Incubator Report & Incubator v2 request for comment
OIP-41 passed Snapshot vote on 10 November 2021 and Incubator was born. The OIP set out that the Incubator program would run for a trial period of 90 days, at which point the incubator team would provide a report updating the community and recommending improvements for the community to consider, discuss and ultimately vote on.
Note: As per the OIP, during this period the incubator is still onboarding new partners and working with existing partners, so long as it remains within the approved budget of $3.5M.
The Incubator contributors have been hard at work these months taking on responsibility for relations with all pre-launch protocols. To date we have:
3 incubated projects (Volt, Vesta +1 not yet announced)
6 pre-launch partnerships (Prime DAO, Phantom DAO, Debt DAO, Jones DAO, Fiat DAO, Goddess DAO). These projects have all been vetted and negotiated by the incubator team before being put before community governance.
8 projects funneled to other products within the DAO (mainly Olympus Pro + Olympus Grants)
Application funnel including robust due diligence framework established
80+ applications processed
Developed a post-agreement success program
As of the time of writing our share entitlements to partner projects are about ~$14mm consisting of:
Moving forward we will update the community on the value of OHM used or locked in partner protocols and the amount of OHM in our partners’ treasuries/liquidity every quarter
What we look for
What we ask in return
A share of our partner's governance token
That partners act with integrity
That partners keep and use OHM wherever possible in their protocol
Budget to date
The costs of running the incubator can be broken down into contributor costs and capital assistance.
OIP-41 outlined a budget of $3.5M - with 10% allocated to contributor costs ($350K) and $3.15M to potential capital assistance for partners
In our first month, November 2021, the cost of incubator contributors was mostly absorbed by the partnership team with a cost of $4,100 of the budget used
For December the cost of paying contributors was $64,509
For January the cost of paying contributors was $50,500
This put the total cost for contributors to the incubator at $119,109 across the trial period - this is 34% of our maximum allocated from the program administration budget of $350K.
Out of the 3 incubated projects, $85,000 is due to be dispersed for providing initial liquidity support to Vesta as VST
A further $85,000 is due to be dispersed for the unannounced incubator project
None of the launch partners received capital assistance
This puts the program costs for the Incubator at $289,109 which is 8.2% of our allocated budget of $3.5mm. Additionally, through governance the DAO swaps for OHM with Prime DAO and Fiat DAO had a cost of OHM at the time of transfer of $500K and current cost of OHM at $237K.
As a new program, we expected to have a steep learning curve and we did - we can report the following learnings from administering the program:
Partners were less interested in accessing Olympus as a source of capital and more interested in the value accessible from our large community, becoming part of the econohmy and advice, assistance from the DAO contributors
We quickly realized that it was necessary - for both reputational reasons and due to the stage projects were seeking to close an agreement - to delineate between being incubated by Olympus and partnering with Olympus prior to launch (launch partners)
The fundamental difference between an incubatee and a launch partnership is how far away from the launch that partner is. An incubatee is usually in need of more support from the DAO, which justifies Olympus taking a higher % of their governance token.
We have had some useful conversations which have highlighted that a single-minded commitment to being diamond handed may not be in Olympus’ long term interest or that of our partners - for example:
If we are entering a round on the same terms as other investors - but committing to never sell - we are giving away more than other participants and more than is necessary
It may be useful for Olympus - in consultation with partners - to OTC some of its allocations to allow other market participants to gain exposure to the project
The number of deals that were dealt with in late January 2022 - that required a governance vote - led to community fatigue and low voter engagement. This was a large resource impost on the team to handle the logistics of governance processes. With this in mind, we propose to restructure the incubator to allow different entry points for projects at various stages of maturity
Looking Ahead - Incubator v2
Sporos, Incubator & Launch Partners
In order to maximize success we intend to restructure in order to have three distinct entry points:
- The Sporos program will be the entry point for founders who have a great idea but are just starting out - the Sporos program will assist with ideation, mentoring, guidance, and funding to get the project on track
- Provision of funding up to $250K paid out over milestones up to launch.
- Olympus will generally target ~10% of the project’s tokens under a Sporos agreement
- We are especially keen to see applications from Ohmie founders who are solving a pain point for DAOs
Incubator will continue to onboard high value, high impact projects that have a significant use case or integration for OHM or the econohmy
Provision of funding up to $250K paid out over milestones up to launch
Olympus will generally target ~6% of the project’s tokens under an Incubation agreement
Launch Partners - pre-launch:
We will continue to partner with projects that are too mature for Sporos or Incubator but will significantly benefit from advice and assistance from Olympus as they head to the launch of the protocol. These are projects with inspiring founders and teams that want to join and align with the econohmy
Provision of funding up to $150K paid out over milestones up to launch
Olympus will generally target ~3.3% of the project’s tokens under a Launch Partner agreement
The flow for projects starting at Sporos stage will flow to Incubator support and then Launch Partner support as they mature.
Playbook & post-agreement success
A big value-add that we can deliver to projects is that we are constantly cycling through pre-seed to launch and have the most up-to-date knowledge of the current best practices. We have been building a modular playbook for aspiring projects to implement to get them ready. We have a robust post-launch success program that allows us to keep up to date with each partner's progress and roadblocks to success - so we can help them along the journey.
Founder mentoring program
With a number of projects that are already alumni of the incubator - we have begun inviting alumni founders to mentor newer projects joining the program. As these founders have just been through launch they are the most up to date about current opportunities and pitfalls in launching. It also has the benefit of networking partners within the econohmy.
Formalizing the network of the econohmy - a place for founders & builders
Our partners in the econohmy are and will be, the lifeblood of building out the utility and value of OHM. Joining the econohmy will be valuable as you are able to access a network of other good actors who are values aligned with Olympus. Incubator contributors will also build out a space for our partners to meet, network, and collaborate. We will also build a system to be able to find and source talent for our partners in the econohmy.
Building relationships with other DAO development programs & other stakeholders
We have begun to reach out to build relationships with DAOs programs & stakeholders that share Olympus’ values. With these strong relationships, we can refer partners to high-quality advisors, partner with aligned DAOs, or access to launch services such as PrimeDAO and Copperlaunch.
Separate track for investment rounds
Sometimes projects would just like Olympus to join their DAO round of investments which will have set terms which apply to DAO’s invited to the round - a recent example of this is Curvance. We will continue to conduct due diligence and recommend such appropriate opportunities to community governance.
We will shortly put forward an OIP requesting:
Continuation of the program
Approval for program budget with a maximum of $3mm per quarter and maximum capital assistance of $250K per project
Approval of a maximum budget of $100K per month across all contributors compensation to administer and improve the program
Please join us for an AMA with the Incubator team on Tuesday 1st March at 9:30pm UTC (4:30pm EST) in the Olympus Discord.