[GIP-44] Business Development Proposal (initiative)

[jared_gb]

Summary

This is a proposal to start the Gearbox Business Development (GBBD) SubDAO, which will lead efforts in attracting large users to the protocol. Due to budgeting and planning constraints, it will likely consist of a single member to start. I, Jared Hedglin, working through Hedglin Consulting, would like to propose myself for the role spanning an initial three month engagement.

Motivation

Gearbox has the potential to become a leading DeFi protocol financially empowering an entire new class of investors who may not have access to similar financial services due to geography or economic status. However, to establish the project as the dominant composable leverage protocol - a potentially enormous category - deeper liquidity on the protocol’s supply-side is necessary. As evidenced by high utilization, there is clear PMF expressed from the borrowing side of Gearbox; however, more effort is required for growing the total amount of liquidity provided to Gearbox.

Like many leading DeFi projects, Gearbox will need qualified contributors to actively build relationships with liquidity providers, borrowers, protocols, wallet platforms, service providers and more in order to attract liquidity and users to the ecosystem. While Gearbox’s current $100m TVL is extremely impressive for an early-stage project, the protocol’s competitive yields could easily support a large influx of liquidity.

Importantly, many whales, DeFi funds, power users, and institutions require some level of human interfacing with the DAO in order to to gain comfort with LPing. Therefore, it is my belief that a coordinated BD program, spearheaded by a specialized subDAO, would deliver outlier value to the Gearbox protocol.

Specification

The GBBD SubDAO would serve two high level goals: increasing Gearbox’s adoption and visibility among potential liquidity providers and DeFi power users. The funding for this subDAO will be used to unlock on-chain research to find whales, setting up calls with institutions to educate them on Gearbox, speaking to broad audiences on Twitter spaces and podcasts, as well as representing Gearbox at key industry events.

This section breaks those overarching goals down into specific tasks.

Goal #1: Increase Gearbox’s Adoption

• Develop a robust go-to-market strategy for a pipeline of LP’s and borrowers with DeFi power users, protocols, funds, companies, and institutional investors. Create and document processes like a CRM, feedback loop, continuity plan for growing this role and subdao
• Integrate best-in-class technologies, such as a CRM, to track and manage subDAO relationships.

Goal #2: Increase Gearbox’s Visibility

• Build relationships and partnerships to bring Gearbox to other user interfaces and applications (especially in a potential partnership/referral program)
• Establish a professional digital and physical presence for Gearbox at key industry events.

Duration

This proposal recommends a three month engagement, which can be extended by the DAO at the end of the term. Subsequent proposals will likely include additional 3-month extensions. This approach allows for the setting of high level KPIs to be set with sufficient time to achieve them, but also allows the DAO to periodically monitor and provide feedback on progress with regards to the overarching goals defined above.

Proposed Budget

I was previously working for Boxcode and Gearbox Protocol Limited, the companies that raised the seed round. My compensation and expenses were the following:

• Total salary: $280K/year (included insurance expenses, travel, conference, and business expenses)
• Token vesting: 5 million $GEAR to be locked for 3 months and then linearly vested over 9 months (as per the current contributor vesting schedules)

I would like to propose a “quarterly salary plus expenses” of 45k USDC, which is equivalent to a $180k per year salary. This represents a 36% pay cut, while still maintaining the additional legal/insurance/conference expenses.

With this budget, I will be able to put forth my full time and efforts for serving the goals of this subDAO and supporting the Gearbox protocol.

Compensation Benchmarking

• According to data from Pave, the median salary for a VP of Business Development is around $185k and a total annual cash compensation of $200k. I will be taking on more responsibilities than just a VP of BD, but added this comparison for context.
• It’s worth noting that these numbers do not include benefits such as health insurance, which I will have to pay for out of pocket. Additionally, there is no bonus associated with this position, so the total cash compensation is equal to the base salary. In comparison to the market, this proposed salary is competitive but slightly below average for the DAO. These numbers also do not consider any additional liability or risks.

Breakdown

• $50k USDC for the 3 month grant period. ($45k salary + $5k in expenses + unlocking tokens) The DAO does not currently use any streaming payments mechanism, so I propose delivering this in a one-time payment.
• 5 million (5,000,000) $GEAR to be locked for 3 months and then linearly vested over 9 months, in line with the same vesting schedule for other contributors. At today’s fair market value, this approximately $75k, but represents both future upside as well as uncertainty in risk in both the market and future regulations. If I were to stay for a full year, then 20m GEAR tokens would represent 0.2% of the token float, which is a comparable number often offered to early contributors that take the risk of leaving “comfortable and stable” positions.
• I will cover expenses out of this distribution to attend additional conferences :
  • ETH Denver (definitely, already booked)
  • 2-3 other conferences which will be selected shortly based on the quality of attendees.

Team

I, Jared Hedglin, would lead the GBBD SubDAO.

I am excited to announce my candidacy for leading the GBBD SubDAO. As a dedicated contributor to Gearbox since March, I am eager to continue my efforts in growing the protocol. With my strong background in institutional crypto, boasting 4+ years of experience, I have played a key role in high-impact projects such as DAO fundraising round pitches, strategy development for V2 launch, and promoting crypto conferences and meetups. I have also been featured on 2 podcasts and 4+ Twitter spaces, and have been available to help with Ninja Mode whitelists. Furthermore, I have successfully led efforts to get Gearbox covered by top industry publications such as Nexus, Token Terminal, Exponential, Cer Live, and others, while working to expand our presence in more DeFi front ends.

I believe I’m the right candidate to lead this effort for Gearbox as I have more than 4 years of experience bringing crypto products to market for leading companies. Prior to Gearbox, I was an Executive Director at BitGo, where I was responsible for selling wallet and custody infrastructure and led the charge to integrate BitGo’s wallets with Metamask. Prior to BitGo, I worked on the Institutional Sales and Trading Desk at Coinbase. Prior to Coinabse, I sold the market leading white-label exchange technology at Alpha Point and led the international Account Management team.

Although I may not be degen enough to mint a DegenScore Beacon, I feel that it’s important that I can even reference that in a proposal. The community, including degens, chads, and whales have been incredibly supportive and impressive getting the protocol to its current TVL in a deep bear market and in a year with multiple black swans, however, in order to get to a top 10 protocol, then there needs to be someone (and eventually a team) actively working to grow these metrics.

Special thanks to Ivan, along with Derek and Spencer from Variant, and Joe from RW3 for providing feedback on this post.

[Satoshi]

For what it’s worth…

I’ve have a professional and personal relationship to the author dating back to 2017. from the broader crypto exchange ecosystem…

I’ve witnessed the author first hand graduate from Account Management to Key Thought and Opinion Leadership at a Senior Level with Sales/BD with Billions of dollars on the line and in flight, both at C.B and Bitgo, and now subsequently with G.B afterwards…

The character of the individual is some of the highest quality, and when compared to the characteristics of some other predominant figures within the public eye of the crypto ecosystem, he should be considered a Saint for how he conducts himself.

So, I know the author will do what’s right both ethically and professional if granted the funding to create this SubDAO for Gearbox. He probably offers the company the greatest chance of success by being placed into this role and having the opportunity to execute the aforementioned ideas necessary for growth…

I genuinely couldn’t think of someone more prepared and better suited for this role and I think Gearbox would be lucky to elevate Jared into this role for the next 3 months, at least.

[RV_ivangbi]

Jared is chad, I think it’s commendable he took a public stance with this initiative (flexible and courageous) and believe it’s totally worth it for at least one initiative period. The initiative period is March to May (3 months) by the way, which should be perfect for any relations with Singapore funds (post Chinese New year) and other institutions. Looks good, hope to see good results too

[apeir99n]

Jared has relevant experience for this job, I’d support proposal.

The only comment from me is absence of metrics of success (me as product guy love metrics). From my point of view main focus for bizdev now is liquidity in pools as there is enough demand from Ninjas. So my suggestion here is to add this metric. Idk what numbers should be there - maybe @jared_gb can suggest one, or somebody else from community…

[ov3rkoalafied]

Full support. I will say, GBBD seems focused on adoption/front end of things? Some of the items overlap with marketing. Curious where things like working/chatting with other protocols about potential integrations, new strategies, things they can build with/on top of gearbox, etc, etc fits in, or if that would be a separate future subDAO. Not requesting a revision - like Ivan said you’re a chad and I would rather see you help where you think you can be the most helpful, and I agree seeking out deeper liquidity is a good focus. Just wondering if this is a separate hole that needs to be filled elsewhere, or already addressed somewhere else within the DAO.

[RV_ivangbi]

This proposal (imho) should NOT be related to protocol integrations, because developers (friends, core, ex-core, whatever) are pretty much connected to most of the teams already. On that side, the burden is on building adapters - whereas that is a dev task. There is no shortage of connections or interest from other protocols, because the value proposition to them is “listen, your users can now leverage - isn’t this awesome” which obviously is a YES. So it’s not a KPI that BD initiative can realistically maintain imho.

The goal of this initiative is mostly (or almost fully) on the passive capital side: growing the passive pools TVL with larger institutions and holders. That is easy to track, that is an easy KPI (as @apeir99n suggested above) and is the largest pain point right now as utilization is at the roof. Also, if it happens that a protocol becomes a passive liquidity provider under the guidance of this initiative - can count as KPI too.

What could be pointed out is that if this initiative (be it Jared alone or with some help he seeks, that’s none of my business) - makes these other protocols integrate themselves. So they build an adapter, they at least co-share audit costs (not just fully by Gearbox DAO) and as such adoption grows. That’s cool because it doesn’t introduce any burden on the current processes and can be done without any help. That’s the long-term view on integrations since the very start, Gearbox is just still new

[RV_ivangbi]

5 million (5,000,000) $GEAR to be locked for 3 months and then linearly vested over 9 months, in line with the same vesting schedule for other contributors. At today’s fair market value, this approximately $75k, but represents both future upside as well as uncertainty in risk in both the market and future.

On this note, a grant initiative in general should not yield the same number of tokens (because imagine if every grant also wants tokens… that’s gonna be treasury-draining a lot). However, this is a special initiative with a long-term contributor, so here it can make sense (up to others’ opinion, I won’t make it my duty to rob people out of bonuses LOL). I would just suggest to consider the token part in line with the new framework (if it approved) as suggested in here:

Either:

• 3M GEAR as per the vesting suggested.
• Or the bonus structure as explained here:

Option 2: have 1:2 USD:GEAR at 150M FDV (so, x2 as many tokens) but not have any liquidity until February 2023, upon which an 18 months linear vesting will commence. So you will need to contribute (well!) for the entire year, upon which you start vesting with a larger portion. TLDR…

Up to the initiative member (Jared) to decide what they prefer.

[spencernoon]

Variant is highly supportive of this proposal, and of @jared_gb, who in our view is the right leader to spearhead this effort and deliver value to Gearbox. It’s also great to see all of the feedback from the community.

In the spirit of progressing this conversation forward, I wanted to offer up my own opinions regarding a few of the points made by various community members.

On Jared leading the GBBD:

• @Satoshi : Strong +1 that Jared has a proven track record as a crypto biz dev leader, having worked at leading institutions such as BitGo and Coinbase previously. I’ve had the chance to collaborate closely with Jared over the past year on Gearbox-related biz dev initiatives and I’ve also known him personally for more than a decade, so I can vouch for his domain expertise and strong character.

On KPIs:

• @apeir99n : I too am a huge fan of metrics, so agree with you that the GBBD should have KPIs that allow the community to measure and track its progress and performance. It is also important, however, that we strike a balance between the community’s need for oversight and Jared’s agency in the role. Experienced industry leaders don’t want to be babysat.
• If passed, it would be great if GBBD could hold an open community call to discuss KPIs in even greater detail during the first epoch. Variant would like to participate in this discussion and give feedback on them, and I’m sure other members of the community would too.

On BD vs. Marketing:

• @ov3rkoalafied : Great question and agree we need to avoid unnecessary overlap between these two functions, however it our view that the proposed structures achieve this. There is a major difference between what Jared has described as GBBD’s biz dev efforts versus the DAO’s marketing efforts.
• For context on the difference between the two: biz dev and marketing are two distinct but related functions within a company. Biz dev is focused on identifying and developing new business opportunities, such as partnerships and strategic alliances. Marketing, on the other hand, is focused on promoting and selling the company’s products or services to its target audience. While both functions work to grow the business, biz dev is more focused on creating new opportunities, while marketing is more focused on communicating the value of existing offerings.
• As head of GBBD, Jared will be working to onboard major CeFi institutions to provide liquidity and become users of the Gearbox protocol—this requires deep and specialized experience and is fundamentally different than marketing. Separating these functions would align with the strategy we typically see, where marketing and biz dev are broken out but still collaborate when required (although this is not as common as you would think).

On compensation:

• @RV_ivangbi : Agree it’s commendable that Jared took a public stance in proposing this initiative, which notably includes his own salary. It takes a tremendous amount of courage to propose a salary for yourself in a public forum, and it’s not lost on us that Jared is proposing to take a 36% paycut. To us this demonstrates his allegiance to Gearbox and passion for the mission of making leverage more accessible to the masses.

[jared_gb]

Thank you to everyone for the thoughtful responses and feedback.

Regarding KPI’s, I do agree that there should be high level guidelines. Here are the core KPIs I am targeting for this proposal period:

• Institutional leads - Tracking new potential institutional LPs and borrowers would be a good starting point, since continuing to grow both sides of the protocol’s liquidity is so important.

• 3rd party integrations - Frontends that integrate Gearbox directly into their end-user interfaces, which will drive more liquidity and volume to the protocol.

• CRM launch - I believe it is important to have a KPI for launching an internal Gearbox CRM so that we can keep track of LP convos. This is a long-term investment for Gearbox’s biz dev initiatives but should provide a ton of value should we onboard new members to the subDAO or if another subDAO took over in the future.

I would also love to have an open conversation on a community call regarding other potential KPI’s and hear the community’s feedback.

Finally regarding the token options, I would opt for the non-boosted 3m $GEAR with the vesting that I proposed. Otherwise, I’m excited to formally move this to a vote and continue growing the protocol together.

[RV_ivangbi]

Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.

[Etienne]

I will let the more active contributors discuss the proposal since I just joined so not fully aware (yet) of how the protocol operates. Imo I found it great to have such open conversions about the recruitment of a BD as leverage for the protocol’s growth and visibility. Congrats @jared_gb

If you’re looking at starting a CRM and as mentioned by @RV_ivangbi, Notion can be a great tool as mentioned by @RV_ivangbi since it’s cheaper than Hubspot (or similar), would be happy to contribute to that since I worked on building similar dashboards and CRMs. We can discuss more if the proposal passes since it’s not the main topic here.

[jared_gb]

BD Q1 Recap/Q2 Proposal

Summary

This is a follow-up proposal to continue funding the BD initiative at Gearbox through engagement with Hedglin Consulting LLC and Jared Hedglin. This proposal would grant another three month initiative to continue growing Gearbox.

Quarterly Review

The primary objective of this first engagement period (Feb 1, ‘23 - Apr 31, ‘23) was to increase TVL. Before and during the engagement, myself and other Gearbox contributors discussed V2 with some funds and advisors, and we received feedback that the rates were not competitive enough to justify large deposits when the “risk free rate” was so close to what Gearbox yields offered.

Institutional and TVL Engagement

With this feedback in hand, I proceeded to pitch the Special LP Boost discussion to 12 new (not previously engaged) venture funds, hedge funds, and family offices, however, only two institutional firms indicated interest in the opportunity. The main pushback around engagement was size required to participate, specifically in a macro environment where return of capital has been dominant over return on capital. As Gearbox has continued to show its safety and security, the “institutional comfort” has seemingly grown reputationally, but we have seen TVL decrease since the beginning of the period. I would attribute this trend to several factors including the uncertain global regulatory environment, the USDC depeg incident, and tangentially Nexus’ V2 launch, which has caused insurance rates to go up, making depositing into Gearbox less appealing. Despite TVL now hovering near $90m, the protocol’s resilience has been clear and that narrative is resonating with larger players in the space.

One highlight of the quarter was the Balancer Boosted Pools launching to deposit funds into Gearbox. I originally engaged with Balancer contributors in July 2022 to start discussing this integration. Fortunately, the Balancer team saw the opportunity and Gearbox’s traction, and so they built out the entire boosted pool system, which is now currently being used to deposit ~$5m into Gearbox pools. Although $5m is just a start, this situation demonstrates the time required to evolve conversations into working relationships and a realized product showing results.

Events

In addition to focusing specifically on raising TVL, I’ve leveraged additional events to grow the network and get in front of users that haven’t encountered Gearbox. I’ve added a bullet point summary below of the events that I’ve covered over the past three months;

• ETH Denver

  • Gearbox/Liquity/Euler Sponsored Event at Happy Camper Pizza
    • ~250 attendees
    • Received feedback that it was the “best side event at ETH Denver” from multiple attendees
    • Teams from Variant, DefiLlama, Balancer, Aura, Alchemix, Chainlink, Redstone, and more came to discuss the space.
    • Special shoutout to the VIBES Subcommittee for funding Gearbox’s share of this co-hosted event and (also designing) the T-shirts that were printed.
  • Met with RIA’s, Asset Managers, Liquid Funds, and protocols/infrastructure teams at ETH Denver.
  • Attended four other VC networking events and networked at the conference

• NFT NTC side events

  • Did not pay for a ticket to NFT.NYC
  • Met with some blue-chip NFT communities and discussed how they use defi (especially borrowing against their own NFT’s or lending them out for APY), and educated them on how to use Gearbox

• Consensus Austin

  • Next week, I’ve scheduled meetings with four wallet companies to continue the push to get Gearbox deposits represented in wallet native UI’s, three funds to discuss LP’ing, and two protocols to discuss potential collaboration

Additional Activity

With the intention of starting to build out a more robust pipeline, I worked with Ilgiz to set up an AirTable CRM to start tracking conversations, as well as an inbound interest form that will live on multiple Gearbox sites so that potential users and collaborators can reach out directly to the business development email (bd@gearbox.foundation) in case they do not feel comfortable jumping into a discord.

I’ve also generated a new KOL revenue sharing link with a former sales colleague that operates out of the Asia/Pacific region, and I’ve started working with them on identifying new potential funds to meet regarding Gearbox. Finally, I’ve met with at least 12 external projects that have reached out to diligence if we can work together. This activity was discussed in the original forum post to see if it would fall under my “jurisdiction”, and although I’m not spending extra time looking forthese projects, I do feel that my knowledge of our system lends itself well to qualifying if an inbound lead would be worth pursuing and introducing across the DAO to members with specific areas of expertise.

Areas to improve and next steps

• Increasing new TVL leads

  • Going to Consensus will be another step to meeting new firms and finding new opportunities.
  • Leaning in to EMEA and APAC opportunities, as those regions seem to be embracing DeFi more
  • Still entertaining buying access to a “funds list”, but working with the network to see the best route for this
  • Working with VIBES subdao to send messages directly to whale wallets

• Gearing up for V3

  • Educating previously engaged funds around the new V3 improvements will continue to be vitalAs V3 launches (hopefully in this engagement window) then the “Make Your Own Leverage” pools will be vital in attracting larger LP’s that are more particular about the risk that they are exposed to.
  • V3 will allow additional limits to be placed within the protocol, thus allowing launches to other chains. Being a point of contact, as well as starting to engage with these other platforms will be an important piece of my job, even if it is not my primary objective. Finding new teams to build on Gearbox, and exploring potential avenues to bootstrap liquidity across networks with partners.

• Events

  • Follow ups from Consensus Austin
  • ETHGlobal Lisbon- Aiming to go to if approved
  • Potentially one other conference to go to this quarter or potentially a trip to Europe to meet with funds

Budget/Breakdown

I propose the same terms as the previous engagement below. For those interested, I’ve spent $3,500 of my expense budget so far, still with some Consensus expenses coming up. I’ve done my best to get free tickets to both ETH Denver and a developer ticket to Consensus, and if I had to pay full price, then I’d be over budget, but I feel comfortable covering expenses with a $5k budget for the quarter.

• $50k USDC for the 3 month grant period. ($45k salary + $5k in expenses + unlocking tokens) The DAO does not currently use any streaming payments mechanism, so I propose delivering this in a one-time payment.
• 3 million (3,000,000) $GEAR to be locked for 3 months and then linearly vested over 9 months

[RV_ivangbi]

PS: will abstain for now from comments on the matter, but wanted to say - the report format and length is a golden standard for any initiative going forward (cc Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.), I believe it’s detailed and analytical enough to give a full picture to every DAO member. Kudos for writing that and being the first on this new path @jared_gb!

[ov3rkoalafied]

My main DeFi role being bizdev with Alchemix, I can vouch that partnerships take time to develop and execute. Agree that this report is amazing showing all the work being put in behind the scenes, so I believe Jared should be able to continue to develop these partnerships. Great job itnroducing gearbox to numerous different groups in crypto. I think ultimately a long-term KPI for Jared could be TVL/revenue brought in by onboarded partners, but given Gearbox is still very much in a growth and awareness stage, I think it’s too early to start looking at such KPIs and we should let Jared cook.

[mugglesect]

VIBES will be happy to help send the messages

Apart from this though boss, there’s a couple of things I would like to personally see added from a numbers perspective

1. Documentation

• Database of the accounts, previously added and new ones, managed by the sub-DAO
• Database of generated leads
• Performance tracking of the same and potential size mapping

Totally understand if this needs to be kept confidential but can be shared amongst Main DAO contributors for verification who can then help.

2. Metric Tracking

While totally understand that the market conditions and the rates atm aren’t ideal, would like to see some more depth.

Overall
TVL brought in from inception
Total accounts active
Total leads generated
Average pool deployment(how many pools does a lender deploy too)

On existing accounts
TVL
TVL growth
Total Active accounts
Active accounts retention%
Growth in average number of pools deployed to
Total leads
Leads converted

On New accounts
Number of new accounts added
TVL brought in by new accounts
Distribution of new account sizes(100-500k, 500k-2M, 2-5M… and on)
Total new leads generated

Let me know if you would like to create any visuals or pitching detailers with VIBES or need any support at all. Kill it

[RV_ivangbi]

This is super detailed and nice, support! While maybe it’s hard to get passive lending numbers up (due to the environment) - these things help set the foundation and should have been eve done before. Now is the time to finally do it and streamline these processes, so anyone can aid in the process if needed. Moreover, it helps everyone understand the hard & easy parts in more detail related to the user side.