Thank you to everyone who has commented so far. It is great to see the community rallying support over these action items, and we are excited to see continued progress on these initiatives.
To address some of the comments thus far:
@LemonadeAlpha : My ask would be that the authors of this become more open to lines of communication and collaboration to get ahead of and help to repair some of these things that are seen as issues, e.g. opinions on what a more proper burn / rev figure is and a number of other strategic considerations.
@afromac : As a next step, a direct engagement between ICC, Set and 1kx in the coming days would be an opportunity to align on a common understanding of the circumstances we are in, and a shared set of goals and targets for success. We request that this does happen on a reasonable timeline.
We agree. We imagine engaging in both public and private where we publicly post our opinions while working with leadership on various issues. We do welcome input in terms of how we specifically engage to maximize effectiveness.
Of note, 1kx is also holding monthly catch-up calls with the Growth and Product Nests to become more directionally aligned. We are also open to working closer with the ICC over the next few weeks as well.
@Mringz : The consern around the management of our balance sheet is new to me. I personally do not see an issue with how finance nest has conducted themselves thus far. I would advocate for more transparency but I do think Finance nest has acted in the best interest of our DAO.
To be clear, we do agree that the Finance Nest has conducted themselves fairly and have kept the best interest of the DAO in mind when navigating treasury management. This is a complex topic, and Index Coop has always been on the forefront of innovation in DAO treasury design, thanks in large part to the efforts of @prairiefi, @ElliottWatts, and others on the team. We do not mean to disparage the remarkable work they’ve done.
I’d also like to take a moment to acknowledge an error in the yield calculation of the original post that was brought to my attention - the quoted yield is inclusive of the unallocated capital, so the real yield for the strategies is closer to 8-16% at all times. Thanks again @ahuja for notifying me. I would still like to state, however, that the return itself is tangential to the actual purpose of the post: safety, security, and focus should be our top concerns.
From a finance perspective, it is perfectly reasonable to put assets to work if they aren’t going to be tapped in 18 months and many mature companies do that. However, a startup that still needs to figure out PMF should 100% be focused on product / engineering / customers. Most early stage startups that raise money usually don’t focus on financial engineering of their capital (even if it’s a minority amount of time).
It feels like resources are misallocated when the DAO has to think about this topic - the scarcest resource afterall in a DAO is ultimately attention. Instead, product, customers, and identity should be getting 150% of Index Coop’s collective attention right now.
@allan.g : Though I personally disagree with disbanding the investment account, I am curious to know what Set / 1kx would consider to be “safe” destinations for idle stablecoin capital. […] I would like to understand your collective risk preferences because, in my opinion, the opportunity cost of doing nothing with our capital is too high.
Thinking from a more DeFi-native perspective, we understand DeFi enables extreme amounts of capital efficiency, but no protocol is actually safe, and we are currently putting a significant majority of the stablecoin allocation at risk. As one of the primary architects behind the Investment Account before joining 1kx, I imagined the Investment Account to only hold stables in excess of 12-18 months of runway - currently, it holds the vast majority with only enough stables in the Operations Account to fund a small part of the operational budget.
If we were to still actively invest in stablecoin strategies, they should be insured and they should be minimized. Over-engineering is counter-productive as I mentioned above in response to @allan.g. Considering the remaining amount of stables after 12-18 months of runway, the cost of insurance, the cost to pay contributors to manage these strategies, the mindshare dedicated to active management, gas expenses, and the relatively low yield of more conservative protocols like Aave and Compound, I would disagree about having a high opportunity cost here.
On @jackiepoo’s post
We will be posting another thread early next week discussing the suggestions you laid out and how we are thinking about the delegation process. Here, I want to acknowledge the work you’ve done raising this issue in the past, and note that we are thinking deeply on how to best approach this.
Generally speaking, we are all for delegating to trusted governance contributors and open to well thought out alternative models that have a clear path to execution.
More to come from our end on this topic.
@Mringz : I think this post highlights that we do need to increase our stakeholders communication and engagement. Our current efforts have not been sufficient. […] some of the issues brought up here are currently being prioritized. Namely financial stability and partnership relations.
We definitely understand that some of these initiatives have been prioritized and there have been efforts to begin these conversations. By publishing this open letter, we wanted to voice support for this prioritization and provide some color on how we are also thinking about these issues. This is not intended to diminish the Coop’s existing efforts, but to embolden the community to collectively engineer solutions.
This is on all of us to execute.
Looking forward to continued progress! 