Our Investment in Valkyrie Protocol: Growth Marketing Engine for Decentralized Applications
Disclosure: Hashed has established, maintained, and enforced strict internal policies and procedures designed to identify and effectively manage conflicts of interest related to its investment activities. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Furthermore, references to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services.
Today, we are excited to announce our investment in Valkyrie Protocol. This unique project empowers any DApps seeking to accomplish a marketing goal by creating a campaign that promotes their projects and incentivizes users who participate in the campaign.
We were initially intrigued by their idea because it not only benefits DApps, but also gives rewards to users who actively participate and contribute to their campaigns which can turn them into a strong community.
This post will:
- Explore what Valkyrie Protocol is and how it works
- Explain why we invested in Valkyrie Protocol
- Define how we can support and add value to its overall growth
What is Valkyrie Protocol?
Before jumping into the project, we want to highlight our favorite game StarCraft. In this game, Valkyrie is an airstrike unit for Terrans. It launches multiple missiles to crash on its target. Fascinating right?
Similarly, Valkyrie Protocol is a growth hacking engine for Terra. It intends to target users and bring them to DApps based on a recommendation system and an incentive mechanism similar to referral/affiliate marketing in the traditional tech industry. However, Valkyrie Protocol can allow projects to design campaigns that require participants’ specific actions verified with on-chain data, thereby providing an unprecedented go-to-market strategy for projects beyond the simple recommendation program.
Two sides play critical roles in the Valkyrie Protocol: 1) campaign creators and 2) campaign participants.
Creators must deposit rewards that will be used to incentivize campaign participants in the form of CW20 and VKR, a native token of Valkyrie Protocol, to start a campaign. Once the deposit is made, the project can formulate target actions and reward conditions for the campaign. For example, the Anchor Protocol introduces a campaign in which participants who stake a certain amount of its governance token, ANC, are eligible to receive rewards and get even more depending on the amount they stake, i.e., eventually increasing the demand for ANC.
On the other hand, participants have to accomplish those actions defined by the campaign to receive their reward. Following the previous example, they will get a token reward in ANC for their direct participation. What is really interesting comes after completing this step; participants can create a referral link and share it with other potential users through multiple channels. They get additional rewards once the referral has succeeded, meaning that other users have also done the required actions through that shared link, and rewards are paid in VKR tokens.
This reward distribution system of the Valkyrie Protocol is called the ‘Cascading Referral Chain.’ It is like a tree structure where all campaign participants are able to receive rewards by constantly sharing the referral link. As a result, those actively promoting the campaign will get continuous rewards proportionate to their contributions.
It is a simple structure, yet powerful and effective. Campaign creators can promote their projects by targeting specific users who would increase the adoption of their DApps, and participants can enjoy receiving continuous rewards while contributing to the projects. Like Valkyrie in Starcraft, the referral link of the campaign spreads to multiple channels and impacts its targets effectively.
Why We Invested in Valkyrie Protocol?
Valkyrie Protocol is unique in the way that it functions as a funnel for DApps to reach out to a broader audience and target them based on real data. Therefore, Valkyrie Protocol is an exciting project for three reasons: 1) growth has always been a missing piece in the crypto space, 2) on-chain data is a game-changer, and 3) the opportunity of scalability is massive.
Growth is an essential part of the business. Even if a project has a great idea and robust technology, it can hardly be successful without a growth strategy. In fact, there are many captivating methods and success equations to make this happen in traditional digital marketing. Social platforms like Facebook, Tiktok, Instagram, Google, etc., have a tremendous user base and data that many companies and startups could utilize to increase exposure and draw users into their applications. Growth hacking is typically possible through this social graph, basically the entire information on the user’s network, activity, and relationship on social media platforms, making it possible to make personalized recommendations for target users. Hence, a referral program has been one of the highly effective ways for growth because it could go viral using the social graph.
However, this has been the case in the blockchain/crypto industry until now. Founders of blockchain projects are incredible at conceptualizing the products and services, but many have struggled to find the answers to growth while many have failed. Standard practices in the space such as airdrop, telegram/discord management, and KOL marketing are all valuable and necessary. However, they have not been adequate because the project rarely has any information about who they target and communicate and cannot even determine whether these community members are actual protocol users. These issues make it challenging for the project to come up with an elaborate growth strategy. As a result, the project cannot predict the expected outcome, despite the resources spent. On the other hand, some claim that marketing agencies could support the project, but most do not fully understand the blockchain ecosystem and how the crypto community is formed and behaves. This is because there are almost no reliable data available regarding crypto users, even on platforms like Facebook and Google.
This is exactly what the Valkyrie Protocol tries to solve. It employs a referral program based on on-chain data that can be verified by using an individual’s wallet address. In crypto, the wallet is an essential gateway to decentralized applications. Once the referral has occurred, Valkyrie Protocol will provide various on-chain data, including proliferation, number of participants, participant tree, etc. The projects can analyze these data to manage their campaign performance and develop a more sophisticated and customized growth strategy. For instance, Anchor Protocol recognizes that 1,000 wallets participated in the campaign through Valkyrie Protocol. It could also find out that 70% of them just hold UST in their wallets by analyzing on-chain data. Therefore, the creators can decide to do another referral campaign in which the participants who deposit their UST in Anchor’s EARN will get rewards and effectively increase the greater adoption of the protocol.
We believe that Valkyrie Protocol’s unique functionality will be essential for the Terra ecosystem. Many projects are coming out soon following the Columbus-5 launch, and they will need to bootstrap their potential users. And Valkyrie Protocol will play a pivotal role in maximizing the community’s interest and strengthening the community, along with projects like Pylon and StarTerra.
Furthermore, Valkyrie Protocol can also expand to other chains like Ethereum, Solana, etc. It can be used in different projects from different chains, from DeFi to blockchain gaming, NFTs, and metaverse, providing the Valkyrie Protocol an excellent opportunity to scale its business. Therefore, Valkyrie Protocol will become the ultimate growth solution for the entire blockchain ecosystem.
What Can Hashed Support?
Hashed has been actively supporting the Terra ecosystem since its inception. Under this mission, we will dedicate the same effort to further support the project, such as community building, partnerships, legal, PR, etc.
As the market matures and becomes more competitive, we understand that winning founders searching for funding will not have to look too hard. Also, it is important to note that funding alone does not guarantee success. We are fully aware of this, so we do not want to wait for the project to grow on its own after we invest. We want to serve as a platform to help our projects grow faster and expand their reach within the ecosystem. To put this into practice, we recently established a startup studio called UNOPND. This organization will support NFT, metaverse, and blockchain gaming projects, some of which will be built on Terra. And, these projects are already talking to the Valkyrie Protocol team on possible collaboration to maximize their marketing effectiveness. With the UNOPND, Hashed acts as an ecosystem builder rather than a simple investor, contributing to the Terra community as a whole. This is why Hashed to be a community-driven fund.
Given our contribution to many projects and various chains from Terra to Ethereum, we stand with Valkyrie Protocol and believe in its ability to expand to other chains in the future by collaborating with these projects. For example, what if the Axie Infinity, which Hashed contributed as an early investor, runs a referral program on the Valkyrie Protocol?
As a community-driven fund, Hashed will keep adding values to the Valkyrie Protocol and other portfolio companies we have. And through our direct contribution, we believe that Hashed will be able to maximize chances for the success of our portfolio companies and deliver on tangible results to achieve our vision of the future一a decentralized future based on data and equity for all.
Valkyrie, prepared!
