Hermes DeFi Venture Capital Proposal

Highlights

Hermes DeFi is raising capital to bring a trader-focused DEX and innovative DeFi primitives to the Harmony blockchain. We are a powerful, community-driven platform that will offer the best swap fees and the most returns to LP providers on Harmony. We will offer advanced charting features, trade report histories, tax report generation, portfolio tracking, and more to advanced DeFi users. We are seeking to raise $440,000 to support the expansion and solidification of payments to our team. In exchange, we are offering an equivalent amount of our HRMS token (30M total supply) after a 15% market discount ($0.3896/HRMS) of our launch price of $0.4583.

Our current investors include:
Harmony ($305,000, Project X at ETHDenver) - Notion 1 Page
Harmony Launch Grant ($50,000)

Summary

Hermes Defi is a global team of experienced DeFi enthusiasts that have spent the last 8 months building products together. First deployed on Polygon, we have become a multichain project with the addition of our native Harmony farm, Plutus. We envision a future of DeFi for all, and our core values of multiculturalism, social responsibility, freedom of expression, and empowerment are only matched by our commitment to safety, transparency, and speed. We are working together to bring Harmony to the forefront of DeFi through our creation of The Hermes Protocol, an all-encompassing ecosystem of DeFi applications centered around a modified TraderJoeV2 Uniswap DEX/AMM.

We aim to bring DeFi to all through our #LearnToEarn new user onboarding system. A large part of this is powered by our community led wiki (https://wiki.hermesdefi.io/). Through this and close relationships with many of Harmony’s DAOs, we are bringing a whole new userbase to DeFi. This is already evident in our social growth and performance-- with over 2,800 active users in our 3 Month old Discord server, and over 460,000 impressions on our Twitter (top 3 influential dApp on Harmony 3 weeks running). According to Dapp radar, our on-chain users increased by 37.2% over the past month, the only DeFi project on Harmony that gained during this period.

Our project success and overall tokenomic design speaks for itself. Our farming reward token PLTS (and pre-sale for HRMS) has performed remarkably well despite the rocky market conditions of the last month.

We will continue to build self-sustaining DeFi systems (no reward lockups) that bring value through partnership and growth of the overall Harmony ecosystem. We will also offer the best returns to LP providers on Harmony, returning 85% of swap fees back to those who are providing liquidity.

Hermes is bringing multiple exciting DeFi concepts together into the same ecosystem. This includes our very first DeFi primitive, Hermes Staked ONE. This fully-trustless smart contract system was only recently (2/11/2022) enabled by a hardfork in the Harmony blockchain (v. It allows for users to directly interact with validators and requires no involvement from our developers to manage. Competing systems are not trustless, have fees associated with their use, and do not reward liquidity providers well. We plan to use this system to unlock the 46.1% of ONE (~$824M) currently staked with validators for use within DeFi environments. Our long term goals include collateralization in markets like Anchor, integration of hONE on CRV, and expansion of this primitive to other chains. More research into primitives like Certificates of Deposits and returns on Protocol Owned Liquidity are ongoing.

Hermes is also bringing a new concept to play, AlgoFi. The next generation of yield aggregation services, we will enable a dedicated team of DeFi experts to identify and implement trustless yield-generation strategies. We hope with this, along with our education efforts, lower the barrier for entry for sustainable investment strategies. Furthermore, our AlgoFi team will work hand-in-hand with our experienced front-end and database engineers to construct the best portfolio management and trading experience possible on our website. Our platform will have both a basic/advanced and day/night trading view to appeal to both sides of the experience spectrum.

We look forward to hearing from any private investors or institutional liquidity providers interested in our platform. Please review our Pitch Deck, explore our website, and connect with us on Twitter, Discord, Telegram, or via email.

Funding Ask

$440,400 in exchange for an equivalent value of $HRMS tokens with a 15% discount to initial market price ($0.3896/HRMS). Split between $290,400 in team salaries and $150,000 as an additional initial liquidity allocation.
IRIS MC - $827,000, PLTS MC - $987,000, Current post-money valuation of $2.1M.

Links

Pitch Deck
Website
Roberto (CEO) Telegram
Emails - robertoquintero@hermesdefi.io, austin@hermesdefi.io

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Sorry, I got triggered reading this proposal late on a Friday night and made this long rant. After cooling down, I have edited this to be more concise of my concerns. You can still read the rant in the edit history if you’re interested.

I am sorry for accusations of this post being deleted. I was to quick to jump to conclusions and own the Harmony team a huge apology. They have been very transparent in all my interactions with them.

  1. I am unhappy that Hermes DeFi’s pitchdeck uses cherry picked stats to dunk on other projects. They also portray themselves having more traction with the Harmony DeFi users than actually exists. Business-wise, I highly disagree with the main thesis of unlocked reward tokens.

  2. Tranquil Finance have built half the proposed Hermes DeFi roadmap including a DEX, Lending and Liquid Staking and we only received the $50k ecosystem grant. Hermes DeFi already received $350k from the Harmony team. Why can’t you use this fund to deliver your Q2/Q3 roadmap and see traction first and prove out your thesis before requesting another $440k?

  3. On a higher a higher level, I’m concerned about Harmony’s’ ecosystem funding strategy. It seems arbitrary and favors teams that can attend live conferences to network with the core team instead of devs who are heads down building. Maybe Harmony should consider a more objective milestone-based system like Fantom Foundation.

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ill keep this short and not be salty like some other repliers here are :slight_smile:
Maybe we see more progress from hermes before another grant is given.
Uniswap version 3 proposal recently failed and you seem like u think u are on shark tank tv show going around different orgs asking for $ in exchange for company shares.

(basically a no)

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Yeah agreed. We throw to much money around. Thats a solid point on innovation, getting the main innovation point rejected, ok why so much funding if they are just waiting to get approved?

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(maybe also delete the tweet 'bout it on twitter :smiling_face:)

Looking forward to the reactions on these imo legit concerns.

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I’m agreeing with krillin in that it would make sense for initial grants to be small, and then as they have sustained growth in TVL, then there should be a system for Harmony to further reward that appropriately.
Basically reward projects that help Harmony climb the defilama TVL ladder. The exception to this would be if harmony snipes a top project from another chain, kind of like what Avax did to DFK.

For Hermes… I think they seem like great people and they have a nice rpc. I do think they should be rewarded appropriately after they grow their tvl. My only concern was that their website right now requires you f5 refresh, because number are not updated in real time. That seemed weird to me, and when I asked in discord my question was brushed off saying that it would cause too many transaction or something like that. I hope their real dex doesn’t require f5ing as even mochiswap, or that one rugpull eden had real time updating numbers…

edit:
Someone below mentioned hermes defi’s team previous project is a dead $50k market cap project on Polygon. On harmony they have a farm page, with numbers that do not update in real time, and no dex. Dex was supposed to be here by Feb., but seems to be delayed until april? Despite this they were able to get $305k from Harmony somehow, and with a straight face ask for $400k+ more from Harmony.
At the very least, after getting the $305k investment, they should present the dex and prove they can get a respectable TVL before asking for more.

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Everyone here, please read https://harmony.one/venture

Thank you

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It’s ironic how in this very post the project call themselves team of experienced enthusiasts lol because that’s who they are — enthusiasts, not devs

It’s jaw dropping how hermes is being approved for this kind of funding by Harmony and in the same breath they do say they plan to go to another chain. Meanwhile, project that genuinely enrich Harmony ecosystem maybe get 50k.

What’s more, and factual: hermes as of now does not bring any innovation to Harmony (besides marketing maybe, and skills in networking apparently?), the protocol as of now is nothing more than a token emission farm. Denied uni v3. And only vaguely talks about AlgoFi — potentially something new and innovative which they need to hire team (read: devs) to do research for. Guess what? I am not a dev but give me half a mil and I will also “get a team” do a research.

To put hermes alongside tranq, fuzz, viper, fox and dfk? Just no. Their team tries to elevate themselves to those protocols, but just no.

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How is it different from a grant? If hermes is this good, they can attempt to raise funds in decentralised manner. They can do that already on Artemis or other launchpads exist. And we will find out true interest and belief in what they are supposedly building

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Here’s my take with your response.

  1. Page 6 has a title of “Better Returns to LP providers”. I think that is true if we’re just going to base it off the title. Tranq does offer about 75% rewards to tranq holders but the title says better returns to “LP Providers”. the part where it says “They also portray themselves having more traction with the Harmony DeFi users than actually exists.” seems to be a personal perspective as I did not see this point while reading their pitchdeck. In terms of the “cherry picked” stats, the date was added on top of the picture. It’s not like they added the Harmony’s Defi Landscape picture without telling people how old it was. You are correct that this is outdated and maybe the team could send an updated one but this is pitchdeck, that’s just how it works.

  2. If you really feel that you have done more and have done better than Hermes, why not apply for another grant? The breakdown on the use for the initial grant of $305k was outlined in that old grant proposal so it was already set aside for another purpose. Let Harmony team decide based on the pitchdeck if Hermes is worthy of another grant.

In all honesty, this is not a typical funding proposal but rather Harmony Ventures. Projects would often ask for fundings and promise to deliver products in return. In Ventures, Hermes is asking for fundings in exchange of an equivalent amount of their token. So in a sense, if Harmony does approve this the $440k investment would double or even triple depending on Hermes’ Success. Which could increase the amount of investment funds for Harmony in the future.

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  1. You went deeper in with cherry-picking stats with this “but it says LP providers”. Gosh. Let me bring you some more stats, if that’s what you are after. Hermes defi protocol as of writing this post has TVL of 3 mil. On Harmony. Polygon, blockchain where they started has TVL of 50k…

  2. How do the above stats, where herems is awarded 300k with track record leaving 50k on first blockchain is not leaving you dumbfounded? Tranquil finance, the protocol of which dev you replied to has TVL over 500M if you count borrowing + lending assets. And they continue to build on Harmony with defira. That’s the entire point — hermes should not have been awarded a grant over 50k in first place. That’s the typical size of a grant and everyone should have level playing field. Now them getting additional “investment” (because it’s not a grant) is just pulling more in the wrong direction.

And lastly, as far as I understand hermes DEX will route all trades through their own token… If so, it’s just marketing lie that shows “our fees are so low”. Yeah if I have to buy your token when I swap between 1USDC and ONE, thank you for the ‘low fees’ smh

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As a ONE holder, I feel my voice should be heard on where Harmony Ecosystem capital is deployed.

As someone who scaled up a DeFi protocol from nothing to over $200M TVL, I think I have some expertise in DeFi tokenomics especially in DEX, Lending and Liquid Staking.

The business proposal is concerning. Unlocked rewards get dumped fast and create a death spiral for the protocol. The arguments in the pitch against this use cherry picked stats on the PLTS price action and fail to mention the low trade volume and liquidity. There have been many DEXes on other L1 chains that tried to compete on fees and they generally fail to get traction.

As an expert in DeFi (from a biased perspective), I suggest the Harmony Venture team to hold of on additional investment and see if the existing roadmap gain traction before investing further. I have high doubts on the ROI looking at the tokenomics of this project.

It’s also concerning there’s no deeper analysis of valuation and ROI. There is no liquidity or price history for the HRMS token and it’s unclear how the current price of $0.3896 was obtained.

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Afraid of a little “friendly competition”?

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Remember, harmony also funded an actual pyramid scheme (see below). It sucks that your and mine favourite projects don’t get the funding they deserve because they often already built something and “don’t need the funding” as base project is already complete. Or because they do not perform marketing focussed on apes, but instead try to stay professional. But thats how life goes. Big mouths / words often get more money than there what in my opinion actually holds value. Yet, those big mouths often also die in bear.

The stratergy, i think, harmony applies is “lets get as much people in our ecosystem as fast as possible. So that when bear arrives we have a userbase.” And we gotta be honest good marketing and big words attract more users than steady projects. You can be against it or loving that strategy, but it in bull market it works. Bsc exploded because of it.

About the live networking and contacting: friends in politics are the only way to survive, and thats the same with blockchain. I volunteer for a specific subreddit about crypto and gained a lot of my contacts through there. A fellow mod over there has the same contacts now and ended up partly thanks to those contacts in the presendential house of el salvador to talk about crypto. I am not saying that its morally okay for a grant team, but pulling strings happens constantly, and only a few people are truly objective especially when huge amounts of money are on the line. Again, not saying harmony isnt objective, but there were some uhm interesting choices.

That said, its their money (kinda), they decide what to do with it. If they decide things as a pyramid scheme below, thats up to them. Decentralisation of this voting would be nice, cause a dao with only a few people is not really a decentralised autonomous organisation imo, but thats something for the future, with gzil on zilliqa or maybe even with OpenDao on harmony.

Thus, by purchasing a block in the tower, for the next 6 blocks you will get back the cost of the block + an additional bonus, which is provided by the fact that each subsequent block is more expensive.

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I think OxKrillin’s thoughts on this are valid. His experience is very valuable to the health of our ecosystem and we should definitely take his response as valuable before further funds are improperly distributed with good intentions

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I agree with what 0xKrillin describes, regardless of whether it’s a Grant or Venture proposal, the source of the funding is still the same (directed to Harmony).

with Hermes’ TVL of nearly $3.5 million, no better than Unite’s $4.5 million (TVL based on hermes website and defilama at the time of this reply)

so, my conclusion is NO

Show the results of your hard work first, then ask for more.

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Here’s my take on this matter,

Hermes team is not asking for “funding” but a possible investment to the project. The team is pitching their project to investors hence why it’s “pitchdeck”

If you scroll back up to the very top, it says " We are seeking to raise $440,000 to support the expansion and solidification of payments to our team . In exchange, we are offering an equivalent amount of our HRMS token (30M total supply) after a 15% market discount ($0.3896/HRMS) of our launch price of $0.4583. "

0xKrillin is against unlocked rewards due to his personal experiences but personally I think Unlocked rewards are better. Here’s why I disagree with 0xKrillin on that matter.

  1. This is Decentralized Finance! Most of us are here to make investments but there are some who are here because they don’t like banking institutions, government related groups to be in charge of their money. Imagine working for 80hrs a week and your boss tells you, your pay is locked for the next 3 months! That hella sucks.

  2. Cryptocurrencies are volatile. Locked rewards will change in value! Let’s say there’s a reward lock for 3 months, in that 3 months the value of the token could triple then drop! Locked rewards prevents investors from taking profit whenever they want. Not including how it gives false hope in a way. Investors would think that they have thousands of dollars of locked rewards but then getting closer to the unlock date, the value drops 3x less than what it should be. That’s false hope. Full disclosure, I have 200+ locked jewels in Defi kingdoms. Sometime ago, the value of Jewel was $20 per token and now it’s down to $5 per token. If only if the reward wasn’t locked, I could’ve made better profits.

  3. Most people think locking rewards is deflationary tactic but it really isn’t! It doesn’t stop dumping but rather just postpone it. Again, look at Viperswap… I think projects should stop holding investors’ reward as a hostage. The very essence of Decentralized Finance or DeFi is that we are in charge of our money, not the banks nor the institutions.

I’ve read Hermes Defi’s Docs and tokenomics and I also have been to their discord server. Personally, I like Hermes idea to keep the rewards unlocked. To prevent pump and dump, they instead will add utilities to HRMS token. Now investors will either use their rewards for Utilities or use them to take profit. In the end, we’re all investors here! Why prevent people from taking profit anytime they want? Do devs somewhat think that everyone in this space is dumb enough to not know what they’re doing? If that so, why not educate them? Follow what Hermes is doing! They dedicated their time to create Hermes wiki so that people can write educational articles. Who would benefit from those Educational Articles? Everyone! Old, New, Beginner, Professionals. You think you got something to share? Write an Article and get paid! You want to understand something about crypto? Oh Here’s a website that has compiled educational articles about crypto!

In regards to the “investment”. Why do I think Hermes is a good investment for Harmony team? It’s simple. Besides fox and viperswap, every other DEXes out there are gamified. I think fox also plans to gamefi their dex soon so that will only leave viperswap. I think Hermes will cater to Professional traders who needs professional trading tools inside DEX. They will also cater to beginners who are still starting to learn the blockchain.

How will this investment benefit Hermes Defi if the investment will go to the devs payroll? I went to Hermes’ discord to ask this same question and they answered something like this. “Using the project’s token as devs pay/salary is bad for the project because they would need to sell their token to take profit. Selling huge amounts of tokens at the same time will cause a drop on the token’s price. We want to prevent that from happening”.

Here’s my long response.

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  • Who are you? Are you in any way tied to the hermes team? Can you reveal your relationship with hermes for the sake of transparency?

  • Your point about “this is not a grant, it’s an investment” has been addressed before you even made it: 1. hermes should not have received higher grant previously, there was nothing that warranted for it to be mire than usual 50k and 2. It’s a bad investment. Will harmony still enjoy “15% discount” when their token price goes to 0.1? Or below? You said yourself token prices are volatile and I can especially see young project’s token price do a downturn. Or maybe, just maybe I can follow the track record and check token price of their first venture, on polygon. And maybe I can realise that with this much liquidity and volume token prices can be influenced, right before a potential big investment like we are facing here.

  • you argue that this move would be good because devs aren’t going to sell the tokens to pay themselves? Therefore anyone else (and token price will benefit? No sh*t. The devs won’t sell but then Harmony will? Since Harmony takes on a role as VC here. VC’s and angel investors or however you want to cal them, buy their tokens in order to make profit too, and guess what, they intent to sell it (that’s the difference between getting funds as grant and capital venture).

  • where did you get the idea that Fox is supposed to gamify their DEX? It’s the first time I hear it. To my knowledge it’s exactly the opposite, they want to keep it with clean design and are targeting community projects (already have lambos and Lumen migrated), they want to fill in a niche from DFK.

  • you’re calling “this is decentralised finance!” well, in this case why don’t hermes raise capital in decentralised manner if they love it so much? I already suggested they can do so on decentralised launchpad — that’s what it’s for

This is a bad investment imo and similarly to Krillin as ONE holder I feel I should clearly voice it, is all

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Finally another sensible soul here. Thank your for sharing your thoughts krillin

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Question: Ever invested in something with vesting schedules? Seems like most armchair DeFi Guru’s here have a lack of real-world understanding on how finance works. to be clear, i understand your opinion/view on unlocked vs locked tokens. Just not the reasoning being used for price vs risk of assets from the funding party perspective.

Remark: About the mentioned JEWEL unlock; it seems like you’re just aiming for more profits instead of the development of protocol/dapp XYZ. Especially since you mentioned that those currencies are volatile… why would Hermes (as can be seen in their previous proposal under grants…) put a big part of that 300K grant into the Liquidity Pool to provide more liquidity? Seems like a potential risk that most asset managers would stray away from. If we track the price movements of the various DEXes and tokens from the OG ecosystem tokens on harmony I strongly believe that the abovementioned issue price and tokenomics aren’t (with all due respect) reasonable/built upon facts rather than bias.

Personal note: I feel currently that these forums are littered with fanboys where a part of the discussions are mainly influenced by tribalism and biased opinions. Not the best outlook for our ecosystem that is trying to become open transparent and fair.

@lij and other @harmonyecosystemmods, please have a look into the fragmented state of current grants/ventures, the rampant running tribalism and ecosystem players unless you want to become another BSC fest with money grabbers everywhere

Also feel that some dapps are being skipped in proposals / measuring success in comparison to those who ask for funding all the time. Venomdao has practically bootstrapped itself. Openswap is being skipped over as do people forget unifiprotocol. Meanwhile (and they have every right to try to), other dapps/devs are trying to squeeze as much runway out of the ecosystem’s funds as possible… Have a look at TRON for example and check up on what the foundation has done with their funds with various dapps. Many of them move/migrated to other chains once more funding could be retrieved elsewhere and let it be. Cross-chain compatibility is (in my opinion) an easy excuse that applies to a lot of the innovation dapps tend to push out.

If we want to make $ONE true benevolent ecosystem, we should aim for transparency, honesty and longevity instead of aiming for short term gains/potential moonshot.

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