Hermes DeFi Venture Capital Proposal

  • 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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Very interesting to see this discussion here.

I wanted to create a new thread in Talk Harmony but I can’t seem to find anywhere that we can start general discussions (maybe a community discussion tab?). Anyway, I’ll make some comments here for now, although I might be going a bit off on a tangent.

I think you should read this article https://bit.ly/3ChpyAi .
This sentence from the article “behind-the-scenes conflicts breed a lot of drama” echoes here and I had a quick sort of unnecessary “drama” experience as well.

Read this article carefully, it might sound all doom and gloom but it is not and has some strong points.

We need to stop using crypto to just make fiat profits. Personally, as long as I can pay the basic bills
I want to keep all the coins in the ecosystem. Difficult I know as I am struggling to get new project work to pay my bills but I try as much as I can to not to cash to fiat.

I keep seeing project after the project they keep bleeding token value.
I have $30K in $VIPER locked rewards which I was planning to reinvest and eventually to pay my house off by the end of 2022 and now worth less than £3K. This is very depressing and demotivating. The worst thing is all is locked and I can’t use them at least on other projects.

The Defi space in @harmony is amazing but as the article says “The technology will evolve while the price bleeds for months
Let’s not make that happen. We are building the tech let’s build it so this “prophesy” will not become self-fulfilling.

We need to prove the value of $ONE and HRC20 tokens being more just the price
We need a utility for all the tokens.

I started Harmony Pay.
The idea basic idea of Harmony Pay (there is much more) is that “Jo public” would want to keep $ONE and HRC20 because the Defi ecosystem makes tokens and tokens can be used to buy things instead of bleeding the ecosystem.

To use crypto to buy goods and services is just one project of many that can keep tokens in the ecosystem.
There is the Tokenization of Things ToT (trademarking this lol :grin: :grin:) with applications in construction and recycling of materials, energy, information, IoT and much more. I could be here for days creating projects that because of Harmony ecosystem can happen.

What is wrong with attending or creating events onboarding as many people as possible? I keep suggesting bringing non-crypto people, especially artists and creatives via the NFT route. Bring them all, then manage the influx with education and guidance make sure there are reasons to keep their $ONE and HRC20 they will be getting. Make sure they is utility in the ecosystem!

So DEXs don’t have to lock tokens and we can use them within the ecosystem

Furthermore, I read Hermes Team are “Enthusiasts”. Why is this a bad thing?

This is the precise argument I had with a dev and had many times with various creatives over time. What makes anyone think that if you don’t do coding you are not valuable. The Dev that left the above project wanted almost all the payment because was “doing all the work” and holding to ransom the whole project. Thus, if I had given in this would have “milked” all the Harmony grant and there will be nothing left to grow the business. He could not even wanted to understand that there are expenses like we need a server and marketing and there are others on the project!!

I have coded before and I’m learning a bit about web3 coding as and when I have some time. But that is not the point to do everything myself the point to build a team.
There is one non-crypto not even a crypto enthusiast in the Harmony Pay team but I value their presentation and management skills. I am working to bring in the team an international crypto influencer and crypto tech start-up expert.
Should I not value them as they are classified as “enthusiasts” ?

On another note, DAOs sound good but we need to get a grip of some existing realities. Value the community yes. So, we need to develop tools for mass participation until then I feel we need hybrid governance and some structure. People want to know who they are talking to so they can have the confidence to buy into $ONE. A great example is the operation or pure R&D teams.

Also, investors when they are cashing out their earrings they should have incentives to cash on another HRC20 token or stable coin or a project or if they want to buy a Lambo or an apartment etc they only using their HRC20 within the ecosystem.
Let’s also build ZPK and systems that avoid corruption!

We are very early so let’s not collapse the ecosystem just in case this article becomes a reality. The Article is a real possibility and not a scaremongering FUD as similar things have happened before eg .COM, Telecomm and Biotech baubles bursts to name a few.

Let’s change this when Lambo mentality and make a valuable ecosystem.

If we can bring this discussion to another Talk Harmony thread I think it will be worth chatting to see how we can work on threats and vulnerabilities so we can convert them to opportunities and new products so Harmony grows.

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Hello Sbae, for transparency I am just an anonymous investor. I have investment in Fox, Tranq/Defira, Defi Kingdoms, Viperswap, Cosmic Universe, Tranquility City and the list goes on. I have recently (last week) invested to Hermes Defi after doing research about it. Do you mind returning the favour and explain who you are?

Your point 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.”

A lot of projects in Harmony gets investments without even explaining where the investment is going or what it is for. Defi Kingdoms got 500k investment and didn’t even outline where that 500k goes to. Hermes on the other hand was able to give an exact breakdown on where the $305k initial investment was going. Honestly, it was for Harmony Team to say “there was nothing that warranted for it to be more than usual 50k”. It seems to me that your first arguments are a bit bias assuming that the project would fail just because you " can follow the track record and check token price of their first venture, on polygon.". I’m not gonna lie, their first token does seems to be what’s holding them back but that is not enough excuse to ignore researching the current state of the project. I could be wrong on this one but it seems to me that you looked at the chart of the first venture and was like “This is not worth investing on” without doing further research.

I agree on your 2nd point. As I said, I am just an investor too and I do take a lot of profit from these projects.
The only difference is that me as an anonymous whale can take profit anytime I wish because I am Anonymous and Hermes has no way of contacting me while Hermes can create a mutual agreement between them, VC’s and other private investors to take profit under circumstances. I think Hermes team can’t really just take profit under certain circumstances specially if they got mouths to feed (Pure assumption). From what I’ve heard (could be wrong) Defi Kingdom’s developers are only permitted to cash out under the circumstances of “green days only”. It has been a month since Defi Kingdoms has seen green days and I doubt the devs aren’t taking profit.
Rather than having the devs keep printing tokens for salary/bonus and dumping (what I assume other projects do). I think outside funding is good.

In regards with Fox. I was recently doing research on them and here’s what their roadmap says.

Last point, “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?”

Just because you love decentralized finance doesn’t mean you’re not gonna utilize all the legal ways to fund your project right? I personally appreciate that they outlined where the investment is going.

@0xKrillin, thank you for starting this discussion and i see this is a passionate topic from our community. i can touch on a few points.

first, as @Jacksteroo mentioned, this application is not for funding from the harmony foundation, but for connecting with venture investors who are interested in our ecosystem. “Harmony Ventures” is to match projects with investors. any project can apply for this. we just kicked this off so it’s our responsibility to explain and publicize this more so that all projects can apply. @Abhi will help publicize this.

as for the larger incentives and campaigns that we have done, we focused last year in 2021 on getting some of the blue chip projects from the ethereum and evm ecosystem on to harmony. i’ll speak for myself that after coming home from ethcc last july, i felt we needed to aggressively pursue some of these projects to bootstrap our ecosystem.

sushi and kashi: $2m
curve: $2m
stake dao: $3m
aave: $5m (planned for aave v3)

later, as our native ecosystem grew very quickly in the second half of 2021 and into 2022, we also started to invest resources into our ecosystem projects.

defi kingdoms: $1m
tranquil: $500k (btc bridge campaign)

our ecosystem fund, launched in september 2021, has guidelines on the types of grants and investments with the goal of standardizing our process as much as we can. see our guideline article as well. there’s always some human judgment applied as a layer on top.

for ethdenver, we executed project x where our teams went out and made approximately 40 investments and grants - hermes was one of the project x investments. we chose to do this as ethdenver is one of the longest running and largest web3 community conference, with 12,000+ people this year. we went all out at ethdenver because it’s one of the largest events for builders and it’s essentially our hometown event of the year that the entire team can participate in. it’s also the first major one of the year that we invested time and resources so that the seeds planted here will blossom in the months to come.

this doesn’t preclude teams who we didn’t meet in person to apply via our public forum (here) and get in touch with the team in various other channels. for example, my twitter direct message is open to everyone. do we always get it right? of course not, there will be projects that we miss and others that we grant that doesn’t work out. we’ll still do our best every day to review all proposals and constantly improve the way we grow the ecosystem.

i actually looked into fantom’s grant program as part of my q4 2021 offsite talk to the team though i have yet to study how effective the program is in the long term in growing users. if there are any good articles, please post them here and we’ll review.

i’m also interested in ideas for community voted grants that we could (quadratically) match, such as this proposal with dorahacks, and ideas where we reward projects for onboarding users (vs total value locked).

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@lij thanks for touching and elaborating on this topic. It might be useful to iterate on the information document of the Ventures section (although it’s clear to me now) and or increase the number of sensible metrics that should be shown prior to asking for funding multiple times in a short time span.

However, we still haven’t touched upon the discussion point of metrics and innovation

The Innovation part
Currently; hermes has little to nothing that is innovative in comparison to its competitors, has no self-built innovative stuff (forked), utilizes ape marketing and is asking for about 25% of the sushi and kashi funding grant… it’s fully understandable that projects want to have more cash on hand but ecosystem managers should be wary about fake innovation and non sensible metrics being shown (VC bullshit meter).
Furthermore, hermes plans nothing truly original besides the quantitative analysis tools that they claim to be developing (as I have seen the alpha/beta version), something a student with some skills could fabricate within a day.

while one could argue that Hermes might bring innovation to the table in some time, the fact remains that sushi, curve, stake dao and save have something unique to bring to the table (as self-built and maintained tech) + are one of the big boys. Hermes is unfortunately neither.

The Metrics part
It’s painful to see the increase of use of vanity metrics (like, price assumptions on your own token) and even worse to see the metrics that are deemed as criteria for success. Missing a lot of things from my background as a small SaaS investor.
Things that might be useful;

  • Total Addressable Market (TAM)
  • Retained – MRR retained from existing customers
  • Expansion – MRR added from existing customers
  • New Sales – MRR added from new customers
  • Resurrected – MRR added from former customers
  • Contraction – MRR lost from customer downgrades and
  • Churned – MRR lost from churned customers
  • Churn Rate
  • Monthly Growth Rate (MGR)
  • Burn Rate
  • Burn Multiple - The Burn Multiple is a company’s Net Burn divided by its Net New ARR in a given period (typically annually or quarterly)
  • DAU/MAU ratio

It’s logical that not all metrics can be presented right away (as hermes doesn’t even exist for a full year yet). It’s the job of the project owners to be informative and transparent on these metrics and therefore also provide nuance/ the estimations they made.

Without some of the above-mentioned metrics; its quite hard to measure the success of 1 protocol/dapp to another. I am sure that you and your team have much more experience in the regard of scaling up and how to utilize metrics in the most effective manner, but still like to give my sincere feedback. It might be useful to have clear boundary limits that a dapp/protocol has to have prior to applying for the next funding round. Multiple funding rounds (A seed round, Series A,B,C) are also not performed within a time span of less than 2-3 months…

A quick look on the DAPPradar stats (also not a single source of truth… I’m fully aware):
nsgk7u0i
Volume peak during last 7 days: 136K USD
Capture
1.04K users in the past 7 days

If one looks at the dappradar stats for the harmony ecosystem:

:mega: I want to make absolutely clear that I’m not shitting on the hermes protocol at its core.
It’s (IMHO) an excellent example of why we should be wary on any funding proposal. Hermes is unlucky that they presented this idea during this timespan and I feel that the $ONE ecosystem should be more cautious with every funding proposal (albeit DAO’s, new dapps, NFT stuff (marscolony as PRIME example), ventures, grants etc.)

TLDR: it’s easy to burn money and to have sharks swimming around trying to scoop as much as possible. proper metric driven assessment would support the trust in the funding process and weed out fake innovation / deter malicious actors.

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Last update on token price (PLTS) (although HRMS isn’t live yet): DEX Screener

would mean that the investment currently would be netting negative capital efficiency

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Thank you @4MCrypto for putting in so much thought and time to react. Hopefully hermes-defi will find some time within their busy schedule to answer ur questions and take our shared doubts and concerns away.

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So far very little to hope for… Also the partner Holygrail that has rugged…

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Normally, i do not speak on this forum at all, but i find myself surprised that DappRadar statistics are being used.

DappRadar, at least regarding harmony dApps, is severely unaccurate.

DefiLlama is much more accurate when it comes to this, it may not be perfect, but it displays numbers much more alike to the ACTUAL Total Value Locked that each dApp within the network holds.
I REALLY am not a fan of trashtalking other projects within this ecosystem, but regardless of it being an honest mistake or a malicious lie, the statistics the Hermes team display regarding their position in the network is completely wrong.

That aside, calling viper & fox as competitively weak is quite low, specially when both of them have delivered much more than what you promise AND hold significantly more TVL (and btw, DeFira has a non-gamified alternative UI).

And i am not finished, first, received a grant of 50k, thats fine, but then asking for 305k and later even more, sure, give me 745k USD too and i also will procceed to hire the people that will build the product.

If a project wants to succeed, its more practical to actually build, rather than entirely do marketing (while trashtalking other projects that are actually building) and then ask for money in order to build.

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Not one of these platforms can be utilized as a SSO (single source of truth), however… They can definitely help paint a more clear picture. Hopefully the harmony team learns lessons from this hastily pushed investment in a clear post-mortem or lessons learned.

I agree!

I’ve been quite concerned with some decisions the core team has done (such as approving grants for literally nearly any project even if it has no fundamentals).

This was significantly worse with project X, where the vast majority happened to be like that.

Overall, the team needs a stricter criteria that seriously considers fundamental financial value (which projects that are just NFTs alone arent going to fill) if we want a thriving ecosystem instead of giving off a ‘‘binance scam chain’’ 2.0 impression to anyone joining the ecosystem.

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As a ONE holder, my voice should be heard too, many of these comments are downright rude and antagonistic towards Hermes and have vested interest in seeing Hermes De-Fi fail, Hermes has been doing something the rest of these groups SHOULD have been doing in the first place and that is community outreach to bring Harmony together… Hermes is dominating in community outreach and if you want to compete then I suggest you begin reaching out as they have and match their energy, that is just how the free market works, I absolutely support any further grants towards bringing energy and community too Harmony

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You could assume that, however, look at the whole thing from a more practical perspective, they already got a grant and later an investment, when having no tangible products that generate value aside from vaults (which only support sushi farms btw) and regular farms (bank doesnt count considering its where the revenue comes into).
Have i said they are failing on marketing? no, but they also should not be shameless enough to:
1:speak of other projects as ‘‘weak’’
2:lie with statistics.
3:ask for more support like if they were completely entitled to it despite all utility being just a promise.
etc…

Taking those points into account, i doubt its other projects trying to ‘‘fud’’ them, more like some people noticing something does not make much sense.

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How many times are you going to post about this? Your initial attempt at this quickly led to accusations that were categorically false. You worked in FAANG/big tech before working on Tranquil right? Put on your strategic hat and think about how your previous org leaders would handle this situation and understand why they are the leaders of the companies you worked at. Hint: it’s most definitely not in this manner. The harsh reality is you need to get a handle on the ego and play politics or others will fill the gap, whether you like it or not. Getting “triggered” is a recipe for failure for a leader and as you scale, anything you post will be put under a microscope. If the Hermes team ultimately does create a compelling product that many people use, continued posts about this topic will come back and haunt you and you’ll quickly become a bitter person.

As a final note, your criticisms about Hermes can be applied to Defira as well. You can spin it any way you want, but Defira is definitely a bit more than just inspired by DFK. Yet you don’t see the DFK team wasting time and resources bashing Defira because their leadership knows how to conduct themselves in these situations and they are focused on the product speaking for itself.

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I really don’t know why Harmony is investing in this one. This project doesn’t have much innovation. No wonder why many projects are moving to AVAX. I’m also disappointed to harmony investing on blue apes, now what? nothing happened. :man_shrugging: Harmony should invest based on TVL just like FantomFDN. This project only has 2.1M TVL, Even the slowrug Euphoria has greater TVL than this LMAO

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I’m not going to comment about this specific or any other project atm.

Just focusing on the above comment although not a direct reply to the person that made it.

I am making general observations.

To make some omelettes we need to break some eggs. In F1 racing the driver has to do the most un-intuitive action, accelerate before entering a corner otherwise the car will fly off at a straight line.

Project X was mentioned weeks in advance at an All Hands video and immediately thought what a great idea I wish I could go to pitch.

We are in uncharted territory and we need to take bold un-intuitive actions.

Spending money on an individual or a project and minimizing the barriers to entry I think it is a very bold move and unleashes creativity.

Yes, there are bad actors so we need the communication channels always be open and listen to opinions. Respect the time (better even pay them) of those with knowledge and hands-on experience in certain subjects and create fast-tracking information feedback loops.

I personally want to suggest an even bigger step further: pay everyone $500-$700 pm even if they don’t work. After that off you go be creative and if you grow further here is $2K or $5K etc

I’m not going to discuss the viability of the above idea because we are in DeFi space and we can make it happen.

What would worry me is if someone or a team cannot cook or drive a car and does not listen to the feedback from an expired hand on self-made chef or the data from the F1 car telemetry or the driver or the scientists and engineers.

Also, it would worry me going to space and someone says it’s fine we will figure it out when we get there.

I see projects that ask for funding and heavily focus on Marketing. Fake it until you make it is a viable strategy however the likelihood they will fail is very high!

Having fundamental concept ideas also from experience I believe is essential.

I quote @lij from one of his tweets “Head in the clouds feet on the ground” to me if this is a genuine fundamental core value in an individual or a team and they genuinely believe and act upon it regardless at what stage any project is I say fund them and even change the rules to accommodate them if they don’t quite fit in.

This to me is real life ZPK before we make AI coding.

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I think a lot of people here are really missing the point

A.) Your under the assumption the Harmony team has no idea what they’re doing, clearly with the BAYC purchase they have put marketing as a priority with investments which has been a community ask to bring more TVL to harmony which benefits every single project here and every project has failed to follow suit

B.) You assume Hermes has done nothing, when in fact they have generated interest and buzz in harmony, instead of welcoming them, the de facto “kings” of harmony threw a fit creating “disharmony” throughout the ecosystem, this seems to be more of a war of populist vs elites battle within harmony itself, something new vs the “old guard”

C.) Tranq seems eager to quickly tweet about leaving harmony thus we need a backup on deck that is loyal to its investors and OUR ecosystem, how can I even trust my funds with a project lead constantly saying he wants to leave? Investor confidence is now low with Tranq on harmony

D.) I do not work for Hermes team btw either but as an investor, I would have agreed with more of the nay-sayers but the reactions that I have seen come at them has only increased both my resolve and confidence in this new project

Edit: TLDR; The project lead of Tranq may have had a point but demonstrated a lack of leadership, a lack of a cool head, a lack of cooperation and now it feels like the conversation has boiled down to one side throwing shade while the other one builds

Edit2: Also I am making references to the Twitter account of Krillin leveraging personal attacks onto members of this discourse that don’t agree with him, was blocked for saying I didn’t agree so can’t link that

And imo we just need better community leadership and this comes as some random investor in this ecosystem and I want too see it thrive, and this is my 2 cents and how maybe a regular investor is seeing things

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Yeah Hermes created a buzz with 2M TVL :slight_smile:. Harmony should fund projects that really brings TVL to harmony like Tranquil. And don’t mention 1btc partnership as it’s not a funding.

And the BAYC marketing strategy clearly didn’t work out, it didn’t more money/users into harmony. Look at harmony’s TVL it plummeted and will continue to do so once DFK goes to its own chain.

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