Hey just to pop in and help respond to some of the latest questions, gave a great overview above of a lot of this so I will try not to be redundant and repeat anything.
seven7hwave:
Regarding our process, I’ll leave some space for and to chime in. Suffice it to say we dig into a lot of areas, including a project’s tokenomics, team, product-market-fit, roadmap, and much more.
Generally the process right now is to consider the potential of a project (and the project’s associated token) on a number of different fronts of which Kent outlined. We then try to consider all of these factors against the DAO’s overall needs with a perspective on what the upcoming narratives/opportunities may be in the market and how to best position vFOX to have exposure to all of that. We also consider strategic partnership opportunities and how the ShapeShift DAO may be able to both assist and benefit from the project as it launches and grows. Once we feel we have a good sense of all of these factors, the vFOX committee votes on an opportunity, so far only two votes have passed the committee of more than 10+ we have done due diligence on. This is actually pretty hefty due diligence for allocations of these size, but I think is appropriate considering how careful we want to be with affecting DAO runway vs any significant potential upside vFOX may bring to the DAO.
Neverwas:
I had a question, the 1 million USDC/FOX used to fund the vFOX sub-DAO as laid out in SCP-69, was that amount transferred out of the ShapeShift treasury to a sub-DAO treasury? Or are these funds still in our treasury and just ear marked to be used if needed? If these assets were transferred to a different treasury as laid out in the proposal, what was the breakdown of amounts USDC/FOX that were actually sent? From the above I am assuming $150,000 USDC and 17,500 FOX is that correct?
The funds were never transferred out of the DAO treasury, as per SCP-69, funds are only allocated on a “as needed” basis related to deal flow and only at the approval of TMDC to transfer of those funds. So there is nothing additional that has moved out of the treasury other than the 2 allocations that have been made.
Neverwas:
Also I saw the statement that “belt-tightening” doesn’t really apply. While this isn’t a WorkStream, it is a funded DAO endeavor and as such is under the purview of this community. If the ask or objective is to protect the treasury then this would most definitely apply correct?
As a community member I would feel comfortable if the stated funds have been sent to a different treasury with asking the vFOX committee to refund up to $500,000 to the ShapeShift treasury, funds that could then be used to protect our liquidity positions and concerns vs asking the treasury for additional spend as in a forthcoming proposal.
Durning this Bear market $250,000 to $300,000 might better reflect the vFOX sub-DAO tolerance for investment for the next 6 months in projects rather than the Bull $1,000,000 previously determined. I would like to hear the vFox committee members thoughts on this if possible.
Certainly the committee has taken a far more conservative approach to allocations than originally anticipated with SCP-69 primarily because of the situation around the DAO’s treasury and runway. We only want to allocate (and have been allocating lesser amounts than originally envisioned) when we see a high potential project with all the right factors. So far that has led to the 2 allocations described above, and I think it is a fair point to bring up that we are unlikely to run through the whole 1 mil allocation anytime soon, I would expect the next 6 months to be more in line with the last 6, so wouldn’t expect allocations much above another 150-200k or so (though that heavily depends on what opportunities present themselves and overall market conditions). This is a hard line to walk in that we don’t want to spend precious DAO stables and reduce runway while at the same time the best opportunities are available when market conditions are poor like they are right now. If the community to wishes to bring down the potential allocation to vFOX for now given market conditions and revisit if/when things improve that seems reasonable to me, but I also think the committee has been doing a good job of keeping that in mind and not overzealously trying to allocate just because it can.
Neverwas:
If the funds haven’t left the ShapeShift treasury , what is the worth of the 90% holdings of the vFox issued. Is it just ~60k from the stated TIC? Also if this TIC is being vested additionally any plans or strategy on how the DAO maximizes this moving forward while mitigating any risk of this disappearing during the bear trend. All eggs in a basket type of thing for TIC.
Not sure I understand the question around 90% of vFOX worth. The worth of the sub-DAO (which is controlled by the DAO) is simply the allocations it has made. Regarding the TIC the sub-DAO now owns, that is being staked in the elasticswap staking program to earn more TIC over time, but the idea here was to hold that for years as elasticswap develops and perhaps revisit that as markets and the opportunity improves, but for the moment we aren’t looking to reduce risk on a allocation recently made, we are taking a long term view on any of these allocations.
Neverwas:
A few more questions, this being the first term expiring during the experiment of vFOX and it’s sub-DAO. For the two stated projects that received funding, what are the vesting terms? Repayment, shares of the project, profit percentages, combinations of such? What type of schedule has been determined, has the bear trend changed this?
The elasticswap allocation does not have any vesting terms, but we are committed with all of our allocations to be taking long term views in line with the projects we are allocating to. The Stealth project will have the same terms as others who participated, which in this case looks to be a linear vest over 3-4 years once the token launches but some of those details could change closer to launch (though we will always get the same as everyone else). Not sure what “repayment, shares of the project, profit percentages” would mean in any of these contexts so can’t comment on that, generally our upside is in the token if things go well.
Neverwas:
As an example I do see that for Elastic Swap the ~$110,000 investment 15,000 TIC was initially received, what valuation of TIC was determined?
What if any, other terms were reached; timelines, protocol fees, so forth.
If the bear trend significantly impacts the value of TIC as it sits, does the committee have plans to help mitigate this ensuring the value of the investment isn’t a total loss?
Generally vFOX is viewing allocations as long term with high risk/high reward (which is generally what you get with the stages we are seeing). Our barometer is that something has to have 100x+ potential to be worthy of a vFOX allocation, we have to be willing to sit through what might seem like “paper losses” during a bear market in order to realize that potential upside so we aren’t looking to change allocations during normal bear market swings. If something dramatic changed, such as an allocated project looking likely to fold or shut down, then we would try to alter the allocation at that point, but generally these are allocations vFOX looks to hold for years at a time.
Neverwas:
Are there any projections as it pertains to these current investments? I personally haven’t seen much public activity from the committee, are there meetings, votes, stats?
I am not sure it really makes sense to show “projections” on such early projects that are either just starting to grow or haven’t launched yet as there is very limited data to go off of at this time, as stated above vFOX wouldn’t make the allocation unless the committee believes in 100x+ potential over time. As things develop vFOX can update on the state of its allocations in the treasury and their worth/performance over time.
Neverwas:
Is this excluded from any all fox meetings?
Is the plan to just give the updates at term renewal moving forward?
We had originally planned to do more regular meetings and I would like to see that occur, a lot of that got derailed by the market and the fact that vFOX was not being as aggressive with allocations as originally planned due to the factors already stated, as a result there wasn’t a whole ton to update on. I know we are planning to spend some time in the upcoming tokenomics meeting updating the community on vFOX’s activities and progress, though I would support something like a bi-monthly vFOX update meeting as well as we move forward or at least when there is activity that warrants an update. Regarding the all-fox, im not sure there is enough every month for that to make sense for vFOX, but if the community wants to see that we could try to have an update along those lines in the future even if its only a quick minute or two.