong native APR, low perceived risk, liquidity effects, and so on.

Most people misunderstand what SOC 2 and other certifications are and what they aren't. SOC 2 is independent assurance that you have verified processes to manage risk and are transparent with clients about them. Not a guarantee that nothing will ever go wrong.

How @EthenaPay streams rewards to its users with Merkl. Ethena Pay users get up to 6% rewards on their dollar balances, paid daily. But each user is owed a different amount every day, based on their balance, their tier and the USDe base rate of the day. To run that at scale, Ethena Pay plugged its reward logic into Merkl. Ethena calculates each user's rewards, and Merkl turns them into daily USDe distributions, fully inside the Ethena Pay app. 1,600+ users less than a month after launch. $6.5M+ in user balances and $3M+ in cumulative card spend, with only a fraction of the waitlist onboarded so far!

What TVL will my incentives attract? It’s one of the most common questions we get from @merkl_xyz clients. The honest answer is that it depends on market conditions and many other factors. Your cost of liquidity is relative. It depends on: - What others do: how much the protocols around you pay for the same liquidity - The underlying asset: USDC, ETH and BTC don’t behave the same way. BTC liquidity is usually the cheapest because its opportunity cost is lower - The type of opportunity: incentivizing lending isn’t the same as incentivizing a concentrated liquidity pool, where LPs take on more risk - Your distribution: the more people see your incentives, the better. That’s why being on Merkl usually gets you the lowest cost of capital: it reaches more qualified LPs than anyone else in DeFi

Great piece by @frostyxbt on incentives, retention and the real cost of liquidity. On retention, one thing to understand: people don’t stay in a pool or a vault because they “like” a protocol. Everyone is looking for the best way to earn, and DeFi makes switching almost free. So if your rate is below a comparable alternative (similar size, liquidity and trust), liquidity will move. Sometimes it takes a while because less active users forget, but in the end everyone is mercenary. If you want your incentives to bootstrap a market sustainably, ask yourself: what would it take for my rate, my trust and the moat my product builds to beat the alternatives once rewards stop? And the cost varies a lot. $1 of liquidity on a DEX doesn’t cost the same as $1 on a blue chip like Aave or Morpho, or on a brand new protocol. So don’t blame your program or your users when liquidity leaves. Everyone wants the best for their money. Your job is to make sure that, even without rewards, the best option is still you.

Want Merkl rewards without the claiming step? Turn on Autoclaim. Rewards land straight in users' wallets. → Campaign creators: no claim flow to build, and users never leave your app → LPs: set a minimum amount and a frequency once, then forget about claiming All the power of Merkl. None of the claiming. 🔗⤵︎

Waiting 8 hours for yield you've already earned is fine for a farmer. For a company running its treasury in stablecoins, it's idle working capital. That's why next up at @merkl_xyz : near real-time payouts. The goal: move money, yield and rewards with the speed and reliability of onchain rails and the flexibility of offchain logic.

Rewards never make up for a lack of product market fit. They can hide the problem, but they’ll never fix it. Incentives work in mostly two cases: - When they’re sustainable and structural, like stablecoin yield - When they bootstrap network effects, like for instance for: • Lending protocols that need to seed both supply and borrow demand • New vaults with no track record, where early depositors take more risk and deserve more reward than those who join once it has $100m+ in TVL If your incentives aren’t building network effects, you’re probably just burning money.

Most stablecoin issuers use @merkl_xyz to add yield on lending markets. That's only part of what Merkl does. Merkl gives stablecoin issuers a full distribution stack: → Rewards follow each venue's utilization. A market that is 100% borrowed adds no idle supply, so it earns nothing → Add or remove any protocol, pool or KYC'd wallet with one API call. Your KYB, your rules → Track your fintech partners' user balances and split rewards between their users and the partner's treasury Nothing to fund upfront. Users accrue right away, and you pay when you transfer from your own multisig. You keep custody, and one allowance revokes everything.

Moats for companies in an AI world where software is commoditized: - proprietary data - physical infrastructure - massive capital - regulatory capture - network effects - distribution Am I missing anything?

Rewards on @merkl_xyz don't have to be always claim-based. More and more teams are using us us to push rewards straight to their users' wallets, with no claim needed. Imagine having to claim the dividends on your stocks, or the interest on your savings account. As finance moves onchain, payouts should just land. People already use our airdrop solution to reach millions of addresses at once. Next step: we're scaling direct transfers even further.

Earn on your stocks. Borrow against them at a capped rate. 7 Coinbase Tokenized Stocks on @aave V4 on @base now earn 3% in USDC, and USDC borrow rates are capped at 3%. Both powered by Merkl.

.@arbitrum DRIP is back for Season 2, with a focus on USDG. GMX and Morpho open the season: supply USDG to the @GMX_IO Dollar Vault to earn USDG, or to the @gauntlet_xyz USDG Premium vault on @Morpho to earn ARB. More protocols are joining soon. Explore the opportunities on the DRIP app, powered by Merkl ⤵︎

There's a reason the biggest hacks in crypto hit bridges and CEXs. They aren't purely onchain systems: they're infrastructure built to move money programmatically. That makes the attack surface far bigger than any smart contract protocol. At @merkl_xyz, we build incentive and streaming infrastructure, so we sit in the same risk category. Everything we design starts from minimizing that risk. We dedicate a significant share of our resources to security. It sometimes makes us slower than we'd like, and without these self-imposed constraints we could ship a faster, smoother product. But it's the right tradeoff. Security comes from stacking layers: our dispute mechanism, where independent validators check every allocation, is one of them. Many others stay hidden, protecting against infra compromise and reward misdistribution. The good news: we're working on a way to 10x our speed while making the underlying system even more secure.

At its core, @merkl_xyz is built to be hyper customizable. Most campaigns on Merkl are simple and linear: what you earn is proportional to how long you stay. But we also support more complex mechanics like vesting, slashing on withdrawal, holding periods, and in fact any type of custom stream. So if you have a complex use case you want to run, we'll build it. But there's a reason most campaigns stay simple. A few insights for anyone considering non-linear campaigns, slashing and the like: - The more complex the campaign, the more edge cases. Say you implement a slash on withdrawal: what happens when someone moves funds between their own wallets? When an integrator builds on top of your vault and holds positions for thousands of users? Every one of these needs a rule, and every rule is an attack surface. With money at stake, someone will find it. - Complex non-linear systems often end up keeping the people you wanted to filter out. Sophisticated farmers are also the most mercenary. They have the time to model their payoff, hedge their exposure, and exploit every edge case to the max. With simpler setups, everyone knows what they're getting, and you're not opening loopholes only the most dedicated extractors will use. - Locks sound like a good idea, but they don't remove the exit, they schedule it. TVL looks sticky until unlock day, then leaves all at once. - LPs aren't naive. They price in illiquidity and slashing risk, so you need a higher APR to attract the same dollar. Meanwhile, the APR you display becomes a conditional promise nobody can really compare. - If you need a penalty to keep capital, the incentive is probably masking a product problem. Retention should come from your product and the network effects your incentives help build: integrations, liquidity that attracts more liquidity, users who stay because it's the best place to be. Not from a penalty.

Incentives for confidential token holders is just the tip of the iceberg. With @merkl_xyz, we've been cooking a ton of features to enable the privacy that people want when it comes to distributing yield, NIM or rewards as onchain finance becomes more institutional