[VSP-0] Addressing Co-founder Rage Quit and Hostile RFV Attempt - A Response to VSP-1 and VSP-2

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[VSP-0] Addressing Co-founder Rage Quit and Hostile RFV Attempt of Vesta - A Response to VSP-1 and VSP-2

Mikey

tl;dr

Due to cultural misalignment, lack of shipping, and lack of coherence, in the week of September, Atum and Midnight, the two other co-founders beside myself, asked to get bought out by the Vesta treasury for $0.4 per token. Each holds 2.1m tokens, so the deal meant using the treasury to pay them $840k per person. As the third and last co-founder, CEO, and the touchpoint for all initial project contributors, I rejected internally as I firmly believe that the treasury is not meant to be used to payout founders - it is for Vesta operation and to continuously bring good products to users.

Now they have posted two proposal (viewable here: [Proposal] VSP-2 - Dissolve and here: [Proposal] VSP-1 - Rage Quit): one is for them to get bought out for $0.4 as mentioned above for a total of $630k per person (minusing the unvested portion as compared to $840k above), and the other is for every token holder to redeem at the same price.

I’m a strong believer in building products that create value, and Vesta was created to realize that belief. We aim to build applications that’s on the same level as Uniswap - decentralized financial applications that can be used by millions around the world.

Vesta in the current form (first product Vesta Stable), has seen moderate success but we will continue to improve and elevate. We believe our v2 with competitive interest rate, high LP reward and deeper liquidity will set us on a strong trajectory. V2 is on track to be shipped in a month.

In the past two months (July-August), we finished drafting a model for oracle-less lending, which you may view our draft here (the final specification document is hidden since we have not implemented it). Oracle-less lending could be the next Uniswap, allowing any tokens to be leveraged upon. We plan to work on it as soon as the team’s capacity is freed up from Vesta V2.

I want to demonstrate some plans the team and I have developed to get us there (detailed version below):

  • Communication & HR initiatives: Please find below how we are evolving to hire focused, culturally aligned, local engineering and product people, removing those who are not aligned. This is already in full motion. We are onboarding people with backgrounds such as Wix, Google, and DeFi native builders who managed projects up to 100m TVL.
  • Product market fit - with a more focused, culturally aligned team, we plan to develop products in a more focused manner, go to market with new products in quick product cycles without sacrificing product quality, maximizing Vesta’s chance of a product market fit.

With that, here is my proposal:

  • Fully let go of the two founders immediately, decreasing yearly salary burn by 32% in this team of ten people. The responsibilities of the two members are fully covered
  • Buy back the two other founders’ tokens at a reasonable price, which we shall discussed in the proposal
  • Vesta continues building to deliver V2 and build out the next big project: oracle-less lending

I deeply apologize for bringing this matter to the public’s attention. You may find more details below regarding the above points and we seek your support and understanding.

I want to also thank everyone else in the team for sticking through with this situation. Thank you for all your support. We will push through this.

What happened?

The lack of progress and the cultural change misalignment has created massive, irrecoverable rifts between Atum + Midnight, two of the co-founders of Vesta on the technical team and myself, the third co-founder and CEO for Vesta. Below you’ll see more about why our development was so slow and the cultural changes I’ve been pushing, and how I plan to remediate them. They are seeking to either rage quit + get paid $0.40, or conduct a “RFV” raid of the whole treasury. For those of you who don’t know, I am the other co-founder and the Product lead at Vesta. Due to the lack of a founder’s agreement and the correlating termination clause, we unfortunately now have to bring this public and have you decide. Below, I will lay out why Vesta should keep building: what I’ve done and what I have planned for the future of Vesta to make it a successful project.

I’m a strong believer in building products that create value. I follow the traditional startup thesis that a team should deliver good products, which is defined by the fact that they are something a market likes to use and will pay for. Effectively, a startup should follow the path that’s always been the case: find product market fit → scale aggressively + optimize for a business model.

Adapting that into DeFi, I aim to build applications that’s on the same level as Uniswap - decentralized financial applications that can be used by millions around the world.

Arguably, Vesta, in the current form, has not been able to achieve that status. Our first product - Vesta Stable - is a product that has seen some amount of PMF, but it did not blow our competition out of the water. I’m sure our v2 with competitive interest rate and high LP reward will do much better. With that said, I believe that it’s best for Vesta to ship in a more focused manner, remove those who are not culturally aligned, and strive to engage in fast product development cycles to reach product market fit.

What does a team need when it is trying to find product market fit? How do we plan to achieve it?

We need to stay lean and engage in fast product development cycles without sacrificing product qualities, building out features and MVPs and going to market quickly, maximizing the chance of building a successful product. And once we hit a product that people find very useful, then we’ll be able to focus on scaling the product and so on. This approach is preached by many successful VCs and companies (ref, ref).

It is common understanding that for a team to iterate quickly and move fast, communication needs to be very rapid and coherent. People need to get on the same page as soon as possible when there’s misalignment, and iterate on understanding again and again to reach the final stage. The final product may look simple, but it takes countless tries to get there.

I firmly believe that Vesta’s lack of success was a result of cultural misalignment. I am a proponent of over-communication. I believe that there’s a reason why lots of the most successful tech companies are built from garages: being in the same place, building with people who you can talk to at any moment is quite magical. It ensures that people can communicate instantaneously, unblocking anything that comes into the way.

New cultural initiatives

As a result, since earlier this year, I’ve initiated many cultural changes in the team. Vesta is originally fully remote and pseudonymous. But recently, I’ve started hiring locally on the west coast and started pushing for more communication on all fronts. As Paul Graham said, “Once a company shifts over into the model where everyone drives home to the suburbs for dinner, you’ve lost something extraordinarily valuable. God help you if you actually start in that mode.” I think god couldn’t even help us since we were fully remote.

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The cozy office set up. The boxes have undistributed Vesta Merch. DM Mikey on Discord if you want Vesta hoodie/shirt/caps

I’ve been able to onboard two math PhDs from a local top 30 global university here on the west coast to compose a research team. Everyday, we get in the office to think about the next big thing to build. In two months (July-August), we researched and finished drafting a model for oracle-less lending, which you may view our draft document here (I’ve purposely hid the final document since we are still far away from implementing it). Oracle-less lending could be the next Uniswap, allowing any tokens to be leveraged upon. Given that engineering isn’t yet ready to build out oracle-less lending, we have moved onto researching other primitives - driven by the possibility of privacy on blockchain and fascinated by the tradeoff between compliance and privacy, we are taking the time now to papers from Stanford Blockchain Conference’s privacy topic extensively, hoping to learn more about how to design a tool that is crypto-native, compliant, and ensures privacy.

Hiring initiatives

Due to limited capacity on the engineering side, we haven’t been able to start implementing oracle-less lending as the available engineers are still working on Vesta Stable V2. With V2 done soon (should be done by end of September), we’ll be able to start working on these exciting new products. One of the engineers is flying to the office from Australia in two weeks to build, and another will do the same in three weeks. Soon enough, we’ll have all of the engineering and research team in person, shipping in full force.

I’ve also started interviewing for senior engineers locally, some of whom are eager to join and cannot wait to start diving into products such as oracle-less lending with us. Candidates that we will soon include engineers that built out the NFT infra for DeviantArt, and senior engineers from Amazon, DeFi native builders who managed projects up to 100m TVL, etc.

Seems ok! Why are they quitting?

I believe that the co-founders’ problems stem from an overall lack of communication. Low amount of communication worked ok-ish in the early days when we were working on the first version of the product, which was a fork. But as we started trying to build things that we could claim our own, the problem became apparent through the pace that we shipped. Even though we were working quite a lot, we never really shipped anything. I would spew out an idea, and then confusion would ensue, may it be diving straight into implementation with some assumptions or dismissing it as just a random idea. Only after a while just to have the requirement change again due to how we never iterated on it fully.

Unfortunately, the cultural changes were resisted heavily by the two co-founders. The truth is that there’s a very distinct difference in the way we treat building. I believe that we are in the pre-PMF stage + trying to build something novel, and as a result we should engage in tons of conversation to sync and iterate on concepts. They are more in the camp of strong engineers who take a solid, finalized spec sheet and build it to perfection. Furthermore, given the long period of time from which research was unable to produce solid specs, and the overall lack of product direction in the past year, they have lost faith in Vesta’s capability to drive product. With this said, I believe the growing research effort, the cultural alignment, and the effort to onboard culturally aligned engineers and product people will fix these problems.

Numerous legal problems with original proposal

As everyone is probably aware crypto projects operate in a highly risky legal space, so any type of distribution proposal which results in monies being paid to token holders would trigger a number of legal risks for all parties who had proposed or affirmatively voted, and create much unfairness across the different token-holders. With a view at arriving at the best outcome for the project we have sought the advice of a number of experienced legal counsel. These are some of the most critical legal red flags:

  • $VSTA token is intended to be a utility token and cannot be a security token, period. In order for $VSTA token to be viewed as a non-security token, token holders cannot have any contractual claim to assets of the Foundation or any Vesta entity. This is expressly disclaimed in many places in previously published documentation, e.g. the Vesta Finance VSTA Governance TOKEN Issuance Agreement - Public Round. “Buybacks” are a very common tool in tradfi to return funds to stakeholders so this is viewed very negatively by regulators and allowing such a claim against the $VSTA token would very likely cause $VSTA to be viewed as a security product and cause all participants involved to be viewed as promoters of an unregistered and illegal securities offering.
  • The sole purpose of the initial fundraising, as documented in the original roadmap to the public, is that all treasury funds are to be allocated towards the Foundation’s mandate of product development and building out of the Vesta ecosystem of products for usage by community members. If the proposal is passed, there will be no funds to continue development of the Vesta ecosystem. The proposal totally ignores the rights of holders of $VSTA and users of the Vesta product who still wish to continue utilising the Vesta ecosystem, and would potentially trigger lawsuits.

With the numerous legal red flags, we cannot in good faith support the Rage Quit proposal and the Dissolve proposal. Any proposal to move forward would need to take into account all the interests of stakeholders who remain interested in the future progress of the project, while allowing uninterested parties to depart. The Foundation’s mandate is to build the Vesta ecosystem of products for usage by community members, and it has a duty to reject illegal proposals which go against this mandate (e.g. operating $VSTA as an investment scheme). With this said, a new proposal to address “allowing uninterested parties to depart” will come soon.

How do we ensure a smooth operation post Atum and Midnight’s departure?

Atum is currently Vesta’s CTO and one of the two solidity engineers on the team. Atum’s solidity duty shall be fully covered by Paul, our team’s other solidity engineer who’s relocating to office from the other side of the world in two weeks.

Regarding Midnight, his duties are fully covered by Shini who is a competent senior engineer. Shini is also coming to the office in the next few months. We’ll be able to make significant progress on this front.

Proposal

To reiterate, here’s my proposal:

Vesta needs to ship in a more focused manner, mobilize the team to be culturally aligned, and strive to engage in fast product development cycles to reach product market fit.

  • Fully let go of the two founders immediately, decreasing yearly salary burn by 32% in this team of ten people. The responsibilities of the two members are fully covered
  • Buy back the two other founders’ tokens at a reasonable price, which we shall discussed in the proposal
  • Vesta continues building to deliver V2 and build out the next big project: oracle-less lending

Decisions

For: agree with the above proposal, proceed with finding a price for the two leaving co-founders
For: agree with the above proposal but do not buy out the two co-founders
Against: disagree with the above proposal

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Disagree. Clearly there is some conflict within the team. As noted in my other comments, holders should decide if they want to stay or exit, and if they want to exit should be given a fair share of the project, the same way the two co-founders are having an offer extended. All holders should be afforded the same choices/outcomes regardless of who they are without respect to when they acquired tokens. One token is one vote regardless of when it was acquired. Why should treatment be different?

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Quite a day.

I must say it is quite unfortunate seeing it come to this. Disagreements between founders are always ugly; for investors, holders, the employees and most of all the founders themselves.
However it was right to bring this up and to the attention of the community, the DAO. That said, I find it quite wondrous Midnight & Atum are asking for a payout from the community treasury.

They have received their token allocations, they have received their payments, which so far they seem to have been quite happy with; the DAO doesn’t owe them anything. The financial success of a founder is directly tied to the financial success of the project. But being a founder doesn’t give special permission to sell above the market price.
Midnight & Atum, of course know that the community would never gift away DAO funds at insensible prices. See, when they internally asked Mikey to agree to buying them out for more than $1.6m combined, there was no mention of a community buyout.
The community buyout was later added for a very simple, calculated reason; to increase the chances of success for their proposal and thereby their own buyout. Under normal circumstances no holder would agree to buying them out at a completely arbitrary price. Dangling the carrot of a $0.40 buyout for everyone and threatening with the stick of jointly dumping their sizeable token allocation might however get one or the other holder moving towards voting for, not because they want to help these exiting founders, but for their own financial gain, this is what Midnight & Atum hope to profit of off.
However having read through Mikey & the team‘s plan for oracleless-lending and overall change in culture, it would be foolish and short-sighted to force Vesta‘s hands towards dissolving the protocol now. And let me reiterate a payout at the full $0.40 open to all will mean closing doors for this protocol. The exiting of two out of three founders and the team‘s overall change in scope is a second wind for vestafinance.

At the same time, this moment poses a unique opportunity for Vesta to organise a buyback, remove unsatisfied or impatient holders from their holder-base at a justified price, and set sights back towards the future. Buybacks are not uncommon in the crypto space and a fair price for such a buyback can be calculated by taking the time-weighted average price of $VSTA in the 30-day period before the discussions about [VSP-1] and [VSP-2] began about 17h ago.
Such a buyback would be open to all holders equally, and the massive advantage over simply selling to the open market is the negligence of slippage. Whether selling tokens worth $1, $1k, or $100k everyone will receive the same price per token sold. This would also be the best opportunity for the exiting founders. Were they to currently sell all their tokens at once the price would dump to about $0.03 and they would receive about $110k combined. This makes it very obvious that such a buyback program would be in everyone’s best interest.

I am open to hearing other comments and opinions, also I am open for any further sensible discussion. Best Regards.

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Yes, there should be a fairness in treatment. There should also be a fairness in price. The problem is that the currently circulating $0.40 is not a fair buyout price. But I agree, if there is a buyout every token needs to have the same chances & opportunities.

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To be fair, the 0.40 was a max estimation and we were open to negotiate it down. But sadly, the only fair treatment was either sell it at market price with sell pressure, so in average 33k each. Or you can request to sell to the treasury at any time with 30% off, where the treasury reserve the right to refuse.

At this point, we rather kick Mikey off and fix vesta. But we evaluated than dissolving might be better for the community.

Same with VSP-1 and 2, the numbers can be negotiated down, this is an open proposal where we want the community feedback.

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To reply to the assumption and inaccuracy

We believe our v2 with competitive interest rate, high LP reward and deeper liquidity will set us on a strong trajectory.

The v2 is just that interest rate module. High LP reward in the form of more VSTA and some ARB. We are deprecating Saving Module, adding one stability pool, closing the others. and voila, this is the v2.

We are also deploying the Governance Staking Module where it has been announced 10-12 months ago. So yeah, took use ~ 12 months to come up with a staking module. Which was badly designed on the product side and I had to clean it up.

The lack of progress and the cultural change misalignment has created massive, irrecoverable rifts between Atum + Midnight, two of the co-founders of Vesta on the technical team and myself, the third co-founder and CEO for Vesta. Below you’ll see more about why our development was so slow and the cultural changes

The main reason that the development was so slow is the switch of direction in mid/end development. I can open-source the whole v2 engine which took ~6 months to develop (near completed) but got abandoned by Mikey given he wasn’t sure if he wanted to continue or not the stable coin.

Due to the lack of a founder’s agreement and the correlating termination clause, we unfortunately now have to bring this public and have you decide.

This is correct, the founder’s agreement mikey proposed was bad faith, asking for full control of Vesta and giving him power to override any decision. We successfully negotiated it down to 1:1:2, where Mikey will have 2x more vote power than midnight and I. This agreement has never been completed, due of the internal issues.

I aim to build applications that’s on the same level as Uniswap - decentralized financial applications that can be used by millions around the world.

I admire his motivation to build, but he has no work methodology or structure, so even if he wishes to build something big, it will still take 2-3x longer than a normal workflow. V1 was mainly released by Midnight and I, while Mikey was working on a V2 doc which we never used. The original V2 was pushed by myself then Mikey joined. It got abandoned later down the route near the end.

I believe that the co-founders’ problems stem from an overall lack of communication

The main issue is lack of skills. Mikey doesn’t have the skills to run vesta, and makes it even harder when he refuses to communicate with us or go through third party to make decision.

Unfortunately, the cultural changes were resisted heavily by the two co-founders.

Correct, because his plan was to fire anyone who didn’t want to fly to West coast to work in an office.

They are more in the camp of strong engineers who take a solid, finalized spec sheet and build it to perfection.

False, we prefer to have a normal production pipeline. Product Research → Product Doc → Architecture → Development → QA → Deployment. We never aimed for perfection since there is no such things as perfection.

they have lost faith in Vesta’s capability to drive product

We have lost faith in you, even after multiple warnings you were not improving yourself. The vesta team members are good, but are slowed down by your decision making, your lack of methodology and your micromanaging. You don’t even fully understand your own products…

How do we ensure a smooth operation post Atum and Midnight’s departure?

As said above, if this is to pass, there is no worry, the vesta team is great. But the issue will still be there.

decreasing yearly salary burn by 32%

This is not true, plus I suggested multiple occasions to lower my salary, where you never applied. You are also the one who gave my salary (which for the public, has been set to 200k/year at the end of 2022, and I suggested to lower to 170-180k). I also said multiple time that I’ll not set my own salary and this is fully in the director board control to modify it.
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But unless our books are no longer up to date, that will cut by ~27%. And this is not including all the expenses you are doing with the office and random business deal that bring no values.

Hostile RFV

Calling a proposal hostile is really ironic, mainly from you. Did you try to remove me from the MS Treasury and set it to one signer only ?
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From the beginning, Midnight and I acted in good faith and you tried to do multiple bad faith actions. It might not have been your goal, which is scarier.

And for the curious, the original v2 that I designed:

  • Cross-chain compatible
  • Vault Permissions → Allowing people to give some permissions to their vault if they want to attach a bot to avoid liquidation or a third party for XYZ reason
  • Vault Configuration → Allowing people to switch the type of liquidation they want to have and which yield farming to use (if multiple)
    • Where we wanted to offer two types of liquidations system, the traditional and one freshly made by vesta
  • Vault Types → Allowing multiple types of vault, e.g if someone wants 0% interest rate, but will be limited on some other portion.
  • One Stability Pool → Having multiple is putting at risk the vault owners and making it hard to manage the system accordingly.
  • Vesta Application (vApps) → Where people could build a vault extension to use vesta’s collateral, giving more options for a vault owner on how to use their collateral instead of being idle.
  • (HearthUpgrade) interest rate

We wanted to build something big, but we got limited / blocked. Even the website v2 we (midnight and I) had hard time to start the development.

I would suggest the community to also ask for a new CEO if they wish to proceed with this. And it should be the COO who hires that person.

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Well say ser. I think there is a lot of greed right now in these proposal.

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Status: Retail came here cuz I got a price alert.

One thing I find really hard to understand is why would the co founders purpose to dissolve a whole protocol when the team has a clear roadmap and plan for v2 and new projects? It seems like that’s something the team has been working towards. Was Mikey even aware that closing down the protocol is what was going to happen?

Looking at the two proposals by the co founder seems like the common goal is so that they can get bought out at 0.4, and honestly is hard for me to understand another way to interpret this. If you are just not ok with the other co founder, why not raise a poll to discuss that or just publish one poll to dissolve the protocol and start another?

Also the consequence of releasing such news is going to result in having an influx of token holders who just come here so that they can arbitrage the chance of liquidation ! Right now it’s at 0.3, even if you cast a vote now you will end up with people who are just here to get the liquidation. Guess what are they going to vote ?

Sorry this is more of a rent than a solution. I really hope vesta succeed so I recommend all parties come together and discuss more rationally around how to proceed with the next step.

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Yep!

Great idea. Seems to me the most fair of all. Thanks Pater for your thoughtful response.

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Thank you for this proposal Mikey. I understand that neither of the 3 co-founders was able to agree on the right path forward. I think that it is up to the core team and the governance tokenholders to collectively find a solution here, a solution that makes it fair for everyone.

I would like to point out that even if your proposal was well written, it doesn’t address at all how value will be created for VSTA holders in the future or how you already confirmed that “V2” will achieve product-market fit. It seems that you want to demonstrate how you created an environment that checks all the “startup success” boxes (nice office, tech hires) and how fun this will be for you to work in this environment, but there is absolutely nothing about reconciling the proposal of the majority of your co-founders with what you envision for the future.

I’m sorry to tell you the hard truth here but now the cat is out of the box, and there needs to be a proposal that doesn’t look like two walls facing each other and ignoring tokenholders in the middle (or just considering them as disposable asset).

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I created a topic for discussion here to hopefully increase discussion quality.

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Hey all, just wanted to chime in and say that all your comments on the proposals are appreciated and being taken in account seriously. I wont re-iterate anything Atum has said already, as what he says is exact, what I think as well and what we have collected and discussed together.

Internal discussions are being conducted to strike a fair middle ground for us founders, holders and community members and of course, the whole of Vesta.

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I will structure my response as follows: Firstly, I will deconstruct the advantages and disadvantages for each proposal. Secondly, I will look to provide improvements to each proposal where possible.

I would also like to be extremely clear that we should NOT as a DAO in any case go to a snapshot governance vote before any reasonable attempt to bridge expectations between the two founding groups and token holders has been made, in order to minimise chaos. To facilitate such discussions, I (or many others the community could nominate) am happy to mediate between Atum + Midnight and Mikey to reach the correct answer that serves each stakeholder fairly.

Section I: Review of Each Proposal

VSP0:

  • Whilst we, as a community are not privy to founder discussions, this proposal seems to be a defensive marketing response and does not attempt to solve any underlying issues or propose any remediation beyond a cursory decision to buyout the founders, severely lacking in any detail. In contrast, Atum and Midnight’s proposals are fully fleshed out with pertinent maths.
  • The main issue I see with this proposal, other than the lack of detail, is that VSTA holders are not accounted for, or, frankly speaking being given a second thought here.
  • The multisig thus far holds $11m (including LPs and other misc items), that treasury is governed by VSTA holders and VSTA holders alone at Snapshot governance issuance date.
  • To this date and looking at the orderbook, one can visibly see what other holders think of the project, preferring to take the -30% delta to IV on this price deviation upwards. This should give an indication on holders’ perception of current team’s execution ability
  • Given the current mood, it would be prudent to realise that there is no project, there is no ‘Oracle-less V2’ without token holder buy-in
  • Seeing that 2 out of 3 founders want to leave and more importantly, given that they have defined VSTA as a backed token. A TWAP buyback is out of the question, since this, by logic, treats token holders in classes with founders receiving a much higher pro-rata share of treasury than open market retail purchasers. There is NO precedence for this in any type of rage-quit / dissolution proposal.
  • A buy-back also does not ensure removal of all potential holders that want to leave, creating a hostile PvP environment, which directly impacts usability and reputation of Vesta v2. Let us be clear, a temporary buy-back is an inferior solution to a well defined problem

VSP1:

  • In this proposal, Atum and Midnight leave at fair value, pro-rata according to token-holding
  • Token holders are also given their right to leave according to the all important principle 1 VSTA = 1 Vote = 100% of IV (or BV)
  • More importantly, Mikey and holders who want to stay can do so, with a treasury that can give them plenty of runway for shipping ‘Oracle-less lending’
  • Snapshot date is set as the date of the actual Snapshot governance for the clear, incontrevrtible reasons I have outlined here
  • The reasons why this is currently the best solution: 1) The egalitarian treatment of all token-holders, allowing exit in a non-PvP manner, and more importantly ensuring that those who stay are all aligned with the Vesta vision. 2) The fair buy-out of the two founders instrumental to the initial bootstrapping of the project. 3) Finally, and most importantly, @mikey, the availability of excess funds post rage-quit ($5m+ assuming an extremely high 50% mark which it will likely not reach), well-beyond what a Series A crypto start up could raise in this environment, notwithstanding the lacklustre prior performance of the team
  • Given these three facets, this proposal is the clear-choice for all three stakeholders (Founders staying on, Founders leaving, Tokenholders). I am again offering myself to help mediate and adjust this proposal if you do not see for any particular reason why this proposal is fair.

VSP 2 and 3

  • Winding up the project is also a perfectly valid option for holders to take. Again, this is down to what governance holders ultimately vote on. The math and liquidation preferences here, however, are so incredibly wonky that we will need a new proposal for dissolution if this were to go to a VOTE. What is absolutely and undeniably nonsensical about these two proposals is as follows:

1. LBP investors getting liquidation preference ahead of open market participants:

  • Not only is this an operational and accounting nightmare (how would you account for partial sells?), it has no precedent in any of the largest liquidations or wind up of the past 2 years in crypto including: Tribe (genesis purchasers did not get reimbursed) / Wonderland (early bonders were not reimbursed either). It also has no economic basis and is not cogent → They bought at LBP at $1/2, what about those who bought at the open market right after LBP ending?

2. Angel investors getting liquidation preference ahead of others:

  • As I previously wrote, protecting Angel downside whilst also benefitting from a favourable initial deal at the expense of other tokenholders (they purchased at a discount) also has no Web2/Web3 precedent and immediately defrauds other token holders. One of the Angels is in the discord right now is arguing for equality in treatment across all VSTA token holders.
  • Looking to the KeeperDAO wind-up which occurred in April 2023, we can see that seed investors including Polychain were paid out based on current Rook holdings at IV and nothing more. This is the right approach to take.

A more acceptable version of a dissolution proposal is presented:

  • VSTA token is backed by ~$0.5. Calculations can be provided but based on on-chain data it is $11m/21m circulating.
  • Token can be backed by higher amount if founders accept a 50% haircut in a situation where they would normally get zero.
  • All VSTA holders are equally treated given the indisputable arguments laid out above with no precedence given to Angels and certainly not LBP investors

EITHER A)

  • 3 month redemption window
  • Any remaining funds will be distributed pro-rata to redeemers

OR B)

  • Convert funds to ETH
  • Burn redemption contract ownership and leave funds in perpetuity

Ultimately, given that dissolution leaves V2 unshipped, and VSTA with no funding despite my ardent belief that it will not find PMF, I reiterate that VSTA holders and founders should vote for VSP1 or a modified form of VSP1 that @mikey may find more palatable (Again the community can nominate a person to mediate between the two founding groups to do this). Not only will this ensure equality of treatment between all holders of VSTA, but it will also ensure that Vesta will have sufficient runway to ship its products before it can self-sustain.

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Thanks Midnight. Please do review my comment above and I do hope you take that into account in your mediation with Mikey.

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Thanks midnight

I’m a seed investor in vsta and I feel that with $10M of treasury it is extremely easy to come up w a solution that gives every vsta holder an option to continue or leave at fair value per token

I’m not sure why the negotiation is difficult as if just mikey’s tokens don’t leave there would be $600k+ of runway and he cant be the only person of all holders that wants to stay

Regardless, if the founders cant find a way forward, I think we can just let the dao vote and do the decision making. As this is a DAO it really should be the only way to make these decisions instead of behind closed doors.

For instance, a voting flow like this would remove all negotiating and give the token holders all say. All 3 founders can even agree to not vote.

  • vote 1: should a buyout of VSTA from holders happen? yes/no

  • vote 2 if yes: which method should be used, followup votes for variables depending on which gets chosen
    A) Full and equal unwind (move all funds into a contract, burn 1 vsta to get your piece of it)
    B) Optional unwind (those that want to leave can leave, fixed window to decide leave or stay)

then if A wins:

  • vote 3: burn all treasury held vesta, accelerate angel investors vesting (they paid for their tokens), pause all advisor and team vesting and burn the remainder
  • vote 4: after the redemption contract is live for 2 years, should there be a 2nd claim on unclaimed capital

then if B wins:

  • vote 3: should there be a guaranteed additional runway for the staying users or should runway be the “backing” of those that stay?
  • vote 4: if vote 3 is yes, how much?
  • vote 5: vote yes if you want to leave so you can be whitelisted to burn your vsta from the claims contract
    after vote 5 move the amt needed over to the claims wallet for those that want out to burn and claim
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Thanks for doing this proposal @mikey !

My humble experience of this bear is that a negative token trend and an angry community can create massive pressure on the team, as well as a toxic environment. This is even exagerated when holders have the feeling of being trapped due to low liquidity and book value exceeding market cap.
I think this is a turning point for Vesta: the product is still nice, you hired some good people to be positioned for growth and development and it will take time.
I am personally quite optimistic about what you are doing, the way you are running things and the direction that is being taken, and will support the team in the long term.
However, to succeed and not be dragged by those token discussions, I think it’s good to start fresh with a clean slate. Enabling angry holders to exit at book value makes sense as you will then have only in the community the true believers.

According to my calculations, book value excluding the ms and the vesting is 0.54$. It makes sense to unlock this as it will bring back the positive trend for the token and the project. Redistributing value to the holders was also the objective of this treasury and this token if I am correct, so it sends the signal that we are being fair with our values, and should give trust in the token and more importantly, in the team, for the long run. We will be very well positioned for the next bull!

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Will reply here to all proposals.

I’ll be honest, I’m not particularly surprised by what is happening. I’ve participated a few times on the Vesta Curia, and always had the impression that the time I spent writing long replies was completely wasted. Indeed, I felt like there was no real interest to gather feedback from users. Rather just a facade to pretend like someone was listening.

In VSP 1, 0xAtum says:

In the last year in Vesta, there has been an unhealthy amount of internal conflict, bad structure and management, and bad faith behavior directed towards two of the co-founders, Atum and Midnight. Multiple attempts have been made over the year to fix the problems, but due to the lack of cooperation, lack of trust and general cultural differences, these attempts have not led to anything fruitful.

It would’ve been interesting to expand on the managerial issues you have between Atum+Midnight and Mikey…

From an outside perspective, it doesn’t look like both of you have been very involved with the project! 0xAtum wrote 1 post before these proposals and Midnight’s first post was yesterday…

Note: If this proposal were to be edited, deleted or not posted to snapshot in 48h, both leaving co-founders (Atum and Midnight) will be twapping their tokens to the market within 48 hours

Honestly, I’m not sure if such threats are necessary. Surely you are clever enough to understand that market selling 4.2 tokens would nuke the price and the amount of money you’d get from them…

In VSP 2:

-Given the non-innovation progress of Vesta in almost two years and no clear roadmap. We are proposing dissolving the Treasury Multisig.
-Given the management at Vesta hasn’t found any product market fit after all this time, and still doing “research” doesn’t show a strong long-term vision for the DAO.

We will get to this point later, but from an outside perspective, I fully agree that there seems to be a lot of “thinking”, “research”, “talking”, & “communication”, but very little action at Vesta.

Again, it would’ve been nice to see more participation from you and Midnight, as you have never communicated much, even on discord.

Now let’s get to VSP-0 (why not VSP 3 btw?)

I’m a strong believer in building products that create value, and Vesta was created to realize that belief. We aim to build applications that’s on the same level as Uniswap - decentralized financial applications that can be used by millions around the world.

Apologies, but you probably have a strong vision, but it seems obvious that you lack the capabilites to put them to action. A lot of words, but no actions!

Vesta in the current form (first product Vesta Stable), has seen moderate success but we will continue to improve and elevate. We believe our v2 with competitive interest rate, high LP reward and deeper liquidity will set us on a strong trajectory. V2 is on track to be shipped in a month.

Please define moderate? I think that you are being generous here. Also, once again, you have high hopes regarding a “strong trajectory”. I doubt it. As I have said many times before, you are not giving utility to a stable coin. If your project revolves around a stable coin, but it has no purpose, what’s the point? None.

I want to demonstrate some plans the team and I have developed to get us there (detailed version below):

Again, lots of demonstration, but no action. The product is not improving, TVL is not increasing.

decreasing yearly salary burn by 32% in this team of ten people. The responsibilities of the two members are fully covered

So why are they still being paid if other people are doing their jobs internally??

Below you’ll see more about why our development was so slow and the cultural changes I’ve been pushing, and how I plan to remediate them.

At least you are acknowledging that development was slow…

I’m a strong believer in building products that create value. I follow the traditional startup thesis that a team should deliver good products, which is defined by the fact that they are something a market likes to use and will pay for. Effectively, a startup should follow the path that’s always been the case: find product market fit → scale aggressively + optimize for a business model.

Once again, link to vc papers, but no action, no progress. Scale aggressively? How? What are your plans and do you believe that you will be able to achieve them? I doubt it, sorry.

Arguably, Vesta, in the current form, has not been able to achieve that status.

So, you have failed once. What tells us the 2nd time won’t be a failure?

I’m sure our v2 with competitive interest rate and high LP reward will do much better.

I doubt it, since you will probably keep researching once it’s shipped, and no proper usage will come out of it.

We need to stay lean and engage in fast product development cycles without sacrificing product qualities, building out features and MVPs and going to market quickly, maximizing the chance of building a successful product.

You have been unable to ship fast before, why would that change after? From the two other founders, it seems like you are the reason why things are slow. Also, linking VC papers doesn’t change much, apart from maybe giving the impression that you’re knowledgeable about something…

I firmly believe that Vesta’s lack of success was a result of cultural misalignment . I am a proponent of over-communication.

Communication is also being able to listen!!!

I’ve been able to onboard two math PhDs from a local top 30 global university here on the west coast to compose a research team .

What has all this research accomplished?

  • Oracle-less lending could be the next Uniswap, allowing any tokens to be leveraged upon.
    -Due to limited capacity on the engineering side, we haven’t been able to start implementing oracle-less lending as the available engineers are still working on Vesta Stable V2.

So, once again, a lot of discussion, but no action

I believe that the co-founders’ problems stem from an overall lack of communication. Low amount of communication worked ok-ish in the early days when we were working on the first version of the product, which was a fork.

Probably, but I think that you are likely to be a big part of the problem. Not listening to their ideas. Sadly, we, the users & investors, do not know much about their ideas, because they don’t communicate.

The truth is that there’s a very distinct difference in the way we treat building.

The way you view building is to research, research, research, and research again. Then have an idea, propose it on Curia, then completely change your mind, and research again!

Even though we were working quite a lot, we never really shipped anything.

Please define “working quite a lot”? From an outsiders perspective, I think that most of you have been slacking quite a lot. You keep referring to the draft document, as if it was the next big thing, but there isn’t much else to show?
The fact that a few posts below this one, 0xAtum says that he was fine with a salary decrease just shows that he was aware that he was overpaid for what he was doing?

I am sorry for being harsh, but you keep talking about communication. Once again, what is good communication? Linking a few VC articles in VSP proposals? A few discord polls were made lately, and were the results shared somewhere on discord, so the community could learn about what other people think? I doubt it.
It’s a shame, because I read Florian’s posts earlier, I believe that he is the vestatooor on discord. He also seems to have been much more active than the two co-founders on Curia. On discord, he replies to all the FUD created by the founders’ inaction and stubbornness.

I think that at this point, it is very obvious that there are major issues internally. I personally doubt that you are competent enough to run this project solo. No proper building has happened, just a few “minor upgrades” to make it look like work is being done, but really, what has been accomplished? Not much.
Compare Vesta to other protocols, some are constantly shipping, making partnerships, going cross-chain, etc. They might research, but they actually WORK. Again, apologies for being harsh, but from the outside, it looks like this team is being led by a fresh undergrad who hit the jackpot and is just playing FIFA all day with his friends, and creates a word document with a few things here and there so he has a small paper to show “he worked” to his boss…

Hence, I believe that allowing people to exit is the best idea. I think the three co-founders have been earning a lot of money for not much activity, and it’s time to put an end to this. If Mikey, you wish to continue, then with your portion of the funds, you are free to continue with a new project and all the “research” team you have hired…

At this point, we rather kick Mikey off and fix vesta.

I think that I could also welcome such a solution if you had communicated more before. Would you mind elaborating on what you would do differently, and more importantly, explain why you think Mikey is not a good fit currently?

-but got abandoned by Mikey given he wasn’t sure if he wanted to continue or not the stable coin
-I admire his motivation to build, but he has no work methodology or structure, so even if he wishes to build something big, it will still take 2-3x longer than a normal workflow. V1 was mainly released by Midnight and I, while Mikey was working on a V2 doc which we never used. The original V2 was pushed by myself then Mikey joined. It got abandoned later down the route near the end.

These two sentences sum up my thoughts as well. I am not a team member, but I share 0xAtum’s opinion.
It appears obvious that Mikey is very stubborn and somehow only believes in research. You have no execution skills. I am being very blunt because at one point truth needs to be said.

I think the best solution would be to either:

  • Buyout for all VSTA holders
  • Change Mikey as the CEO, let both 0xAtum and Midnight run the company. It can hardly be any worse and it would allow the protocol to continue operating.

Seems like this situation has lasted for way too long. We are in a bear market, so I have no issue with the token price being down. As I said before, feel free to market dump your 4.2M tokens. It doesn’t change much as this protocol is not evolving, it’s not improving at all. Token price doesn’t matter now.

Also, I find it very ironic to see all the “angel” investors create an account over the week-end. Why were none of you involved in governance over the past few months, when it was already clear that the team showed a complete lack of insight?

accelerate angel investors vesting (they paid for their tokens)

Tell me you’re an angel investor without telling me you’re an angler investor…?!? What’s the point of vesting then?

At least, I am thankful that this has happened, as it will allow Vesta to evolve, whether it becomes better though a management change (Mikey leaving or 0xAtum and Midnight leaving), or simply shutting down and splitting the treasury equally between token holders.

EDIT: Comments from other team members could also help the community get a better understanding of the dynamics. As Florian said, it appears that he was not aware of this. But additional comments on the work structure, culture etc could be shared here so we can understand how people at Vesta work and feel about the three co-founders…

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I am a long time VSTA holder that is retail. I am sickened by the number of well known rfv raiders joining the discord in last few days since this news happened and drowning out voices of real vesta holders who have been with the project and put their money and soul into this for so long. They all joined in just the last few days, you can see by the new Discord member signs they have and they attempt to be the only voices in the room so people think they are the consensus.

I have held vsta for alot longer than 2 days like they have and deserve more in outcome and influence from this process than someone who bought on this news for a quick 2-3x in a week. Yet they are the only ones having any input in the discord. That is extraction of value and that value could and should be given to runway, long term vsta holders, angels and way more groups long long time before its given to people who bought this week.

We should refund people who bought mistakenly on what they thought was different news than they expected and then proceed after that with plans. The biggest obvious part of this is that opinions of people who arent here for quick 2x are what matters. discourage more rfv radiers from buying and coming in with this refund for anyone buying after first snapshot until now so that they leave us alone to make our own best decision for those who matter. not 30 rfv radiers in the discord acting like the whole community and pretending we have consensus when they only just joined

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I am a long-time holder too. I am sorry but I don’t blame anyone for participating in free markets. Because 1 VSTA is 1 VSTA at the end of the day, and there are no share classes. You seem to miss the biggest point in these discussions which is that we are in a situation where 2 out of 3 co-founders would rather stop the project right now and distribute the treasury to holders, rather than endlessly spend money while they search for a decent product to build.
What you are describing is exactly the opposite of why I joined DeFi in the first hand, so that behaviour that exclude individuals on grounds of their decisions wouldn’t exist.

I would like to hear as soon as possible from the management team and more community members, because I’d rather have this as a public discussion where tokenholders can defend their plot instead of backdoor deals between co-founders and business angels.

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strange this sentence language is the same what we see on all rfv target forums if you are long time holder! can you sign some on chain message to prove that?

i would like to propose refund toxic rfv radier arbitragers who bought after the post was made and then offer ragequit option for real holders. then the rfv radiers dont lose any money and real holders get what they really deserve which is higher price without dilution from these parasites.

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