The longer this conversation goes on the more reasons I discover that this is not only a good idea but a necessity. hindsight is 20/20, but providing the reasons you have here in the beginning could have saved a lot of pain haha. for example, I had no idea that we would need to spend 75k/quarter on audits. I believe @Praneeth 's post here Financial Reporting ideation - #5 by Praneeth speaks to this lack of information. I believe proposed POOL disbursals can run much smoother when we have a good dashboard to analyze the financial impact of proposals. I am fully on board with this proposal at 5, 6, or 7 million. I not see a reason why we cannot include all of the interested VCās and an option for any community members to participate under the same terms.
Good to know that there are some recurring expenses.
In the bear market scenario, how would the salaries of the core team be covered? Is it likely that it could be the treasury? If so, how large is the core team, what is an average salary, and whatās the anticipated growth in the headcount over time (e.g. doubling every year).
Modeling the best case productive use of capital is interesting. Modeling the worst case consumptive use feels necessary.
Having some competition for the treasury diversification with Maven 11 getting involved is a very healthy sign.
Having several VCās showing interest shows they understand the upside potential on their investment (and how itās a great opportunity). Iām ready to watch these VCās show their commitment beyond capital with community engagement other than just a time lock on their funds.
The community is the lifeblood of this project so far and I hope Maven 11 or the first set of VCās (wonāt list them all) will keep that in mind. Exciting times ahead!
At least on the 12 month time horizon. The protocol doesnāt need to worry about any expenses incurred by PoolTogether Inc. those are budgeted and funded by PoolTogether Inc. With that said, PoolTogether Inc currently has 8 FT employees (up from 6 last month) and a burn rate ~$90k monthly.
Post 12 months, there is a possibility PoolTogether Inc could seek a grant(s) from governance for specific work. However, itās also possible that will never be needed as PoolTogether Inc can make revenue by building on top of the protocol.
So in the short term (6 months time frame) there isnāt really a worst case scenario where working capital needs would exceed what I outlined. However, I do think the optionality to pay for opportunities that might come up is nice (i.e. maybe we want to fund $1 million for a PoolTogether mobile app).
Thank you for sharing. While itās not the intent to fund the core team using these funds, it helps me justify the transaction by providing the assurance that it could fund the core team if needed.
8 full time at $90k burn / month works out to $135k / person. Assuming 4 new hires per year (1 per quarter) we have
Year 1 @ 10 people: $1.35m
Year 2 @ 14 people: $1.89m
Year 3 @ 18 people: $2.43m
So for three years, itād cost $5.67m. Factoring in the additional expenses, I support a $5-6m sale. I donāt believe the POOL price is fair, but that concern is ultimately secondary to risk management concern that this proposal solves.
Great discussion all around. Love to see the community sentiment shift towards an acceptance of PTIP-11 after new information came to light. Seeing how involved Nascent was from the very beginning of PoolTogether definitely swayed me over. I was not familiar with these companies initially, so my stance on this PTIP was a little lukewarm.
Whether the PTIP goes as proposed, or slightly changes, Iām all for it. We need to focus on growth and this capital will go a long way. Not to mention weāll have backing and support from some great companies intimately familiar with the space.
Great discussion all around. @Leighton thanks for the further clarification.
You have my support on this. In business you have to protect the downside. There are both pros and cons for this and both have been laid out nicely in the discussion. For me the pros out way the cons and ultimately puts PoolTogether in a place to survive and advance regardless of the market climate.
I think this is an amazing idea and I support it. I think to grow as a community and protocol we need to diversify the treasury to have a more stable ecosystem.
I really enjoy the debate here and think Iāve been brought on board. Iāll vote yes on this proposal if we see a slight reduction in scale, and I think the capital and partnerships will be put to good use. Thanks @Leighton for the great discussion here.
Good idea, bad deal.
Reserves increase by like what, $100K a week? Youāll get this amount ($7M) in like a year probably. Yeah, I understand, everyone still has PTSD from the previous bear market and we want to prepare, we want to make sure we have money in the treasury so in case of lots withdrawals we would still have prizes at least, we would still have something if it all goes south etc etc.
Should we really be that scared? Do you really value PoolTogether at just $140 M (I donāt: Why PoolTogether will be one of the biggest DeFI projects | by D | Apr, 2021 | Medium)? Do we really need $7M? Will it really have a huge impact? Remember, we are at the infancy of it all. Arenāt we being too conservative? Too cautious? Why should we be this cautious? Do you believe in this or not? Do you believe one day your non-tech friends / family members will be buying tickets at PoolTogether?
Itās safe, it gives comfort, it gives confidence. Does PoolTogether really need that at this moment?
Well, but majority will decide. Thatās the beauty of it all, isnāt.
P.S. I truly love this project.
Sorry for 2 messages in the row, but another thing Iāve been thinking about is: it doesnāt actually put PoolTogetherās valuation at $140 M. It would only do so if we had 9.5 M tokens issued. It puts valuation at just ~$30 M (because only ~1.5 M tokens have been issued so far, so selling 0.5 M would give them 25% of the protocol for just $7 M). Think about the stock market and stocks issued. Total possible supply doesnāt actually matter. What matters is how many tokens have been issued. Am I wrong here?
The proposal is very good to grow, but the price is very cheap if the price is modified in favor
The treasury has 5,179,010.64 POOL thatās not counted in the circulating supply you referenced. Thatās over 50% of all POOL tokens. You can see the breakdown of the circulating supply on CoinGecko.
Great question!
The total supply of POOL is 10 million, thatās how many tokens have been issued. The circulating supply is ~1.5 million. The majority of the POOL tokens are controlled by governance so they have been issued but they are not in circulation. They only come into circulation if POOL governance votes to use them for something.
So typically, this is how āfully diluted market capā is calculated vs. āmarket capā. Fully diluted is (token price * total token supply), Market cap is (token price * circulating supply).
If we did this deal at $13 that would be valuing the network at $130 million. The current token price is $25 so as of the time Iām writing this, the full diluted network valuation is $250 million
VCs should buy POOL at market price. I donāt think VCs should be privileged.
I understand you believe in the project. I think every person who takes the time to post in this forum does. I would suggest taking a little more time to read through some of the explanations on this post to get a better understanding of why this is a good move for the protocol. I think the most important aspect to consider is that we need non POOL funds to pay for expenses. Itās a lot better to pay for things with stablecoin instead of market selling from the treasury in the future to pay for recurring expenses. If we market sell governance tokens from the treasury to cover costs we are only pushing the market down. Itās much better to sell the tokens to people that are locked into holding for a long term period and have shown tangible support to the protocol before it even existed.
Just to update everyone, this has been a great discussion. Iāve been working on an amended proposal that I hope to post tomorrow.
The signaling vote ended up passing 70% in support. Since there are some changes though, iām going to post it as a new PTIP and hopefully take it to on-chain voting fairly quickly 1-3 days. Then we can have a final decision made by POOL holders.
Thanks Leighton for taking care of the feedbacks.