Everything EOS EOS Fireside Chats, 30 Nov 2022

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From YouTube: Driving Value Back to EOS

Description

Yves La Rose Explains how the EOS Network Ventures (ENV) will eventually drive value back to the EOS token holders by bringing in Venture capital and keeping the system decentralized by using the community's feedback while making investment decisions and setting up safeguards to monitor the funds.

Watch the full clip on fireside!
https://www.youtube.com/watch?v=kx-I-YFJeH0&t=4837s

The EOS Network Foundation coordinates financial and non-financial support to encourage the growth and development of the EOS Network. We’re harnessing the power of decentralization to chart a coordinated future for the EOS Network as a force for positive global change.

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#EOS #EOSIO #Web3

A

So I've been talking about the EnV log, which is essentially the GP which will be the vehicle for external to be able to come into the ecosystem and they're. Essentially, the managers of whatever funds are set their way so they're the ones reviewing the potential investment opportunities and ultimately making the Investments.

A

So that's on the GP side of things, the EOS LP, which right now we're naming I, guess the EFM EOS fund management, this idea of the EFM and how it can essentially fund as an LP, the GP, while being still accountable and creating enough accountability to the block producers and the network validators, because those accounts still belong to the funds essentially always belong to the network at onset. Actually, there was a lot of talk of veto.

A

This idea that the EFM would have a veto over where and how the EnV can deploy Capital that ultimately did not reach consensus. There are too many people that were opposed with this idea of a veto from the EFM to the NV in large part, because the MV is one of its Mission and mandates will be to attract external capital and, if you're, trying to attract external capital from different VCS.

A

The structure that you have and that you're building around needs to be quite vanilla, because the more you're off the tracks, the harder it is for external LPS and the more risk there is and the more uncertainty there is, and so the harder and the higher the barrier is for those external LPS to want to deploy into the ecosystem. The way that reach consensus essentially or a design function by which kind of was able to get over that particular Gap was through something that's very standard.

A

Very formal that is called comment calls, and so the funds stay in the lp, which is currently the iol ill.fond account is not the lp. That is simply the fund itself. The GP will do commit Balls to the lp, and maybe that will take it. The form of a very similar to the enf, where smaller amounts are given, there's trust, that's built and at some point maybe then the the amounts grow in size, but realistically, even if there was Capital right now, there's very few actual Investments to be made.

A

So even if you did have access, even if the EnV had access to, let's say 68 million tokens and change, they would not be able to deploy them tomorrow. Anyways, but through this function of commit call, then you make it that every time is a decision similar to the enf. So this also created based on the feedback that we received from the token holders and the stakeholders about the enf, is that we currently have a structure where the enf goes back to the block producers and requests funding.

A

Then the block producers assess at that time based on the direction and the feedback and what they've seen that the enf has done and then make that decision at that time as to whether or not they want to continue funding that dnf. That entity that will be very similar between the EFM and the EnV, whereby funds are transferred from EFM to EnV. Let's take, for example, a million EOS within that million EOS.

A

Then the EnV can operate freely, so it can go, do research and make decisions on which Investments it'd like to make now within the NV, though there's going to be one individual from the EFM, that's going to be embedded in the ndmv.

A

That simply is a function of accountability whereby this person also participates uh the research and the determination of whether or not investment should be made in whatever particular potential investment, and then accountability can happen there and or changes can be made to the process or what they potentially invest in and or any kind of Direction the EFM or the lclp is kind of in between the current VPS and then the EnV, so that first part one of the drafts was no EFM just EnV, and so this function of the FM came about as a middle body because of the size of the tokens because of that particular function.

A

In order to add extra accountability. Now, on the second part, which is really what you asked in terms of the carry so all of this, so all of this what I just said right now, that is what we're now going to undertake with with legal and with members of this space like VCS and other GPS, to Define this structure. So what I, basically just told you are some of the concerns some of the goals, some of the like this design requirements. So then we're going to present that to a legal team.

A

This is what we're trying to achieve. These are our concerns. This is what we want to ensure doesn't happen. This is what we want to ensure does happen. How can we create entities and how can we structure these entities in the term sheets between the entities so that it fulfills those goals? All of this hasn't happened, yet this is what's going to happen going forward now, one in terms of carry in terms of essentially if an investment is made and then there's profit and or there's investment is successful, then that carry so.

A

Let's talk about the carry, which is what you asked.

A

How do you ensure that actually drives value back to the EOS token holders, two of the ways that we mentioned right now in the pr that we did release that are known in the industry and they're quite standard that we know likely we can leverage and that legal Prem preliminarily has given the go ahead, that this is one way that this these particular entities once they're set up, Etc et cetera, would likely be able to do is through token BuyBacks and or to token Burns, which is essentially the same thing, but to size the coin give or take.

A

So those would be ways whereby, if Investments are made, those Investments are successful. The carry that goes back to the EOS LP now becomes revenue and dividends for that EOS LP. What do you do with that Revenue? Then? It can go back into like I, said token, BuyBacks and or a token burn and or token lockup. Those are ways that we know that within this space have shown to be successful and or are possibilities. Think of binance with the BNB Burns, for example. Those are just examples of now.

A

What we need to figure out is all right. What can we do? What are we legally allowed to do? How could we structure it? How do we ensure it happens so that we don't recreate what we saw with yaza VC, for example? All of this is is to come all of this right now are ideas, and now basically operationalize the work. The administrative can now begin and we even talked about.

A

Maybe this will need a new blue paper whereby we actually commission a paper to look at what could be done with potential Revenue, because when you talk about Kerry and you talk about standard VCS and such we need to structure it in a way that is somewhat vanilla so that we can actually attract capital from the outside and that it is standard enough that they don't need to jump through hoops in order to understand it.

A

But realistically those dividends in a typical carry structure are maybe like five plus one or something that's what we're talking about years time before those Investments actually generate Revenue. We still have plenty of time as a community to be able to figure out all right when funds come back when Investments are made in our generating Revenue. How can we ensure that those funds actually go and not just our funds?

A

So we will only be responsible for the EOS LP side of things right, the EFM, the other external LPS that generate revenue and they have dividends they can do whatever they want. It's their profit. The idea behind this fund is to take it from current Target of 100 million to bring it to 400 million. At some point, people asked, for example, why wouldn't you want to just reinvest into the fund, so you take the carry and you put it back. That might be the case for a period of time until you reach that goal.

A

But at some point the fund is large enough they're, a successful investment, they generate dividends, and so they double in value or whatever it may be. At some point, your fund will keep growing, but there's no point to a certain extent where the fund just grows too much, because you don't need more than a certain amount at some point, there's not enough Investments to make anyways.

A

Our current goal is that 400 million range it is possible that one of the mechanisms will be that the funds are invested into the fund, that's possible likely the non-carry percentage. So let's say you had a million dollars that becomes two million dollars.

A

Let's say the carry is 70, then 700 000 goes back in as carry for the eslp that one million that was initially put in that'll go back, but maybe at some point actually it doesn't even need to go back because there's enough capital from outside that the majority of the capitals is actually from externals and EOS doesn't even need to be an LP anymore and all it does is reap the benefits of the Investments that it made and it can now go burn, go buy back like I said airdrop. Maybe that is still undefined.

A

We still need to figure out what that will look like, but essentially the goal is to create value-backed specifically to EOS holders. How will we do that? Well, we will do research to figure out how we can do that. What is possible, what is legally possible? What are others doing? We've got time for this. Nothing is happening in the near future. It will take months before any Capital actually moves anyways, and then it will take years before any Capital actually returns a dividend most likely.