DXventures Grant Investment to Opolis

Background

In February 2021, DXdao community members proposed the creation of a DXdao venture arm, coined DXventures. Community members quickly adopted the idea, and DeFi projects have since approached DXdao regarding investment opportunities.

Grant to Opolis

DXventures is happy to announce that it is seeking the community’s feedback for an on-chain proposal to make a grant of $50,000 to Opolis, Inc. from the DXdao treasury. Also, some individual DXdao contributors have committed to match DXdao’s $50,000 grant to make the total grant from the DXdao community to Opolis in the amount of $100,000. By matching the DXdao grant with contributor funds, DXdao was able to obtain a larger token issuance from Opolis with better terms.

If the $50,000 grant proposal is passed, DXdao would join Consensys, MakerDAO, Gitcoin, Panvala, Raid Guild, Snapshot, Superfluid, Sushiswap, and other DAOs, as Opolis Genesis Coalition members. In making this grant, DXdao intends to work as an active partner with Opolis and a voting member of Opolis Commons to solve issues that contractors in the crypto currency space regularly face.

About Opolis

Opolis is a Digital Employment Cooperative offering independent workers fully portable benefits, payroll, and shared services. Opolis founder, John Paller, has been involved in the DeFi and ethereum spaces for many years as a co-founder of ETHDenver. John created Opolis in order to provide contractors in the cryptocurrency space with a way to navigate the concerns that naturally come up when handling health insurance, payroll, and tax issues while being paid in cryptocurrencies. Opolis was founded in Denver, Colorado, and currently focuses its cooperative services within the United States, but it has plans to branch outside the US in the next one to two years.

Grant Details

If a proposal is passed, DXdao would receive Opolis tokens, called $WORK, two different ways:

First, through an initial grant of 237,599 $WORK, 20% of which would immediately vest, with the remaining $WORK vesting over the course of 4 years.

Initial $WORK 20% = 45,720

Total Vested $WORK 100% over 4 years = 237,599

Second, since DXdao is not obtaining any direct equity of Opolis for its funding, Opolis has agreed to provide DXdao with a future issuance of $WORK in the event of a sale, liquidation, or merger of Opolis. The number of $WORK that DXdao receives would be in proportion to a 0.165% equity ownership of Opolis, Inc. at the time of any of the above stated events.

Next Steps

If the DXdao community signals interest in going forward with a $50,000 grant to Opolis, Opolis will make an on-chain proposal on DXdao’s mainnet voting interface on Alchemy for the grant.

We Want Feedback

Through this grant and partnership with Opolis, DXventures looks forward to filling a need that many DXdao members actively face as crypto contractors. If you have any feedback on the grant or ideas on how Opolis can help crypto contractors, let us know.


---------- UPDATES ----------

Here is the Opolis tokenomics document.

Here is the Opolis pitch deck, which has a lot of information on projected traction rates and competitive landscape.

Regarding traction, since Opolis’s launch on April 22, Opolis has retained 3000 new members in the Commons from 65 different countries. These numbers majorly outpace their initial projections of 300 members by end of year 2021, found in the Opolis pitch deck.

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The idea of DXventures is to invest (as in for profit) a portion of the treasury in promising projects related to DAOs and generally building tools useful to DXdao.

In this context, the present proposal seems to miss a clear statement of what is expected from this investment.

Questions:

  1. what are the projections of DXventures for the value of $WORK in, say, 24months under several scenarios (positive, negative, etc), and what are these scenarios?
  1. Will DXdao receive 0.165% equity or only 50% of that (the rest going to the DXdao contributors who provided the 50k?)
  2. Who are these DXdao contributors? I ask because this should be a transparent process. They are accessing to a significant investment thanks to the 50k of DxDAO. Can anybody join this group o DXdao contributors ?
  3. 0.165% equity for 50k usd means a 100% value of about 30m usd. Is it reasonable to assume the Opolis will be so successful?
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What’s 100k among friends? :upside_down_face: Let’s do this!

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@Iam_kmkm good questions.

The way that Opolis has structured this opportunity is quite unique.

DXdao would be participating via a grant (similar to how MakerDAO participated in Opolis) that has the opportunity to become WORK tokens.

There is also a multiplier mechanism that gives larger participation for larger participation sizes. So given that DXdao is aiming to start with an initial size of 50k, the 50k additional contributions by individuals actually improves the multiplier giving DXdao an improved percentage.

Overall, Opolis is creating a product to fill a huge growing need that web3/contract workers have. If we believe that Opolis can continue to build and fill this need, it should turn out to be a successful opportunity.

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I am sure this is the case, but this being the first investment of DXventures, I think it should go through a (bit more) rigorous discussion/analysis.

For example I believe it is necessary to answer precisely the 4 questions I asked above (and probably more).

Some other DAOs might be investing on this project not on the same basis as DXventures.

EXAMPLE: I am pretty sure that it is the “Maker foundation” and not MakerDAO (despite what they write on their website) that is investing on Opolis. And I am 100% sure that they do not do this as a way to invest/multiply their capital. But just as a way to develop the ecosystem (the Maker Foundation needs to use their cash before dissolving).

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Hi @iam_kmkm thanks for the questions. Here’s some more information on the value proposition for the grant to Opolis.

One thing to mention is that Opolis, inc., a Delaware corporation, is the funding and launching arm of the Opolis Commons, a Colorado cooperative. Opolis Commons is where members join a cooperative to receive a variety of contractor-related benefits and use $WORK tokens that act as voting power and ownership of the cooperative. DXdao will likely join the Opolis Commons as a member to partner with Opolis on finding solutions for crypto contractors.

Because there are two separate entities, DXdao is receiving two forms of return on its 50K grant investment:

  1. an initial token distribution (20% initial, with 4yr vesting). These tokens can be used to vote and stake for more voting power in the Opolis commons; and
  2. 0.165% equity in Opolis, Inc. (The 0.165% is for DXdao only).

Regarding the first portion of the investment, which is the 237,599 $WORK tokens vested over 4 years, it’s my understanding that DXdao would hold onto these tokens, possibly use them to stake in Opolis governance, and, at some point, maybe sell the tokens.

For the equity portion, like you said, the post-money valuation of Opolis is approximately $30M. A good outcome that has been discussed is that Opolis, Inc. will be sold to the Opolis Commons in about a year at a approximately a $50M purchase price. This would be about a 1.5x return on the 50K investment plus the initial tokens. This is just a possibility and not at all a certainty.

All venture-related investments are high risk, but the DXventures crew was impressed by the founder and goal of the project, which already has a viable product with users and immediate plans for growth.

Also, if you’re interested in DXventures, you should attend our bizdev meetings that happen on Mondays at 15:00 UTC. We talk all things bizdev, but that’s also where projects have generally been making their pritches and whether DXdao should invest is discussed.

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Thanks @Tammy !

Disclaimer to what follows: I still have 0 REP, so basically just commenting as a DXD holder.

Yes, I was present at the meeting when you discussed Opolis.

The meetings are great but I think they cannot (or anyway should not) exclude a proper “paper trail” here in the forum.

Nobody answered this question.
Am I the only one to see a potential conflict of interest here?
It seems to me that these contributors should:

  1. be disclosed openly
  1. their participation to the vote (with their REP) should be questioned too.

My overall impressions and feedbacks: I totally get that John Paller is a trusted actor in the crypto space and that Opolis tries to solve an important/concrete problem. However what is the goal of this investment for DXD holders, really?

  1. to obtain a +50% on 50k USD (=25k USD) in 1year selling the $WORK corresponding to the 0.165% equity ?
  2. vote and participate in governance in Opolis (aren’t we already maxed out with our own Governance)

The fact that 50k usd is a small fraction of DXdao reserves doesn’t mean we can just use the money to just contribute to the ecosystem and “maybe sell one day”:

I am excited by the idea of DXventures but I think this starts in a rather bad way (sorry if I am quite direct about it):

  1. there is no clear prospectus of “future cash flow”, “current discounted price”, “growth curve”, “competitors analysis” etc, just a vague “one hope is to see a +50% in 1 year” without any estimation of the risks involved. Also, we get only $WORK tokens and no real equity.
  2. some DXdao community members are involved and are getting access to these terms as well, leveraging DXdao treasury [nothing bad in this, per se, but it should be 100% transparent]
  1. The returns for DXD holders are unclear (“maybe sell the tokens”…), without any timeline, and participating in Opolis governance seems a weird thing to do at this stage of DXdao where it is already hard to do our own governance/development effectively.

Conclusion: Although I don’t work in investment/finance, this investment proposal, as currently phrases, does not seem to meet the basic standards of due diligence for a (venture) investment firm.

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@Iam_kmkm these are valid thoughts. I’d be interested to know how the other 1,600+ DXD holders and 500+ REP holders are thinking about and framing DXventures.

When reading this: Idea for discussion: DXventures
I think of DXventures quite different from how I am interpreting your framing.

From my perspective, the point of DXventures is not to be a full-time team of professional VC investors.

I see it to be much more open and experimental, and a smallish experiment on whether a global decentralized collective like DXdao can participate in a ventures space alongside it core goals. All while helping to invest in projects/services/ideas that DXdao community (and other DAOs) needs and will need more and more in the future.

But I am not saying anyone’s perspective is better or worse - just different. That’s the power of a global decentralized collective.

In fact, my goal is more like: DXdao becomes a stake holder in Opolis, and then DXdao/DXD communities participate and create momentum behind Opolis that is becomes a massive success for all parties involved and the world.

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Hey @Iam_kmkm
Would love to have you on the Bizdev call on Monday (17:00CET / 11:00ET), and maybe intro yourself (You can stay Anon) and talk about some of these reservations and issues with DXventrues and the first investment into Opolis.

The DXdao very welcoming to criticism and to be honest, the goal is to improve and become better in a decentralized way, so your feedback is even more valuable than you think.

I can say that there is a lot of positive reactions, and some of the topics you touched on are already being attended to, like the conflict of interest of members who want to participate.

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Hi, @therfnoob! :slight_smile: You’ve attended meetings and the other contributors /no different than you in any way/ have been vocal that everyone finds you a valued member of the community. Nobody’s contribution goes unnoticed, yours especially. :wink:

My conclusion is slightly different. In a past life I had a boss who owned a company with thousands of employees. He barely slept and some folks thought he was going mad. I was lucky to work with him directly on a daily basis and the most valuable lesson I learnt from the way he managed to pull himself together was this: No matter how constructive the criticism, unless someone gave him a solution, he just ignored them. He was already so busy, and it felt as if someone is giving him extra work. On the outside you’d think he’s favoring people who make mistakes and ignoring people who are trying to help, but in reality he was protecting his sanity, and one could argue the company as well. No matter how constructive the criticism, unless someone offered a solution, it would only muddy the water. If one finds something that may not seem like the most effective way to go, it isn’t necessarily because someone is doing it on purpose with any alterior motives. Maybe they need help. And help is always welcome here. :point_down:

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As @Eylon said, it would be great to have you at the biz dev call on Monday to talk more about your points. Here’s my last set of responses with some of the info you requested.

I agree that we should disclose who committed to investing in Opolis. The individual investors also agree. They are: @corkus , @martinkrung , @nicoelzer , @0xVenky , @sky , @Zett . I’ll update the post with this info.

I’m also in support of the investors not voting on the Opolis proposal. I doubt any of them would have an issue with this. We also need to have a broader discussion about how we can open these investment opportunities up to the DXdao community.

DXdao contributors are having issues accounting for payments from a DAO. So much so that some have not pulled out funds from DXdao into their bank accounts. This has, in some cases, also been an issue with recruiting devs. Anything that impedes recruiting, undermines product development, which hurts the price of DXD imo. Opolis’s Web3 solutions for payroll can be a solution to this.

To clarify, DXdao would invest $50K for 237,599 WORK plus 0.165% equity in the form of future tokens. Here’s Opolis’s Tokenomics Paper. If you have comments on the paper, would appreciate more analysis, since this decision still needs to be voted on.

Also, since we’re a DAO, there’s no KYC, and therefore no ‘real equity’. That’s true for any investment DXdao partakes in. DXdao would need to set up a legal entity in order to obtain traditional equity.

If DXdao becomes a member of Opolis, DXdao members can receive discounts on contractor-related services. Also, if DXdao decides to stake its WORK tokens in Opolis’s governance, DXdao will receive more WORK tokens.

This information was generally discussed in Opolis’s pitch deck. Take a look here.

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100%. Furthermore we need to work towards opening co-investing up.

In reality in this case, DXdao is getting better terms thanks to the community members’s co-investment pushing the total above a more favorable term threshold.

The work involved to do DXventures right might actually warrant more resources than we currently have.

It’s early days for DXventures. Choose your pill.

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It would be great to hear all the different perspectives on how each person is thinking about DXventures, what its goals are, and how this fits into the overall DXdao ecosystem.

As mentioned above, if this framing varies widely across different people, then these smaller details can be taken totally out of context.

Also, defining what it means to “open these investment opportunities up to the DXdao community” is important.

For me the “DXdao community” is extremely open → meaning REP holders, DXD holders, contributors, participants, anyone who has any interest in DXdao.

So this is effectively “the public”, and in this type of scenario it would be difficult to open this up to “the public”.

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We could possibly ask stakeholders whether they’d be open to have a portion of the buyback reserve allocated to venture investments that could be curated communally on Omen /SharkTank/. The rate of return distribution that stakeholders would be entitled to could also be adjustable and up for a vote.
All that keeping in mind that one reaps what one sows and the more one gives, the more one gets back in return.

Some of my thoughts on @Iam_kmkm questions

  1. It’s possible to do such things, but … crypto is a highly irrational place. If you look at the value of different projects everyone has to admit this. I more looked if the tokenomics makes sens, then a possible future valuation. For myself I think the biggest influence on the valuation will be the cycle in which the whole crypto market will be at this point. As we don’t know the future, this is hard to predict. What I also see, most tokenomics are not set in stone and can be changed. Mostly, if they are changed, they are changed in the direction that the token accrues more value, not less.

  2. I’m one of these contributors and I think we should be transparent about this. But for me, this is about having skin in the game. Imaging DXdao is investing, but none of the contributors invests along, even if it’s possible? This would be a very strange signal and many will tell us we play with other peoples money.

I don’t understand what’s the ratio why these contributors should not vote about the investment. They are confident to invest their money, so if the vote yes this yes has “more” value because they have skin in the games, where other which vote yes have not. I guess aligned interest is good.

Opening up the investment opportunity has one big drawback: From outside it looks as these project only need money, but this is not the case. There is enough money. These projects need the right investors. Either investor which help them grow and giving valuable feedback, or investor which don’t end up in the public complaining how much money they lost by investing and how this particular investment underperformed. I guess opolis is willing to take investment from contributors because they know we are pros and will not end up complaining in the public, which can produce significant distraction.

Personally, I think DXdao should not invest with the biggest return in mind, but with the best fit to what we are. It’s not about to make to the best profit, it’s to create a network effect which benefits us all. For Mesa, this early-stage investing could be a good strategy to get good projects later selling token on the IDO platform.

DXdao is on the forefront of decentralization and the tools and services we need now, will be used by many in the future, so I think there is also could be big profit in this.

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Hello everybody [theRFnoob here, unfortunately can’t change my nickname],
and thanks for the very open discussion that you have produced :slight_smile: !
This is a good community! :muscle: :call_me_hand: :clap:

Some points:

  1. I am quite excited about DXventures
  2. and I am also kind of positive on Opolis,
  3. my comments were mostly motivated as an attempt to improve (or at least, try to improve) the DXventures investment process: more forum discussion, more transparency, more details about the investment, etc.

Thanks!

One question, that perhaps meets the suggestion of:

is: “why didn’t we ask community members to participate rather than coming up with the restricted list above”?

[If you did, sorry, I must have missed it.]

Perhaps the outcome would have been the same. But still, the process is important.

It’s true that these contributors are likely bullish on Opolis.

The conflict is, however, in the fact that they’d benefit from DXdao voting YES, because they get a better deal (as individuals) that what they could get if DXdao voted NO.

It would be, of course, entirely different (no conflict) if these investors invested in Opolis independently (i.e., without leveraging the money of DXdao).

This is a 100% legitimate viewpoint.
But are you sure DXD-holders share this opinion?
Will they vote on this investment, or it’s all decided by REP holders?

I like DXdao REP-based system when it comes to ordinary governance, product development, etc. But here we are talking about investing the money that DXD-holders put together into DXdao.

This is definitely true. Still, this truth does not mean we should not try to be analytical, make sound/scientific decisions, etc.

CONCLUSION:

I am not against this investment in Opolis for 50k. However I have the feeling that DXdao is progressing very quickly on this thing [or at least compared to many other things that required months to discuss/vote/etc].

I understand that the opportunity is now, with Opolis, either we act quickly or we don’t act.

But is this really such an amazing opportunity that we have to rush through it? Maybe, yes… I don’t know.
I’d instead prefer a slower process, more details, more DXD-holders expressing their viewpoints (both forums and onchain), etc.

But overall I trust the REP-holders and, anyway, 50k is a limited amount for a rich DAO like DXdao.

Ok! I will try to participate, but monday is a work day for me, and the time is 17h00 Paris time if I am not mistaken.

One suggestion I’d like to make (e.g., participating actively in MakerDao’s governance) is that a detailed governance process in the forum is sometimes preferable to calls because not everybody have time to participate and/or to re-watch 1h long videos on youtube, while most people can read a single thread of their interest once/week.

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F5, reboot, single user mode with networking

I am interested in what you are proposing, What’s the conversion rate between your $WORK and US Dollars? I have a significant number of ideas that could make our desires and ventures in this space much easier to come to fruition. I wish it were easier to explain simply.

Can you help me? Are you interested?

I would like to see a shared ethereum “wallet-chain” held in some kind of shared space; it really needs to combine multiple wallet signatures and ownership … but specifically what I am looking for is a way to connect my current contact lists–on various social network platforms to something like “a single ethereum identity” probably something like “a 3box” and be able to communicate in a more secure and direct fashion with those contacts.

Being able to do that would go a long way towards

F5, reboot, single user mode with networking

I am interested in what you are proposing, What’s the conversion rate between your $WORK and US Dollars? I have a significant number of ideas that could make our desires and ventures in this space much easier to come to fruition. I wish it were easier to explain simply.

Can you help me? Are you interested?

I would like to see a shared ethereum “wallet-chain” held in some kind of shared space; it really needs to combine multiple wallet signatures and ownership … but specifically what I am looking for is a way to connect my current contact lists–on various social network platforms to something like “a single ethereum identity” probably something like “a 3box” and be able to communicate in a more secure and direct fashion with those contacts …

It’s not a difficult concept–I need to have a unified messaging contact list that spans across services like Facebook and Snapchat; but isn’t bound by their control or strange ways of hampering communication.

I do not have the personal technical expertise to make something like this come to fruition; but I can almost see exactly what’s needed and what will work.

#1 0xc514f094370cFc5eE45a1Dd9B72bb9675efE266f@ethmail dot cc
#3 0xa780F8a7C4721bbFf6Ee2d3EFD94bf151Cf8006F@ethmail dot cc
fb dot me/admdbrn

I am beyond “out of time” and nowhere near third dimensional thinking. Is there anyone here?

The Opolis opportunity for DXventures was discussed on today’s Governance call.

There was come lively discussion and a few takeaways:

  • Overall, community seems interested in the Opolis opportunity and would lean towards proceeding.
  • To keep the deal clean and concise, it might be better to use DXdao funds only and not increase the amount and get better terms with additional individual contributor’s fund
  • Maybe DXdao could increase amount to $100k instead of $50k
  • For this specific opportunity, it would be good to hear additional signal from DXD holders, using a snapshot vote.

There is additional background and discussions above.

Proposed snapshot vote for DXD holders:

Should DXventures proceed with the Opolis opportunity with a $50k allocation, $100k allocation, or pass on the opportunity?
Choices:

  1. $50k allocation
  2. $100k allocation
  3. Pass on the opportunity

DXD snapshot vote here: Snapshot


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The DXD holder signal Snapshot closed today, on May 10. DXD holders voted for DXdao to invest 100,000 in Opolis with no individual contributor investment.

Go to the Snapshot proposal outcome for more information.

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