Integration Grants Application '24: YZ => How to empower early stage web3 Projects

[Finion]

Integration Grants Application '24: YZ

Application Introduction

YZ empowers web3 Projects to build up trust and momentum from the very inception, accelerating the network effect.

Problem:
Web3 Projects have limited leverage BEFORE their launch, especially during Bear markets that tend to last much longer than Bull markets. How to incentivize users to participate in early stage testnets and Ambassador Programs without a token? How to create a sense of belonging and strong community? How to establish and convert solid Partnerships with other Projects?
Furthermore, project teams spend significant resources on Token Management and struggle to provide full transparency regarding token allocations and vestings.

Solution:
Our base solution relies on Charged Tokens (CT) which are used to tokenize the whole token allocation. They can be used later on to claim the underlying Project Tokens. As CT contain the vesting terms, immutably, they provide full transparency to all stakeholders. Beyond building up trust, this also allows Project teams to delegate and automate the token management so they can focus on their core Business.
CT unlock new paths very early on, even BEFORE launch, enabling airdrops, staking and especially adaptive farming to support tokenized partnerships at any stage, empowering co-marketing campaigns. This will give web3 Projects early exposure to multiple communities at once, breaking up the silos of solo marketing campaigns performed within platforms such as Galxe or Zealy. The potential of partnerships and Co-Marketing campaigns will be massively increased, enabling the creation of a map of Partnerships with their strengths (directly related to the % of token exchanged between projects), which will provide useful insights and metrics to both Projects and investors. It is also the base to establish an on-chain reputation system to identify the most valuable users, which is a key challenge in the space.

Our V1 is already live with 2 Projects onboarded on BSC and Polygon, fully bootstrapped. We are looking for a L1/DLT ecosystem to build a long term collaboration to source and support early stage web3 Projects.

Alignment of the project with the Conflux Network

YZ can provide following benefits to the Conflux ecosystem, to support healthy growth:

1. Reduce the amount of scammy Projects, as token management and tokenomics are pre-defined and set onchain

2. Growth support via our solution based on so-called Charged Tokens (CT):

• CT are deployed very early on by Projects (potentially at pre-seed stage), making it less likely for them to switch to another Blockchain until their launch
  ⇒ CT can make infrastructure Projects become more « sticky » and retain new Projects more easily.

• Most importantly, with Adaptive Farming (that could be supported via this Grant), onboarded Projects will likely bring other Projects to the platform and Conflux, YZ uniquely enabling the creation of tokenized Partnerships at any stage of development, creating a flywheel effect.
  It will also provide metrics about Projects (partnership strength) and overall users behaviours.

3. Longer term YZ can contribute to:

• increase adoption of Conflux by providing a seamless user experience on the whole lifecycle (Deck slide 10)
• have even less scammy and more commited projects, with a more engaged community as it has deciding power in the token emission (see DAICO model proposed by Vitalik Buterin, Deck slide 23)

We have a Roadmap up to our V4, see slide 12 of our Deck.

The end goal is to have a platform that creates a stronger bond between builders and investors/community/users by addressing simultaneously their needs.

For users/investors this means:

• have a seamless user experience where one can invest / claim / stake / unstake / swap / sell crypto in a single environment without having to look for a DEX, staking provider, launchpad… (Deck slide 10)
• have full transparency in terms of token management and tokenomics (all onchain)
• regain control over their investments (immediate allocation of Charged Tokens in exchange of investment), and even take part in the validation of fundraising sequences and related token release via a DAO/DAICO to ensure Project teams commitment (Deck slide 23, DAICO concept proposed by Vitalik Buterin in 2018)

For builders/Projects this means:

• deliver faster (automated token management)
• with more transparency to build up trust with the community (tokenomics onchain)
• more engaged community (see DAICO above)
• get broader and earlier exposure, BEFORE launch: airdrops, staking and specifically via this Grant access to adaptive farming, uniquely enabling tokenized Partnerships at ANY stage of development. This empowers Co-Marketing Campaigns and will help Projects get earlier and broader exposure to multiple communities at once. Long term this will also feed an onchain reputation system to help Projects identify the most valuable users.

For all:

• more sustainable token prices via reallocation mechanisms to stretch out the selling pressure and more proactive and resilient communities (investments performed via bids and not lotteries, see Deck slide 19)

How this product will increase assets and transactions on-chain

The advantage of our solution is that smart contracts are deployed at the earliest stages, as Charged Tokens can be launched at the inception of a Project. Airdrops can be done, also staking campaigns, in the future also farming campaigns… basically a significant onchain activity is created prelaunch, providing more transparency and unlocking new paths to create early stage interest and traction.

Demonstrate a competitive edge that differentiates it from other projects

We have 2 types of competitors:

• Projects like Kaizen Finance or Sablier that support Projects with token management and token vestings. Those are targeting mainly the post TGE phase while YZ’s main value-add is to provide levers BEFORE launch via dedicated Charged Tokens that open new paths such as Adaptive Farming which empowers co-marketing campaigns very early on, much before launch. Another differentiator is that those Projects, like others, have a vision where the future is multichain. We believe that the current space is exceedingly multichain and very fragmented because it is still in its infancy. Also, historically infrastructure Projects have provided the greatest returns. This occurs at the expense of applications that are less funded. While this is likely to be balanced out in the future, the number of truly active Blockchains should be fairly limited and the emphasis should be put on having integrated solutions that minimize friction, as it is the case in more mature industries. Hence our Roadmap focuses more on greater integration rather than expanding into more and more Blockchains (unless those bring real value-add to our customers).

• In the longer term: Launchpads like Polkastarter or DAO Maker. Initially we are only B2B oriented, helping web3 Projects with their token management. But in order to provide a fully integrated offer we will also help Projects with their Fundraising and organize public sales. The last slide of our Deck provides a pretty detailed comparison with launchpads and in the end we might rather be complementary as we will be targeting a more experienced user/investor base.
  One of the main differentiators is that investors will have to burn Investment Credits (obtained by staking YZ token) to invest in Projects, making them more proactive than just participating in FCFS sales or lotteries.
  This has 2 advantages:

  1. it is more transparent than lotteries, as investors will do a bid and they will be either in or out depending on a clear and unique threshold that is identical for all investors
  2. it will create a community of stronger holders as investors will have to decide which projects they want to invest in (rather than relying on lotteries). This will be reinforced by rewards in Investment Credits that will be given proportionally to the duration during which investors will stake purchased tokens. This will reward long term holders by giving them more Credits to invest in future Projects. Stronger holders will lead to attract better Projects, creating a virtuous cycle.
     NOTE: We have 2 additional mechanisms to sustain token prices at launch which are already functional and integrated in the V1.
     Overall our value proposition towards Projects will also be broader as they will be able to delegate and automate their entire token management and do airdrops, staking and especially Farming which will enable Projects in the YZ ecosystem to partner up seamlessly, at any stage, before and/or after launch.

Links:

Here is our Deck: https://docsend.com/view/xbu9h3tzf8qynnqr

Or a short video version of it: https://www.loom.com/share/e2946f484d7747c7a8c13bfbb00fd151

Our Business Strategy & Market approach to scale:

YZ Business & Marketing Strategy

Concrete use cases and customer testimonials:

YZ usecases & testimonials

Access to the app, connect with Metamask on BSC or Polygon:
https://app.yz-network.com/

2 demo videos of the app are displayed on our website:
https://www.yz-network.com/

Github: https://github.com/YZ-network

Linkedin: https://www.linkedin.com/company/yz-network

Twitter: https://x.com/YZ_Network

Conflux eSpace grant recipient wallet address
0x493942A95Bc6Db03CE8Cc22ff5a0441Dcc581f45

Are you an incorporated startup?
Yes, in Cluj (Romania). But the company is not only managing this Project (YZ) so we might launch a dedicated company, also depending on opportunities in other geographical areas and fundraising (especially when equity will be involved).

Technical Introduction

Refer back to problem statement

Our V1 is already live, fully bootstrapped, with following functionalities to address problem statement mentioned previously:

• automated token management with onchain vestings for more transparency, easy consultation via our app so that all users/investors/project team share the same level of information regarding the whole token allocation
• investors regain control: a fundraising can be set in which investors immediately get Charged Tokens (CT) in exchange of stablecoins; by default those are staked but they can also be withdrawn in the users’ wallets (with potential withdrawal fee) and transferred
• CT can be used to do early stage Airdrops / marketing campaigns
• Staking campaigns can be created on CT at any time, to attract and reward early stage investors and reduce the selling pressure at launch (a staking campaign can be used to bridge the TGE phase)
• value can be transferred from dumpers to holders via fees that can be set on claims and/or withdrawals. Those fees are retained and reallocated to the remaining stakers; this is a second mechanism (on top of staking campaigns) to stretch out the selling pressure, especially at launch

How it works:
Projects launch Charged Tokens (CTs) gradually, for example starting with the seed round, then KOL round, public round etc… to tokenize the whole token allocation, as CTs contain the vesting conditions.
Along the way they can also create dedicated CTs for one or several airdrops, launch Staking Campaigns on CTs to reward early investors or reduce the selling pressure around launch. Once they are ready to launch, they deploy a Project token (PT) and interfaces to connect CTs with the PT. The idea is to have the specific code of a Project in the PT contract while the CTs handle all the generic token management part to make it automated and more secure.
Users/investors can then use the YZ interface to claim PT by discharging gradually the CT according to the vesting schedule.

This is for our current V1.

Now we aim to use this Grant to support the development and release of the core functionality of our V2: Adaptive Farming.
Its purpose is to enable tokenized Partnerships between Projects at any stage of development, before or after launch, using Charged Tokens and/or Project Tokens, without liquidity fragmentation. There is no such solution on the market yet.
Furthermore, this will be performed in a fully decentralized way between 2 Project team managers, without any third party, via proposals / counter-proposals / validations that are done fully onchain. The goal is to transition from a mono project token management perspective (V1 which is live) to a multi project token management perspective (V2).
This will give web3 Projects early exposure to multiple communities at once, breaking up the silos of solo marketing campaigns performed within platforms such as Galxe or Zealy. The potential of partnerships and Co-Marketing campaigns will be massively increased, enabling the creation of a map of Partnerships with their strengths (directly related to the % of token exchanged between projects), which will provide useful insights and metrics to both Projects and investors. It is also the base to establish an on-chain reputation system to identify the most valuable users, which is a key challenge in the space.
Adaptive Farming is likely to create a flywheel effect, as web3 Projects will be incentivized to bring other Projects to YZ, as there is no other solution on the market enabling tokenized Partnerships with prelaunch Projects.

Scope of the system
The goal is to provide a fully onchain advanced token management solution for Projects and their Partners at any stage, with great flexibility:

• before launch using Charged Tokens (CTs)
• after launch using Project Tokens (PTs)
• with both CTs and PTs being used in a Partnership between prelaunch and launched Project

Objectives and success criteria of the project

We are currently B2B so our goal is to onboard as many Projects as possible, ideally organically so that in the end more and more users and community members will require Projects to use our token management solution for more transparency and early stage leverage.

Metrics/KPIs:

1. Number of onboarded Projects
2. % of new Projects that were brought by previously onboarded Projects to create tokenized Partnerships. An increase in value would demonstrate the potential of Adaptive Farming to create a flywheel effect, creating organic traction and long term sustainability.

More details with metrics and KPIs to be found here:

YZ Business & Marketing Strategy

Technical Proposal

The image below shows the structure of the smart contracts designed to ensure flexible token management, including Adaptive Farming:

• The contract “LiquidityTokenYZ” is the contract of a Charged Token (CT) which is associated to a stakeholder category within the token allocation. A CT can be deployed for the Seed Round, one for the Public Round, one for the team etc…
• Each contract “LiquidityTokenYZ” is linked to the Project Token (PT) contract “ProjectToken” via an Interface contract called “InterfaceProjectTokenYZ”.
• The Project Token (PT) contract “ProjectToken” is a “DelegableToLT” contract to delegate the token management functionalities to the CTs
• The contract “DepositYZ” is used to deposit CTs or PTs. Users doing deposits will be eligible to get staking and/or farming rewards from all Projects having partnered up with the deposited token. They can receive a combination of PTs and/or CTs
• The contract “StakingYZ” is used by Project Owners to set up staking rewards on deposited and staked tokens within the “DepositYZ” contract. It can manage both CTs and PTs via specific deposit IDs.
• The contract “FarmingYZ” enables Project Owners to do a partnership proposal to another Project in a fully decentralized way. Provided are the start date, end date, and amount of tokens to be transferred, for both Partners. This can be validated by the Partner or a counter-proposal can be made etc… until agreement is reached, stored onchain and executed. A partnership can be created between PT and PT, CT and CT or CT and PT and without liquidity fragmentation. For example if Project A partners up with Projects B and C, then a user staking token A will receive token rewards from Projects B and C. If Project A then partners up with Project D, then the user will also receive token rewards from Project D without any additional action needed. This will ease new Projects discovery.
• The contract “PlacementSetUp” is the parent contract of both “StakingYZ” and “FarmingYZ” that could be used later on if a different type of placement contract is created.

Regarding the dapp/user interface, React is used (react-redux, react-saga) with twitter bootstrap for app themes, mongodb(server) and AWS (infra).

Grafana/Prometheus is used for monitoring.

Regarding the performance, it is pretty tied to node providers, as we had some good uptime with Alchemy, less with getBlock. This is an important aspect to be assessed as we have no experience with the supposedly 6 main node providers for Conflux (UNIFRA, NOWNodes, Goldsky, BlockPI Network, Particle Network, thirdweb).

If we look more into the user interface, it provides:

• exhaustive information about tokenomics with a tab providing the vesting schedule and another one the token distribution as shown below:

• a dedicated tab disclosing fees (withdrawal and claim) and staking rewards
• a dedicated tab for token management; in the image below it is disclosed for CTs, where users can deposit, withdraw, recharge CTs and also use them to claim the underlying PTs. More “basic” users can switch to the “Standard Mode” to have a simplified view with less actions to be performed (basically only a Claim button to claim the Project tokens).

The user interface needs to be adapted and extended to enable the management of Project Tokens (deposit, withdrawal and creation/visualization of Staking Campaigns) and Partnerships between Projects (Adaptive Farming).

All the smart contracts are/will be open source, no specific licenses.

Total Budget

The overall cost is estimated to be around $120K to $150K to have a fully flexible multi-token management platform with Adaptive Farming but we are ready to support significantly the development via our own internal resources.
Hence a grant of $25K to $50K could already be helpful.

See next paragraph for the Break down of activities and costs (in%)

Development Roadmap

We can propose milestones in terms of project advancement, with the final goal to have the token management app live and running on Conflux. We are B2B so we can’t set a goal in terms of user traction. Eventually the last milestone (number 3 below) could be associated with a number of Projects deployed on Conflux with our solution. This number should be discussed, as it will also depend on how we can be introduced and promoted within the Conflux ecosystem.

Timeline with breakdown of costs (~ 6 to 7 months in total with parallelization):

1. Smart contracts (30% of costs, 2.5 to 3 months)

• Workflow of adaptive Farming, integration analysis, Process validation (3 weeks)
• Smart contracts with adaptive Farming and iterative proposals (1 month)
• Smart contract testing (1 month)

2. Creation of web interface (40% of costs, 3.5 months)

• Proposal / Counter Proposal
• Lifecycle management (Proposal/Validation stages, active pools, archived pools)
• Responsive app to allow adaptive Farming with multiple Partnerships in a single pool, with Charged Tokens and/or Project Tokens
• Integration/synchronization with other token management features from V1

3. Final validation and deployment (30% of costs, 1.5 month)

• Overall testing (1 month)
• Smart contract audit (2 weeks)

Team

Our team has a solid track record, from startups to leading positions in Fortune 500 companies, with technical experience as well as management experience (both human/organizational and product/project).
We have been crypto builders and investors since 2017, having scanned 3000+ Projects.
We were confronted with issues of both builders and investors in the web3 space and found a way to address those simultaneously via a single app, to close the gap and build up trust between Projects and their community and investors.
We know each other for 10+ years and have already worked together on a Blockchain Project (tokenization of real estate).
And last not but not least our motivation: we developed and released our V1 being fully bootstrapped. And having a V1 also shows that we are up to the task with limited resources.

Ion Fintescu: Concept & Lead
https://www.linkedin.com/in/ion-fintescu-4846604/
Investor in Blockchain Projects since 2017 (200+ projects), Ion was confronted with current limitations of token offerings, therefore ideally placed to establish the vision for YZ.
Prior to YZ, Ion managed the development of FractAll aiming to provide fractional ownership through Blockchain, including to tenants (becoming “tenowners”).
Previously Head of Numerical Methods at Safran (Fortune 500 Company), Ion led teams of engineers and project managers to develop innovative 3D methodologies to facilitate the design & quality control of aircraft engine parts, also via measurements & statistical process control. 800+ people were impacted with a reduction of design time from 20 to 50%, reducing production cycles by several weeks.

Youssouf Naciri: Solutions Architect
https://www.linkedin.com/in/ynaciri/
More than 17 years of experience as IT architect within all sizes of companies, from startups to major corporations & organizations such as Banque de France, TotalEnergies and the French Ministry of Justice. Since 2017, Youssouf has also been active as investor, Blockchain consultant and developer of 2 decentralized applications (fractional real estate investments with Ion Fintescu and automated trading with multi-swap atomic transactions).

Rodica Farcas: Business & Organizational Development
https://www.linkedin.com/in/rodicafarcas/
Wide multi-cultural management experience through Europe as Director of Customer Care, Systems and Software at Emerson (Fortune 500 Company).
Rodica led the digitalization of Sales, implemented business infrastructure to support the scale up of the business to 600M€ sales/year.
Rodica also developed creative & innovative business growth programs, resulting in 25% efficiency gains by implementing PMO methodologies and reviewing commercial compliance practices resulting in 5 M€ gains/year.
In the Blockchain field, Rodica helped startups to develop a customer service and adapt their organization, tools & processes.

My Hoang: Technical Development & Support
https://www.linkedin.com/in/ॐ-m-0026645/
Investor and previously CTO at WeCashUp, a virtual supermarket for digital financial services in Africa with its Ecobank Visa card available in 30 African countries.

Terms of Use

I agree to all of the following terms of use in applying to a Conflux Ecosystem Grant

I have read and understood the Conflux Grants Ecosystem Overview
I have read about and understood that the Conflux Technical Grants are subject to a No-Sale rule
I agree to provide KYC information to the Conflux Foundation for the sake of overall ecosystem security
I understand that I will be required to follow public grant reporting requirements

[cj_hux]

Hey @Finion,

Thanks for your submission. I have a few questions regarding your proposal:

1. The proposal is mainly focusing on technical integration. Beyond the initial grant period, what is vision for YZ’s presence on the Conflux network? How do you plan to achieve sustainability and growth within the ecosystem?

2. What strategies do you have in place to onboard new projects to the YZ platform on Conflux? Are there any initial partnerships or commitments from projects that have expressed interest in using YZ’s solution on Conflux?

3. In your proposal, you mentioned a range for the grant size. Could you please specify the exact amount you are requesting? And how this amount aligns with your proposed development roadmap and milestones?

4. What are the potential risks associated with the integration of Charged Tokens and adaptive farming? How does YZ plan to mitigate these risks?

5. Could you provide specific performance metrics and numbers demonstrating the impact of YZ’s platform on your current users, such as the number of tokens managed, airdrops conducted, staking participation rates, and any measurable outcomes related to community engagement or partnership formation for projects like Hyme and your other onboarded project? Additionally, can you share some any data on how these projects have grown or benefited since adopting your platform?

[Finion]

Thanks for your reply and interest! Below you will find the answers to your questions:

1. The proposal is mainly focusing on technical integration. Beyond the initial grant period, what is vision for YZ’s presence on the Conflux network? How do you plan to achieve sustainability and growth within the ecosystem?

We have a Roadmap up to our V4, see slide 12 of our Deck.
The end goal is to have a platform that creates a stronger bond between builders and investors/community/users by addressing simultaneously their needs.

The grant should support the development of our V2 which is key to create a leverage effect, as there is no other solution on the market enabling tokenized Partnerships with pre-launch Projects.

Beyond the V2 here are the gradual releases planned:

• Investment platform enabling the community to invest in promising Projects. We will be pretty complementary vs existing launchpads as we will be targeting a more experienced user/investor base. Indeed, it will be based on Investment Credits (obtained by staking YZ token) to be burned to invest in Projects, making the community more proactive than just participating in FCFS sales or lotteries. It will also provide full transparency vs lottery based solutions (see Deck slides 19 and 20)

• Integration of NFTs and coupling with Charged Tokens, unlock of multi-usage potential of NFTs (Deck slide 9)

• Integration of DEX and FIAT on- and off-ramps to deliver a fully integrated solution to ensure a seamless user experience on the full lifecycle (Deck slide 10): investors/users can invest / claim / stake / unstake / swap / sell crypto in a single environment without having to look for a DEX, staking provider, launchpad…

• fully decentralized Governance via DAICO, giving more control to the community and investors regarding fundraising and token emissions and vestings (extension of DAICO concept proposed by Vitalik Buterin in 2018, see Deck slide 23) => less scams, Project teams with greater commitment, more engaged community with more control

All this could be developed on Conflux to provide a truly decentralized, efficient and partnerships oriented token management solution on the whole lifecycle.

Regarding overall growth and GTM strategy with KPIs and metrics you can consult the following document:

YZ Business & Marketing Strategy

To achieve sustainability we are implementing a gradual revenue model:

Short term (currently):
• fees from onboarded Projects, % of total token supply to align incentives
• additional fee in FIAT/stablecoins for support in tokenomics

Additionally, in the medium/long term:
• fee in FIAT/stablecoins as a % of funds raised via YZ (starting with V3)
• fees from integrated DEX (V4+)
• fees from service providers as our Super App aims to support Projects on their whole lifecycle (V4+)

2. What strategies do you have in place to onboard new projects to the YZ platform on Conflux? Are there any initial partnerships or commitments from projects that have expressed interest in using YZ’s solution on Conflux?

Again, regarding our GTM strategy you can access it via the link provided in the previous question.

The main driver and upside potential for our app and especially our upcoming V2 relies on the surge of platforms such as Zealy and Galxe which generated massive traction recently.
Nevertheless, those platforms which empower Projects to do targeted Marketing campaigns have significant limitations, especially for pre-launch Projects which are limited to stablecoins, whereas Charged Tokens can bring more fluidity and sense of belonging to Projects and their communities, also with reduced costs (no expense in stablecoins).
Furthermore, Adaptive Farming will open up new horizons. Indeed current marketing campaigns are being done mostly by Projects on their own, creating silos. Tokenized Partnerships between Projects at any stage of development will remove those silos by enabling Co-Marketing campaigns to be realized seamlessly.
This will also enable us to build a map of tokenized Partnerships with the strength of each Partnership being directly linked to the amount of tokens being exchanged between the Projects. This should provide great insights and metrics for both investors and Projects (see our Deck slide 7).
Hence we believe that our solution could generate great organic traction by removing significant limitations currently observed within platforms such as Zealy and Galxe.

Specifically for Conflux it could be a good idea to reach out to the VCs of your ecosystem, ideally with your help, to collaborate in the sourcing of early stage web3 Projects. Those could be:

1. Projects that are being supported by the VCs of your ecosystem and for which our token management solution could be an additional value-add and incentive to launch on Conflux
2. Projects that might not be supported by your VCs but for which they took an observational position to potentially invest later on; in this case they could bring the Projects to us and we could help them assess their potential by working closely with them on the token management and strategy, give insights about their organization etc… and again push them to launch on Conflux
3. Projects rejected by the VCs of your ecosystem => VCs could still bring them to us, as warm introductions increase significantly the chance of cooperation, and again we could push them to launch with us on Conflux

The advantage of our solution is that Projects are launching Charged Tokens at early stages, from pre-seed stages on. Hence they are more likely to stick to the same Blockchain later on as they would have to start form scratch all the token management if they switch to another chain. And this will be amplified with the V2 and Adaptive Farming when Projects will partner up with other Projects, leading to a multi-token involvement onchain.

Thanks to Adaptive Farming if we manage to create even a small ecosystem of Projects on Conflux that have partnered up with each other, it will be much easier to attract other Projects that will be tied to each other on Conflux, which could pretty quickly generate a snowball effect.

3. In your proposal, you mentioned a range for the grant size. Could you please specify the exact amount you are requesting? And how this amount aligns with your proposed development roadmap and milestones?

Indeed, a range was mentioned, as the total cost to develop and release Adaptive Farming seems out of range for a Grant: about $120-150K as mentioned in our proposal, the screenshot below gives more details with an estimation of roughly $135K.

Hence I provided a range of $25-50K which seems like a good compromise, also giving you some latitude depending on your own evaluation of YZ’s potential value-add to your ecosystem. The more we get, the faster and more focused and dedicated we will be towards your ecosystem. If you have some flexibility we would therefore request $50K.
An additional financial support from the VCs of your ecosystem would of course help us greatly to accelerate the development and potentially allocate more resources towards Marketing.

Regarding the alignment between the funds of the Grant and the milestones, we can use the 3 milestones mentioned in the screenshot above with the distribution provided in the proposal:

• 30% for milestone 1 (i.e. $15K for a $50K grant)
• 40% for milestone 2 (i.e. $20K)
• 30% for milestone 3 (i.e. $15K)

Eventually, the last milestone (number 3) could be associated with a number of Projects deployed on Conflux with our platform. This number should be discussed, as it will also depend on how we can be introduced to the Conflux ecosystem.

4.What are the potential risks associated with the integration of Charged Tokens and adaptive farming? How does YZ plan to mitigate these risks?

Charged Tokens are not meant to be significantly traded at this stage. And Project owners can control their withdrawal by adjusting withdrawal fees.
In the longer term, in case that Charged Tokens are more massively used and there is a significant demand in early trading, then solutions like IX Swap could be used to ensure full compliance, even with potential security token constraints. That’s also why we have a DEX on our Roadmap to be customized if there is sufficient demand.
Considering our value proposition up to V4 of our app we consider that the trade of Charged Tokens is not a “must” but rather a “nice to have” for the future, as it will be associated with constraints, hence likely to be of interest only for the most hyped projects with long pre-launch phases.
Our platform based on Charged Tokens is inherently interesting for Projects as they allow to decouple the token management from the specifics of a Project Token, streamlining the process and giving more flexibility early on, before launch, via Airdrops, Staking, Adaptive Farming, automatic reallocation of fees from dumpers to holders to sustain token prices…
Instead of having a single black box token contract, the tokenomics and token management part is split into several pieces to increase transparency and modularity. In that sense our solution should also be seen positively by regulators, especially if the space continues to grow and regulators take into consideration how tokenomics are prone to changes over time… Our platform could be a technical solution to serve potential future regulations in the field.

There is no specific risk regarding Adaptive Farming. The main constraint we have is to provide a fully flexible platform to accept both Charged Tokens and Project Tokens but as both have the same structure (ERC-20 based) the technical hurdle is not so high.

5.Could you provide specific performance metrics and numbers demonstrating the impact of YZ’s platform on your current users, such as the number of tokens managed, airdrops conducted, staking participation rates, and any measurable outcomes related to community engagement or partnership formation for projects like Hyme and your other onboarded project? Additionally, can you share some any data on how these projects have grown or benefited since adopting your platform?

Regarding Hyme, they created 9 Charged Tokens (for investment rounds, team, advisor, marketing…) to tokenize their whole token allocation and used our platform up to the launch of their Project Token. By doing so, they had to write 0 code in Solidity, reducing their costs and time to market and could focus on the development of their app.

Beyond deploying Charged Tokens for their investment rounds (Seed and Private), Codenekt also used our platform to do a pre-launch Airdrop campaign, by launching a dedicated Charged Token they called “Ambassador Program”. They also did 2 pre-launch Staking campaigns for private investors. By default, Charged Tokens were staked so the participation rate was close to 100%. This was a way to reward more early stage investors as fundraising rounds can be pretty long, especially during bear markets. By providing more transparency with tokenomics set onchain early on, which is materialized by Charged Tokens owned by investors, and implementing Airdrops and Staking Campaigns, Codenekt could reassure their community and investors which otherwise would have waited month after month with growing doubts and frustration.
All this with 0 code written by the Project team and very little effort.

The V1 was developed to set the foundation and collect needs: Codenekt mentioned their interest in NFTs and coupling with Charged Tokens, Codenekt also introduced another Project to us but they already had their Token launched so we didn’t have much to offer them. Several discussions with other Projects underlined their interest in partnering up with other Projects, especially at early stages.
These observations and feedbacks are pushing us to prioritize the development of Adaptive Farming as it can open much more opportunities for pre-launch Projects to partner up with each other but also with already launched Projects.
Hence our focus now is to develop and release the V2 to extend significantly the scope and to enable partnerships, rather than onboarding more Projects on our V1.

[cj_hux]

Thank you for your response. While I appreciate the additional information, I still find the grant range somewhat broad for the scope of the proposal.

• Regarding the grant and milestones, I would recommend adjusting your milestones and objectives to focus not only on development and deployment but also on attracting projects and fostering growth within the Conflux ecosystem. Could you please rework these areas with this consideration in mind and align them more closely with a more constrained budget?
• Could you further elaborate on your strategies for onboarding and reaching out to new projects on Conflux? Additionally, a more in-depth explanation of how the Adaptive Farming initiative would specifically support projects and facilitate partnerships within the Conflux ecosystem would be valuable.
• Lastly, could you provide specific performance metrics from your live V1 on BSC and Polygon? Metrics such as the number of airdrops conducted, staking participation rates, and any data on community engagement or partnerships would be helpful in understanding the current impact of YZ’s platform on its users.

[Finion]

To address the first 2 questions, the best might be to provide more concrete use cases regarding Adaptive Farming and how it can help Conflux attract more Projects.

Use case 1:
Take 2 early stage Projects P1 and P2 with one or several ongoing or completed token investment rounds. Each Project deploys a dedicated Charged Token for each of its investment rounds, with specific vesting conditions. Projects P1 and P2 can then decide to enter a partnership based on a Farming Campaign applied to any of their Charged Tokens, for example between the Pre-seed round of P1 and the seed round of P2.
A proposal is made by either P1 or P2, they can iterate until reaching an agreement where P1 allocates an amount of tokens with a given vesting schedule to P2 stakers and vice versa (with potentially different terms). If P1 and P2 are pre-launch Projects, then those tokens are charged tokens, but it can also be a mix of charged tokens and/or project tokens.
By doing so, investors in P1 will also receive tokens from P2 and vice versa. P1 can then partner up with P3 and investors in P1 will also get P3 tokens on top of P2 tokens, and so on. Our solution is fully adaptive, meaning that new partner tokens can be added over time without users/investors having to stake their Charged Tokens in different pools. This will ease new projects’ discovery and if over time P1 partners up with 10 other Projects, then it will be exposed to 10 other communities and related investors very early on, much before launch.
All the proposals, potential iterations and validation of farming campaigns are done fully onchain, without any third party involved, making it fully transparent and frictionless.

Use case 2:
Still as a pre-launch project, but closer to launch, a Project P1 can create a Marketing campaign with airdrop rewards, but instead of doing a solo campaign as it is currently done within platforms such as Zealy and Galxe, P1 can for example partner up with 2 other Projects P2 and P3 to launch a joint airdrop campaign. To do so, Projects P1, P2 and P3 can create specific Charged Tokens dedicated to that airdrop and follow a similar process to the one described in use case 1. By doing several tasks linked to the 3 Projects, users will then receive token rewards from Projects P1, P2 and P3.
Later on, if P1 decides to partner up with 3 other Projects P4, P5 and P6 to do another airdrop campaign, then those Projects can launch a dedicated Charged Token with Farming campaigns so that users will receive rewards from P4, P5 and P6.

Use case 3:
The previously described partnerships can also be created with a Project that has already launched its token. In that case, charged tokens are replaced by project tokens. To do so, an already launched Project just needs to create a Deposit with its Project Token and it will be able to establish partnerships with one or several other pre-launch and/or already launched Projects. If the Project launched on Conflux, then the process will be completely frictionless. If the Project launched on another Blockchain, then a token bridge will be required. This might introduce a little bit of friction but could help attract Projects to Conflux that have already launched on another Blockchain.

CONCLUSION:
Our Adaptive Farming solution will be completely flexible: Projects can partner up at any stage of development, before or after launch, using Charged Tokens and/or Project Tokens. One can even imagine a hybrid partnership between an airdrop of a Project and a seed round of another Project!
This full flexibility will maximize the potential of partnerships and combinations between Projects, generating a flywheel effect to grow the Conflux ecosystem.
It will also provide valuable data and insights to establish an onchain reputation system to identify the most valuable users as well as a mapping providing the strength of the partnerships.

In the end, the deployment of our Adaptive Farming solution on Conflux will be the main lever to attract Projects to Conflux and grow your ecosystem, as Projects themselves will pull other Projects to Conflux as there is no other similar solution on the market today for pre-launch Projects.

I understand you might want to see funds oriented towards marketing efforts but:

1. the development of the solution is crucial and costly (and the Grant will cover only a fraction of those costs)
2. marketing, especially based on small funds, is unlikely to be sustainable after the initial push, whereas the core principle of Adaptive Farming should generate organic traction and a flywheel effect.

That said, to address the lack of specific milestone and metric regarding the deployment on Conflux, we can propose the following:

• the final milestone (number 3) is reached only when at least 5 Projects recognized by Conflux have performed at least 1 partnership using our adaptive Farming solution on Conflux
• until the previous target has been reached, if our v2 with Adaptive Farming solution is deployed on other Blockchains, then Conflux will receive 10% of the resulting revenues until 120% of the Grant amount released has been repaid

This will ensure that we will push Projects towards Conflux, via several channels:

• direct outreach via Linkedin and dedicated Telegram channels for early stage Projects
• via Blockchain events (we already participated in events in Istanbul, Lisbon, Paris, London, Bucharest, Warsaw)
• via partners (see below) and referral agreements
• contact Projects within the Conflux ecosystem, to foster partnerships between them and especially with new Projects outside of the ecosystem; prior to that, and for those interested, we can also collect their needs and develop our Adaptive Farming solution accordingly

Regarding the metrics of our V1, I have already provided them in my previous response (number of Charged Tokens, airdrop, staking), as well as the value-add for the onboarded Projects.

We have been focusing mostly on Product development and Projects onboarding so far but have made some first partnerships along the way:
1) Web3 Players which are supporting early stage web3 Projects and can bring us customers for tokenomics & token management:
a) Prima Felicitas, redsteep: web3 development studios
b) Soken: smart contract auditor (Referral agreement signed)
c) isotopic: web3 gaming hub (that partnership will be stronger once we release our Adaptive Farming solution as it will strengthen their gaming ecosystem)
2) Hyme: web3 projects aggregator with scroll to earn
=> share new web3 projects and increase their exposure via Hyme app
3) Web3 marketing firms and incubators (also for advisory and sharing early deal flows):
a) grow3.ai (also our advisor)
b) Venture Capital (https://venturecapital.consulting/)
c) Faster Capital (our incubator)

[cj_hux]

Please provide a clear grant size and establish specific milestones that include measurable performance and social-based metrics to track the project’s launch effectively. These details are essential for us to assess the proposal’s progress. Without them, we won’t be able to advance your proposal to the Foundation for a vote.

[Finion]

I would like to highlight that we are B2B, hence our target is to onboard early stage web3 Projects and help them to be more transparent, efficient and unlock early stage levers they don’t have today. Our app in itself will create leverage for OTHER Projects to grow within the Conflux ecosystem. Our app is not just a fork or improvement of an already existing protocol or app where one could focus more on socials and marketing. In our case, we are developing a new solution and intend to roll it out for Projects that will fuel Conflux’s growth. Hence we need to focus on the Product itself to make it as attractive and useful as possible for Projects. The web3 space is currently plagued by Projects creating short time buzz and not delivering long term value.
Later on we intend to do a marketing push to increase awareness around our Project, with the target to have the community itself pushing Projects to use our solution. But to get there, we first need to develop our Product further to bring more value-add and onboard more Projects. Hence, currently the main metrics are tied to product development.
Nevertheless we can still add metrics in terms of twitter followers.

Updated milestones with deliverables (~ 7 months in total with parallelization):

1. Creation of smart contracts ($15K, 2.5 to 3 months)
   • Workflow of adaptive Farming, integration analysis, Process validation
   • Smart contracts with adaptive Farming and iterative proposals
   • Smart contract testing

   Deliverables:

   • set of operational smart contracts, deployed on Conflux testnet
   • 2000 Twitter followers

2. Creation of user interface ($20K, 3.5 months)
   • Creation of a Mockup of the app
   • Lifecycle management (Proposal/Validation stages, active pools, archived pools)
   • Responsive app to allow adaptive Farming with multiple Partnerships in a single pool, with Charged Tokens and/or Project Tokens
   • Integration/synchronization with other token management features from V1

   Deliverables:

   • functional user interface
   • V2 with Adaptive Farming deployed on the testnet
   • 2500 Twitter followers

3. Deployment and Projects onboarding ($15K, 2 months)
   • Overall testing
   • Smart contract audit
   • Deployment of V2 with Adaptive Farming

   Deliverables:

   • after the smart contract audit and potential iterations, no remaining issue that could break the contracts’ logic or worse lead to any loss of funds
   • fully operational application to onboard Projects, V2 deployed on Conflux Mainnet
   • 4000 Twitter followers
   • at least 5 Projects recognized by Conflux have performed at least 1 partnership using our adaptive Farming solution
   • until the previous target has been reached, if our v2 with Adaptive Farming solution is deployed on other Blockchains, then Conflux will receive 10% of the resulting revenues until 120% of the Grant amount released has been repaid

[cj_hux]

Thank you for your response. I have a few suggestions that could further strengthen your proposal:

1, Typically the Foundation’s preference is not to allocate funds for testnet deployments. We encourage projects to focus on mainnet deployment as part of their initial milestone. We also tend to prioritize directing the majority of grant allocations towards activities that drive direct growth (i.e.: incentives, marketing, campaigns, community growth) or building, rather than adaptation.
2, Regarding grant allocation and milestones, I recommend adjusting the proposal to include a more constrained budget with a stronger focus on project and ecosystem growth rather than on smart contract development and testnet deployment. Consider prioritizing strategies for attracting projects and fostering growth within the Conflux ecosystem, setting up milestones and KPIs aligned with this focus. (Please note: The Foundation releases funds only upon milestone completion.) This will assist in tracking progress and clearly defining grant requirements.
3, For the voting process, please include two separate sections in your proposal: a detailed budget breakdown and a milestones section for fund release. The budget breakdown should clearly explain how the funds will be allocated, while the milestone section should essentially outline the timing, conditions for disbursement, and include performance KPIs (e.g., web traffic numbers, unique wallet count, transactions, partner integrations, campaigns) as well as social growth KPIs (e.g., X followers, Discord users, webinars) to demonstrate the project’s progress.

[Finion]

Thanks again for your response and time to elaborate.
We could have gone the simple path and just asked for a grant to deploy our existing V1 on the Conflux Mainnet and do a marketing push around it. This would have taken a few days max, we might have onboarded a few Projects here and there but long term this would have cost us time and Conflux money for achieving just a local spike in activity.
But we chose a much more ambitious path to cover the development and release of the V2 of our app which is not a simple upgrade or adaptation as it will help us transition from a mono Project token management app to a pretty unique multi token management app. There is currently no other solution on the market that allows several Projects to seamlessly be interconnected in their token offer and supply, at any stage of development and in a fully decentralized way. This has much more potential long term than short term oriented marketing campaigns that will fade off quickly. How many Projects have had tens of thousands or even hundreds of thousands of followers, users or “active” wallets? How many of those managed to get traction and keep a significant user base over time? Close to none, and if one considers apps that got lasting success like Uniswap, Aave, Curve etc… their success and traction came from having a good differenciating product, not from marketing pushes of an average product that lacks utility.
And again, the main feature of our V2, Adaptive Farming, is by itself a growth generator, as Projects will inherently be incentivized to bring other Projects to the platform to establish tokenized Partnerships and Co-Marketing Campaigns. Indeed, if they are a pre-launch Project and/or want to partner up with another pre-launch Project they have no other solution on the market to do it. In itself Adaptive Farming creates a leverage effect that amplifies with time, when more and more Projects bring more and more Projects to YZ.
Conflux needs disruption to catch up to the leading L1 players and Adaptive Farming could be a significant step towards that. As a reminder, here is a link to a short document describing the innovative use cases of Adaptive Farming and its great flexibility, such as coupling for example a seed round of a very early stage Project with an airdrop of another Project:

Adaptive Farming use cases

The fact that we have already released a V1 of our app, fully bootstrapped, reduces the risk towards the V2 and shows our motivation.
Considering that we need to focus on the Product utility, I don’t see how we could change the deliverables for the 3 milestones. And regarding the costs, I already provided a clear breakdown related to the 3 milestones, here it is (the costs are higher than the funds requested in the Grant):

I really think it’s time to focus on long term utility and traction rather than chasing metrics that have proven in the last few years to be very short lived and completely useless to track medium/long term success. And for YZ the key metric is very clear: it is the number of onboarded Projects, as it is the only metric that is going to grow exponentially thanks to Adaptive Farming, whereas any increase in transactions, user number or followers will not create such a traction multiplier.

[cj_hux]

Thank you for submitting your project’s proposal to the Conflux Grant Program. Unfortunately, your proposal did not pass the grant committee’s decision. We greatly appreciate the effort and innovation behind your project, and we encourage you to keep exploring future opportunities within the Conflux ecosystem.