Quarterly Recap Rook Q2 Quarterly Report: Operations Recap

The Rook Labs Growth, Organization, Treasury, and Studio teams present an update to the community on Q2 business development, financial health of the treasury, organizational progress, and our outlook for Q3 and beyond.

Key Takeaways

Growth and Business Development

• Rook has noticed a marked improvement in the number of contributors and partners that want to work with the protocol.
• The team is talking with DEXs, market makers, and other potential sources of integrations and partnerships. However, details of these partnerships cannot be disclosed at this time.
• Rook is focused on delivering three key product verticals: orders (ERC-721), transactions through RPC, and smart contract integrations.
• Lessons learned from keepers and market makers have been very valuable in helping to improve the product.

Community [16:30]

• The community has been "an amazing source for bringing in new folks."
• The reorganization exposed flaws in community management, and Q3 will bring an overhaul in public-facing operations.
• At least one of our weekly meetings will include dedicated time for a recap of weekly progress, time for a deep dive or discussion by a subject matter expert, and time for questions and oversight.

Studio [20:30]

"KeeperDAO is dead. Long live Rook." - Watts

• The new branding and website have been launched; the refreshed look and content are more accessible to partner protocols.

"We have a brand new style to go along with this – less dark forest and more bright abstract tech." - Watts

• Rook has partnered with Starbased, the DeFi-native media agency behind Tokebase, to handle meeting notes and written content.

Treasury [23:40]

"I think the story of this quarter is really around rapid expansion in every way imaginable." – Matt

• Rapid expansion brings added complexity to reporting and treasury management. The treasury team has been working closely with the operations team to streamline these operations.
• The treasury team has been working to meaningfully deploy assets in order to mitigate risk.
• The Rook treasury is in a very robust and well-diversified position.

"...from a runway perspective – from an operational perspective – we don't see any reason to take the foot off the gas." – Matt (28:00)

• The treasury is 60% stables, with the next largest position in ETH, followed by ROOK.
• A Treasury Charter will be established to aid the creation of a shared cultural mindset around the purpose of the treasury.
• The purpose of the treasury is to support the high-level vision of Rook.
• mStable has been an excellent partnership that established a permanent source of order flow, and therefore additional protocol revenue.
• More partnerships of this nature are a priority, since they bring long term benefits.
• Crowdsourcing from the community during Treasury Tuesday has been a valuable source of discussion on treasury management.
• The ETH deployment strategy KIP passed. It will allow the treasury to deploy 75% of the idle ETH into Stakewise, RocketPool, and Lido.
• The treasury will be pulling funds from Bancor in response to the failure of their impermanent loss mechanism.
• The Tokemak deployment strategy is in progress; Rook is waiting on Reactor ignition. Listen to the recent Rook <> Tokemak AMA.
• The number of Rook contributors has grown, and compensation is the largest source of material outflows. The Compensation 3.0 plan will work to address this and extend the runway dramatically.
• Switching to USDC compensation will decrease downward price pressure on ROOK.

Organization, Legal, & Governance [56:40]

"Running a DAO... It's hard. And it's hard because it's new. So there are a lot of hard novel problems that we need to solve, and there are no textbooks for this." – Tommy

• Excellent new personnel have been onboarded, including Guard, Jason, Stef, and Katelyn.
• The team has been ensuring that the organization has a good regulatory strategy, while building resilience against governance attacks and compliance problems.

"It's basically not an easy feat to make an organization that is legally defensible that… deals with things like liabilities and regulatory exposure in the right way, but at the same time follows the kind of crypto ethos where we build decentralized structures that don't concentrate power in too few hands." – Guard (1:00:00)

• The legal team is creating a bespoke legal structure for Rook.

"The idea is that I make incentive structures that are such that even if everybody is an idiot or evil, the DAO will still survive and thrive." – Guard (01:03:16)

• Improvements to proposal templates, the forum, GitHub, and Discord are in the works to help improve visibility of the governance process.
• More details about the governance reform process will be made public in the coming weeks.

Onboarding [1:08:30]

"Resilience, for us, means building so that the people will stick around and will have all the conditions [for] their best work and best life." – Stef (1:08:30)

• The onboarding experience will be improved using data, rather than gut feelings.
• Crunch & time-off rotations will be enforced to improve work-life balance and prioritize health and productivity.
• Improved knowledge sharing and remote feedback processes will be introduced.

Recruiting [1:14:50]

• Hiring has slowed now that we’re at the required headcount, and we’re now focusing on improving processes and easing the team together.
• Cost per hire has been drastically lowered due to internal recruiting.
• An improved grants program will be developed during Q3 to further open up another pathway to onboarding talent.

Outlook [1:21:00]

"The types of products that we can build, and the types of products we've already been able to release, are unlike anything that I think any of us would have imagined even just a year ago. [...] This data that we gather, and the things that we're learning and building... this is the first time this has ever been done. So this data is the only data, these products are the only products, and this team is the only team working at this cutting edge. This is what it feels like to work at the cutting edge."– hazard (01:22:38)

• Rook is fully staffed to carry out the DAO’s ambitious goals while benefiting all network participants.
• MEV is a misunderstood aspect of blockchain tech that isn't going away. Rook is in an ideal position to capture it.
• Q3 goals are to manage contributor growth, preserve treasury capital, and focus on growing productivity.
• A key part of Rook's strategy is increasing the market's awareness of the benefits of the protocol.
• Outlook: Positive!

Transcript

[00:00:00.070] - Deetz
All right, everybody. Well, welcome to the fifth and final end of quarter events that we've had planned. For folks that have been with us for every single one, I truly appreciate you committing some time with us. Hopefully the things that we've been sharing with with you have been both educational and insightful for what the DAO has been up to, the things that we've been building, what we hope to achieve going forward. For me, this has been just another awesome opportunity for getting to collaborate with the whole team. And as you guys know, I like to come and talk and put a microphone in front of my face, but getting to see all the people that got to share the work that they've done up to this point and what we'll get to through this call has just been fantastic. So with that, again, just some quick housekeeping for anyone that this might be their first of these end of quarter calls. We're here in the end of quarter voice chat channel where if you're looking to ask any questions or anything, be sure to ping me in the voice chat text channel that's right above this.

[00:01:13.030] - Deetz
And we can get to questions while we can during the presentation or we can get to them afterwards as well. But we do have a ton to get through for here, so I'm excited to just kind of dig in and get going. And so I'm just going to quickly kick this off with just at least a retrospective. From my perspective, it's been just right about exactly a calendar year since I've joined, and seen the operation side go from when the first six of us got brought into labs back last June and July to getting through the turn of the year and starting to get to expand and bring in new faces on both engineering and the operations side and where we've gone. I was talking with hazard earlier this week that it's been an absolutely unreal experience and unlike anything I've gotten to experience in my career, which, I've had a lot of great opportunities. And this one... I don't think there's been anything that's matched it. And I've gotten to do a lot of the things that I dreamed of as a kid, including working for professional sports teams and working for Fortune 500 companies like Disney and other things like that.

[00:02:36.250] - Deetz
And there's absolutely nothing that's compared to the experience that I've had working with these folks here and getting to be a part of this community and coming out of this community. And so for me, this is kind of a special time. But also as we kind of allude to at the beginning of the recap, there are some things that we definitely need to continue to work on and improve on, and some of those things are challenges that we can take head on, and some of those things are going to take a little bit of time. But as we go through this recap, I'm really excited to show you kind of all the work that the operations team has been working on. We'll hear from a bunch of different folks, but we might as well kind of get quickly started here. And we'll scroll down to the first section we'll be talking about, which is -- and I'm sorry if this is making anybody sick as I scroll -- we'll be talking about growth. So that's a team that I lead and Troy and I have been working really hard on for this last quarter in terms of where we've started and where we've gotten to.

[00:03:47.750] - Deetz
So the thing about the growth team is that we have made some necessary enhancements to kind of what we do on a day to day basis. We've improved kind of how and where we talk to folks. And what we've seen is a marked improvement and increase in the attention that we've gotten: the number of folks that want to meet with us, number of folks that want to commit to working with us.

[00:04:21.370] - Deetz
So if you look at this first section here, what we've done is really increase this rate of partnerships that we've had over the last three months. It's funny to actually go back and tally it up where at the end of the quarter. We had announced, I believe, like, seven or so new integrations. Well, right now, between the conversations Troy and I working on, we're already at over 50 active partnership conversations, and we continue to have new conversations with folks every day. And the mix is absolutely awesome... We're talking to new market makers and automated trading shops, as well as new projects, growing projects, massive projects, even folks that provide massive amounts of absolutely essential infrastructure to DeFi and crypto as a whole.

[00:05:25.040] - Deetz
So for me, this last quarter has just been so exciting in the conversations that we've gotten to have.

And so with that: something that we talked about a little bit in one of the earlier calls was kind of this new framework for how we're approaching growing the protocol. Our three key areas of growth that we're going to be focusing on is different types of orders. ERC-721 types of orders that want to execute trades with us, the transaction RPC type of orders that are piggybacking and are completely related to the project that Gman has been driving on the transaction relay, if you caught that from the engineering recap earlier. And then on the smart contract side, where we'll integrate at the very kind of early levels of smart contract building with different partners as well. So I'm going to go ahead and quickly pause there and hand it off to Troy to talk a little bit about our integration pipeline, and we can kind of keep going from there. So, Troy, you want to talk a little bit about what's in our pipeline right now?

[00:06:43.850] - Troy
Hey. Yeah, thanks. Can you hear me okay?

[00:06:46.430] - Deetz
Yeah.

[00:06:47.690] - Troy
Okay, great. Yeah, so like Kyle said, we're talking to new projects just about every day and it has been just so exciting to kind of share with them what we're doing. And it's been really neat because we're talking to such a variety of different projects. When I first started here, it was kind of like... The goal was to get people to use the limit orders, right? Maybe offer limit orders natively on the site. So we certainly are working with a number of partners that are doing that. But the scope that we can now kind of work with these partners, with the transaction relay, it's just so exciting. We're talking with bridges; we're talking with partners with huge treasuries that need to constantly rebalance it, and we can provide an improvement on how they are currently operating. I went down to New York for the NFT NYC. I just went for a Friday night -- took the train down to meet with a potential partner. And when I met with them, the guy said to me: we get pitched projects all the time that come to us. They reach out and say: "Hey, we can help you guys. We need to partner with you guys. Look what we can do."

[00:08:16.350] - Troy
But it always ends up that we're basically doing more for them, and we don't really get anything from it. And when he looked at Rook, he said: "Wait. This is a game changer. This is what we've been waiting for." And he went back to his team -- he sent it to all the different teams, his product team and engineering team. And they all came back and said: "This is it. This is a game changer. This is the first thing we've seen in so long that it's actually beneficial to us and helps us move forward as a project."

[00:08:52.230] - Troy
And we just get to see so much of that. Going to these conferences this year, talking with people just on the floor -- that's how we really kind of hone this pitch. A lot of people don't know what MEV is, right? Cryptocurrency in general, MEV is very difficult. But we can kind of get this... I can kind of get this pitch going where we can start with the traffic stuff, move it into how you're getting wrecked when you're sandwiched on Uniswap, and then kind of... It's a light bulb moment for folks and it's just been very exciting to see.

[00:09:30.350] - Troy
So we're talking with -- like I said -- bridges, big treasuries, wallets, market makers. We just have this great pipeline of people... of integrations... And I think that a lot of them I think we're going to be announcing very soon, and then I think it's going to be a great rest of the year. I'm very, very excited. I've had so much fun talking with people. I mean, I basically think it's like I sell free money, right? So I have so much fun going and talking to these projects and really just people about what we're doing at Rook. And it's been an absolute joy.

[00:10:14.330] - Deetz
Yeah, I would completely echo that sentiment. And thanks, Troy, for sharing. For us, it's also about balancing the conversations as well. So something that I spent some time on this quarter was building a native CRM that works inside of Notion that tracks all of these conversations. The dates are a little out of date as I grabbed the screenshot from earlier last week, but what we're doing is making sure that we can keep talking to folks. We make sure that our engineers know where things are at, that marketing and our social stuff kind of can stay updated, and so that every contributor that we've got can quickly see kind of what stage things are at. Something that I will say -- right now there's a little bit of a challenge. As you can see, we've kind of obfuscated some of the names here. They're around kind of announcing a partnership before it's official. For me, it's not just a little bit taboo, it's also... It probably puts improper pressures on different parties as well. So there's a reason that we're not naming all the names of different folks that we haven't already announced. But we will in due time -- as kind of MOUs and stuff come to an agreement, we will be sharing more information about who we're working with.

[00:11:48.230] - Deetz
But it's just absolutely kind of exciting times that we have. So outside of that, the other side of the growth team is what folks might have seen on our app where, if you look at the auctions tab or the rankings tab, you might have seen some tallying up of market makers and keepers. We've been running a pilot program where market makers and keepers are competing against each other. Market makers against market makers, keepers against keepers, that will... as they do their own versions of organic trade volume that we've instituted a number of different kind of anti farming policies within. We've been seeing a lot of great volume from that. But also it has enabled our protocol to offer some things right off the bat. So one of the things is kind of instant liquidity on wrapped ETH pairs, and some stablecoins, and some other coins that they've chosen to kind of market make and provide liquidity on directly into the HidingBook. But we've also seen them be kind of early partners -- before we went fully live -- on helping us test through the rest of the Coordinator and how things are working and so what they've done.

[00:13:14.510] - Deetz
And the lessons that we've learned in the short kind of few weeks that this has been running will allow us to provide better documentation to market makers that want to integrate with us, or for new keepers that want to integrate and the process that we'll go through there... and some bugs that we've found over time, and help people troubleshoot. And so these keepers and market makers that had signed on early with us have been absolutely awesome, integral partners.

[00:13:44.850] - Deetz
But on top of that -- and you can dig through our report on the tracking of rewards and volume and things -- I've got links here in the report that's tracking each of that as well. This program alone has driven about 128 million dollars of volume with their on-chain liquidity being provided with about 90% up time. And so it's been an absolutely fantastic opportunity to kind of learn and build alongside them. But along that, the feedback that we've been getting from the market makers and keepers has really been awesome. Our market makers are finding that the solutions that we're providing are absolutely kind of better than where they're finding anything else on chain. Looking at sell capital, talking about gasless orders and gasless cancels, have been absolutely awesome for them as they kind of rebalance their different strategies... or talking with the guys over at Bastion and talking about bringing different levels of CeFi execution to DeFi.

[00:14:59.010] - Deetz
It's been awesome talking with them and working with them about their strategies. And then on the flip side -- on the keeper side -- these guys are just absolutely top level. We actually have the wonderful benefit of having JZ on the team with us, and having both built operations on both sides of this operating volley fire on the market maker side and building Ninja on the keeper side. And the conversations that I've gotten to listen to between kind of Joey... Zubair's hopped on a few of those as well. And talking to our different keepers and market makers and the ideas and improvements that each of them talk about have just been awesome. And so their partnerships have been just so valuable to us. And for us that the lessons that we're learning from them are going to allow us to kind of open this up once we're ready for more keepers... And obviously when we're ready for more market makers, more volume coming through as well. But it's really just been an awesome program for us to have run. That's the growth team. We're going to go ahead and skip ahead past organization. We'll skip back to them.

[00:16:19.320] - Deetz
I know that they've got some folks that are coming out of meetings at this time, so we're going to skip ahead and we'll scroll back. So close your eyes if you get a little bit of sick of me scrolling, but we'll hop right into... Community. And so community, as I mentioned at the start of this call, was something where there was growing pains. There were lessons learned, and there's improvements that need to be deployed for folks that have stuck around for a while. They lived through this just as many of our contributors and longtime token holders and stuff have had. So if you think about the community, the community is not just our first line of users and folks that will read through our documentation, think about our tokenomics, and be our first investors. They're also our clearest line of sentiment around the program and idea generation. But most importantly, it's been an absolutely amazing source for bringing in new folks. But I wouldn't say that that process has been perfectly handled throughout the last six, seven, eight months, where lessons learned during our reorganization and whatnot had led to maybe some folks having a less than stellar experience with us.

[00:17:43.330] - Deetz
And so from some of that kind of community management side -- where we had brought in some folks to try and help us with different community things that... maybe they weren't the right fit for, or just ideas that never really got off the ground -- what's going to happen in Q3 and beyond is an absolute overhaul of how things are going in terms of interacting with and updating the community. And hopefully you've enjoyed one of the things that we've been doing in an effort to kind of keep more folks updated and be more transparent, which is the recording and publishing of these calls and these recaps, and something that we started earlier this week with Treasury Tuesday and governance workshops. We're going to be continuing this throughout the rest of the quarter as well. That's just one kind of aspect of where we want to kind of continue to make improvements around the community. I mean, other things like governance reform that we touched on in the call yesterday, and touch on a little bit more in the Org recap later in this call -- different updates and enhancements that we'll be doing to Discord moderation, and different guidelines for participating within the Discord, and really trying to make sure that the meetings that we hold, the calls that we have, bring a lot of value.

[00:19:13.170] - Deetz
I did even some internal polling as well, and found that we had much more room to grow on both community members and our contributors getting more value out of our calls. And so that will be a big focus of Q3 -- of just improving kind of what I would consider our public facing operations, and really getting things to a point that every single thing that we host or bring folks in to or ask them to contribute on is a meaningful experience -- that they feel like that they're a valuable contributor, that their voice is heard. I just kind of want to wrap that by saying that there's been a lot of folks that have shared their feedback that they felt like potentially that they didn't have as big of a voice as they thought they should have as a community member. And we really want to do everything that we can to improve those processes. And I've seen it from the top down that this is a priority for us and we'll be making sure that things change, kind of looking ahead. But with that, it kind of ends community and we can go on ahead and move over to studio.

[00:20:37.010] - Deetz
So, Watts, you want to talk a little bit about studio here?

[00:20:43.390] - Watts
Yeah, for sure. Thanks, Deetz. Can you guys hear me?

[00:20:47.590] - Watts
Cool.

[00:20:48.180] - Watts
All right. So the most obvious change this past quarter was, of course, our rebrand. KeeperDAO is dead. Long live Rook.

[00:20:55.610] - Watts
There are many reasons to do this. The launch of our Coordinator and upgraded trading app kind of gave us the perfect opportunity to do so. It was a fairly simple change, but it has already done wonders in solidifying our identity and just our presence and confidence in ourselves. If you've ever tried to tag @Keeper-underscore-DAO on Twitter, or explain to people what the fuck KeeperDAO even means, then you'll understand we have a brand new style to go along with this: less dark forest and more bright abstract tech. You've seen this on our new website, which will continue to grow to include detailed case studies, FAQs, an integrated job board, and more. And you'll be seeing it elsewhere as we continue to develop these visuals in service of our marketing, which I know is the more pressing topic here for a lot of people. Everyone has a different idea of what marketing even means, but it has been subpar in the past by any metrics. So here's what we're currently doing.

[00:21:46.570] - Watts
Number one: well, we're not marketing to you unless you're a whale, partner, or protocol. This is not the normal trader retail push you might have expected, but that is coming this next quarter in anticipation of our protocol upgrade. Different audiences require different strategies. So a lot of what we're doing right now, what we're focusing on is really supporting direct sales, which Troy is killing it at, as he's shown -- slide decks, pitches, developing our identity to effectively sell ourselves, basically.

[00:22:13.570] - Watts
Another priority which you've probably seen is data. You've probably seen it in our whale threads, and you'll be seeing it more elsewhere. We only launched the Coordinator like, what, two and a half months ago? But in a marketing environment like crypto Twitter especially, where everyone is shilling endlessly, it really helps to be able to back shit up with data. We know it speaks louder than anything else, and we're excited to gather more of it to prove our worth as time goes on and these partnerships launch. We've also recently -- as in, like, two days ago -- partnered with Starbased, the DeFi-native agency running Tokemak's Tokebase. Shout-out to tratium and Danica. I think they're in the crowd right now.

[00:22:51.990] - Watts
They'll be handling our meeting notes, generating written content, and giving you all a constant stream of Rook, which people have been asking for forever.... and maybe more in the future. And if you just attended our Rook narrative call like two hours ago, you'll know that we have further clarified our value props and defined a clear mission that better connects us to the health of Ethereum and conveys our unique strengths and products, and leads some hot upcoming narratives. From our perspective, we have a product and a team and a mission that stands out from the rest. So expect our marketing to speak to this -- and you -- more in this next quarter.

[00:23:26.910] - Deetz
Watts, I also do want to just give a big shout out to you on the re-launched website as well. Absolutely fantastic work there. All right. We're going to move on ahead and hit the treasury section. So Matt, whenever you're ready, go on ahead and introduce us to treasury stuff.

[00:23:45.850] - Matt
Hey everybody. I hope everybody's having a great Friday.

[00:23:49.010] - Matt
Yeah. So excited to kind of present my little section here. Maybe it's not little, but there's a lot of good information that we kind of dive into. I'm going to try to keep it high-level for the most part, I think. I'm not going to get too into the numbers and bore everybody with that. But really I think the story of this quarter is... around rapid expansion in every way imaginable. You can look at this report compared to our last one and just see how much we've done, and with that amount of activity it brings added complexity. We've seen the amount that the team has expanded, and with that there's a lot of infrastructure and processes. Really shout-out to the organization team who's done a great job on that as well. But with that it comes as financial implications from that. So being able to handle a lot of that from the treasury side as well... I'm going back to internal financial operations within treasury. That's something that is not necessarily on this report a lot, but behind the scenes has been a big part of what I've been doing, and working alongside the organization team closely in addition to this.

[00:24:48.830] - Matt
Really the other kind of parts of the story that are important to kind of talk about are: we've really taken an emphasis on trying to deploy our assets in meaningful ways. And we'll get more into that. And then on the side of that, and kind of on the other side of that, is really just: how do we mitigate risk as we do this? How do we mitigate risk with our current investments? As it stands, I think we're probably in some of the worst macro conditions we've seen a long time, especially in crypto's short history. Especially DeFi's short history. We haven't really seen a macro environment like this. So we as a treasury, and as a community, just really need to look at what we're doing and try to mitigate risk wherever we can. I think there's been risk of contagion. There's probably still risk of contagion. We need to do everything we can to mitigate that, and we'll kind of get into some scenarios exactly around this. But then I guess the final thing that's kind of a high-level concept that has been a really big part of this quarter is just really laying the foundation for what we hope to do for the next many years.

[00:25:47.820] - Matt
And that's really around establishing processes and infrastructure that provide more data, more transparency, and then setting up things like Treasury Tuesday just to have more venues and mediums for communication. Just so people can have more idea of what's happening with regards our treasury, our internal financial operations... allow them to kind of make their voices heard as it relates to what they think is the best approach. Because in the end, my job isn't to come in here and be the ultimate DeFi specialist on every single thing that's going on. I think the most optimal path forward is one where we all kind of crowdsource our ideas, put them together in professional and meaningful ways, and really that's going to be the best solution in the end.

[00:26:32.890] - Matt
So those are the high-level themes. We'll kind of unpack each of those shortly. But maybe before I do, just want to do a quick shout-out. Speaking of foundation, I really want to emphasize how critical it's been that Jason has come on board. I think I understood how much of a roadblock governance could be from a treasury perspective and how many different things I want to do... Because every action needs some kind of governance. It has some kind of governance impact.

[00:27:00.310] - Matt
And so we didn't really have a dedicated specialist to kind of push that forward, give their advice... just making sure that we're doing everything above-board with regards to treasury and governance. So he's been really critical, and now that he's here, I think we're going to be able to move forward rapidly. But I guess kind of starting at the top of the section... Really, overall -- I'm sorry, Deetz, I know you've been kind of moving around, and I've kind of been going off the report -- but looking at just the very top, looking at our financial position, we're still in a very robust, well diversified position. You could see we're anywhere between, I'd say 40, $50 million is what we've been ranging. We have a good mix of directional assets. But the majority of what we hold -- close to almost 60% -- are in stablecoins, which is really great. I think if you were to look at the largest treasuries in DeFi -- and especially in the DAO space -- a lot of them, if you were to take out their native tokens, would probably be far lower than us. So we're kind of in this blessed position to where we haven't been as impacted by this downturn.

[00:28:05.840] - Matt
Obviously our numbers have, but from a runway perspective -- from an operational perspective -- we don't see any reason to take the foot off the gas. Really. I mean, to some degree you just need to be -- again, going back to what I was saying originally -- is we need to be keeping risk mitigation in the back of our mind with every action. But we understand the opportunity ahead, and we know that we have the assets to really grab this opportunity. And so there's no reason not to do that.

[00:28:34.390] - Matt
So just kind of looking at our positions a little bit more. Again, around 60% in stables. Our next biggest position, which used to be a lot bigger, was in ETH. We will get into how we're deploying that a little bit more. And then obviously Rook is kind of followed, and it goes into other assets. So just looking at those pie charts, you can see: well diversified. And if you were to be like, hey, that orange section is... maybe it's not diverse because they're 50% that's stables. That's true cash on hand, which is what you would want to see looking down below. Really, this next section just kind of breaks down where our assets are being held.

[00:29:11.030] - Matt
Like, where do we have our assets parked? You can see that really the vast majority of it is in our treasury. So a lot of that is idle. And again, we're going to get into how we're deploying those in meaningful ways very soon. But I think that's actually really good. We've seen with at least one of our positions how there's a little bit more risk by just parking funds. I think there's always risks outside of smart contract risk that we need to be aware of, and we'll get into that more. But if you look at this mix, it really is a good solid breakdown of where we are and where we want to go. So outside of our treasury, B Protocol -- that's a future integration partner. That's where we're going to get our highest ROI. And that position, which we'll see later, has been performing pretty well. Maple Finance, I'll hold off talking about that one. Our LPs we've done some research on as well, and we have more to discuss. Convex: that position has materially decreased. I think that's one thing that's been controversial in the past and maybe continues to be controversial. And I think we will explore our different options there over time.

[00:30:14.920] - Matt
But that's by far been our worst performing position, at least from an asset gain or loss position. And then mStable: we only have about $500,000 deposit in there right now, but we are set to do quarterly tranches about $500,000. And with us looking to deploy more stablecoins in meaningful ways, we could definitely continue to increase that allocation because that has performed very well. But not to bore you guys with too much of the numbers, but that's kind of the high-level TLDR of where our financial position is by asset type and by location. But again, all very diversified and I personally feel pretty comfortable with regards to funding operations for a long time. But we can't just kind of go off of my opinions or these gut feelings that I or others may have. And so this next section is really about kind of formalizing that -- kind of establishing what I was going back to in the beginning: a foundation for how we can operate as a decentralized group of individuals. Right? We don't want to just rely on one person's intuition. We don't want to be in the game of trying to time the market.

[00:31:28.510] - Matt
But all these things kind of need to be outlined in a formal and a comprehensive way. And so as part of that, we kind of need to create a true North Star that we can all kind of be guided by. And so this is kind of under development. This is something that I'll share more. And I apologize for anybody who's been at Treasury Tuesdays, because they've got kind of a teaser of this. But really what I've been trying to do behind the scenes is develop a treasury charter that basically puts us on this path -- establishes this North Star, and really allows us to kind of establish a shared culture and mindset around: what is our treasury for? Maybe that's a dumb question or kind of an obvious question to some, but I think for others it's not. Some people may view their treasury as a hedge fund that needs to increase in perpetuity, and you're just trying to make as much money as possible. There's like us, which... I feel we're mission focused and we should be really trying to fund ongoing operations through targeted budgets and really kind of focusing on governance that we can all kind of be a part of.

[00:32:29.110] - Matt
And maybe take a step back. I think there are four key areas that we want to deploy our assets and really kind of utilize our treasury for. And I think I just mentioned... ongoing operations is priority number one, building and maintaining capital reserves. I think -- especially now, what we've seen in a bear market with the risk of contagion with all these different things happening -- you have to plan for the future. You can't always anticipate when things are going to go wrong and to what degree they may go wrong. So we need to kind of set aside capital to reserve against that. So that's kind of another key area.

[00:33:01.510] - Matt
And then another one is just funding community grants and supporting community-generated initiatives. Again, that's going to help our mission overall. We don't always have to rely on just Labs or full time people. There's so much talent and space. There's so much passion that we can harness this energy as a decentralized group and create a higher ROI than we could have otherwise. So I think that's number three. And then number four is just making targeted and risk controlled strategic investments. We're not in the game... again, we're not a hedge fund.

[00:33:31.130] - Matt
We're not here to ape our assets into one asset and get some wild 1000 percent return overnight, at least in my opinion. That's not what we want to strive to be here for. So those are the four key areas. And then kind of paralleling that and kind of layering on top of this, the charter also explores what are some more broad key principles by which we can just manage it. And some of these are intertwined with some of those first four key areas. But going through those now: mission based management. Again, we've already heard our strategy. Hazard has done an amazing job. Hazard and the rest of the team has done an amazing job of outlining their vision for the future -- outlining how do we accomplish that vision, and what's our true mission? And when I listen, I get excited by that. And so when we take a step back, our treasury assets should be really to support that mission. Because total immutable market, the impact on the space -- the impact on real people's assets, their retirement funds, whatever it may be -- we could have a really material impact. And we need to use this North Star and really stay focused that we have a mission and we need to use our assets in line with that.

[00:34:46.690] - Matt
Kind of along the same lines, we just really need to maintain an infinite time horizon. I think a DAO... I've always thought about it as an organism that grows, but maybe there's a different way to look at it, because organisms have kind of a set lifetime, right? I think we need to kind of think bigger. We need to really be thinking beyond my lifetime -- your lifetime -- and say: how can we make every decision? How can we put our assets in ways that are really going to set us up to where this is just going to grow and grow and grow in perpetuity and over time, as less human involvement. And as part of that, we need to make sure that every decision we make is really informed, is really systematic, and is really understandable for the average person to grasp. So I think that's another key principle that is kind of understated in most ways. Kind of moving on... Diversification: that's kind of an obvious one. Win-win scenarios: maybe taking a second for this one. I know outlined this in Treasury Tuesday, but really I think the most optimal solution for where we park our assets and where the highest ROI is going to be is one where others win with us, right?

[00:35:56.040] - Matt
I think we're seeing this with mStable. They have great returns, and that's amazing. But if we were just to compare it to maybe some other protocol where we can park our stablecoins and get yield... Maybe it's lower; maybe it has a better risk-reward scenario. But we may not be factoring in us being able to secure order flow, which means we can secure MEV, which means we have additional protocol revenue, which means we have additional Rook burned, and all these things. If we secure it at one point in time and that protocol thrives, that's cash flow in perpetuity to some degree, assuming that they can manage their protocol effectively. It's really an intriguing opportunity to just be able to use our assets as a carrot to incentivize people to want to integrate with us -- if there's not a more compelling reason, which I think that there is. But sometimes people just don't like change. They don't want to take away bandwidth from other things they're doing. But if they're trying to secure TVL as their main priority, we can use our treasury to say: hey, look, we can partner assets in you, and we also want to secure an order flow.

[00:37:03.760] - Matt
We want to secure that integration. And I think those are going to be kind of the best scenarios long term. And so this charter just basically explicitly states that a little bit more formally. Kind of along the same lines, but I would say a little bit more explicit in how it's managed, and how it actually relates to decisions and actions by the treasury. But again, we want -- going back to one of the core principles, which is systematic execution and diversification -- we want to make sure that before we're making any move that we're looking at every attribute. We're looking at every other investment we have. We're looking at how that action impacts our operations or our other investments to make sure that... Hey, are we going to have some concentration of credit risk? Are we going to have some concentration in correlated assets? Whether that's non-directional or directional. All those things need to be taken into account before action. I think a lot of organizations, especially in the crypto space -- a lot of treasuries -- they don't have something that's formalized, and they don't have anything that people can really go back to and say: does this make sense? Has this been agreed upon, or are we just trying to time the market? Are we going off of somebody's intuition?

[00:38:14.050] - Matt
So we're working on a treasury management framework to really kind of establish and explore a couple of different things. One, going back to: what are the expected use of funds? What are those treasury diversification and risk management parameters that we have to work into... whether that's defining what a core asset is versus what's a strategic asset. And within that you can say what's high risk versus low risk. Looking at establishing what is our risk-free rate... Like what's our internal minimum return that we have to get if we were to invest those assets into hiring talent? Are we going to get a higher return than if we just invested that asset and got a 3% return? I think asking that question is something that's not done before every action. I think it's something that we need to formalize. But again, those two things are really like I think kind of high-level, but I think really, really important for the long term success of our treasury overall. And again something that I think not a lot of people are doing with all these different management frameworks and things that we need to kind of measure and look into before we know we're actually thriving as a treasury.

[00:39:26.150] - Matt
We kind of had to expand our treasury, right? Like one person can't do it alone who's fully committed to this. And we can crowdsource ideas from community, but we still need a little bit more people who were really taking ownership of a few different components of the treasury. And so we kind of brought in two part time people... when I was saying part time, they're definitely fully committed, but still I guess technically contractors, who have done a really amazing job of really establishing some key processes. They're taking ownership of different components of what we want to do, and it's been really helpful. So I don't know if Stubbs is here, but maybe I'll let Starfire talk a little bit about what he's done so far and what he wants to focus on moving forward.

[00:40:10.730] - Starfire
Yeah. Thank you, Matt. My goal is help the DAO make informed decisions, and provide the DAO with substantial research on the protocols and venues where we're putting our assets. In DeFi, it's almost synonymous with degeneracy or being a degen, and that's kind of how I've played the space. But that's not how a DAO treasury should be run. It should be research-focused, strong analysis backing every decision. And that's what I'm here to do. And that's what I've been doing. Assisting with proposal developments regarding our ether deployment, stablecoin deployment, as well as understanding the layer to landscape and how we fit in there. Most notably is: we're pushing forward on an Optimism proposal which will secure us some additional funding for the growth team to make partnerships on Optimism. Yeah. Excited to be here. I've been blown away by the talent of this team, and I don't have words to say how excited I am for the future and the way that Hazard really lays out our vision. It pumps me up and I hope it pumps you guys up too.

[00:41:37.490] - Matt
Yeah. Again, I know Stubbs is not here, but just kind of speaking to what he's been doing. He's really been focusing on building a lot of insight -- as he put it, illuminating the dark force around our treasury. And I think we've all kind of seen his deliverables in the form of all his dashboards, which are listed below. Kind of picking up the speed of this. I know we have other people to talk about or talk to and kind of other things here from the organizational side, but I think we already... You can take a look at those data dashboards, but really a lot of increased transparency there.

[00:42:07.250] - Matt
Moving on to Treasury Tuesday. Again, another venue by which we can communicate more in real time, gather input, and again, just kind of collaborate a little bit more to kind of crowdsource the best ideas. So that's been pretty successful so far. We have a lot of discussion around recent events and news. We've had some panels with some great people, and it really has been super informative and has helped us with actually the formulation and research of our own proposals. And again, that's just a place where we can kind of sync and do some working group.

[00:42:37.610] - Matt
I guess kind of diving into our treasury management activities a little bit more. I think the first thing... Before we could meaningfully make any kind of management or any kind of material moves with regards to our treasury, we first had to understand in this quarter where was the bulk of our assets which were really in our LP positions. And so we had somebody -- Icebreaker I don't think is here -- come in, do some really in depth research on looking at how much our liquidity pools have been utilized, and really kind of finding the most optimal balances in each of those pools to where we can still say: okay, we're still supporting people who are using flash loans, we're still supporting what those funds need to be in there for. But what is the absolute maximum that we can take out and actually start getting much higher yield off of? And so really that was viewed not only from a utilization, but from an opportunity cost perspective. And so we were actually able to free about 90% of our funds from that position, which again, moving into this next section, we are going to start deploying meaningfully. So I think maybe a week or two ago we had the ETH deployment strategy KIP that was, I think, passed unanimously.

[00:43:47.170] - Matt
But this will basically allow us to deploy about a maximum of 75% of our idle ETH between three different liquid stake providers which are Stakewise, RocketPool, and Lido Finance. And I think we've had some discussions around the peg. Again, that's not the right term, but the peg to like stETH and same with even Stakewise. But this is an opportunity for long term minded thinkers like ourselves, because really you're just getting a discount. I know Starfire has been starting the process of just trying to come up with a schedule for how we can systematically deploy those and that will be happening very soon, I imagine, but we will keep you posted on how that will be deployed. And then again, about 60% of our liquid funds are in stablecoins. So I think it's time for us to now turn our attention towards that and start getting some yield off of that. So I know the treasury team has already started looking at different options and we have that research process underway, and so hopefully a KIP and other details will come more from that soon. Protocol and token, I won't get too much on this because I think that the engineering team kind of had a lot more bulk of the information in their section as well as some other stats.

[00:45:01.770] - Matt
And I know Hazard has already talked a lot about these different things, so maybe I'll kind of reserve some time there. But one thing I want to highlight is that Rook Q2 -- ROOK and liquidity pool -- or actually that's staked ROOK. But you can look: despite our price going down dramatically, our staked ROOK has actually been pretty steady and pretty consistent. So I think that we have a core base of people who are staked and they really believe in the protocol, long term. At least that's my speculation.

[00:45:30.950] - Matt
I'm going to fly through these current investments and positions and just talk to them -- talk about a really high level -- because you guys can all kind of see them in real time. But most of them, I think, have performed pretty well outside of Convex. But we can see that our Maple position, we've actually made some good rewards. But given the volatility in the market and the risk of contagion, we have a KIP -- I think it actually just passed, and we just announced it being passed -- and we will be attempting to withdraw those funds as soon as possible. The way the mechanics of their operation work, we have to make sure that there's a sufficient amount of repayments in those pools before we can pull out.

[00:46:09.160] - Matt
And so we are working the best we can to try to line that up with those expected repayments. But it doesn't sound like, at least from what they've told us at the Maple Finance team, that there's any risk or loss of funds again. But we still want to try to mitigate that as much as possible, and not go off of what humans have to say. So that position will be going away, potentially soon. It just depends on repayments. Convex Finance: I think we've all seen the drop in that asset and we are set to unlock on August 3. So we have a little bit of time as a community to understand what we'd like to do about that. Overall, we're still in a good position relative to ETH; it's been about a total gain of 26% compared to ETH, but really a 65% loss. If you were to look at it in USD terms, you can kind of see those calculations here. We do have a special agreement with Alchemix as part of our Token Reactor. When we were trying to secure that, they were able to provide some votes to help us secure that.

[00:47:11.450] - Matt
I don't think there's too much more to say about that. Same with our -- not saying, but -- moving on to our B protocol, our BAMM investment, definitely one of our more meaningful ones. Again, this is an integration partner, so we have a decent ROI -- about 4.5% off of this. But again, as that integration comes live, those returns will be capturing. That ROI will not necessarily show the full picture of the MEV as well as the ROOK burn off of that order flow.

[00:47:43.250] - Matt
Then I guess the final one that we have currently underway and that's been invested for about 20 days now, is our mStable. And as you can see, this has performed very well. Only about $4,500 in net gain. But again, this has only been for 20 days. So we've seen this have really good yields, very safe yields, because again, this is stablecoins and they're an integration partner -- prospective integration partner. And then moving on to our other programs initiative section, we have a staking boost program, not a ton to say there. We did about almost 7300 ROOK that was agreed upon by the community as part of our buyback program from the CVX investment.

[00:48:26.700] - Matt
And so you can kind of see the schedule there. I don't think we have a ton of data on whether that was successful from a marketing perspective, or whether that caused any kind of meaningful price action. But that program has officially ended and there is no current plans to extend that without, I guess, the Sophon moving forward the existing proposal or for another proposal coming live. Bancor and Tokemak. Starfire, you want to do a super brief update on that?

[00:48:56.390] - Starfire
Yeah. So if you guys didn't see Bancor, let me scroll into the section. So Bancor, they experienced some issues with their impermanent loss mechanism. Short story is their impermanent loss mechanism requires the minting of new BNT and they had a large sell off in BNT -- all their liquidity pools are paired with BNT -- which resulted in massive impermanent loss. And so to prevent the recursive selling of BNT, they paused impermanent loss protection. And right now they're allowing liquidity providers to withdraw from Bancor without that impermanent loss protection. Or you can wait until Bancor resumes that service. And so right now, the treasury team is drafting up a KIP and some analysis around why we're going to be pulling our rook liquidity from the Bancor platform. And then on the Tokemak side: we've had a couple of meetings with them, and they even came on for a community call. And I highly recommend listening to that. Those guys are rock stars over at Tokemak, and we're coming up with a strategy for deploying some ROOK into our reactor with Tokemak and increasing our on-chain liquidity, which could use some attention right now in terms of timeline.

[00:50:23.650] - Starfire
We're just kind of waiting on the Tokemak guys to finish prepping the ignition of the reactors, and from there we'll keep driving forward and discussing with the community on what's coming next.

[00:50:41.210] - Matt
Awesome. Yeah, I guess moving into the contributor expenses section again -- I'm going to fly through everything fairly quickly, and I know Tommy is probably mad at me -- but again, we've had rapid expansion of the team in the first six months of the year. We had that really rapid expansion in the first quarter, and then it kind of slowed down as we kind of had our baseline and really kind of had a solid foundation. So we increased from about 12 to 20 in the first quarter, and then slowed down to about three more contributors, or actually five more contributors in the second quarter. We had two terminations that had basically taken it down to 23. So you can kind of see a breakdown of every position by person there, as well as just some good charts about what is our breakdown by function. And as you can see, it's pretty balanced. I think operations right now is about 47%. Development is 43, with executive only being 8% when you look at it from headcount perspective. And then you can also see that same kind of chart, but from a compensation perspective and again, relatively balanced -- which is, I think, what you would want to see.

[00:51:50.730] - Matt
And I think over time that will only be more and more engineering, at least from my opinion. There's some stats on like stated salaries and number of contributors by this position. Again, this is all just kind of slicing-dicing the different details we have on our full time contributors. I won't talk about this a lot because I'm sure that Tommy and the organization team will also talk about this. But from a financial perspective, us changing compensation is a big undertaking that's obviously our most material outflows and probably always will be. So getting it right for 3.0 is something that we've... really taken a step back, and really worked hard on getting right. We're... Nothing set in stone by any means, but we're very much working behind the scenes to come up with the optimal solution -- not for contributors, not for the community, but really for everybody. And also looking at that in line with our tokenomics, you can kind of see our growth in our USD outflows as well as our ROOK in relation to headcount. So that's just some cool data there for you guys to look at. And then as well as just some short term data on our compensation 2.5, which is again, really just two months of difference in how we are structuring our compensation.

[00:53:01.550] - Matt
And really in the end, I guess the TLDR of this is by switching this plan for a two month period, we're only increasing our outflows by about $113,000 a month, which... You can kind of see those calculations below, looking at the current price of Rook. Runway is kind of hard. It's kind of tricky. Right now, everything we can see about 3.0 is looking like it's going to extend our runway dramatically. But because we don't have that formalized, it would be inappropriate to report on that. So what I wanted to do was kind of set the high watermark, so to speak, by just showing what our 2.0 runway would look like. Because again, that was a situation where ROOK was our true bottleneck, and that was going to be the first thing that would run out. If you just look at under that plan FY 25, we would have about $17 million in stablecoins under that plan. But then in that same period, we were getting very close to running out of ROOK. So that was one thing that was not ideal about that situation, but there was a lot of other things that we are all aware of that needed improvement there.

[00:54:04.830] - Matt
And so that's just some data on that. And then I think just finally just kind of showing that Rook Labs has been good stewards. We have been very conservative with how we utilize our money. You can see both Rook and USDC usage by function right here. And one thing I want to highlight is especially in the change from May to June, we started paying contractors in USDC -- similar, because they needed predictability with regards to their pay. We also wanted to potentially reduce downward pressure on the price of ROOK. This is again speculation; I don't know if this is true, but I feel like contractors could be the first people to liquidate their positions. And so we just wanted to kind of reduce downward pressure as much as possible and just explore different ways. But really in the end we were just trying to provide more predictability to those parties who are really critical to our operations. And so that's why you can kind of see USDC increase between May and June while it takes a dramatic drop, and then the final schedules are really just kind of showing our budget to actual. You can see that we have a surplus in basically every single category.

[00:55:14.520] - Matt
So there was no frivolous spending, at least from my perspective. We have been really conservative with regards to our cash flows, and you can kind of see that here. And then just kind of briefly going through, looking ahead. Posting the Q3 budget request again -- that's going to go through full governance so people can have their say on it. Obviously it's going to be a reconciliation between what we have in Labs budget right now versus what we're requesting, and that'll all be kind of posted. And then yeah, so a lot of other proposals, and I think the future of the treasury is really bright. I think we've laid the foundation for a lot of great things to come, and I think with especially the team we have in place and everybody who's been helpful in the community, I think we have nothing but positive things to say about the financial direction of our treasury despite horrible macro conditions.

[00:56:07.370] - Deetz
I think that speaks volume to the work that you, Stubbs, Starfire, Wes, Breeze, and everyone that shows up to Treasury Tuesday have done for the DAO. And so really exciting to see that go. So thanks a lot Matt and Starfire as well for coming up and speaking. Let's get to the last section for this recap, which is Organization. So let's have Tommy take it away for Org.

[00:56:40.080] - Tommy
Yeah, sure. Thanks for the nice concise summary of the treasury section, Matt. Very interesting. Yeah, organization team is last. Running a DAO... It's hard. And it's hard because it's new. So there are a lot of hard novel problems that we need to solve, and there are no textbooks for this. And I guess if you look back at the past year, we haven't always been able to do the best job of that. And that's mostly because we just didn't have the personnel.

[00:57:18.430] - Tommy
So since the beginning of this quarter, we have been able to onboard the right people. So now we have a team of specialists leading the organization team. So we have Guard, who is just like brilliant, like, Ph.D. legal scholar. We have Jason, who likewise has a Ph.D. and is an actual blockchain researcher, and is now leading our governance and doing a great job at that. We onboarded Stef, someone with a lot of experience doing a contributor experience and people operations. Also in DeFi as well as I'm starting to work together with Katelyn, a full stack recruiter who has really helped our recruiting arm. Yeah. So now we have one dedicated team dedicated to work on the DAO and on the Rook Labs organization and all its aspects so that the rest of all the contributors can focus on building and selling Rook's suite of protocols and products and growing the treasury.

[00:58:27.170] - Tommy
Yeah, I'm super excited about that. I guess what they've been doing in this quarter, I guess the broad team is just building resilience, right? Resilience against possible governance attacks, possible compliance problems, making sure we have a good regulatory strategy... I guess resilience for contributors as well, allowing us to onboard them and retain them to make sure they're not churning. Matt already talked about compensation, and I guess the fragility of our compensation is sort of one of those things that we're addressing currently. Because it was, in a way, brilliant in a bull market... but then in the bear market, it's kind of devastating, right? So these are all aspects which we need to harden ourselves for. And in a way, it's kind of good that this bear market is here now because it gives us some time. In the frenzy of peak bull market, it wasn't really there, but now we have some time to build and some time to properly harden ourselves and safeguard ourselves from issues that other DAOs are currently having or had in the past. So, yeah, that's kind of the silver lining, I'd say. So there are few, I guess, aspects we can talk about. Guard, do you want to briefly recap the legal section?

[00:59:56.810] - Guard
Yeah, sure. Can you guys hear me okay? Okay, good. So, I mean, Tommy already gave a very good introduction to the basics of the kinds of problems that we're looking at and, as it were, philosophy behind it. And the idea is just to essentially make the... sort of improve the legal defensibility of the DAO, because that's not an obvious thing.

[01:00:26.390] - Guard
I already spoke about this yesterday, so I'm a little bit worried about repeating myself too much. But it's basically not an easy feat to make an organization that is legally defensible that sort of deals with things like liabilities and regulatory exposure in the right way, but at the same time follows the kind of crypto ethos where we build decentralized structures that don't concentrate power in too few hands. We are committed to that view as well. So those are kind of the two horns of a major dilemma when it comes to my work. And so that sort of organizational design that's somewhere in between those two things -- where we get a good or hopefully of course get the best of both worlds -- that we get both a decentralized system that distributes power to the token holders in the right kind of way, but at the same time also make sure that we are not liable for absolutely everything in the world, and can kind of speak to the legal or regulatory regimes that are out there in the right kind of way.

[01:01:39.830] - Guard
That essentially is the problem. And frankly quite a lot of the work that goes into this sort of initial thing is planning a structure that sort of follows the subjective or gets towards the subjective, and that's not... Well planned is half... is already quite well made. A lot of it is actually kind of in the planning stages, and it is a challenging thing to plan for because these kinds of organizations don't really exist and haven't really existed before. You would have perhaps seen some of the challenges that, like, Maker for example is having, in trying to create an organization that can both act in a way that is coherent so that it doesn't follow objective X today but objective Y tomorrow, but at the same time it doesn't get caught by every regulation that's out there. Right?

[01:02:45.160] - Guard
And so that's the challenge, and there's a lot of kind of planning involved in that. Like I said yesterday, in my mind and Jason's kind of main talk about this stuff, I'm the guy who's really cynical about everything. My job is to assume that everybody's either evil or an idiot and to develop the kinds of incentive structures that we have within the DAO and with the sort of broader community in accordance with our principle. Right?

[01:03:16.990] - Guard
So the idea is that I make incentive structures that are such that even if everybody is an idiot or evil, the DAO will still survive and thrive. So not an easy task. But we have consciously taken quite an ambitious set of goals for that, and that's what we're following. So we are not going to take an off-the- shelf structure and just kind of copy paste whatever it is that the next town is doing. We are doing a bespoke Rook-specific kind of structure that will marry both the legal side and the governance, and that's the sort of end goal of it. If anybody wants to hear some of the specific things about it, then I'm more than happy to go into that, but that may be a little bit technical and maybe a little bit legalistic. So if anybody wants to talk about that, I'm more than happy to. Everybody is also free to send me a DM about it, and I'm more than happy to talk about it. We are committed to building this stuff out in the public, but at the same time, I don't want to bore everybody with, like, really super legal stuff right now. And that's probably all I'll say for now. But thank you, Tommy.

[01:04:33.490] - Deetz
Awesome. Jason, you want to talk governance?

[01:04:39.230] - Jason
Always! All right. But I will not do it at the length I did yesterday. I just want to echo Guard's framing there -- that we talked a lot about the philosophy behind a lot of this stuff yesterday. So today we'll just keep this focused on just more of the operational aspects. So really, in terms of governance, we focused in two directions. You can say over the quarter, one of them was saying: okay, we have an existing governance process. How can we make this work better? And so a lot of the focus was on working with the Sophons, working with people, writing proposals, working on the infrastructure to really just try and get the cadence improved and get the process as it currently exists working more smoothly. And so you can see in this table, there's sort of visual evidence of a lot of things that went through. I will say what's not visible in that table -- and here I have to give a shout out back to Matt -- is a lot of the work that goes into writing proposals, and just... My education into this came through really partnership with Matt on a lot of the proposals that are coming out of his team.

[01:05:44.710] - Jason
And to the extent that I was able to learn and figure out some things that made sense to template and think about work as we move forward, those also came out of that partnership. So I have to thank him for that. So that is sort of what we focused on over the course in terms of the current process and where that is ongoing. As we are also continuing to focus on looking forward -- I would say looking forward, we're really focused on two things. So, one, within this sort of framework of governance reform, we're focused on thinking in public, and we're also focused on building in public.

[01:06:20.470] - Jason
So in terms of thinking in public, another shout-out here to Wes, who relatively recently joined our team and has quickly become indispensable. We're working on the infrastructure of the forum and on GitHub and on Discord, and just trying to find ways of making what we're doing more visible. So we're publishing short research pieces about the governance process, which will continue. And so really trying to think in public as we're building in public. So as Guard referred to, as we look forward to the kinds of changes we want to make in governance, that reflect Guard's work on the legal structure and that also reflect where we're trying to go as a DAO... We remain committed to building that in public, and really thinking through a lot of these aspects to the extent that we can, through a combination of publishing pieces and also -- most importantly, perhaps -- is governance workshops on Wednesdays. So looking ahead, you can expect that to continue. We've also in this document, a little bit lower down below the table...

[01:07:33.170] - Speaker 8
We've got a Gantt chart below this where we've got a planned rollout and key milestones. And so this is just a screenshot of what is now a Notion page, but is going to become something that will probably make public next week. And so this has got an expected time frame for the components of governance reform where we're rethinking sharpening up what we expect of the Sophons and what we're allowing, what powers we're giving them -- thinking about the process more broadly, and then also just trying to find places where we can standardize it. So this sort of time frame will be consistently updated, will be made public next week, and we look forward to taking all of this into the next quarter. So, thank you Tommy. And also happy to take questions.

[01:08:20.640] - Deetz
Why don't we take questions right at the end here? Let's pass it on to Stef to talk a little bit about contributor experience.

[01:14:55.750] - Tommy
Yeah, actually I was going to do this section. I'm sorry. I mean, Kat is perfectly able to do it herself. Anyway, recruiting... I'm going to race through this a bit because this meeting has been running long. TLDR: we slowed down our hiring. We hired almost all the people we needed to hire the past few months in quarter one. And now it really is about gelling and allowing people to get to know each other -- do their best work, fully grow into their role, so to speak. And if we'd be hiring like a dozen more people or so, they'll just make things very hard. Not just for culture, but also just being a room of strangers in a way. So we're just letting people settle in. And so far it's been going really well. It's been really nice to see people come in, being a bit timid at first and then kind of finding their feet, starting to work with other teams, and then developing in like these fantastic contributors. That's been really great to see. But we haven't totally stopped hiring. We're still looking for some roles. The job board is still online. If you just go to rook.fi, there's a link to it.

[01:16:24.720] - Tommy
And also during peak bull market, like a few months ago, this was really like an employee's market, right? Talent was scarce; recruiting fees were high. And now it's different because it's very much an employer's market, as we've seen with other layoffs like Coinbase for example, right? So there is top talent that's become available. So we're very much keeping our eyes and ears open. And if someone great comes along, we definitely won't say no. We'll definitely explore. So that's sort of the state of our recruiting, I'd say. It has also given us some time to really focus on improving our processes and improving the candidate experience, because when we just started recruiting we had a lot of incoming applications and we didn't have the manpower to respond to them -- or most of them -- or properly screen them. Now we're setting up processes so that we do and that it's a better experience for people applying as well, which is kind of important for our brand too.

[01:17:34.510] - Tommy
Once again, I don't know if I just did it before, but having Katelyn on board has been really great. It really helps us professionalize recruiting and onboarding. It makes hiring much less time-intensive for our recruiters and our team leads. And purely number speaking, it is drastically reducing our costs per hire, because we're no longer reliant on external partnerships or external recruiters who command like between 10%-25% of like a year one salary. For instance, Stef -- we've been able to find her just through Katelyn's work, so that's been really great. So shout out to her, I guess.

[01:18:17.930] - Tommy
One more thing related to this is: we are a DAO. We have this really unique chance of finding and onboarding talent through the community, as we've done in the past. So many of us started in the Discord. So hopefully during quarter three we're going to erect a much better grants program to have an additional pathway for talented individuals to come in and start participating. Yeah, I guess... we have compensation. Yeah, Matt kind of alluded to it. Much has been said in the recent weeks about compensation. Nothing set in stone. First of all, we have a working group with people from various teams.

[01:19:04.270] - Tommy
We're working on it. We're looking for something that works for everybody, right? This isn't about draining the treasury. It isn't about being super frugal either, because we have top talent and we need to pay them. So as it stands currently we're working on some concepts. We have one really interesting idea that Guard kind of introduced to us. We're just working through it. Once we have it somewhat more formalized in a decent shape, we'll start discussing it with the DAO on the katana or whatever and work through it before we implement it. That's kind of all I want to say about this.

[01:19:48.930] - Deetz
Well, I think this is a nice natural stopping point here too. I know we've gone through a lot between Growth, Studio, Unity, Treasury, and the Org team. Would love to pause and ask if anybody's got any questions here. We've got a number of us still here on the call ready to answer anything, so if you've got any questions, just quickly tag me. I appreciate everybody that has listened throughout this entire presentation and the previous four calls as well. But yeah, let's take a moment. If anyone's got any questions here, feel free to ping me and chat and we can unmute you and let you ask your question. If not, we'll wrap up with just Hazard looking at an outlook for Q3 and beyond.

[01:20:55.990] - Deetz
Not seeing any specific questions here, so why don't we have Hazard bring us home here?

[01:21:07.910] - hazard
Thanks, Deetz. Thanks, everybody, for sticking around for this call. And thanks to all the contributors for putting this report together and then taking time out of their day -- kind of making an event of going over all of this. For a lot of you, this is the first time you've been able to be on one of these calls and talk to the DAO, and I hope we continue to do that and have more of these sessions in the future. And I know that's what's planned.

[01:21:35.930] - hazard
The last part of this report is Outlook -- looking forward into Q3, and beyond Q3 as well. And as you'll find in this report, there's some introspection about things that we've stumbled on during this quarter: communication, community engagement, the general market downturn, and making sure that we're telling our story and that we're accumulating brand equity and people know about what we're doing, what we're building here. But I think it's hard to not see that we have come a long way right from where we started just at the end of last year, and from the beginning of this project a couple of years ago. This team is phenomenal.

[01:22:38.730] - hazard
And the types of products that we can build, and the types of products we've already been able to release, are unlike anything that I think any of us would have imagined even just a year ago. We have these protocols and these products live in production for the first time. And this is huge. This is huge because today they're the only protocols and products that are available that can do what they can do.

[01:23:07.880] - hazard
So this data that we gather, and the things that we're learning and building -- this is the first time this has ever been done. So this data is the only data, these products are the only products, and this team is the only team working at this cutting edge. This is what it feels like to work at the cutting edge. And so having this data is new every day. Every day. Everything that we see is brand new. That's huge. That's extremely valuable. And it's an extremely valuable thing for us not just to keep for ourselves, but to share with the industry and with the community as we start to educate and convert people to an understanding of what we're doing and what the value of it is for them.

[01:23:59.490] - hazard
And we've already seen that start to happen this quarter, and we're going to see that continue to grow. I think there's been increased uptake among partners and builders and protocols and users too. It's never been higher. And we had a really big quarter one for that, and we just blew all those numbers out of the water this quarter. It's been accelerating, right? We have a unique value proposition. And it really is unique. It's not like anything else. It's not like anything else. And for the first time in this project's history -- and this is something I'm very proud of, because many protocols and projects can't say this -- we are staffed to actually capture the full potential of the opportunity. We have the right people in place to actually carry out our goals, and to carry out the DAO's goals. And I think that's just amazing.

[01:25:04.140] - hazard
And we're going to be able to do that -- achieve those goals while benefiting everybody, while benefiting the users, and the keepers, and the market makers, the applications, and the token holders, and the treasury all at the same time. That sounds like a lot of load to carry, but that's the kind of system this is. That's how cool it really is.

[01:25:27.350] - hazard
We know that MEV is not going away. The desire to capture the MEV at the application layer is not going away. It's a desire that's never been fulfilled before. Most people, most protocols, even some of the most sophisticated builders don't understand that they even can capture that. They don't necessarily understand that they are even leaving it on the table. So this is a huge -- as Troy said, it's a huge light bulb moment. And as we begin to educate people about this reality, there's going to be more and more uptake, I think, of this technology. And we're positioned uniquely to do this. Any competitor that would be able to offer a similar offering with similar guarantees -- with similar decentralization, similar technology -- it would look just like us. It would be just like us. It's very hard to flank this project in any of those axes.

[01:26:37.610] - hazard
So I think we're in a very strong position. It's a very good position to be in. I think over the next quarter -- as you saw in this quarter -- you're going to see us continue to accelerate and this stream of data start to expand and grow as some of these integrations come online, and some of these new projects and new potentials and new products reach maturity and perhaps come to market. So if you want to look at what to look for in quarter three... So last quarter I had some bullet points, we did some bullet points, but this time I think instead of looking at kind of OKR-style stuff, let's think about it in terms of what you would expect to see happen in the next quarter.

[01:27:21.090] - hazard
So I think we're going to see contributor growth continue to slow. Probably we're looking to conserve DAO, treasury capital. We're trying to focus on growing the productivity of existing contributors. It doesn't mean there's a hiring freeze. It means that we're focused on seeing where this team can take us and filling gaps where we need to and taking advantage of opportunities. But growth for growth's sake is not really the goal.

[01:27:51.590] - hazard
It hasn't really been the goal this quarter, and it's going to continue to not be the goal. Right now we're in a very adverse market environment. We've got everything we need to succeed, and we want to see what we can do with what we've got, and get some more maturity in our technology, and start looking at some of these revenues. This proposed compensation restructure, this compensation 3.0 is probably going to be introduced, right? That's the plan to be introduced about two months from now. And that should have significant benefits both for the treasury and for contributors in terms of retaining capital, allowing contributors to control their tax burden better, and giving us more flexible options for how we compensate contributors. I would expect to look for us to deploy the next elements of our tech and the profitability curve that we have, including enhancements to the Rook
trade application and to the protocol, as well as new products that are going to bring additional volume, some of which you've seen alluded to in this report. That's not a release date, but you can expect to start seeing elements of that as they become developed and enter into different phases of development and maturity starting to come to market.

[01:29:17.830] - hazard
We expect the first major integrations to start going live-- including potentially the first direct smart contract integrations, relay integrations, as well as additional integrations into the HidingBook, from market makers and other automated traders. Perhaps even some new keepers as well. Integrations are hard to time. It's hard to predict or to give an accurate roadmap, because there's so much coordination that has to happen between teams. There's a lot of things that can delay that work, from vacations to just the fact that you're maybe on different sides of the planet. And it's hard to sync up to the fact that we're all living in a crazy rat-race industry, and trying to synchronize our treadmills is just difficult sometimes. But I think you'll start seeing the first of those start to come online, and perhaps more. We'll see. There's been a lot of proposals for Rook DAO governance and organization and legal upgrades, and we think that those are going to start to get introduced and potentially go live. These have been planned in some form since the beginning of this reorganization effort at the top of the year -- calendar year in January. And we didn't have all the answers for how to accomplish those, and we still don't.

[01:30:47.430] - hazard
But we've learned a lot in the last six months. We understand much more about what kind of organization this can be -- should be, wants to be -- and what we need to do to make it succeed. We've learned a lot, and I think we are now in a much better position with the expertise we have on board, as well as with our experience as a DAO and as a team. That we can put together something really solid and hopefully industry leading here. And as we bring this together and start to introduce this, I think this is going to start to bring to a close this sort of interim reorganization period, and kind of lay down a longer term foundation that will let us just kind of enter cruising altitude from an organizational perspective. Part of that is going to be introducing some proposals about management principles and risk frameworks for the treasury -- for the DAO treasury -- which is a really important resource. And as a DAO we've learned a lot about managing that as well, and I think we're going to start seeing some better frameworks for that start to be introduced. And just like with the organization, the legal, and the governance, I think that will start to solidify some of the principles and things that we've learned since we started.

[01:32:16.650] - hazard
Finally, I think we're going to -- you've seen some of it already -- be publishing a lot more content. A lot more content about strategy, our operations, our tech, our values. Our products, partners, and just the day-to-day reality of what we do either as a DAO or as a team... as a project. And the goal there is that we need to start telling our story, right? We need to make sure that users and potential partners understand who we are, and what we do, and why we're doing it, and why that's unique. We need people to be aware of what we're building and what we can offer them. That's a key part of our strategy.

[01:33:07.890] - hazard
And I think we've learned enough that we can take the spotlight now. We're in production. So it's time to start scaling that up and really introducing ourselves, or reintroducing ourselves, in this project to the industry... and building up some real goodwill and reputation, and using that to further our goals. So I would look for that as well to start ramping up in a big way next quarter. So the outlook is positive. I think if you were to draw a trend line between the first quarter report to this quarter it's looking good.

[01:33:50.370] - hazard
It's looking good. And I couldn't be -- and I say this from the bottom of my heart, having worked and led teams at some of the top companies in the world and some really scrappy, really cool startups -- this team is unlike anything I've ever worked with. And really the reason that we are able to do something real here and succeed here is because of their efforts, and the support of the DAO for that effort. And I just couldn't be prouder of everybody for coming together and building such a monumental 80 page report to just kind of act as a statement of that fact. I'm just so in awe of all of you and the talent and skill that is on display every single day, and I can't wait to introduce more of that to the community and to the industry, because you're one of the best assets that this DAO could ever have. So with that all, I'll stop talking, and we can open it up for questions and other comments and things.

[01:35:07.910] - Deetz
Let's give anybody a last chance here for any public comment or questions.

[01:35:19.220] - Deetz
But if not, we can go on ahead and wrap up our end of the quarter events. And as we spring forward here with the first of the month and looking ahead, I feel nothing but excitement for where we're heading. And for folks that got to stick around and participate in these calls, I hope that they share that excitement. And with what we're going to be working on, especially around increased transparency and communication, I feel like that more people will continue to find us. Our community will continue to grow, and hopefully only successful times ahead. But with that, it looks like we're hitting a conclusion here, and just want to say a big thank you for all the folks on the different organization verticals that came and talked today. For the community members that listen through, on this especially longer meeting than we typically do on Fridays, I hope that you all found a little bit of value out of this -- got a little bit more excited about what we're doing. And if anything ever sticks out to you and you read through our recaps or re-listen to these, that you ask questions. We'll still be here chatting with you.

[01:36:44.840] - Deetz
You're in Discord and on the forum. But folks, I can't wait for the months ahead. It's very exciting. And there really is not much more I can say about the work and quality of the folks I'm working alongside, so I'm just totally pumped. But with that, it looks like we're in time to touch some grass, as little Deetz bingo can go. We'll wrap up these calls, we'll have our recaps posted when we can, and we hope to see you around. We'll have more calls again next week -- our regular calls for Treasury Tuesday and governance workshops -- and we'll just continue to improve and iterate and get better. But thanks everybody, and we'll go ahead and end the meeting here.