Treasury Status Proposal
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Dear ContinuumDAO members,
This proposal is a collective effort that underscores the importance of synchronizing the treasury's status and seeking effective solutions from the wisdom of all DAO members. Your input is not just valuable but crucial in this process.
Due to current market conditions and project development, the Continuum treasury is insufficient for long-term sustainability. Although there are over 53,000 ARB in the treasury, the price of ARB is dropping drastically, and operational costs will not be sustained for more than one month.
Since June, contributors have deferred 50% of their pay, until the treasury status improvements, extending the treasury's lifespan by an extra month. Meanwhile, some contributors are and continue to actively pitch to different VCs. Based on feedback from several global conferences, our initial product positioning and vision have not gained our anticipated interest.
Although Continuum is viable and potentially profitable, its interoperability and cross-chain capabilities are currently viewed as similar to other protocols in the space. With a DAO structure built-in as a core component of governance, feedback the team has received during engagements with VCs is that it is an inefficient approach for a startup, and the fact that we are trying to build a public good that serves the whole Web3 rather than any particular sector is also not viewed positively. This makes the project viewed “less favorably” than other hot narratives such as AI or RWA. Therefore, we are revising our narrative based on feedback from these conferences to focus on RWA to better align with market trends.
Despite these challenges, we have achieved numerous milestones in the protocol development over the past several months. Our commitment to sustaining the protocol's development and providing reliable service for the betterment of the overall blockchain ecosystem remains steadfast. With that, we would like to discuss the path ahead for Continuum with all community members in this challenging time and hopefully find a solution for the protocol’s continued growth.
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Do we have any other financing options seeing as we said we would like contributions to come via VCs? Also what is the RWA offering how can we create a buzz, and generate interest in the tokens? We need a clear roadmap, clear product offering but I guess most people won't get on-board until they see VCs jumping in so it seems like a bit of a catch-22 to suggest some kind of ICO/Pre-sale or TGE makes sense.
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It will be hard to convince a large subset of VCs to:
- Fund a DAO
- Fund a public good
- Fund an open-source project
Correct me if I'm mistaken, but that's my thoughts on the challenge of raising from VCs.
Also, raising funds from VCs is not a short process; it's long and tedious, with many months of engaging them to build relationships even before trying to raise and facing rejections over and over again.
If the treasury is running low, we may have 2 months at the maximum before core contributors start dropping off (they have bills to pay after all). Maybe we should relook at:
- Whether we should continue focusing solely on raising from VCs?
- Whether we should relook into the tokenomics and raise from community / public?
That's my thoughts at the moment
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Continuum was founded as a DAO for very good reasons (we all know about what happened to Multichain). Being a DAO and having exclusively open source code is the only alternative to a centralised company led project and for me this is non-negotiable.
But having spoken to a large number of VCs over the last few months, I do not think that this is the issue at all. In fact if a VC is looking for a preferential token allocation on different terms from early investors (i.e. a 4 year lock of veCTM with voting rights), then this for me is a huge red flag. They likely want to do a quick 10x from Seed to Series A and dump on retail as exit liquidity. If a VC believes in our long term vision, then this would not be an issue. But like I said - I think that other factors are in play
Typically this is how the conversations with VCs have gone in the past - I emphasise that we are building a public good for web3, with no central control and as a trusted base layer for cross-chain dApps. This does not get a strong reaction (neither hostile or positive). Sometimes they will point out that there are other solutions (L0, Axelar etc.). They simply don't care that we are Autonomous and have no central control. I then point out the security advantages of MPC, but again this does not bring a strong reaction. Usually they simply don't know what MPC is and I do not have enough time with them to explain it. I say that we are integrating non-EVMs (TON, NEAR, Solana, SUI). This is more interesting to them, since we are entering unploughed ground here, but not enough. I say that we have incubated an open source router, but some say to me that the profit margins are not very good anymore and that there is a lot of competition in this sector. The feeling I get is that this was the last bull run's narrative.
So I don't particularly agree with your analysis @Insomniac The main issue is that we need to align our goals with TODAY's narratives.
Recently I attended ETHCC in Brussels. I went to many side events. By far the most exciting one was the RWA event. There were many new RWA protocols, VCs and tradFi representatives there (e.g. Stripe, VISA). The packed audience were voting on how long it would take the next 1 trillion USD of tokenized RWAs to arrive. The consensus was 18 months. There was much discussion about how tradFi could increase their profit margins by a few percent by cutting out middle men using DeFi. Also there was agreement that RWA was much more immune to bear/bull market cycles, since investors typically use USD stable coins. Several panellists said that almost all alt coins would die, that retail would only hold stable coins and that mass adoption of blockchain would not come from the 'casino' of trading alt coins, but only through more sober investing though useful investments such as :
- SME loans
- Invoice financing
- Fractional tokenised assets such as real estate, rental properties, commodities (including gold)
- Bonds
- Securities (e.g. equity)
Interestingly (and this is where i think that our opportunity lies), some panel contributors talked about how early block chain was in this field and how the solutions still do not exist in DeFi, leading to prohibitive costs for participants, poor access to liquidity, regulatory challenges, poor user experience with wallets and more.
When I got back from ETHCC, we started to develop a deck that re-focused Continuum towards RWA. Here is the link to it and I would value your views on it : https://docs.google.com/presentation/d/1-5FEB905Ff54cDkKnkauCilbT8OQdWU0Rn2u29JVYbE/edit#slide=id.p
We have sent this new deck to some VCs and I would say that the feedback is quite good, but it is early and as Insomniac points out, it takes time for the discussions to bear any fruit. I think it is fair to say that not all contributors believe that we should pivot 100% to this new narrative, rather than maintaining that we should address ALL sectors (e.g. GameFi, AI, liquidity aggregation etc.). I think that we should pivot with COMMITMENT now and focus exclusively on bringing RWA products to RETAIL investors by creating cross-chain solutions to cheaper faster blockchains like TON, Solana, NEAR and SUI - playing to our strengths. What do you think? Please read the Deck and comment here. Some feedback we have got is that this is aspirational and that we do not have our new RWA Toolkit yet. We are in the same boat as Axelar and Wormhole here - no one has developed solutions yet, so it is a race. This tells me that we are in the right direction though. We need working Proof of Concepts for things like fractionalised cross-chain NFTs for assets and the ability to access RWA vaults on Ethereum from non-EVMs etc.
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Thanks for the great discussion, everyone. The idea of focusing on RWAs definitely seems promising, especially given the current market trends. Before we dive in, though, how much funding do we actually need to get the first mainnet route up and running? Knowing this will help us figure out our next steps and how to best raise the funds.
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Given the current development status of the project and the necessity to sustain its presence in the market, it is crucial to secure additional funds for the treasury. These funds are essential to maintain basic operations and to achieve existing milestones. We urgently need to implement measures to increase treasury funding. Concurrently, it is important to accurately track supporter contributions to ensure that community members are appropriately rewarded for their investments.
For the funding required until the mainnet launch, we estimate that an ideal amount would be at least $1 million. This will enable us to complete all necessary audits, recruit additional contributors, and achieve significant milestones, such as integrating more ecosystems and onboarding additional projects, ensuring a 12-month operational runway.
Feedback from researchers and venture capitalists indicates that we also need to enhance our growth capacity across multiple market cycles, both bullish and bearish. This capability is currently lacking in our deck. While RWA present an exciting opportunity, the infrastructure is not yet mature. In addition to developing RWA infrastructure, we must also focus on trends in this market cycle, such as non-EVM chains like Solana, TON, Near, and SUI. Establishing our identity within this cycle is vital for business growth and will lay the foundation for achieving our long-term RWA milestones.
Key action items include:
- Develop a comprehensive funding proposal that involves DAOs, community members, and venture capitalists, and establish a public funding channel.
- Continuously update our pitch deck and narrative based on feedback, ensuring it supports growth across multiple market cycles.
- Onboard more projects for partnerships to increase Continuum's credibility.
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To be clear - we won't get VC funding unless we present a UNIQUE and INNOVATIVE proposition for funding. They are interested in backing the next unicorn, not another cross-chain interoperability protocol. We may get some backing from other sources such as DAOs, crowd funding and private funding, but I'm not sure we will get 1 million USD.
Regarding performance across market cycles, let's not forget that stable coin based RWA strategies are favoured in bear markets.
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Great discussion so far! I totally agree that focusing on RWAs could be a smart move, especially with how the market is shifting. That said, I think we need to be realistic about our current situation. While the RWA direction is exciting, we should maybe consider breaking it down into smaller, more manageable goals to show some early wins and build momentum. This might help with both VCs and other funding sources.
Speaking of funding, I think it’s definitely worth looking into other options beyond VCs. Maybe some kind of crowdfunding or partnerships with other DAOs? It could give us some breathing room and keep things moving.
Curious to hear what everyone else thinks!
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@Selqui I have been thinking about this. We appear to have a burn rate of 20k/mth atm. I suspect our current DAO community is able to put together another six months or so or funding since it's not a huge amount - until we find other sources. Is crowdfunding an option?
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@Raini-Ng Crowdfunding is an option, though we need assistance from someone who has experience in organising this. The real funding issue is that we need money for the code audit and listing on a CEX before we can go to mainnet and this could be a substantial amount, even if we limit the code we audit to MPC code, C3Caller, veCTM. Unfortunately this is not cheap and is why Jerry mentioned the figure of 1 million. Let's see how our new deck and RWA focus goes down with VCs.
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I think in general it is a very wise idea to first target 1 market segment and completely dominate that segment before we move to another segment. If that first segment is RWA because of narrative and momentum, i'd say we go for that.
This has large advantages in terms of communication, marketing & sales as well. Easier to distinguish our selves ('branding') from others. Targeting everything with a small team and budget usually means nothing is really effective.
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Hi is there a updated I missed so far ? I am a fan of the project and curious 🥸
