[RFC] Marketing to US residents, risk disclosures

There has been unanimous agreement for PICKLE to spend more on developers, strategists but also marketing.

Marketing DeFi to US residents is threading on thin ice. I propose that we make effort that our marketing does not target US residents or is targeted in a way that it should not reach US residents. I think it’s a relatively easy thing to do, that can save us from trouble down the line.

Another topic is “investor protection” laws and disclosures. Top regulators argue whether we are in the wild west or wild, wild west. Why not show good faith and make risk disclaimers visible on the farms and jars page?
I think a subtle but visible link/button in the user interface would not harm. It could say: “What are the risks?” which leads to a popup/page specifying:

  • Just like majority of decentralized finance, interacting with Pickle protocol is risky and not suitable for most people. You should not interact with the protocol unless you fully understand the risks. Please refer to protocol documentation and ask questions in our Discord.
  • Value of cryptocurrencies can rapidly decrease
  • Yields can change rapidly to the upside but also to the downside.
  • There is risk of complete loss of funds due to: hacks, exploits and bugs in code
  • Withdrawing funds can be expensive when the blockchain is congested
  • Despite our best efforts, on rare occasions, information on the Pickle website may be incorrect for reasons including API errors, connection errors, subgraph errors. We encourage you to check the on-chain data or contact us on Pickle Discord to clarify.
    Did I miss something? I’m sure my wording can be improved :slight_smile:

Why am I mentioning all that? Obviously I want everyone to understand the risks. Also, Uniswap is now testifying for US regulators about how it does the marketing. SEC keeps repeating “investor protection” like a parrot. There are all sorts of nasty dynamics if someone loses 100% when one of the farms collapses. Whether we want it or not, coins in our farms will collapse.

What are your thoughts?

6 Likes

I agree wholeheartedly with making sure we both cover our own asses and also alert people to the real risks involved in DeFi protocols, such as smart contract risk and also the risk of holding volatile assets. Thank you Jimmy for bringing this up as a topic, will be interesting to see what comes from our discussions about it!

3 Likes

Could just add a simple notification before you go to the app page, “pickle does not take any responsibility for potential losses etc.” and the user has to agree before he enters the app page.

I think it’s ok to be more open about the risks. Does a user know that liquidating a collapsing farm during an NFT drop might cost $5000 in ETH gas fees? No need to force any more clicks or popups, I’m just proposing that this information is readily available on the farms and jars page.

This scenario actually came up in the recent congressional hearing with SEC. Someone paid $20 in gas to buy $100 worth of tokens and it was something around $200 in gas fees to cash out. Then Garry “the daddy” said that the cost to cash out should be in the user agreement :stuck_out_tongue_closed_eyes:. Garry is a BTC maxi, understands BTC and ETH and knows what tx fees are… Anyway, if the SEC chair says that such stuff should bee in the user agreement, it’s prudent to mention that as a risk and make it readily available, to show good faith.

1 Like

I agree with you Jimmy, both about not targeting US resident for marketing campaign, or at least doing it in an indirect way (got the same problem when targeting French client, we are actually building some specific preventive strategy For my new baby, would be happy to share).

Also I agree concerning disclaimer in farm, as we discussed it with @Entbeard during our call a few weeks ago We should be as transparent as possible, doing the max won’t be more scary for investor and would protect us when the hammer of regulators will fall (and he will it’s only a matter of time).
We should probably say « past performance is no guarantee of future performance » and « be wary as transaction cost may be volatile and impact your performances, take them into consideration when considering investing » don’t you think?

2 Likes

@JimmyJ I like this. Very forward thinking of you. This can only protect Pickle in the uncertain regulatory environment of the United States. Perhaps a quick warning/disclosure pop-up for the first time a wallet interacts with Pickle app? The new user then “signs” via their wallet app that they have read and understand the risks, and we are not liable for potential incurred losses.

1 Like

Thanks for all the comments.

I think it should easy to not target the US residents. Something to think about when planning the marketing.

As per transparency, I’m advocating to make a “person to person” disclosure, as you would give to a buddy. I don’t think a “lawyer to lawyer” detail is needed. Also, I think it should be subtle, not intrusive and should not clunk the UI.

@JimmyJ really like your approach here, but I would even take it a little bit futher then „just“ a disclaimer and start educating users along the way…showing even more good will. I believe @Cerunos is also really fond of this idea.

When it comes to not targeting US citizens, I’m usually all for it, but I feel like first we have to check how big our actual user base there is…talking about not biting the hand that is feeding you.

2 Likes

While I get what you’re saying @JimmyJ for not targeting U.S residents in theory, I’d have to agree with @dallenator here in terms of wait and see when it comes to marketing.

Two reasons:

  1. The survey we did last month showed our Discord base and Twitter followers were over 1/3 U.S Residents. Discord analytics shows something similar
  2. As Pickle Finance is not incorporated a lot of the marketing we’ll have to do won’t be able to go through traditional digital channels (where it is easy to target and suppress certain audiences). We’ve tried doing display ads over the past few weeks but many vendors won’t work with us as we’re not incorporated. This means we’ll have to utilise a lot of influencer and organic/ earned marketing. This means casting a wide net and can make it hard to suppress certain target audiences from not seeing our ads/ marketing activity. I think if you’re most worried about legal action coming our way then our messaging is key. We don’t want to rock the boat too much perhaps? Welcome your thoughts.

I know it’s hard to do marketing in a way that does not reach eyes of US residents. And not very effective as well.

I think as long as there are no obvious campaigns targeting US it will be ok. Targeting the whole world should be ok. Some twitter promos, organic stuff, influencers are a good idea.

I’m most worried about inadvertently making a decision that will put us in the front row when the s*** hits the fan. Staying the the middle of the group of DeFi protocols, having good disclosures aimed to protect Pickle users, and being transparent, should position us well for the coming storm.

What do you think about putting in the terms and conditions that Pickle is suitable only for accredited investors? (keeping it broad, definitions are different across the world, but it sends the right message)

And in the small disclosure on farms and jars settings saying that “we think that, as most DeFi protocols, Pickle is not suitable for general public, and more suitable for accredited investors”

Accredited investors are generally the ones that understand risks, have capital, and regulators are not worried about them riding their investments literally to 0.

edit:
Another thing to add: “high yields from the token are often achieved through inflation which could contribute to the value of the tokens going down over time.”

Many coins on Pickle are highly inflationary.

Accidentally stumbled across the wording:

As a frame of reference, in the most recent testimony by SEC Chairman Gary Gensler, Senator Warren questioned Chairman Gensler about transaction fees specifically on decentralized exchanges. His answer – which satisfied her – was that it was determined by user agreements . Not gas. Not dynamic pricing (I try to use Uber’s “surge pricing” as an analogy many understand). User agreements.

source: Senator Warren Meeting; Chance To Address Issues - Community Development - The Maker Forum

Since these two are pretty important, it makes sense to satisfy both of them by making sure Pickle has some sort of a user agreement where user agrees to pay gas fees to withdraw. Does not make sense to a defi person but seems important for a regulator.

I agree with the sentiment. There are creative ways to do marketing without getting Pickle into trouble.

Marketing could be focused on phrases like “Look, what a pickle”, “Check out Pickle protocol”, “Pickle compounds DeFi gains since 2020” instead of saying “Buy Pickle” or “Deposit into farms”.

What do you think about a gamified NFT drop which will eventually lead to a donation to Coin Center to fund efforts supporting DeFi? You interact with the Protocol onchain, forced to open Pickle, see the yields, but don’t have to invest (or maybe you have to invest a little on Polygon, Okex or Arbitrum), after having to go through the website you learn something that needs to be used as paramenters for the NFT mint. When you mint correctly, you get the NFT that has the right parameters and you have earned a donation to Coin Center. You keep this NFT which proves that you have contributed to saving DeFi. Coin Center gets money. Pickle gets the right kind of publicity. Users are forced to learn a bit about Pickle. Nobody tells anyone to buy Pickle or invest.

You can replace Coin Center with any other organization that DeFi cares about, but they come to my mind first.

1 Like

not really a disclosure, but if there is a list, this could be added at the end:
“by using pickle.finance you confirm that you are not subject to US sanctions”:

  • Just like majority of decentralized finance, interacting with Pickle protocol is risky and not suitable for most people, but suitable for accredited investors. You should not interact with the protocol unless you fully understand the risks. Please refer to protocol documentation and ask questions in our Discord.
  • Value of cryptocurrencies can rapidly decrease
  • Yields can change rapidly
  • There is risk of complete loss of funds due to: hacks, exploits and bugs in code
  • Withdrawing funds can be expensive when the blockchain is congested
  • Despite our best efforts, on rare occasions, information on the Pickle website may be incorrect for reasons including: API errors, connection errors, subgraph errors. We encourage you to check the on-chain data or contact us on Pickle Discord to clarify.
  • Many DeFi tokens are inflationary in nature.
  • By using pickle.finance you confirm that you understand the risks, that you are an accredited investor and you are not subject to US sanctions.

Why accredited investors? We don’t know what is the relation between defi tokens and unregistered securities:

  • Sellers of unregistered securities are only allowed to sell to accredited investors, who are deemed financially sophisticated enough to bear the risks.
  • Accredited investors are allowed to buy and invest in unregistered securities as long as they satisfy one (or more) requirements regarding income, net worth, asset size, governance status, or professional experience.
  • Unregistered securities are considered inherently riskier because they lack the normal disclosures that come with SEC registration.
1 Like