Hey Rich,
I am going to try and address your points in order to hopefully make it easier to follow and marry up.
Just to double check in that first block of text you meant to say all but one or two aren’t profitable right? Which is probably pretty spot on, those that are profitable aren’t necessarily sustainably profitable they are either propped up by investors using the products (often in a way that isn’t ideal but for support), AF deployments, TDR driven usage or through operating at such a low burn it risks (or is already resulting in) being left behind.
I can’t say I agree that only profitable companies should apply for grants, in theory excluding the prop ups there would be almost 0 projects who would be able to apply. I don’t actually think we have a lot of combative options and if we are comparing to other Layer 1 we should be looking at who our competitors are based on where we want to be (in the top rankings). Compared to them we do not have a lot of options - let alone (combative) competitive options - though we clearly have a competitive base technology which won’t win alone. I do think a lot of this comes down to what Algorands overall DeFi strategy (and more broadly its strategy across other verticals) should be which needs to take in to account the competitive landscape. I do completely agree we need to focus, where I think we disagree (I think, maybe TBD) is what success looks like and what the path to get there looks like. What are the greatest opportunities (this could be subsets as well), who are the competitors, what is it going to take to ‘win’, do we have the resources to execute and then finally order the opportunities based on what will yield the highest ROI. There is an entire overlay as a part of this such as do any of the opportunities on the list have duplicated resource cost or the ability to cross pollinate that collectively result in an enhanced ROI together. This is what should dictate Algorands strategy and if it doesn’t fit, it shouldn’t be supported (financially), we saw this in Near where on analysis the foundation decided to no longer support DeFi.
If we want Algorand to have a large and thriving DeFi ecosystem that will do more than support the current ecosystem and community then a strategy and plan needs to be executed on ASAP. I completely agree 2024 is a pivotal year, I do have my own thoughts on the what the strategy could potentially be but have been awaiting the AF strategy which is apparently immanent. I do hear you on if businesses have the same advisors they end up with the same strategy and fair thinking, but advisors aren’t decision makers and certainly don’t get involved in everything (there isn’t enough time) especially when it is generally donated time. But provide advice when it is needed, the projects do with it as they will - some times it is embraced some times not, mainly it is a factor in a bigger piece that contributes in some way. There was also a much bigger variety of advisors in the ecosystem previously now there is not. In terms of xBacked being purely for leverage, it is the key business model for Folks and I would say pairing with volatile pairs in constant product AMM’s is something top degens avoid the most unless they are strategically hedging the price which is certainly not at play in any substance in Algorand. Again this does tie back to the strategy, should Algorand be targeting top degens? Or something else not DeFi related, or a DeFi subset, does something like xBacked get used to unlock capital in other assets for uses that are less degeny (new word?) like Lofty assets and other RWA’s? The current structure of TDR would actually penalise xBacked (in that the assets wouldn’t count towards the TVL) compared to other options like this proposal. Either way if it is top degens, then we are certainly not poised to win that battle currently.
I think there is some confusion about advisors being listed on the proposals as well, I am not listed because I was an advisor for the proposal but as being an advisor for the project. Which I believe how it was meant to be, similarly the teams listed on all the proposal didn’t necessarily all help with the proposal but form the team behind the project. I think TDR is a whole additional conversation, I have tried to keep my answers concise but I am sure it was the same for you I could turn this in to a short novel. But to the copy paste comment, templates were shared and some used them, some didn’t. I also did recommend to a large number of projects that they should apply, I believe some have, some haven’t yet or may not. After last periods results, I think it is prudent that projects in the ecosystem should be applying. In general the TDR program is ill-equipped to achieve the kind of growth we are all wanting, it is to small and needs more than just some ALGO’s and marketing to be successful. If we attract users we need them to land in a place that is sticky, the base tech is user friendly this is a one part but they need to find the utility they want. We haven’t got that yet.
I don’t agree in regards to having advisors during a bear market is a sign of fire, businesses need more help when times are tough. If you are a business during a bear market (whatever industry you are in) and you aren’t looking for help and advise I think your likelihood of success is certainly lower than those that are. I also don’t think the food analogy is fair, what a human produces from food is quite different to what xBacked is proposing to produce. The cost of maintaining Zap leverage vaults once deployed compared to the revenue generated from interest I think would produce positive cashflow.
As I have said I do agree that there is a minimal marketing effort that should be maintained and every project I have spoken with who weren’t doing this and they have committed to and are working to implement. I know you say it is just time but it is also important to note time is a cost that still needs to be accounted for, whether as dollars or opportunity cost. I disagree with who should be applying for grants, a plan like I described earlier needs to be in place to then look at what should and shouldn’t be supported in order to give Algorand the highest chance of success. We don’t have enough (debatably any) Algorand DeFi projects that are well funded enough to be competitive.
For marketing, we need to get people here and have the kind of products that deliver them value. This needs to be in comparison to competition but less so if they aren’t DeFi initiated if Algorand is their first interaction with Blockchain this battle is different (again this should be accounted for in the strategy analysis). We need a better base to keep the people we spend money on bringing here, here. But I would be keen to chat about the marketing side more and some of these thoughts in general if you are up for it.
Finally we do need to be real and looking at what I have said above about analysing where Algorand should be focused I think is a critical next step. I do think this is a place to discuss things and ask hard questions, from the reasoning as to why xBacked should have had its ducks better in a row I am not sure what exactly that would have meant but in reality I think it wouldn’t have mattered for yourself as your core definition of why xBacked shouldn’t be included (not being top 3 and being a product overall that fits where you think the focus should be etc) would exclude it regardless? Out of interest what do you define as community consensus and how would it be calculated? I also think as a society particularly digitally we seem to discuss and lack the desire to want to understand more before concreting ourselves in a position and end up coming from a place that generally feels combative which means a poorer a result for everyone.
Cheers.