Pearl Launch Strategy

Pearl Exchange
4 min readMay 31, 2023

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Pearl is scheduled to launch one week from today. This is the first you’re hearing from us.

Pearl will launch as the premiere liquidity layer on Polygon, the market leader for Solidly forks on crypto’s fifth largest chain.

How can these two statements both be true? Let us share our thinking and an intro to Pearl.

THE DEX ARMS RACE

We are firmly in Solidly Summer with a new ve(3,3) DEX launching weekly. The competition is fierce, even on chains with little more than $100MM total TVL.

To stand out from the competition and establish the best foundation for success, these DEX engaged in lengthy hype windows, announcing countless partners, hosting AMAs several times a week, running Discord contests, aggressively community building and hoping to dominate share of voice on crypto Twitter. The long lead time is seen as critical to building community which is key to activating LPs at the start of the DEX.

This work is often accompanied by an aggressive airdrop strategy, running countless contests to share valuable protocol equity with the most engaged users, who the protocol hope will convert to early LPs, using their voting equity to earn incremental yield.

Funding all this work are pre-launch sales of locked tokens, protocol NFTs and various other financial instruments.

This is the grind.

THE PROBLEM

In our view, it’s too much work to maintain this endless hype train and we’re skeptical that DEX success at launch is causal.

The intense marketing activities are a drain on team resources, distracting from the core efforts of building a safe, reliable, well-designed protocol. This is especially true for small teams, some of who are also core contributors to other DAOs in the space.

Airdrop contests build hype, but they also attract airdrop farmers who, in our opinion, are generally unreliable customers and bad community members. Their only motivation is to earn free money to sell, and when these programs hit a snag, it can be a customer service nightmare.

Pre-launch NFTs add additional dev and marketing layers to the launch and end up being additional products the protocol feels compelled to support long term. They’re not always understood by protocol users, adding confusion to the user experience.

Lastly, community-building is great, but liquidity is mercenary. Will a strong community prevent capital flight if bribe yield and pool APRs were to fall 30% below that of competitor on the same chain or an easy bridge away? Solidly mechanics are designed to help prevent this type of behavior, but we’ve seen it play out enough to know that money talks and money walks.

THE PEARL STRATEGY

To launch Pearl we’re going to attempt something completely different, innovating on the current ve(3,3) playbook, condensing our launch window into as little time as possible. We view this consolidated window as a win-win with little downside, provided we execute as planned.

Key Benefits:

A concentrated hype window

  • Focused activity for a bigger impact and more timely awareness at launch

Fewer marketing man-hours

  • Allows our team to focus on the build, biz dev and other protocol responsibilities

Relies on financial incentives

  • We believe bribes and pool yield to be the primary drivers of action

We don’t disagree that airdrops are a critical tool to attracting liquidity and they’ll be used conservatively, rewarding reliable ve(3,3) token lockers and liquidity providers with a generous 18% of protocol equity. Our goal is to put meaningful sums of money in the right hands, active participants in key Solidly ecosystems and major liquidity providers on Polygon. Token holders in key partner protocols will also receive locked Pearl. Airdrop details will be announced before launch.

LAUNCH STATUS

If you’re reading this, our docs, audits, Medium, Twitter, Discord and landing page are going live. Your favorite threadooors have just started to spread the word about Pearl.

Shortly, airdrop criteria will be shared and we’ll start to engage those communities, alerting them to the airdrops they’ll receive the following week. And over the following days we’ll share a detailed look at the philosophy behind Pearl and the research that shaped our approach.

Epoch 0 will start on June 8th, at which time we’ll start to announce early bribe values. We’ll also share key protocol partners with our followers in the lead-up to Epoch 1.

Epoch 1 starts June 15th and our thesis will be put to the test. As emissions start and liquidity flows, we’ll have the opportunity to see if our strategy has been a success.

THE PEARL THESIS

There will be much more content on this over the coming days, but the Pearl thesis is essentially the ve(3,3) flywheel that runs in reverse. Pearl is an ecosystem built on the belief that bribes are the only part of the Solidly flywheel that truly matter and everything else is a distant second.

Stay tuned for much more content in the coming days. We hope to see you at Epoch 1.

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Pearl Exchange

The premier liquidity layer on Polygon and first DEX to focus on tokenized real world assets.