Proposal: Messari to provide investor relations/reporting services

šŸ°Hop Ecosystem
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Abstract:
In an effort to better inform the crypto ecosystem on ongoing fundamental changes and major developments on Hop, we are proposing that Messari initiates coverage and provides quarterly financial reporting. This would serve to attract more builders, entrepreneurs, and investors who would then provide value to the overall network once they are more aware of these core project fundamentals.

All reports would live as free resources on Messari and would be distributed through our newsletter (230k subscribers) and various social channels.

About Messari
Messari is a team of crypto natives passionate about building powerful data analytics tools for the web3 world. The company was started in early 2018 and has since scaled to over 100 employees after raising a Series A led by Point 72 Ventures. We recently received a $12.5 million grant from The Graph to become a core developer to build and standardize subgraphs creating a robust open-source data infrastructure for the broader crypto ecosystem.

Messariā€™s core products include Messari Enterprise, a leading market intelligence platform for crypto professionals as well as Messari Protocol Services, an outsourced research and investor relations service for many of the top DAOs. This has included long-form research, comprehensive data dashboards, and quarterly reporting for over 150 projects.

Rationale
Currently, there is a high barrier for those within existing project communities and the broader crypto world to stay informed and up to date with all of the major key performance indicators and protocol-level changes. While there are various analytics dashboards, blog posts, and messaging channels, it is still cumbersome to have a strong understanding of all the important developments going on. This leads to a misallocation of resources, both time and money since stakeholders are not acting with the full breadth of knowledge at their disposal.

To alleviate this problem, many top projects and DAOs are expending additional resources to better surface a lot of this core information. These initiatives are serving to increasingly professionalize this industry, however, what is still missing is the proper contextualization of this data from an independent third party that would allow an outsider to gain better insight into whatā€™s going on.

As we continue deeper into a bear market this becomes even more important as stakeholders tend to overweight price as their barometer of project success. By outsourcing this critical investor relations function to a specialist firm, Hop can be better positioned to withstand turbulent times and not fall to the wayside as weā€™ve seen during the last bear market with projects unable to retain the mindshare of major crypto participants.

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Proposal Breakdown

  • Initiation of coverage report that breaks down what the project is building and why it matters, while contextualizing it within the broader crypto landscape. It will also delve into a competitive analysis and breakdown of the token economics.

Examples: Osmosis

  • Four quarterly reports beginning in Q3 that present and analyze key KPIs and fundamental metrics (exchange volume, liquidity, protocol revenue, etc.) from both a macro protocol level as well as more granular specific markets. The report will delve into major governance developments, upgrades, and key roadmap initiatives on a recurring basis.

Examples: Compound

Total cost: $100k total (5 reports)

We understand this is a significant cost for a DAO, particularly in these market conditions, however, this equates to ~$8k/month for the year which is much less than what would be paid to a full-time contributor taking on these crucial responsibilities. (Not to mention the added value from the distribution Messari provides)

We look forward to hearing the communities thoughts as weā€™re eager to become a long-term partner with Hop protocol!

1 Like
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There may be value here medium-to-long-term, but I do not see this as a required service right out of the game. I am not sure the value proposition aligns with a week-old DAO whose initial steps will likely not require condensed analytics and reporting.

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The DAO only has HOP tokens right? What is the proposal for payment? Up front? $100k divided by the market price in USD? Payment timeline? Is Messari willing to accept tokens that vest?

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Hi Jack, how would you measure the ROI for an investment like this? Do you view this more as a marketing expense or a business intelligence expense?

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@tony_intern We view this as more of a business intelligence expense geared towards educating stakeholders (similar to normal Investor relations in tradfi) but with the added benefit of marketing by getting it in front of a quarter million crypto professionals. In terms of ROI it comes from the increase in people interacting, investing or integrating with the protocol which shows up in the form of more active wallets, value locked, and even participants engaging in Discord/forums.

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@thisguyisngmi We prefer stablecoins but can work with token payments as well. We can accept $100k in HOP upfront or $25k paid quarterly at the then current market prices. Weā€™d also be willing to accept tokens that vest but would structure it such the USD amount is higher than the cash price to account for volatility depending on the preferred vesting schedule.

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We understand Hop is a newly launched DAO and think that good IR is just as important from day 1 as day 100 or 1,000 since existing stakeholders still need to be adequately informed plus it can help bring in a more participants and economic value into the ecosystem to help it grow in the early days.

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Reporting service provider should not be paid by the organization that it is auditing. That creates obvious incentive issues.

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Sure in tradfi as the auditing organization can fudge numbers but in this open-source world all of our methodology is free for anyone to check. In fact, weā€™ve actually found errors in many of largest DeFi projects dune dashboards or subgraphs that weā€™ve corrected to more accurately represent key metrics.

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All respect to Messari but this proposal pretty daft.

100k for essentially paid promotion.
Thatā€™s more than 2.5% of the current market cap.
And in stables not $HOP.

One of the few sliver linings to the bear market should be that these kind of proposals are a thing of the past.

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In no way is this ā€œpaid promotionā€ look at any of the examples weā€™ve done for Uniswap, Compound, dYdX, and 20 other top DAOs - we do a ton of data science work to build out dashboards (and increasingly comprehensive subgraphs) and then provide a a data-driven analysis to better surface important fundamental metrics.

We understand Hop is an earlier stage protocol but we figured it was worth starting the conversation as thereā€™s always lighter weight analysis we could start with

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I see value in eventually providing financial reporting but $20k per report doesnā€™t seem like the best use of funds given market conditions and age of DAO. I believe we should prioritize protocol survivability and bonders seem to be a first concern. Regardless, glad you started the conversation and believe it should continue in the future.

2 Likes