[Proposal] Omen vs Gas: Experiment #1 - Authereum solution

sky · August 28, 2020, 5:15pm

Omen vs Gas: Experiment #1 - Authereum solution

One of the issues we are tackling now is high gas is hurting usage.

So if we had a good, easy way to pay for users gas, the DAO would likely be happy to for a period of time

We don’t know how much of a hurdle it is, but it is a hurdle.

Today, we can start an experiment where DXdao pays for users gas on Omen if they use an Authereum wallet (and connect to Omen with Wallet Connect).

Users who use Authereum to connect via wallet connect would have their fees covered. Other walletconnect users (Argent, Safe, etc) would not have their fees covered.

Zero dev implementation. We just need to fund a pot of gas reserve then they turn it on.

Let’s set an intial budget for how many users we want. At Omen’s early peak, it was 200 users. That should be our first goal.

Couple estimates/ideas:
davidoj: Gas prices currently around 0.3 Eth/day with ~50 weekly users, might be 1.5 Eth/day with 200 weekly users: https://explore.duneanalytics.com/queries/8612/source#17284
2 Eth/week, might be 10 Eth/week with 200 users
Each user might also trade more if you’re compensating gas costs

geronimo: - lets send 10 ETH to authereum and announce that anyone who is using an authereum smart wallet will have their transactions paid by the DXdao (first limited by 10 ETH, if we see more demand and everything is legit we are gonna increase it)

Marketing benefit
This will give us an opportunity for marketing. We can spread the word: Gasless usage of Omen.

Protections:
At the same time, we don’t want some bot to just waste it by draining the pot for zero reason, so we would want to have some additional protections in place.

Authereum team says they can implement additional rate limiting protection based on ETH spent on fees per user or offer the ability for DXdao to countersign transactions to mark as sponsorable.

They themselves offered sponsored transactions on Authereum for ~6 months and dealt with spammers. They spent a lot of time adding protections and firewalls to transactions that tried to spam them (mint gas tokens, airdrop tokens, etc.) and pretty successfully stopped them. The DAOs txs would also be checked by those same filters that they now use on Authereum, as well as the rate limits and other items mentioned.

The user scans the QR code using the scanner on the wallet connect page on Authereum wallet to establish the connection.

This tweet has a demo video https://twitter.com/authereum/status/1212090099044761605?s=20

With Wallet Connect, the user needs to be on the wallet or taken to the wallet first. Ideally the dapp is integrated directly with the Authereum SDK so the user can click on the Authereum login option to signup/login and use the dapp without going through the Wallet Connect flow.

Add the “Connect With Authereum” as a third option

We may also use existing libraries like onboard.js or web3modal that offer Authereum as a login option.
But since we already have a custom modal with login options then adding Authereum as a 3rd option seems like the way to go. Integrating the Authereum web3 provider is relatively simple https://docs.authereum.com/web3-provider

Experiment, Learn, Iterate…

Proposal Summary:
Send 10 ETH from DXdao to Authereum’s gas tank for DXdao Omen.
Authereum’s receiving address for this is: 0xa8866c94Ab7a09a50bfC18370D86F66F4079DE18
Have Authereum team turn it on.

sky · October 13, 2020, 5:21pm

Due to unexpected technical events, we never got to start this experiment.

We have spent the past month trialing, testing, refining and improving the Authereum - Omen integration, which allows DXdao to sponsor users’ Omen transactions.

We now have Wallet Connect with Authereum for Omen and we also have “Log in With Authereum” built right in. It’s a great user experience.

We have had some pickup in users during this experiment without widely sharing it (only sharing internally).

Reference: https://explore.duneanalytics.com/dashboard/omen-stats

We have sponsored 3.8 ETH in fees so far (out of the 10 ETH). A large part of it was spent by internal people testing and trying to fix Omen and Authereum. You can think of it as 1.5-2.5 ETH fixing Omen.

It is all working well now.

We are preparing to go wide with the announcement this week, and we want to be prepared for a decent pick up in activity. We want to top up the gas tank with another 10 ETH to be ready for this.

Proposal Summary:
Send 10 ETH from DXdao to Authereum’s gas tank for DXdao Omen.
Authereum’s receiving address for this is: 0xa8866c94Ab7a09a50bfC18370D86F66F4079DE18

sky · October 13, 2020, 8:47pm

I incorrectly made some assumptions that more people have been following what has been going on with Omen so apologies for that, and I’ll try to clarify.

To provide some additional detailed context:

After a successful launch of Omen, super high gas prices on Ethereum mainnet literally killed Omen - users and new markets started heading down drastically.

Some thought that incentivizing LPs was the answer, and we got to see that in action with the Kleros PNK program but it didn’t seem to be doing much.

In order to combat this, the goal was to see how Omen usage is affected if DXdao could come up with a way to eliminate gas costs. The cool thing is that this idea isn’t gameable in any way. It’s just removing a user pain point.

For background, see prior post: [Proposal] Omen vs Gas: Experiment #1 - Authereum solution - [Proposal] Omen vs Gas: Experiment #1 - Authereum solution

There are tons of benefits to attacking this issue via a partnership with Authereum. We set off on tackling this. The tricky part was that even though this is a simple, easy to use user experience, this is a complex process behind the scenes (with proxy smart contract wallets interacting with each other).

We had issues with the CPK returning the wrong gas limit and issues connecting to Authereum, then fixing the CPK issues led to some other front-end problems, then there were issues with transactions because Authereum’s relayer had a default gas limit of 1 million which certain transactions exceeded. With help from the Authereum team, Gnosis team and everyone else, we were able to solve all of these issues.

We shared the entire process with “internal” groups like DXdao community, Omen community, and a couple others. Community members helped test, identify and sort through all these issues. It has taken 1+ month and 1-3 ETH spent testing and doing all of this. Some ETH was also used to allow community users to use Omen.

Also, by sharing this feature lightly, we have had a pick up in Omen activity even though gas prices remained high. We’ve gone from 9 users to 20-30 per week (even though we haven’t truly shared the feature yet!)

Now, we are in a position to do the original experiment: Omen vs Gas: Experiment #1 - Authereum solution, but now it’s #1.1!

After all of this work to get to where we are, to have made Omen better, to have created a great technical partnership, we now have ~6 ETH left in the gas tank. You can think of the 4 ETH spent, as it cost us $1400 to make Omen more Awesome!

We now have a plan to announce this new feature to the world (planning with DXdao marketing, Gnosis and Authereum), and if we get the many more users we want (the whole point of the experiment from the start), and we run out of the 6 ETH in say 1 week, that is set-up to look pathetic.

Also, we are competing with entities in the pace like Augur and Polymarket - we want to be well positioned relative to them, and lead with our strengths.

So now we can do a few things:

Go with what we have, and hope
Top up the gas tank with 4 ETH, so we can do the original experiment. (and spend $200+ to do this), and, if successful, then do another proposal (and spend another $200) in 1 week or so after the feature stops working and everyone complains, and then we scramble to do another proposal and that takes a week.

OR,

as proposed, top up the gas tank with 10 ETH so that we are set-up for success *****

#3 sounds best to me!

If you have any thoughts about this plan, please share here!

JohnKelleher · October 13, 2020, 10:04pm

It is clear that subsidizing gas costs is not sustainable unless it makes up for itself in profitability somehow. While it is not very clear from the posts above, I think there are two potential goals here:

Understand the impact gas prices are having on usage of Omen
Onboard new users

As pertains to these goals, I have some questions.

How big is the Authereum user base?
How much gas does it cost to install an authereum wallet?
What are the potential actions we would take after this experiment? What happens if demand is high and the money runs out quickly? What if it doesn’t get used?

sky · October 14, 2020, 5:57am

We can just use what we have left and see how it goes.

Here are some of the stats we want to look at post experiment:

How many users created a new Authereum wallet and then used Omen?
How many users had an Authereum wallet and used Omen?
How many new Omen users?
How many new Omen market creators?
How many new Omen LPs?
How many returning Omen users?
How many returning Omen market creators?
How many returning Omen LPs?
Change in average size of bets?
Change in average number of bets?
Does gas price affect users even with sponsored txns?
Measure of marketing reach from announcement?
Value of marketing reach?
Measure of users coming and doing non-sponsored txns?
Compare stats to other prediction platforms before and during.
Gather qualitative feedback from people who still don’t want to use Omen even with free gas.
Gather qualitative feedback from people who decided to use Omen.

What else do people think it would be good to learn?

sky · December 1, 2020, 11:46pm

Recap and Analysis: Omen vs Gas - Experiment #1 - Authereum solution

Conception
At the end of August there was a proposal to experiment with DXdao sponsoring gas fees for users of Omen. At the time, gas prices had elevated significantly and the early usage of Omen had drifted off.

We explored a few ways to try sponsoring gas, but the easiest and quickest method to achieve that was to experiment with a partnership with Authereum wallet which is able to cover gas fees using a network of gas relayers. You can find original forum post here: [Proposal] Omen vs Gas: Experiment #1 - Authereum solution

Launching the Experiment
After putting all the technical pieces in place and passing an Alchemy proposal to fund the experiment the experiment was set to be shared internally.

On September 7, 2020 we shared this feature with internal communities at first. This included DXdao community, Omen telegram community and some other smaller prediction market groups. We needed to test the feature to see if it worked.

Testing & Fixing the Experiment
Over the next month, a handful of community members actively used and tested the feature, encountering numerous major and minor issues along the way. Unfortunately, two smart contract wallets interacting with each other is quite complex, and some hard technical issues were solved.

Some issues were significant things happening with the Omen proxy kit. Other issues had to do with Autherem adjusting and fine tuning the methods being used.

During this “testing period” an estimated 1.5-2.5 ETH was spent on transactions and market creation by DXdao’s Omen-focused wider community. One way to think of this cost is that it was a cost to make Omen technically much stronger and more effective.

We were then ready to go.

Going Public
On Oct 14, 2020 DXdao, Omen, Authereum and Gnosis announced the Omen Authereum Sponsored gas program to the wider public.

A couple weeks later, we also publicly extended the program to keep awareness going:

Summary Analysis
In total, 17 unique Authereum wallet users executed 317 successful transactions on Omen.

Once announcing the program publicly, the number of weekly Omen users jumped from 24 to 31 to 65 to 130 over a three week period.

Obviously, the latest acceleration is likely affected by the election markets, but that sees to be mainly in election week.

There was also likely increased awareness around Omen due to the announcements.

Because it also specifically pertains to Gas, it prompted some people to then ask “When Omen on xDai?” which shows demand for Omen.

Graphical Analysis
The below graph shows a summary of the situation.

Omen good launch
Gas prices start to rise significantly and Omen usage declines
Sponsored-gas program gets moving
Program launches in internal community
Testing and fixing happens
Gas prices also declining
Program announced widely
Omen usage picks up
Gas prices remain reasonable
Election markets gain attention
Omen usage increases back towards launch highs and then through

With so many variables, it is hard to say exactly how much influence the Program has had but I would say it is a net positive.

Looking at Omen market creation, you can see some pick-ups following the announcements.

Questions and Statistics around the Experiment
These are some targeted questions and statistics we outlined to try to learn during the experiment. You can see the list here.

Currently, we have the answers to a portion of the questions. We will need help from a contributor with on-chain or Dune data analysis skills to dig deeper into the data.

How many users created a new Authereum wallet and then used Omen?

17 unique users of Omen with an Authereum wallet

How many users had an Authereum wallet and used Omen?

6 new Authereum wallet users of Omen (implies 11 already had Authereum Wallets)

Gather qualitative feedback from people who still don’t want to use Omen, even with free gas.

A handful of people have asked “Will Omen be on xDai? And When?”
Others were not interested in creating an Authereum wallet

How many new Omen users?
How many new Omen market creators?
How many new Omen LPs?
How many returning Omen users?
How many returning Omen market creators?
How many returning Omen LPs?
Change in average size of bets?
Change in average number of bets?
Does gas price affect users even with sponsored txns?
Measure of marketing reach from announcement?
Measure of users coming and doing non-sponsored txns?

Gas Tank Numbers
10 ETH to start in the sponsored gas tank
7.87 ETH has been used to sponsor gas fees.
2.13 ETH left in the gas tank.

Conclusions
Sponsored gas transactions is a positive feature to have as an option for users that have that barrier. Anyone who wants to use Omen gas-free has that option.

Currently, Omen is only on Mainnet. With competition offering zero gas opportunities to users, it is especially important to have this option while Omen on xDai is still being worked on. Even after that, it may make sense to maintain this option with Omen still in an early growth phase.

We currently have a bit of gas left in the gas tank, but we may want to think about keeping this feature around in the short term.