Introduction
Stake pool operators (SPOs) are the pillars on which Cardano blockchain operates. Without them, the network would collapse because no one is validating transactions and adding blocks to the chain. However, most SPOs struggle to attract the essential 2 million ADA in active stake that is needed for long-term sustainability. Without this minimum threshold, many are forced to retire, impacting Cardano’s resilience and degrading its decentralization. AdaLink is an affiliate network platform designed to facilitate partnerships, connecting SPOs with influencers, NFT leaders, marketers and whales to boost pool delegation and share rewards.
Impact
AdaLink aims to be a platform designed to facilitate meaningful connections and partnerships within the Cardano ecosystem. As a first-of-its-kind affiliate network, AdaLink will leverage smart contracts to create a trustless environment. This will ensure that all transactions and partnerships are transparent, secure and fair. The primary objective is to function as a partnership management platform, boosting the visibility of SPOs by facilitating their collaboration with partners. Whom will assist SPOs in attracting new delegations in ways that best align with their unique capabilities and audience reach.
Affiliate marketing is a practice in advertising where third-party publishers are rewarded for directing customers to a company’s products or services. It has gained popularity due to its effectiveness, affordability, and low-risk nature, making it a favored method for enhancing a company’s visibility and revenue. This multibillion-dollar global industry has demonstrated its impact and wide acceptance, transcending borders and industries. Notably, over 80% of top brands have implemented affiliate marketing programs, and an impressive 94% of publishers participate in two or more affiliate programs. In the context of Web 3, NFT projects can be considered as publishers, and the goal is to have 94% of Cardano’s publishers join AdaLink, a platform designed to support SPOs. AdaLink aims to incentivize influencers, NFT project leaders, marketers, and large capital delegators to promote SPOs and attract new delegations to their pools.
AdaLink will operate as a dynamic affiliate network platform, offering various functionalities to its users. The process begins with user registration and profile management, where stakeholders such as SPOs, NFT Project Leads, Marketers, and Large Capital Delegators can create accounts and provide relevant information. Affiliates can then interact with SPOs by searching for them, reviewing potential commission rewards, sending collaboration offers, and requesting bonus rewards. AdaLink will track NFT policy IDs and wallets, enabling precise estimates of potential commission rewards and additional delegation for SPOs. At the end of each epoch, the platform will calculate the incoming delegation resulting from affiliates’ promotional efforts and distribute commission rewards accordingly. Users will have personalized dashboards to manage interactions, track performance, and access key information about partnerships and rewards. AdaLink plans to offer referral links for affiliates with NFT collections and whales to attract delegation to partner SPOs. In the future, the platform aims to expand its services to marketers and influencers, providing referral links to guide audiences in creating Cardano wallets, minting NFTs, and delegating to chosen SPOs. AdaLink’s goal is to evolve into a comprehensive tool for promoting SPOs and increasing stake pool delegation.
The proposed model for affiliate partnership reward distribution is based on a proportional split of the stake pool’s margin, determined by the percentage of delegation an affiliate brings to the stake pool. The fixed cost is not included in the split and the duration of the partnership, in terms of epochs, is determined by the SPO. For instance, if an affiliate partnership is active and an affiliate contributes to 25% of the total delegation of a pool, the affiliate would receive 25% of the pool’s margin rewards as commission rewards, excluding any fixed fees.
AdaLink is poised to bring substantial value to the Cardano ecosystem through various means. Firstly, it aims to foster community growth by facilitating collaborations between Stake Pool Operators (SPOs) and content creators, influencers, marketers, and publishers, thereby attracting new users to the Cardano community. Secondly, AdaLink’s implementation of affiliate marketing is set to strengthen the ecosystem by boosting pool delegation, contributing to Cardano’s decentralization, which is essential for network security and resilience. Moreover, the platform tackles the problem of visibility and reach for smaller SPOs by connecting them with influencers and marketers, promoting a more equitable distribution of delegation and leveling the playing field. Lastly, AdaLink’s pioneering role as one of the first affiliate marketing platforms on Cardano opens doors to future innovations in this field, promising further advancements and possibilities within the ecosystem.
The success of AdaLink will be assessed through a comprehensive set of quantitative and qualitative Key Performance Indicators (KPIs). Quantitative KPIs include the completion and launch of the platform according to the roadmap, the number of registered users encompassing stakeholders like SPOs, NFT project leaders, marketers, and large delegators, the quantity of active partnerships between affiliates and SPOs, the total commission rewards earned by affiliates, the amount of incoming delegation received by SPOs through partnerships, the number of successful transactions executed on the platform, and the revenue generated by implementing a 2 ADA transaction fee on commission reward claims.
On the qualitative side, engagement metrics like website traffic, user engagement, and social media interactions will gauge platform engagement, while customer satisfaction will be measured through surveys, interviews, and feedback analysis. AdaLink’s impact on Cardano’s ecosystem is expected to enhance decentralization and resilience by promoting a fairer distribution of delegation, thus strengthening the network’s security. Additionally, the platform’s ability to attract new users will contribute to the growth and vitality of the Cardano community.
Feasibility
The AdaLink team is composed of skilled professionals with diverse backgrounds and expertise, each contributing to different aspects of the project.
Natalia Rosa, project lead, brings her extensive experience in film and multimedia production, ensuring effective project management.
Mahmoud Nimer, lead developer, is a Plutus Pioneer with a background in mechanical engineering, specializing in industrial automation and NFT projects.
Gisela Rosa, project lead and community manager, is co-founder of Blockverse Media, adept at fostering an inclusive environment for the Cardano community.
Keith Hedges, SPO and technical advisor, possesses technical expertise from his software engineering background and hands-on experience operating a stake pool.
Bryan Hernández, project advisor, is a software engineer with a passion for emerging technologies, ready to offer expert advice and contribute to the project’s success.
Together, the team aims to create a platform that comprehends and caters to the needs of the Cardano community.
Since Fund 10, proposers of Project Catalyst need to provide a detailed explanation of the project’s milestones and the main tasks or activities to complete them. The proposal has an intended development lifecycle of twelve months. During the development period four key stages have been identified: Pre-Production and Research, Development and Integration, Preparing for Testnet Launch, and Testing, Deployment, and Post-Launch Maintenance. Each stage has been designed to build upon the previous one, ensuring a seamless transition and continuous progress towards the final goal.
Milestone 1: Research & Pre-Production
During the first month, the team focuses on research and pre-production, defining the project’s scope and objectives, conducting extensive research on trustless operations and smart contract usage within the Cardano ecosystem. Second to fourth month involves pre-production development, where wireframes, mockups, and backend scripts are developed, and the user interface and user experience are iterated upon.
The acceptance criteria for this milestone involve finalizing the project scope and objectives, completing wireframes and mockups, establishing the database architecture and data collection plan, and developing a clear understanding and plan for the potential integration of smart contracts. The estimated cost for Milestone 1 is 60,000ADA, and the evidence of achievement includes documented project details, wireframes, mockups, the database architecture, and a comprehensive report on the research conducted on trustless operations and smart contracts.
Milestone 2: Development and Integration
During the fifth to eighth month, the team will emphasize integration and feature development, implementing the database architecture, backend scripts, and engines for data tracking, while adding new features and conducting rigorous testing. The primary goal is to complete the user interface for the minimum viable product (MVP), using the wireframes as a basis. Additionally, they are integrating the wallet, user, and database functionalities with the frontend, ensuring a seamless user experience.
The acceptance criteria for this milestone include achieving a fully functional MVP user interface, enabling users to connect to the site through their wallets successfully. Integration of the authentication flow between the backend and frontend is successfully completed. The team also develops and thoroughly tests various user features, and the smart contract designs are finalized. The estimated cost for Milestone 2 is 60,000ADA. The evidence of achievement includes a completed user interface allowing users to connect and authenticate in a pre-production environment, functional backend scripts and engines, tested user features, and well-documented smart contract designs.
Milestone 3: Preparing for Testnet Launch
During the ninth and tenth month, the team is dedicated to platform testing and deployment, where thorough testing is conducted, leading to the platform’s launch on the public testnet. The main goal is to ensure a smooth and reliable peer-to-peer process, allowing Stake Pool Operators (SPOs) and counter-parties to interact seamlessly through the AdaLink platform.
The acceptance criteria for this milestone involve successfully initiating potential ‘Links,’ which can be accepted by any party involved. The estimated cost for Milestone 3 is 60,000ADA. The evidence of achievement will be demonstrated through the live launch of AdaLink in a closed beta setting, where select users will be able to experience and test the platform’s functionality and peer-to-peer interactions prior to its full-scale deployment.
Milestone 4: Testing, Deployment, and Post-Launch Maintenance
Finally, in months eleven to twelve, the team focuses on post-launch monitoring and maintenance, addressing any issues and bugs that arise, and continually improving the platform based on user feedback. Through this comprehensive roadmap, the team aims to develop a robust and user-friendly platform for trustless operations within the Cardano ecosystem.
The estimated cost for Milestone 4 is 60,000ADA. The evidence of achievement will be demonstrated through comprehensive test results, including the outcomes of the smart contract functionality tests, the successful deployment of the platform, detailed monitoring reports, and records of bug reports and their resolutions. This milestone sets the stage for a robust, well-tested, and user-friendly AdaLink platform ready to make a significant impact within the Cardano ecosystem.
Value for money
Another modification for Fund 10 is that the budget is now in ADA and not in USD. This makes sense from the perspective that we are working to develop a new decentralized financial operating system but at the same time most projects need to pay for goods and services in fiat money. This brings a new challenge to the table since now teams need to ask for a coherent budget in a volatile currency.
The budget for the AdaLink project has been thoughtfully crafted to ensure the successful completion of an MVP platform that brings substantial value to the SPO community and other users. The team has taken into account industry standards for similar projects and carefully considered the specific requirements of the endeavor to arrive at their proposed budget.
The total cost of the project is 240,000 ADA, with allocations as follows: 157,500 ADA ($45,000) for Smart Contract Research and Platform Development, 77,000 ADA ($22,000) for Project Management, Legal expenses, and Basic Marketing, and 5,000 ADA (~$1,500) for the first year of server hosting. The team is confident that their budget provides excellent value for the Cardano ecosystem. The AdaLink platform will facilitate seamless interactions between Stake Pool Operators and their affiliates, fostering a more interconnected and collaborative Cardano ecosystem. By aiding SPOs in attracting delegation, we firmly believe that the platform will significantly contribute to improving Cardano’s decentralization. The long-term value of a more decentralized Cardano ecosystem is immeasurable and far outweighs the project’s cost.
Q&A with the team
Q1: The proposal is asking for 240,000 ADA, which represents 5.07% of the challenge pot, to develop a minimum viable product (MVP) that will take 12 months to complete. Given that the team, although composed of experienced individuals, has never delivered a product together, wouldn’t it be better to develop a smaller proof of concept (POC) in 6 months at a lower cost for example?
A1: While the idea of developing a smaller proof of concept (POC) over a shorter timeframe may seem appealing, we firmly believe that committing to a robust minimum viable product (MVP) will lay a stronger foundation for the AdaLink platform. The recent unilateral decision by IOG to halt Project Catalyst fund rounds for a year underscores the risks associated with not having a well-planned strategy and sufficient funding to ensure the success of a project.
In the case of AdaLink, creating a POC would require almost as much effort as developing a comprehensive MVP due to the platform’s unique characteristics. Therefore, we are convinced that dedicating the necessary time and resources to develop an MVP that fully meets our users’ needs and delivers a high-quality experience is the most prudent course of action. This approach will also make us resilient to external factors that could otherwise disrupt our progress.
It’s also worth noting that our team is composed of highly experienced individuals who have successfully delivered products in the past. Our lead developer, Mahmoud, is a Plutus Pioneer who has been actively contributing to the Cardano ecosystem for over two years. His accomplishments include providing minting services for multiple NFT project launches, building a highly efficient batch minting engine, and creating a Token ATM as a proof of concept for the scalability of the UTxO model. He also developed Shrooms, a dApp offering specialized services for non-fungible token projects (NFTs), including non-custodial staking, raffles, and token ATMs.
As part of our vision for AdaLink, we plan to transform user dashboards into a hub for community dApp plugins. Shrooms, being one of our first official partners, will be among the first dApps integrated into these dashboards. We are confident that our strategic approach, the expertise of our team, and the support of the voters in the Cardano community will ensure the successful development and launch of AdaLink. We invite all the readers of this AdaPulse article to join us on this exciting journey and help shape the future of the way people connect and collaborate in the Cardano ecosystem.
Q2: The main value proposition of AdaLink is to connect “publishers” with stake pool operators (SPOs) to use their platform inside of the Cardano ecosystem to promote their brand. Have the assumptions of “publishers” willing to use this service of affiliate marketing been corroborated? Is there a plan in place to attract publishers during the initial bootstrapping phase of the platform?
A2: We’ve conducted extensive market research and engaged in meaningful discussions with various publishers within the Cardano ecosystem, including NFT project leaders, content creators, and influencers. These interactions have validated their interest in utilizing our affiliate marketing platform. It’s important to note, studies show that 94% of publishers join two or more affiliate programs to boost their income and sustain their operations. This trend, coupled with the positive feedback we’ve received, demonstrates the potential of AdaLink as a platform for promoting SPOs and earning commission rewards.
To ensure a successful launch, we’ve developed a targeted marketing and outreach strategy. This includes forming strategic partnerships, implementing targeted advertising, and launching community engagement initiatives. We’re excited to unveil these plans soon, as they will play a crucial role in onboarding publishers and establishing a solid foundation for AdaLink.
Initially, our focus will be on attracting influencers and content creators already active in the Cardano and crypto space. However, as AdaLink matures and demonstrates its usefulness, we anticipate attracting content creators from various niches who recognize the potential to augment their income by promoting SPOs and the broader Cardano ecosystem.
Q3: Given the twelve months expected life cycle of the project and the volatility of ADA against USD, is there a risk the project cannot be completed on time and on budget? In the same manner if ADA appreciates above the expected price in the next twelve months, are there extra functionalities that could be added to the platform?
A3: Recognizing the potential volatility of ADA, we’ve strategically planned our project’s milestones over a 12-month timeline to accommodate unforeseen challenges and provide flexibility. In the event of ADA appreciation, we’ve set aside a small budget for administrative expenses, operations, and contingencies, which could allow us to explore additional platform functionalities.
However, it’s important to note that the majority of the budget is allocated to compensate our dedicated team, who have willingly accepted the risks associated with being paid in ADA. Their individual financial decisions, naturally, remain their own.
This seed funding we’ve requested is crucial to set our plans in motion and kickstart the development of AdaLink. Our primary commitment is to the success of AdaLink and the broader Cardano community. We’re proud to have been selected for a business accelerator program and are actively exploring alternative funding options to scale beyond the scope of Project Catalyst funding. Our roadmap is designed for continuous development and improvement, underscoring our confidence in delivering a valuable platform, irrespective of market fluctuations.
Q4: There’s currently a discussion going on regarding changing parameters in the Cardano blockchain that would impact SPOs business model. From decreasing the minimum pool cost to increasing the k parameter that influences the saturation point. Since AdaLink would work with the margin fee only, do you foresee this could limit the amount of stake pools willing to participate in the platform?
A4: We’re aware of the ongoing discussions about potential changes to Cardano’s parameters that could impact SPOs. While these changes may require some adjustments, we believe that AdaLink’s value proposition remains strong. Our platform offers SPOs an additional avenue for visibility and delegation through affiliate marketing. Although our initial model focuses on the margin fee for sharing rewards, we’ve proposed additional ways for SPOs to attract affiliates. These include the ‘send a tip’ function and the ability for affiliates to solicit bonus rewards.
We will continue to closely monitor the evolving landscape and adapt our platform to ensure its continued relevance and effectiveness for SPOs. We value the feedback from our community and are always open to suggestions. Our future goal is to make this system fully customizable, allowing all parties to negotiate terms that best suit their needs. This commitment to flexibility underscores our dedication to creating a platform that caters to the diverse needs of our users, regardless of changes in Cardano.
Q5: How will the AdaLink platform be able to differentiate between wallets that delegate to the stake pool due to the affiliate marketing with the publisher from random wallets that decide to delegate that have no knowledge of this arrangement?
A5: Differentiating between wallets that delegate to a stake pool through affiliate marketing and those that delegate randomly is an essential aspect of the AdaLink platform. To address this, we plan to implement tracking and attribution mechanisms that utilize NFT policy IDs.
From the moment an affiliate partnership is formed, our platform will track the movement of delegation holding the affiliate’s associated NFT. Any wallet holding the NFT with the associated policy ID that moves their delegation to the SPO partner during the contract period will be considered as a result of the affiliate’s efforts.
Additionally, our platform will provide affiliates with unique referral links to their SPO partners’ pool. We will display the number of conversions coming from these links, along with other performance indicators, on the SPO dashboards.
This system will allow us to accurately attribute delegations to specific affiliates and ensure fair distribution of rewards.
Link to Ideascale proposal: https://cardano.ideascale.com/c/idea/105570
