5 ways to earn by working for protocols
There's endless opportunities to work in DeFi. Here's a few of them!
It’s Day 3 of Badge Week 2! We’re giving away a Ledger Family Pack to 1 lucky Badge Holder.
Dear Bankless Nation,
There’s no shortage of opportunity in the crypto economy.
DAOs and DeFi protocols are exploding in growth. And while many of these have core teams, they need a vast army of doers.
They need builders. They need designers. They need community managers. They need protocol politicians.
Most of these protocols now have the funds to pay key contributors (more on this tmrw). If you can give a DAO what it wants, it will pay your for it.
These opportunities are available for those who seek them.
My best: don’t ask what a DAO can do for you, ask what you can do for the DAO. Write something, build something, manage something—do something for the DAO first—eventually you’ll get paid.
Ok now let’s get practical. Where do you start?
William gives us 5 different opportunities to earn by working for a protocol.
Here’s how you can help build a decentralized future.
📺 Watch Episode 43 of State of the Nation
Part III of the Drake trilogy—we break down the full model behind ultra sound money with Justin Drake.
How to earn by working for a protocol
Ethereum’s Decentralized Finance (DeFi) ecosystem is absolutely teeming with earnings opportunities. If you’re an adventurous crypto native looking for part-time or full-time work, you’re in the right place at the right time.
But let’s be clear: working in DeFi may be different than what many are used to. Instead of working for third parties like private companies or state-backed institutions, you’re working for public protocols and thereby servicing the needs of these protocols’ respective global communities.
That said, there’s a little something for everyone when it comes to working for DeFi protocols—there are a variety of ways to pitch in. You just have to get into the flow of things and then target the opportunities or combination of opportunities that fits your style and needs best!
If you’re interested in working for a DeFi protocol but aren’t sure exactly where to begin, I’ve got 5 promising avenues you can explore and potentially start working for.
Let’s get into it.
1) Protocol Programs
Recently, we’ve seen a range of DeFi projects roll out special programs in which people can earn token rewards in exchange for meaningful participation—usually building products with the protocol. Synthetic token project UMA and index token project Index Coop are two great examples here.
For instance, UMA rolled out not one but two of these special protocol programs.
The first was UMA Developer Mining which launched last fall. It’s currently distributing 50,000 $UMA tokens (1 $UMA = ~$25 currently) every week to devs who publish synthetic asset products via UMA. That’s over $1.25M every week in rewards!
Even more recently, the team launched UMA Talent Referral Options, which are tokenized talent referrals that payout $UMA rewards depending on if referred candidates complete interviews for UMA, get hired by the protocol, and so forth.
Another interesting protocol program to consider is Index Coop’s Index Methodologist system.
These methodologists are the designers of the Index Coop ecosystem and are responsible for researching, compiling, and publishing the data that underpins Index Coop’s index token strategies. A recent example was the launch of the Metaverse Index (MVI).
In exchange for their service to the protocol, methodologists 1) earn from a bounty pool that was composed of 7.5% all INDEX tokens and 2) streaming fees, which are paid steadily over time. Bankless is currently exploring this program with the proposal of the BED Index too!
Bankless Resources on UMA & Index Coop
Another viable avenue for earning in DeFi is through grants programs.
Every DeFi project is an ecosystem unto itself, replete with its own unique needs and aims. A lot of these protocols have amassed huge treasuries. They need ways to spend all that money! As such, one way protocols have been addressing these demands lately is by using grants to spur contributions that are for the good of their communities.
The general idea is to build something useful for a protocol—at least an MVP—and then request a grant from that protocol’s community in exchange for your service to finish the product.
Of course, every project has their own approach to grants, but the general flow across the board will be to apply with an idea you think would be useful (Compound’s grant application form can be found here, for example) and then wait for a funding greenlight.
Just make sure if you do apply that your application is polished!
Bankless Resources on Aave, Compound, & Uniswap:
3) Become a Core Contributor
Interested in going deeper with your DeFi work? You’re in luck: you can actually apply to become a full-time member of these projects’ core contributors!
Again, similar to grant programs, this process works differently from protocol to protocol, but a great demonstration of the possibilities here is the hiring guidelines the SushiSwap community have been developing this year.
Even if they’re not set in stone just yet, these guidelines as they already exist provide a general model for how to be hired by a DeFi protocol. First, prospective candidates should make an application proposal outlining the scope of their desired services to their target projects’ governance forum, e.g. forum.sushi.com in SushiSwap’s case.
Then, things are in the hands of that project’s community. Feedback is made, and a governance vote will be held.
If you get approved, then you’ll be onboarded to that protocol’s core team and will start earning your salary in DeFi tokens!
Bankless Resources on SushiSwap:
4) On-Chain Actions
DeFi protocols are like on-chain machines, and machines require certain services to keep running smoothly.
Accordingly, some DeFi projects depend on particular on-chain activities from their users in order for their respective protocols to remain vital and useful. So if you’re interested in earning your keep around DeFi, one way is to get to work directly on-chain!
One project this is certainly true for is KeeperDAO, a “game-theory protocol” where users pool their money together to maximize profits from keeper strategies, e.g. liquidations, arbitrage, and beyond.
In short, the Hiding Game helps traders extract maximum value back to themselves in the form of KeeperDAO’s $ROOK token. Maximizing value is the name of the game for this protocol, so playing the Hiding Game gives you a way to earn tokens for servicing KeeperDAO’s mission.
Another example? Liquity’s stability pool. This protocol offers DeFi borrowers flexibility with 0% loans against their ETH. However, that also means the project needs a hearty backstop.
That’s where Liquity’s Stability Pool comes in. Users supply this pool with the project’s native stablecoin, LUSD, to ensure Liquity stays solvent. In exchange for this, depositors earn the LQTY fee token and distributions of ETH collateral from liquidated borrowers. These kinds of on-chain protocol gigs exist all around DeFi, and participating in them gives you ways to earn while directly helping projects thrive.
Bankless Resources on KeeperDAO:
Bounties are also a very promising way to earn money by working for a DeFi protocol.
These might be one-off bounties, like a protocol’s team looking to fund a spate of marketing NFTs on a first-come, first-serve basis. Or they might come in the form of protocols sponsoring specific bounties in wider hackathons, like we’re seeing projects do in the upcoming Open DeFi x Gitcoin hackathon event.
Of course, if you’re a security specialist you can always explore around for bug bounties, which are becoming increasingly lucrative in DeFi.
As DeFi continues to blossom, more and more people will come to work for DeFi protocols. It’s a new, flexible way to earn in a digital world.
The fact you’re reading this now means you’ve already beaten the vast majority of the world to the ecosystem’s work opportunities, which are already impressive and wide ranging.
You’re not late, you’re early. So without question, now’s the perfect time to start getting the hang of earning via open sourced protocols. And since this space is a self-sovereign, global industry, you have the benefit of being able to approach these opportunities on your own terms and remotely!
✍️ Compile a short list of protocol work opportunities you’d be interested in participating in. What’s your dream DeFi workflow look like? Then ask yourself what it would take to get there for you personally.
William M. Peaster is a professional writer and creator of Metaversal—a new Bankless newsletter focused on the emergence of NFTs in the cryptoeconomy. He’s also recently been contributing content to DeFi Pulse Farmer, Josie Bellini, and beyond!
🙏Thanks to our sponsor
Balancer is an automated portfolio manager and liquidity protocol allowing you to deposit capital and earn a passive income on your portfolio. With Asset Managers, Balancer V2 takes this idea to a new level by leveraging smart investing strategies to maximizes your APY at all times. Welcome to the future of programmable liquidity—earn, trade, and build new applications on Balancer V2. Check it out here.
Sponsorship paid for by Balancer Labs🚀
Want to get featured on Bankless? Send your article to firstname.lastname@example.org
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.