This was raised by @verto0912 and echoed by @Matthew_Graham. The idea was to lock in an Index price and allow leaders to participate in value accrual to Index for their efforts and was something with precedent in the Coop (See GWGI). I think that’s well understood and both of you are coming from a place of wanting consistency for each cluster of Working Groups. From that perspective, totally understood and we’re ok to revert to USD for Leaders.
However, we’d like to propose that’s how we compensate Leaders going forward. It makes sense for them to participate in upside/downside of price variation if they’re driving initiatives that will affect that. The Treasury is currently perfectly hedged to handle that because it’s denominated in INDEX (and that will still largely be the case, even after the OTC sale to partially diversify).
These points are well taken. We were trying to strike a balance between a) requesting a large amount now that would likely generate sticker shock and hold us up on leaner short-term operations and b) reducing the frequency with which we come back requesting funds. Two categories you both discuss above are Exchange Listings and Conferences/Webinars/Hosted Events.
- Exchange Listings
This has generated some concern lately from the community so I will lay out what makes it complicated to budget, our current thinking as a group, and why we landed on our (admittedly imperfect) number.
Budgeting Difficulty
These partnerships produce some ballooning and variable costs that are tough to estimate. I’m pulling a few bullets directly from an older post by @reganbozman that help illustrate that point.
- Legal fees for non-security letters (ranges from ~$5K for Singapore to ~$80K for US)
- Payments to market makers to provide liquidity for DPI (~$10-$20K per month)
- Listing fees (~$20K-$400K)
- Marketing budgets for marketing promotions associated with a listing (~$5K-$10K)
Based on Regan’s estimates, a given listing can vary from ~$40k to ~$500k. A greater complication is that these costs can be incurred at different stages along a months-long process.
Current Status and Strategy
As everyone knows, we’re currently deep into the KuCoin listing process. We started there because of the relative ease and cost of a Singapore letter and it’s a significant signal to the market. The next step is to tier up and out (geographically). Our options will be made much clearer by the results of the first week or two of liquidity. This is because many exchanges won’t give a token a look unless/until it has consistent trailing liquidity of $6MM/day, based on our discussion last week with Kairon Labs. Our DEX volume alone is fairly close to that, but the thinking is that DEX volume + anything other than a disastrous KuCoin launch will put us in a much better spot to be prioritized for listing elsewhere. We will approach or continue conversations with all of the names listed, but which one emerges as the top priority remains TBD.
Basis for Estimate
Legal ($10k-$80k) - We intend to begin legal work on the “next” jurisdictions (Europe and the US) to open up more business. Speaking only for myself, I think it’s worth going full bore on a US security letter but generally accept the pushback that that isn’t worth doing unless we have more clarity on a US exchange listing that requires that.
Market making costs ($10k per month) - We’ve set this aside in case this group’s funds need to support this for Kucoin and also prospectively for the next listing, but would agree with the feedback that firmer coordination with GWGII to clarify would be helpful.
Listing Fee ($40k) - Realistically, we know if we have a meaningful listing fee to pay, that the community would fund it, but wanted some room to cover the lower end without a separate ask.
Marketing Fees ($10k) - Similar thinking to listing fees.
Verto and Fire, I think this was the right call-out and appreciate your demand for a little more here. It’s a challenge to strike a balance for something that is 1) so needed for our products 2) so difficult to budget for and 3) will require some level of opacity because there are negotiations with an entity involved. I can say that I’m getting much more involved in this personally and so in some respects am getting up to speed but will commit to conversations, iteration, and improvement for communication around the project.
- Events/Conferences/Webinars/Coop-Hosted Events
To @Matthew_Graham ’s point about listing what we know.
Bitcoin Miami - We think we should have representation here. Custodians and investors have asked if we will have a presence and it will be the first major crypto conference after many are coming off of lockdown. Travel/lodging/tickets for up to three will run ~ $5-$7k
Coop-Hosted Events - We’re already working on an NYC-based speaker series and hoping to squeeze two in during the WG period. Given we have boots on the ground in Singapore we’re also discussing doing something there. ~$10k
The remaining $15k is to allow for geographic expansion of hosted events, hosting/creation/sponsorship costs for webinars, and allow for the possibility of attending another conference.
Can you provide more detail here? We reviewed all other working group proposals. In many ways, GWGII is the only comparable one. Analytics, Treasury, and Design all request for contributor rewards, leader stipends, and either licenses or gas costs but no specific project requests. GWGI used the “experiment” format that was ultimately abandoned by the GWG leaders for GWGII. In GWGII, there’s a line item of $100k for Exchange Listings with little other explanation. I agree that the bar should be raised, but don’t see what you’re suggesting about greater detail from other working group proposals.