Q4 2022 Financial Report
Intro:
A lot of change has happened with Honey during Q4 2022 and the beginning of January 2023.
So it’s understood; as we ended the last financial report in October, this report starts with the first week of November and ends with the final week of January. The following report will encompass all of Q1 2023. Therefore, there will be an overlap as weeks 9–12 will be weeks 1–4 for the following report.
Q4 has been an amazing journey at Honey, ending with us deploying our V1 and starting the process of “Feedback Driven Development.” This is where users of Honey can have a more direct role in shaping the future of the protocol by providing insightful information. This is done through user interviews that are currently being conducted with the team. Make sure to schedule a call with Tom or myself to talk with us even more directly about your experience as a Honey user (more information in the discord)!
Overall, these past months, the team has become a lot leaner, to reduce burn and extend the runway into 2024. The last two weeks of January have been preemptive to this objective with it being our priority for February. By hitting our target weekly burn of around 10–12k, our runway is projected to last us into 2024. More to be addressed in later sections of this report.
As always please feel free to reach out to me regarding anything in this report you would like more information on.
Quarterly breakdown:
As can be seen in this chart we’ve been working non-stop to reduce burn, and in turn, working to increase our output. As these weekly expenses continue to decline, we estimate to maintain the same output rate. This rate comes with the new “Feedback Driven Development,” while still lowering burn to stay between 10–12k weekly. These reductions come with improved efficiency within the comms team and an increase in contributors rather than full-time developers working for honey. Anyone interested in contributor status make sure to check our #builders channel in the discord.
This being said, we have had a couple of extraneous expenses over the quarter that was not included in our salary expenses:
- 30k for bug bounties, contributor payments
- 10k for finalizing design work for the Front end
- 5k for the beekeeper art
Bug bounties at Honey are extremely important, as well as rewarding contributors that help advance the protocol as a whole. Should anyone want to learn more about this process please reach out to our founder Tom, or refer yourselves to our docs!
Here we see a breakdown of the quarterly expenses by department. For simplicity’s sake, as well as changes within the project, we currently have two categories: Development and Communications. As we progress we expect that the communications department will grow in share(%) as compared to the development team. We will continue to pivot in the direction of drawing users, focusing on partnerships, and marketing for the rest of the items on our roadmap(UI/UX improvements, P2P, Beekeepers, EVM).
For the exact wallets that are holding the DAOs treasury, please refer back to my October report.
Finally here is a breakdown of the DAO holdings available for development:
With breakdown across chains being shown:
This current snapshot of the treasury does not include:
- 70k USDC on the Sol blockchain used for the Honey/USDC market on Orca whirlpools
- Llamapay reserves
For payments to the dev and comms team at Honey finance, we have been using Llamapay.io on both Polygon and Ethereum. We currently have sufficient funds (not included in the total above) to fund development costs at current rates until the end of February within Llamapay Reserves.
If we were to maintain this current burn rate, that puts us just shy of 30 weeks of runway. With the projected max burn leaving us only around 24 weeks of runway, our target burn of 10,500 would be a year of development on our runway.
Our goal is to reduce this burn to the projected minimum, by mid-February and re-evaluate development and communication goals at said point.
The DAO also has Sol deposited in Honey markets. As more marketing campaigns are run, the DAO will look at depositing Sol into these markets to resolve the “cold-start” issue of liquidity. Bringing in some interest on the deposited Sol for the DAO until markets are up and running.
Profits:
A quick note on profits. The protocol still has maintained its 0% fee initiative in this V1 period. Please refer to the October report for more information.
Looking towards the future:
As our protocol develops and finds its place in the Solana ecosystem, and later the multi-chain ecosystems, I’m looking forward to seeing us position ourselves as the primary lending platform for NFTs and long-tail assets.
With our constant improvement, ship ship ship mentality, and user-driven feedback, our growth will only be exponential.
See you all on April 1st for the report of the first quarter of 2023.
Have a wonderful couple of months everyone and keep on buzzing,
theSailor ⛵️🍯
