Glossary: Return on Investment (ROI)

Return on investment (ROI) measures the profit or value generated by a campaign, program, or investment relative to what it cost. In marketing and growth, it’s used to judge whether spend on ads, incentive campaigns, or points programs is paying off.

Examples

• A team calculates ROI on a liquidity mining campaign by comparing rewards paid out to the protocol revenue generated.

• A paid social campaign is paused after its ROI falls below a target threshold.

• An incentive campaign shows strong short-term ROI but weak long-term retention.

ROI in crypto growth

Crypto campaigns often pay in tokens. A points program, a liquidity incentive or a quest reward has a cost that changes with the token price, and the return can be fees, volume, deposits or retained users. Mercenary users can make short-term ROI look strong and then leave when rewards stop, so measure the return again after 30 and 90 days.

Example

A protocol spends $20,000 in tokens on a liquidity campaign. In the first 30 days, wallets from the campaign generate $26,000 in fees, an ROI of 30%. By day 90 most of those wallets have left and their fees stop at $27,000, so the next campaign rewards wallets that stay rather than raw deposits.

How Formo supports ROI analysis

Formo provides the return side of ROI. Revenue and volume come from the revenue and volume properties of your custom events, summed as sent with no currency conversion, so send them in USD. You can break revenue and volume down by channel, campaign or ad network, and each wallet keeps its first-touch and last-touch attribution. Cost data stays in your ad platform or finance records, so you combine the two to calculate ROI.

Related reading

Explore Customer Acquisition Cost (CAC), Revenue Attribution, Cost per Click (CPC), and LTV:CAC Ratio.

FAQs

How is ROI calculated?

ROI is typically calculated as (return minus cost) divided by cost, expressed as a percentage.

What counts as “return” for a DeFi campaign?

This can include protocol revenue, TVL growth, or the lifetime value of acquired users, depending on the goal.

Why can ROI be difficult to measure for crypto campaigns?

Campaign exposure and onchain outcomes may be recorded separately, while token prices, incentive costs, market conditions, and attribution windows change. Define return, costs, identity link, and time period; attribution does not prove causation.

Can Formo calculate ROI?

Formo provides the return: revenue and volume from your custom events, broken down by channel, campaign or ad network. Formo does not hold your costs, so you compare the return with the cost from your ad platform or incentive budget.