[Proposal] Commission quarterly financial reports through the Messari Hub

Governance Ecosystem Fund [deprecated]
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Summary
In an effort to scale the amount of quality, long-form research available, we are proposing Balancer joins the Messari Hub to commission quarterly financial reports. This would serve to better inform the crypto ecosystem on major developments and ongoing fundamental changes, effectively attracting more builders, investors, and traders to the ecosystem.

Background
The Messari Hub is a community-driven marketplace for public research where we work with top projects and independent analysts to increase the amount of quality, open source research. One particular area of research we think many DeFi projects would benefit from is more standardized financial reporting with contextual analysis.

An example of this was in our recent Q3 report for Compound where we outlined all the key fundamental data points and analyzed why they occurred. We also took a look at major governance decisions over the past three months and assessed the implications of upcoming changes to the protocol.

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In addition, we would build and maintain a comprehensive data dashboard to view these metrics in real-time.

All reports would live as free resources on Messari and would be distributed through our newsletter (120k subscribers) and various social channels.

Rationale

We believe the actionable insights generated from these reports will better educate stakeholders on the economic, financial, and social health of the project, whether it’s a surge in certain markets liquidity/volume or the implications of a major governance decision. As more players in the space are adequately informed it will help them make better decisions and allocate resources more effectively.

Furthermore, as more and more traditional institutions get onboarded to DeFi they will seek to have consistent reporting similar to quarterly financial reports and sell-side equity research with which to rely on to make key decisions. By blending the objective reporting of a 10-Q with the contextualization of sell-side research, these players will grow increasingly comfortable trading with and investing in this new financial infrastructure.

Terms

We are requesting a grant of 13,000 BAL from the Ecosystem Fund vesting linearly over the next year.

Reports will be produced in the 2 weeks following the end of the next 4 quarters starting with a Q4 report released in January.

We appreciate any and all feedback on our proposal!

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Thank you for making this proposal. I’m curious if this was solicited by anyone from Balancer or did you do this purely on your own accord?

I’ll mention what you said in discord - we have the option to pay in stables or remove the vesting to bring the price down to $125k.

To me, even at $125k I’m not sure the value is there. Our Dune dashboards are free and cover exactly what you’d cover in this report. But, open to being persuaded.

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Hey Davis - Thanks for the quick response! I’ve been talking back and forth with Markus on commissioning research for the last few months.

On your last point, most of the value lies in the long-form research, having an independent third-party assessment to help the community and broader crypto ecosystem better understand what’s going on and why it matters rather than just having the numbers to look at.

I’ll also note that we can start with a lighter weight proposal possible starting with a more “initiation of coverage” report (example) where we do a deep dive on the current state of Balancer and can always explore doing quarterly reports for 2022.

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Thank you for taking the time to make the proposal, @jpurd17 . I look forward to seeing the reception from the community.

Jack reached out a few months ago mentioning the Compound grant to write their quarterly reports. At Balancer Labs we didn’t feel this was something we should commission ourselves, but rather that much like in Compound’s case it should be proposed to the community. For this reason I suggested he should start with a forum post to gather feedback and polish the idea.

It would be great to get more people familiar with Balancer. Leveraging Messari’s reach is a value in itself. Would it be possible for you to share some metrics related to the Compound report (eg, of the 120k subscribers how many have read it, engagement metrics on social media, etc)?

I very much agree with this point. I wonder how the community could assess the quality of the research beforehand - IIUC Messari Hub leverages a network of researchers, right? Is there any chance we could know in advance who the author would be?

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Do not support this but thanks for the post guys. If u really wat to help so just do it . Don’t ask for 300k $

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For metrics related to the Compound report:

  • 25% open rate on the newsletter (30k views)
  • 100k impressions on Twitter
  • Analyst call webinar with Robert Leshner and our Senior Analyst Ryan Watkins had ~200 live attendees

As for the author of the report, we have our in-house analysts currently doing the quarterly reports. It depends on the current pipeline but would likely either be Ryan Watkins or Dustin Teander

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Would you mind adding a poll to the OP? Would like to get a better sense of how people feel about this. I’m leaning towards a yes and paying with non-vested BAL at $125k. With all the conversations around the financial side of the protocol recently, this kind of long form research could be a valuable input and its worth trying considering Markus’ endorsement.

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Move forward with the Quarterly Research proposal for $125k non-vesting BAL tokens
  • Yes
  • No

0 voters

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I voted no for now, however this type of analysis could be useful in the future.

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We are not at a stage where we need this kind of reports given the general setup of our treasury/fees etc

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I think such reports can be useful information. Right now I am leaning towards a no due to the following reasons:

  • The benefits this report right now are not clear to me. The word actionable insights is something sounding really good. I use that word alot also but I would appreciate a bit more “meat on the bone” here.

  • I assume these type of reports mostly follow a strict template in what data they present. In order for us to act in the benefit of all BAL holders we should also ask other service providers what price the quote on a similar serivce.

I think acting on option 2 would drive the discussion to faster consensus. What do others think?

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In terms of actionable insights, we’ve spoken to a number of key stakeholders that have done follow-up analysis using this report. For example, a protocol specialist at a16z was able to use this report to assess the efficacy of liquidity mining incentives.

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I also understand the communities sentiment behind the price point as $125k isn’t a small fee. That said, Balancer is essentially outsourcing their Investor Relations for an entire year to a trusted third party with the requisite expertise to create valuable reports and the distribution to ensure it’s broadly consumed.

In addition, while I don’t advocate for reckless DAO spending, there is an inherent risk from keeping the belt too tight around the treasury and not spending towards growth. The dYdX founder, Antonio Juliano, recently posted a thread that highlights the importance of this in an industry with high network effects. These quarterly reports can play an important role in Balancer’s growth by getting a lot of the important fundamental developments into the hands of the broader crypto ecosystem.

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Hi @jpurd17,

I don’t think we meant no. But I believe the community recognises the fact that Balancer is at some early stage of decentralisation. We don’t have a protocol fee activated yet and we know pretty well our financial condition (simply because is very basic - a lot of native tokens - BAL - in our treasury).

I’m sure your service will be very valuable once a number of actions are put in motion.

Please come back in a few months and I’m sure we will reconsider your offer :smiley::wink:

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I think this is a pretty steep price for such a service. I would actually propose to use community resources and develop our own metrics with the Uniswap v3-info dashboard fork from BEETs we are working on. All data is there, it just needs to be implemented and curated.

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Thanks for the response @Andrea81

I don’t think protocol fees need to be activated as there still is a lot of analysis to be done around fundamentals (exchange volume, TVL, etc.) on macro level as well as split across various markets. While many close in the community are abreast of this data, the vast majority in crypto are not, so quarterly reports through the Hub would serve to better inform the wider crypto ecosystem.

Lastly I know many are worried about the steep price but as you mentioned, there are a lot of BAL tokens in the treasury so 13k BAL (1/1000th of the total) for a value-add service to an organization like research/investor relations feels reasonable. Regardless, I understand if now is not the right time and we’ll be happy to revisit for Q1 2022!

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I just wanted to give a quick update on this proposal: I will be working on a Treasury Dashboard in Q2 2022 through a Balancer grant in collaboration with Beethoven-X. Our goal will be to build live reporting on key metrics. Therefore I think that this proposal is redundant and still way too expensive. An open-source project that fetches data live on-chain is way more efficient and beneficial for the Balancer DAO.

Here is a preview build of the analytics site for Mainnet: https://balancer-v2-info.web.app/

In short: I am still against this initiative given its steep price point and “static report output” nature.

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Thanks for the update! I think you’re missing a few key points here:

  • It’s not “static” in nature as we build rather comprehensive live dashboards as well

  • The value of this proposal doesn’t lie in just the surfacing of the data - it comes from the analysis and contextualization of the data from an independent third party and then wide distribution of it to now over 200,000 crypto professionals.

This better informs the broader ecosystem on important project fundamentals which then brings in more users, investors, traders, developers who are eager to provide value, allocating their time/money now that they are more informed of the interesting developments going on

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Our governance process has changed a bit since you first made this proposal. The door is open for this to proceed to a vote if you as the author are still in favor of moving forward with it. I think the only thing we need from you is clarification about whether you want to go with the 13,000 BAL over four years or the flat $125k (which we can pay in USDC or BAL, your choice).

Also, the address which will be the vesting beneficiary or the recipient of the one time payment so it can be included in the vote.

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Great! Well I’d like to move forward, requesting $125,000 in USDC for the above proposal.

The recipient address will be messari.eth

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cool, let’s give everyone another week or so to chime in if that works for you. Can probably start the vote on the 8th or so

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