Unearthing the Veins of Effective Leadership and Streamlined Collaboration for a Prosperous Co-Op

GM to all Miners, veteran and intern alike. It’s been a long 16 months, and for any readers that have been exploring the caves with us this entire time, we’d like to express our heartfelt gratitude for your continued support. It has not been easy being a Concave maxi for the past several quarters as deadlines were missed, alpha was gated behind psyops, and WAGMI vibes quickly dried up as the promise of a once-promising return on value has diminished greatly.

This has been a multifaceted failure on the part of the Co-Op. From the inception of the organization, we have struggled to maintain a steady heading towards success as the organization lacked clear structure, leadership, and vision. On top of this, we’ve struggled to even comment on the issues brought forth by the miners whether that was through organic interactions within the server (RIP 🍃the-spring), or by engaging through the newly created proposals forum.

To put it plainly, the Concave brand lost any and all respect it garnered in the beginning, eroding any trust or confidence held by stakeholders. You were told Concave hand-panned only the finest of gems in the form of Angel investors who would diamond hand you to the promised lands. It was suggested by both internal contributors and external collaborators that Concave related NFTs would provide huge incentives well beyond the scope of the whitelist. The team has maintained over the past several quarters that our contributors are stripmining the depths of DeFi to deliver high value applications while entering into lucrative seed deals and protocol partnerships. And most importantly, you were promised a steady stream of products that would generate substantial revenue for stakeholders in the platform, ensuring the Concave flywheel would pump the protocol to a leader in the space.

We acknowledge these shortcomings and take full responsibility for them. However, we are determined to turn things around and create a brighter future for Concave. In this new chapter, we will focus on addressing our past failures, establishing clear goals, improving communication, and fostering innovation. We aim to create a sustainable, value-driven organization that benefits all stakeholders, ensuring the Concave flywheel will propel the protocol to become a leader in the space.

Join us on this journey as we spelunk into the heart of the matter and uncover the true potential of the hidden gem that is Concave.

Digging for Direction

For those in the know, Concave was created with a clear goal, to bring further value to the Ohm ecosystem with a for the ohmies, by the ohmies mantra. This goal, however, was short lived. After we launched, the Ohm forks began to die shortly after (or implode, in some cases).

The Co-Op was hit with an immediate dilemma - pivot or die. As we were stood up with agile principles as a guiding light, the group collectively chose to pivot. We sourced ideas internally and externally hoping to find a gap in the ecosystem that we could help to fill, far away from Ohm as the narrative shifted and the partnership was extraordinarily one sided. Although we did pivot to put out what has the capacity to be a profitable MVP in LSDs and dynamic bonding, Concave had lost any momentum behind it as the release for these applications far exceeded initial scoping, causing us to try to keep the hype alive in the miners, burning out most of them in the process.

It’s this speed of delivery, as well as lack of communications along the way that we see as one of the largest failures of the organization to date. Many of these issues stem from the fact that we were stood up in a manner such that there was no leader of the organization - it was a feature, not a bug. With so many ideas on both content and processes coming through, we were quickly overwhelmed with decisions to be made, yet no individual to enact what was being discussed as no consensus could be reached on many aspects of the organization. On top of this, we had an enormous organization (in terms of sheer manpower, not in the terms of burn (as can be seen by looking at nearly any competing DeFi protocol’s allocations sheet) but relative to the value that was being generated both in terms of real yield and services rendered. Many departments have members performing overlapping duties, with unclear roles and responsibilities both in terms of day-to-day work and roadmapped departmental goals or performance indicators.

All things considered, the Co-Op is at a crucial turning point. As such, starting today, overarching structural and process changes have been made to properly realign the organization, incentivize builders, and generate substantial ROI for stakeholders. The Co-Op has undergone the following changes:

Structure V2

- The current marketing team is being scrapped in favor of a more accurate title, Business Development. The changes to the overall structure and function of the department are as follows:

Business Development will be restructured to leverage the team members’ strengths to set up structure, create funnels for dealflow, and to onboard investors into the Concave Fund of Funds (CFOF). Additionally, BD will be supporting existing portfolio companies from current seed investments. This initiative will allow Concave to plant more seeds to capture value in the current market condition in preparation for the harvest (bull market).

The scope of the BD department will be as follows:

• Building, maintaining, and expanding connections with prosperous DeFi ecosystem protocols, sophisticated market actors, venture capital funds, and angel funds.
• Communication and outreach with portfolio companies providing consulting and networking opportunities.
• Providing services and advice that will benefit portfolio companies for success.
• Generating quarterly BD reports to CO-OP members regarding investment health and BD progression.
• Tracking and managing protocol updates from our partners and portfolio companies.
• Generate new contacts and dealflows for Concave via networking by attending conferences and events.
  
  

- The design team is undergoing a process change as they were backfilling marketing design work that ended up overloading them and taking away from UX/UI design as their primary goal.

- Operations is being reworked with talent being shuffled around, with Voke taking over the role of Product Management to oversee product development and ensure market success, ShangHigh will oversee the execution as Project Management.

- The Policy team is being reworked to an Asset Management team, with the following roles, responsibilities, and goals:

Complete the restructuring of the (formerly known Policy) team with the ultimate long term goal of directing a group of highly accretive specialists spanning quants, chain/DeFi analysts, data scientists and modelers/backtesters in the pursuit of alpha

• Manage the Co-Op’s liquid and non-liquid portfolio under a rigorous portfolio management schema mindful of liquid cash standing, short/long term liabilities and other common metrics such as portfolio sharpe and sortino ratios
• Develop, manage and iterate on automated or automation-assisted portfolio strategy pursuant idea generation taking advantage of market inefficiencies
• Maintain current to industry trends, technology and financial primitives for the purpose of portfolio design and, more critically, product development
• Manage organizational burn rate, all miscellaneous cash expenses with mindfulness to current and implied future market conditions
• Maintain frequent communication with stakeholders to duly inform of active Policy-led product developments, current market outlook and portfolio updates

- Engineering is receiving an internal restructure, as they were at one time split out into separate front and backend teams with their own respective leaders. This was causing a massive slowdown to the release train as the teams were not in sync between projects, causing constant scoping issues. Additionally, due to low performance over the previous quarters, the engineering team has been leaned out in allocations until such a time that the expected amount of value has been returned to stakeholders.

- A communications team is being stood up to cut through the heavy layer of psyops that was laid on the community, increasing the transparency to our stakeholders while also providing new forms of growth marketing, with Epik reclaiming the mantle.

• Establish communication with lsdCNV holders in order to have open dialogue on fear, uncertainty, and disbelief.
• Establish an information release pipeline to provide product, asset management, and co-op initiatives on an effective yet realistic timeline. This is crucial to establish as many aspects require time for discussion and agreement on terms.
• Grow social media presence by leveraging information pipeline and data studio statistics in order to maintain transparency and grow user base.Establish monthly office hours on community discord/twitter spaces to listen to community feedback and discuss community proposals at high level.
• IMPORTANT: For the sake of transparency we want to work with the community in order to continue iterating and refining the transparency dashboard.
  

- The partnerships team was reworked to be the Ventures team, however as decreed by the Asset Management commander, no further funds will be diverted to ventures until such a time that the treasury has grown substantially to justify further long-term investments. At this time, all members of the original partnerships team have been repurposed or offboarded.

With these changes in mind, and after establishing that concrete structure and leadership is a need of the organization, the Co-Op went through an internal proposal process to establish the new leadership team. The finalized leadership roster is:

• Jman - Communications Commander
• zuff - Asset Management Commander
• RMS Rob - Engineering Commander
• HemmiG - Operations Commander
• Andy - Co-Op Commander
  

With a newly established leadership team, the group came together to define SMART goals to guide us on our new organization vision and strategy. From these SMART goals, KPIs have been set per role such that organization leadership can accurately report on our progress internally and to stakeholders, with mandated formal assessment periods to ensure deliverables are being met. These KPIs will be shared publicly via Concave’s social channels, as well as any pivots or correctional actions taken within the assessment period.

With that said, here’s a sneak peek into the SMART goals that will encompass the next six month roadmap of the team:

Specific:

• Develop a comprehensive low-beta risk-adjusted portfolio through CTA, Arbitrage, and Yield Farming.
• Design, develop, and release a Binary Options platform, an Insurance Derivatives platform, and a MEV pilot/alpha.
• Develop and implement an effective communications strategy.
• Cease external investments and off chain/discretionary trading strategies until the treasury grows sufficiently or confidence in the newly formed asset management department emerges, implicitly determined by stakeholder sentiment and returns generated.
• Begin raise for second leg of the Concave Fund of Funds.

Measurable:

• Generate a minimum ROI of 15% through effective active treasury management practices.
• Achieve $5 million in cash receipts from short-term activities.
• Double user engagement across all social platforms, as measured by the number of active users and user interactions.
• Raise USD $3-5 million for Concave Fund of Funds in 6 months.
  

Achievable:

• Maintain an operational expenditure spending rate of $175,000 or less per month through cost-control measures and optimized resource allocation.
• Onboard a growth marketing specialist to enhance the communications strategy and drive user engagement.
• Streamline and create co-op processes to improve operational efficiency.
• Generate new contacts and dealflows for Concave via networking & events.
  

Relevant:

• These goals contribute to the co-operative's growth, revenue diversification, and expansion of offerings in the crypto space.
• Create additional opportunities for collaboration with other members of the DeFi ecosystem.
• Creating services that will aid our portfolio companies and making sure they succeed.
  

Time-bound:

• Complete all goals within 6 months.
• Conduct formal assessments every 30 days to review progress and identify bottlenecks/blockers with both internal leadership and third party resources.
• Implement necessary changes based on assessment findings within 15 days of each review to improve efficiency and maximize returns on both cash receipts and human capital.
  

Tapping into the Veins of Cooperation

Members of the Co-Op have told you for over a year now that the strength of our organization lies in our community. Although it is a fantastic point to parrot, it doesn’t mean anything if you don’t actually take in the feedback that’s being given to you. Our miners, both veteran and intern, possess a wealth of knowledge and experience that can provide invaluable insights into the direction and growth of our organization. Therefore, we are committed to incorporating a robust framework that encourages active participation and collaboration.

The keystone of this “governance” framework will be an effective feedback loop, where users can propose ideas, the community can vote on them, and the Co-Op can provide guaranteed feedback on all proposals that reach a specified level of engagement. This process will ensure that we truly tap into the collective wisdom of our stakeholders and chart a course towards a more successful future.

Additionally, we have seen both great successes and failures in the Concave intern program. The successes are not specifically on Concave, but in the individuals that were sourced directly from our community who brought in both a fresh perspective and a vigor to provide value that has diminished as the Co-Op struggled to right itself on the course to success. But with successes also come a plethora of failures, almost all of which were on the Co-Op and its leadership. With a freshly restructured organization and a team of hungry builders, the Co-Op would like to re-extend the invitation to all community members to come into the organization at an intern level where you’ll be able to sit in on meetings and provide feedback and ideas in a welcoming, empowering environment rather than the unfriendly, discouraging environment that was allowed to foster previously. In the coming days we will provide a form for anyone that wishes to sign up to be onboarded into the various departments, and this form will permanently be available, with a review of submissions on a weekly basis by Co-Op leadership.

To kick this process off, we’d like to address many of the currently proposed changes without going forward with a vote, as we’ve seen more than enough discussion on these topics as the proposals have been up for too long without official response as is.

Add Signal Voting - by DCF

The first step in our governance process is to create an open and transparent platform for users to submit their proposals. This has already been created in the Proposals forum, however in the coming days this will be enhanced by adding in a feature to inform miners of newly created proposals, as at present only the largest ones are seen in a timely manner. By encouraging prompt, open dialogue we ensure that all voices are heard, and the best ideas rise to the top.

Community Voting

Once proposals have been submitted and discussed, they will be put to a vote. Votes will only be taken in by pre-existing Discord users that hold at least one LSDCNV position, ensuring fairness of outcome by ensuring bots can’t be spun up in order to amass votes for one side or the other. The voting period will last 7 days to start, and we will periodically reevaluate this timing as the community changes alongside us. Our community-driven voting system will empower stakeholders to have a direct influence on the organization's decision-making process.

Guaranteed CO-OP Feedback

To further enhance our governance framework, the Co-Op commits to providing

guaranteed feedback on all proposals that have more than 25 total votes within no more than 7 days of the vote. This feedback will be provided by the relevant teams within the Co-Op, according to the specific tag used on the proposal (asset management/engineering,etc) and will ensure that every proposal is given the attention and consideration it deserves. By providing this feedback, we build trust with our community and demonstrate our commitment to transparency and collaboration.

Maximizing Dividends Below Book Value - by DCFgod

Much internal deliberation has surrounded the topic of sound forward earnings distribution policy. Both contributors and public stakeholders are aligned in that stakeholders should be privy to maximized earnings issuance for the foreseeable future as a means of true “proof of work”.

However, firstly, it is necessary to contextualize where the organization stands in terms of financial position as well as provide insight into former Asset Management measures pertaining specifically to earnings issuance that occurred in Q3 ‘22 and Q4 ‘22.

Leading up to Q3 ‘22, a number of proposals were internally submitted pursuant to revenue issuance; these proposals initially argued for a broad-based repurchase schema over an extended period utilizing funds that were categorized under the formerly named “Revenue Reserve” portion of the dashboard - utilizing the dashboard number as a basis for the allocation of repurchases, deferring the fact that no profit had been made during any quarter. In the end, the Co-Op collectively did not agree with any repurchases of CNV and instead tasked proposal writers with creating a structure for the issuance of cash directly pursuant to ‘deliverance of value’ to token holders who had eagerly awaited some level of returns; the result produced the Q3 Special Airdrop, and by extension, the Q4 airdrop.

With that in mind, our forward implied DeFi cash/cash-convertible position is expected to range between $4mm and $5m and another $1mm or so to the CTA strategy. Assuming that 100% of this cash is utilized for on-chain passive low/zero beta opportunities, the yield range on 10% to 25% annualized stands at anywhere between ~$150k to ~$375k per quarter (wherein the top end of that range is unlikely). Effectively, from investment activity alone Concave will still likely run at a loss considering operational expenses (namely salaries). In the base case, it is imperative that the organization generate excess yield through the development of products and ventures activity - this is core to the original goals of the cooperative; said another way, Concave is not a hedge fund - it is a builder’s cooperative.

Pivoting to issuance of excess earnings, Asset Management will fully deprecate the EDR model in favor of returning 100% of generated excess value to token holders quarterly until $5mm in value has been effectively returned as a minimum - after which new guidance will be posted, but largely operating under the same schema. However, the way earnings are actually ‘issued’ to the market may include a combination of non-CNV assets (i.e. USDC), tokens (i.e. tokens of protocols we develop), and repurchases of CNV - in general, the best way to view the revised policy here is what the organization deems to be the most accretive in earnings per token terms -  a more specific overview will be embedded in a separate tokenomics overhaul currently being finalized by Asset Management.

Align All Stakeholders Around CNV - by DCFgod

We have heard feedback from every side on this argument - current and historical contributors, long-term CNV maxis, NFT hodlers, and new miners alike. This issue, like the issues of Concave itself, is multifaceted. To contributors current and historical, their equity token is being ripped away to ensure current holders are not diluted by a terminal supply redemption. To Concave-affiliated NFT holders, they were promised a long-term investment in the form of pCNV, of which they will now receive a fraction of the expected returns. To those in neither category, this is a great play as you can ensure that by staying locked there’s no dilution to your value at the cost of the former parties. In this vein, it is the belief of the Co-Op that A) Contributors are drawing a warranted short stick, as the team has failed to deliver and the only loss (outside of personal CNV purchases w/ allocations) was an opportunity cost of taking a much more accretive position within a more established organization. B) pCNV holders largest value-add from the NFTs should have been the available whitelist allocation without the required role grinding, and speculative assets being just that, there was a gamble taken that didn’t pay out in terms of actual jpeg value.

With this in mind, we will be moving forward with the deprecation of pCNV and forward minting additional CNV for the purpose of conversion. The exact details of the pCNV plan will be covered in a separate document produced by Asset Management, but is largely inspired by existing documentation found in the original forum post.

Sell ½ BTC xcPinata NFTs for Q1 Dividends - by DCFgod

It seems this proposal was initially spun up in response to an inflated Ordinal floor price marked on the dashboard. This has since been corrected and processes are in place such that such highly speculative assets will utilize a worst-case valuation rather than the perma-bull copium-filled valuation that was initially utilized. With this in mind, and with the current mindset on the valuation of the BTC Ordinal space within the coming quarters, and given that Concave has already covered its initial expenditures on the projects, we will not sell them at this time and instead elect to continue to have the Asset Management team keep a close eye on the market, ever-mindful of the speculative nature of these investments.

Generate Dividends from INV - by DCF

Asset Management solidifies the treatment of all yield-based earnings in the following way:

Earnings are derived solely from realized - non-compounded - returns liquidated to stables with no consideration for mark-to-market value (up or down) on the ibTKN(s) asset(s) unless it is liquidated prior to the end of the relevant quarter term, after which it is counted as part of net discretionary profits (loss) realized. In the final month to quarter end, all yield generated from productive assets shall be liquidated to stables with no consideration for auto-compounding and included for the purpose of earnings per token.

Migrate  CNV/DAI LP To Timeless - by mir

Although the initial proposal was to migrate to Timeless, the asset management has agreed with the initial proposal such that the DEX, however gas efficient it might be, leaves us with an opportunity cost that we no longer deem acceptable. As such, we have begun the process of migrating the LP to Balancer but the team has elected to not undergo the additional migration to Timeless at this time and  will revisit this potential change in the future as we tackle larger-ticket items on the existing backlog.

Performance/Transparency Reporting - by Doraelong

Although the team has made strides to provide both more transparent and useful reporting, we still have many steps to take in order to have properly informed stakeholders. On this topic, we will begin to provide monthly performance updates in terms of departmental KPIs to help stakeholders better align with the current state of the Co-Op.

In summary, our enhanced proposal and feedback framework aims to create an environment where the collective intelligence of our miners can be harnessed to drive Concave towards greater success. But we cannot do this without your help, and we certainly cannot hope to do so with only the opinions of a few being represented in the community. We hope that by setting up a formal process that the Co-Op will follow, more of you will feel comfortable sharing your thoughts, ideas, and opinions on the direction of the Co-Op in these forums. By embracing open dialogue, stakeholder-driven decision-making, and a commitment to transparency, we can unearth valuable insights and unlock the true potential of our organization. Together, we will navigate the complex landscape of DeFi and emerge as a leader in the space, delivering on our promises and providing significant value to our stakeholders.

Prospecting Manageable Growth

As we continue our journey to redefine Concave's direction and fulfill our promises, it is vital to shed light on financial performance, and forward-facing outlook. Additionally, we will address the recent airdrop snapshot taken at the end of quarter 1.

Airdrop Snapshot

At the end of quarter 1, we took an airdrop snapshot to assess the distribution of rewards to our valued stakeholders. This snapshot serves as an important milestone in our commitment to fostering a fair and transparent reward system. These snapshots will always occur at midnight UTC on the day that the quarter ends. The Asset Management and Engineering teams will have the airdrops prepared and redeemable within 14 days of the snapshot.

It is important to remember that the main source of earnings that will be received in the form of airdrops should be, in order of impact, 1) Revenue generated from deployed products, 2) Ventures revenue, 3) Managed Portfolio returns, 4) Bonding, 5) Misc revenues. With these in mind, and utilizing the transparency dashboard on the Concave application, you can stay informed as to the state of expected airdrop returns.

For Q1 2023, Concave is deferring airdrop issuance due to negative earnings derived from operations expenses and losses on discretionary trades. The Co-Op has, however, completed the Q3 2022 clawback, of which will be utilized for repurchases and/or issued to token holders.

Financial Performance and Forward-Facing Outlook

The past quarters have been a learning experience for Concave, and we recognize that our financial performance has not met the expectations of our stakeholders. We have taken the lessons learned to heart and are committed to delivering substantial improvements in the coming quarters. We have already implemented significant changes in our organizational structure and processes to streamline operations and optimize resource allocation.

Our forward-facing outlook is optimistic, as we have a solid foundation and a strong team dedicated to executing our new vision. We are focusing on developing innovative products and services that will provide real value to our stakeholders and drive industry-leading growth.

To ensure the long-term sustainability and success of Concave, we have developed a robust risk management framework. This framework aims to identify, assess, and mitigate risks associated with our operations, investments, and treasury management. Our risk management approach is centered on transparency, continuous improvement, and adaptability, allowing us to navigate the ever-evolving DeFi landscape proactively. This topic and much, much more will be discussed in length in the upcoming article by our Asset Management team.

Tunneling Towards Triumph

In conclusion, we would like to express our gratitude to the entire Concave community for your unwavering support, valuable insights, and constructive feedback. We recognize the challenges we have faced and the setbacks we have experienced, but we are confident that the substantial changes we have implemented will put us back on track to achieve our objectives and generate value for all stakeholders.

We are committed to fostering an environment that promotes open dialogue, collaboration, and transparency, ensuring that every voice is heard and every idea is considered. Our, as well as additional internal processes will enable us to tap into the collective wisdom of our community and drive us toward a brighter future.

As we embark on this new chapter for Concave, we understand that change can be challenging, but it is a necessary step to ensure our long-term success and growth. We believe that these changes and improvements to our organizational structure and processes will bring about a brighter future for our community and stakeholders. Now, more than ever, we need your support and collaboration to make these plans a reality.

We encourage you to actively participate in the decision-making process, share your thoughts and ideas, and help us collectively refine and perfect our strategies. By working together, we can overcome challenges, capitalize on opportunities, and create a more resilient and prosperous Concave.

Remember that our strength lies in the diversity of our community and the collective wisdom of our members. We are confident that, with your support, we can navigate the complexities of the DeFi landscape and build a brighter future for all stakeholders. Let us unite under a shared vision and work collaboratively to bring about the success we all desire. We look forward to growing together and achieving new heights as a united Concave community.

We would like to once again express our deepest gratitude to all stakeholders for your patience, understanding, and commitment to Concave's success. We are excited to see what the future holds, and we are confident that, as a united community, we can achieve our ambitious goals and deliver exceptional value for all.