Arbitrum DAO's Million-Dollar Gamble: Incentives Fail to Stick, Web3 Studio Warns

Arbitrum DAO has been throwing millions at incentives, hoping to reel in a flood of new users. But according to one sharp-eyed Web3 marketing studio, the gains are slipping through their fingers like sand.

Arbitrum (ARB) DAO is under fire for its user retention game. On April 4, Pink Brains, a crypto and Web3 marketing powerhouse, dropped the hammer on the network's incentive programs.

Arbitrum DAO has been splashing cash on incentive programs like STIP and LTIPP, trying to pump up users, TVL, and volume. But here's the kicker: most of these programs have one thing in common:

📉 The gains vanish faster than a crypto scammer. Metrics plummet right after the campaigns wrap up.

Pink Brains didn't hold back, pointing out a laundry list of core issues: no off-chain marketing, weak tracking of key performance metrics, and barely any analysis of potential ROI. A recent survey they cited showed that only 21% of protocols even know their customer acquisition cost.

"The gains were short-lived. Metrics dropped soon after the campaigns ended," Pink Brains slammed the incentive programs.

And get this: not a single respondent knew their users' lifetime value—a basic metric that's crucial for any marketing campaign's success.

Arbitrum DAO Needs to Track ROI: Pink Brains

To fix this mess, the agency threw down the gauntlet: projects that get funded need to set clear performance indicators. The goal? Figure out what incentives actually work and measure the ROI for the protocol. Pink Brains pointed out that these measures were part of a recent Arbitrum DAO proposal, but it didn't make the cut.

Arbitrum kicked off with a short-term incentive program, dropping 50 million ARB on active projects in January 2024. But to keep the party going, holders greenlit the long-term incentives pilot program.

Despite all this, Arbitrum's total value locked has tanked from its all-time high of $3.454 billion on December 14 to a measly $2.422 billion now. And the token itself? It's down a whopping 86.94% since hitting $2.40 on January 12.