This is the transcript for Matt’s Q3 2020 AMA. Click here to view the full recording.
Hey everyone. It’s Matt dialling in from The OAN, Aion, more recently Moves, for our quarterly AMA. I’m excited about doing this. Obviously, these last couple of weeks has been a whirlwind for those of you who pay attention to the project and on our community Telegram channels and follow us on Twitter. You’ve seen some news this week that I wanted to make sure we had time to address. Lots of questions about where we’re heading with Moves, what it means for Aion and what it means for The OAN. So I’m going to do my best to get through as many of these topics as possible.
Also very specifically, address some of the events that happened surrounding Jin, who was previously on our Board of Directors, and years ago was one of my cofounders. I do want to get through all of this. There were a lot of questions this AMA, as you can imagine. I’ve tried to organize responses into categories of topics but I’ll do my best to try to get to as many of the questions as I can. Some explicitly, some by telling you things that have happened, to answer and address many questions sort of all at once.
Before I get started, I do want to spend a little bit of time just resetting a little bit of history, a recap of where we’ve been, what we’ve been up to, how we got here and how this all started, frankly, because some of you have come into this project at different moments in our history. Some of you have been following me particularly for a few months, some for a few years. So I want to step back and sort of walk you through how all of this came together with Aion initially or even what happened before Aion and how we got to Moves.
All this, with the intent to sort of share with you that as with any early-stage software venture, especially a high-risk software venture in new industries with new technologies, there’s a lot of learning and there’s a lot of trial and error and there’s a lot of strategic efforts that are made down one path just to discover that that’s the wrong path, to then pivot and go down another path. This is not unusual for early-stage tech companies, but I want to share our story. And none of this is with the intent to justify or make excuses for anything. I think I’m personally very proud of the last four and a half years, five years that I’ve been working on this and the lessons that we’ve learned and how we’ve come out the other end, I think stronger, more focused and with a significantly higher probability of success to achieve an ultimate goal that I think is in everybody’s best interest.
I’m going to start by retelling that story in as much detail as I think is relevant for this AMA. Most of this information is public and probably many of you already know a lot of this information if you’ve been following us for long enough. All that to say is my big takeaway from last week is that the best I can do with you, our community members, is convince you, or try to convince you, that day in and day out what we do as a team, what I do as a CEO is attempt to put forward strategy that is in the communal best interests of this community. The strategy has changed over time. We’ve learned things that either created a strategy years ago, that we then moved off of and then created a new strategy months ago that we then moved off of.
I want to focus on some of those pivotal moments in the company’s history. My hope in this is to address some of the concerns that you have, to answer as many of the questions as I can that you’ve brought up and really leave you with, if anything, not a convincing argument that we’ve made all the right decisions, but a convincing argument that in the process of making decisions, we’ve done it with you in mind, with your best interest in mind. Frankly, we’ve built a lot of the incentives around this project to make sure that our best interests were aligned as often as possible as we made these types of strategic decisions.
So let me start at the beginning without over telling history. I’m not going to spend too much time on what happened in 2016 because I think, for the most part, that’s ancient history. In 2016, for those of you who aren’t aware, I left a what you might call a cushy job at Deloitte, where I was leading an innovation team. The first of its kind, at the time, that was doing sort of blockchain discovery, blockchain R&D.
Within that team is where I met some of the people that eventually became my cofounders, namely Kesem Frank and Jin Tu, who both worked on that team under me when I was at Deloitte. After about a year and a half leading that, prior to that at Deloitte, I had been a CA, a CPA working in tax and accounting and sort of that’s my education and my history. Having gotten to know this industry for a year and a half while at Deloitte, I felt compelled that there was an opportunity to leave that firm, leave the comfort of that job and start a company.
When I did that, I did that with zero certainty and zero roadmap as to how this would play out. I quit my job. I walked away from my salary. I did not have an investor and I did that alone, frankly. I started that business with the intent to prove to myself that I could become an entrepreneur, with the intent to prove the blockchain industry was ready for investment.
In 2016, I spent months working on finding that first investment. That investment came together in the early seed financing round that framed or formed Nuco, the company that became Nuco Networks. Along the way, I also convinced my two former colleagues to jump onto this mission with me, my two former colleagues being Kesem Frank and Jin Tu , at different points in the startup story of that company.
I have only positive things to say about the experience that led us to starting that business. We were all doing this for the first time, and I think we all learned a lot collectively. The thesis in 2016 was that our background was very well tailored to the enterprise fortune 500 market. There was interest in what was happening in the blockchain space.
We started building a blockchain technology stack, a protocol that was geared towards enterprises. Effectively, one of the first versions of what became known as the enterprise Ethereum technology stack and one of the reasons that I still sit on the board of directors of the Enterprise Ethereum Alliance, as a lot of you are aware of. So with that, came early funding, to the tune of about $750,000 was the total funding pool that we had pulled together. For probably the first year and a half of that business I didn’t pay myself a salary. I took a lot of the common risks of what you might expect from an early stage founder that’s still trying to prove the merits of the business that they’re building. Over that period of time, we built a lot of really interesting software, led primarily by our CTO and my cofounder, Jin and also having built an engineering team of really rockstar candidates, some of whom are still with us today.
In early 2017, fast forward six months into the story of that business, we started realizing that one, the early work we had been doing with enterprise clients, the Toronto Stock Exchange, some of the major banks in Canada, was interesting, but moving slowly. This is a lesson I took out of that business, was that enterprise B2B software companies move slowly. It requires a lot of patience, a lot of capital and a lot of recognition that enterprises don’t turn on a dime and they don’t adopt new technologies first.
Frankly, a lot of the really philosophical things about the blockchain industry that appealed to me were happening in the public blockchain space and 2017 was sort of the open window that a lot of you are aware of. We took our engineering effort and resources, and we started pointing them at the development and design of the new public blockchain protocol called Aion, that we announced and released as a whitepaper in July of 2017. Still operated under Nuco Networks, a privately held corporation of which I was the majority shareholder with angel investors that had been backing us to get to that point in the company’s history.
So we went out and we built this design for the Aion protocol. We had an emphasis on what we wanted to do with the Aion Virtual Machine, what we wanted to do with hybrid consensus, what we wanted to do with interoperability between public chains. That was our thesis, our thesis was “let’s go to market and show the blockchain market that there is an alternative design to the protocols that were leading in the market at that time,” protocols, like Ethereum and others.
We spent months and months and months planning and preparing for that event, that event of explaining to the world what our designs were, what our aspirations were. That effectively is what ended up becoming sort of the public token sale that happened in the end of Q3, early Q4 of 2017. So at that point, Nuco Networks also has a Barbados subsidiary business back in 2017 called Nuco Global. Nuco Global houses a team of people, at the time, engineers primarily. We also worked very hand in hand between the two teams of Toronto and Barbados to get the token sale out the door and to make efforts to get our first public network built and launched, which happened in April of 2018.
Fast forwarding into 2018, we’re still operating under this structure of Nuco Networks, Nuco Global. I’m still the primary shareholder. I’m still the CEO of this business, and we’re doing all of this with the intent of getting a public network out the door as early as possible in 2018, which we eventually do on April 25th, 2018, with hours and weeks and months of engineering effort and overnight. I remember the team, at that point, getting very close to burnout.
The amount of effort led by Jin, at the time, was just, mind blowing to see how much hard work that could go into that protocol. What was missing though, from our strategy and what was missing from the broader strategy and the public blockchain markets, was a reasonable explanation as to who was going to use these technologies that we were all building. We all had these very ambitious, technical roadmaps. We were all sort of outgunning each other in terms of “look how fast my VM is, look how fast my consensus algorithm is,” but nobody had a good answer as to what industry trend was going to shift to allow for mainstream adoption at these protocols.
Sometime after April of 2018, if you’re following my timeline here, the public network has launched. We stop and realize that our primary strategy has to be to go out as an open source technology project to go convince third parties of the merits of our technology stack and to convince them to build products, build apps on top of the Aion protocol. But the best way to do that would not be through a privately held corporate structure called Nuco.
So in July of 2018, we announced and we launched the Aion Foundation. The Aion Foundation is intended to be the steward, the host, the governance organization that frankly I voluntarily created with no requirement, because we thought that this was the best way to align our interests of a team working on a technology with a publicly traded cryptocurrency and our community of people that we wanted engaged in this community, all with the view towards “Can we get third party developers building on top of our protocol?”
And so we shifted our entire legal structure from Nuco Networks to the Aion Foundation. In that shift, effectively, what happened is all shareholders that used to own shares in Nuco Networks were swapped out. So they were swapped out in exchange for locked, restricted, vestign Aion tokens at the time, or I guess we were on the public main net at the time, so not tokens, but mainnet currency.
All of the shares of Nuco Networks were shifted to the Aion Foundation, so now the Aion Foundation is the ultimate parent structure of this entire strategy. Again, the strategy’s emphasis is community engagement, it’s third party app developer adoption, it’s grants, it’s bounties, it’s open-source collaboration. We built our entire business model around a non-profit open-source software foundation to drive for that objective.
What I learned in that transition, from 2016 to 2017 and into 2018, was that structure drives business model, which drives strategy. Or the other way to put it is that strategy drives business model, which drives structure. You cannot try this strategy under this structure because there are constraints to doing that.
For the foreseeable future in 2018, moving into 2019, we were building on this strategy of open-source community involvement, open-source third party app development, adoption grants, bounties. Many of you came into the project at that time. As you know, in 2019, we started seeing the writing on the wall. We had done an incredible job, I think, in hindsight of managing our finances, being extremely responsible, not only by being among the most, if not the most, transparent projects in the world with you, our community members, but also just managing our budget to extend our life.
I look back to 2017 and I remember that we had raised about $23 million U.S. dollars at the time of our token sale. We have been able to extend that into what had become probably an excess of $60-$70 million over the course of the next four years that have led us to today, and into next year and into the year after that frankly. That was not by accident. There was an enormous amount of conservative financial planning that went into making sure that $23 million could be extended, without touching significant portions of our treasury and putting significant supply pressure into the public secondary markets, but by managing the money that we had ,part of which was Bitcoin, part of which was Ether, part of which was dollars and managing that to effectively extract the longest possible runway that we could.
In 2019, what became very clear to us when we started our strategy – this poster behind me reminds us of that, of moving from the narrative of Aion, the interoperability focused public blockchain protocol to The Open Application Network, that had a very distinct go-to market strategy thesis around the types of problems in the world that we wanted to address and solve and positioning us away from just another alternative to Ethereum. Positioning us towards a set of problems that we thought we were uniquely able to address and solve using the technology that we had built of Aion, that was rebranded in November of 2019, as The Open Application Network.
Following that transition, we made a very specific decision that we’ve shared with you, for the last nine, ten months, if not longer: the success of this business, the success of this protocol, the success of our collective interest in this community was going to be driven by how much adoption could we primarily generate into this technology. Not that we would go and convince third parties to generate demand and adoption into our technology, but that we would take the front driver’s seat of building a product that could go to market, could capture consumers and users and adoption and drive those consumers, users and adoption back into our protocol, back into our cryptocurrency for the benefit and the growth of the overall ecosystem.
In December of 2019, we started the exploration in this broad scope of what we were calling The Open Application platform problems thesis that led us to an “aha” moment. My team and I spent weeks and months and Christmas holidays diving into a couple of different alternative businesses that we were considering. We landed on financial services, inclusion, ownership focused, and driven into the gig economy – a market that was exploding in relevance, in every part of the world, and a market that was starting to seemingly implode from its own pressure, from its own systemic challenges, from its own protests and demands for unionization and all of the stuff that many of you who have followed us, heard talk about in the last nine months.
And so the gig economy became our North Star. It became our attempt and our strategy to go into a market with a product thesis, prove that we could build something that was actually solving a real problem for a real customer in a way that consumed our technology, consumed our asset and generated demand that would benefit our community.
When we started down that path, before we even picked the name called Moves, we started doing a lot of analysis of what this business would look like, how this business would be built, what types of skills would we need to build this business, what type of financing would we need to build this business, would we run into regulatory and licensing obstacles in building this business, and the writing was on the wall. The only way to build Moves was going to be with a structure that allowed us to capitalize the business, meaning raising money from venture capital equity investors. A structure that allowed us to apply for financial services licensing with regulators in various countries and various states that have very stringent requirements around due diligence around the corporate structure of the business that’s operating these products.
We had requirements around raising debt because now all of a sudden, we were going to be passing debt instruments onto customers within our product. Again, debt lenders have certain requirements around the structure of the business. All of these things led down a path that said: “we could spend all of the money in the Foundation to launch a product that does not have the ability to succeed, it doesn’t have the ability to be capitalized, it doesn’t have the ability to grow, it doesn’t have the ability to invest in new markets.” The money we have in the Foundation is finite but the money that is theoretically available to Moves, if it’s successful, and if it finds its traction, is theoretically infinite.
So that was the very obvious decision making point. In Q1-Q2 of 2020, we started down this path with a significant investment in legal counsel, accounting counsel, working with PWC, working with Deloitte, working our law firm, a very significant law firm here in Canada, working on this question around “how could we build this structure?” Considering our current corporate structure, considering our ecosystem, considering our community, “what was the best way to approach this and to move forward?” We also started testing our thesis with venture capital investors to say, “does this resonate with you? Is the problem making sense to you?”
We started talking to folks at Uber, folks at DoorDash, folks at Foodora, folks at Skip the Dishes to help them understand what we were trying to do and validate that we were down the right path. We spent countless hours interviewing over a thousand gig workers in Toronto, in San Francisco, on Zoom calls, on the streets to validate: “this is the problem we think that you have, this is how we intend to solve it, here’s what the future of the gig economy could look like if we exist.”
We learned a lot along the way. We tweaked and adjusted our strategy as we got feedback, but all of those signs pointed to the fact that there was a massive opportunity in front of us for Moves. The one thing we had to get right was build a structure, for the second time in our history, moving from Nuco to the Foundation, and now from the Foundation to a new structure, to allow us to have the legs for this business, to hit the market and succeed at scale because it’s in nobody’s best interest if we dabble in this strategy, just to fall flat on our faces and run out of money.
So we spent, probably, four to six months on legal analysis, on structural analysis, talking to investors, talking to lawyers, talking to accountants, talking internally to our team, understanding what needed to be true for this business to have the possibility of hitting the market successfully. Where we came out of that, without exaggeration, tens of hours of board conversations – our Board of Directors at the Foundation up until very recently, it was myself, Robert Schmultz and Jin Tu – tens of hours of conversations with our Board of Directors, with our law firm, et cetera, that led us to a conclusion unanimously agreed upon by our Board, that this was the strategy that we needed to pursue, this was the way we needed to pursue that strategy. We were going to create a new business. We were going to help capitalize that business, and we’re going to let that business go raise capital so that it can actually continue to do the work of pushing forward the mandate of Aion, The OAN and building a product that consumers actually want.
So that’s where we were all the way up until about a week and a half ago. About a week and a half ago, as many of you saw, we had a little bit of a public falling out, if you want to put it that way. One of my former directors, on my Board, Jin, who had in parallel been working on a project called Axis Defi. When I first found out about Axis Defi, only about a month ago, my first reaction was to reach out and wish him well and ask if there was any way that we could support. We had a very brief conversation about whether or not Axis and Aion could collaborate.
Frankly at this point, keep in mind that our strategy was focusing on “go vertical, go vertical, go vertical, go chase after this Moves strategy,” but there was still some merit in discussing if there are benefits from having multiple parties collaborating on the open-source components of our codebase. We had broadly agreed that this would be an idea worth considering.
Then all of a sudden we saw that there was a blog post coming out from Axis that they want it to work with EOS. So we just said, okay, it’s not a priority issue, we’re not going to push it up if they’re not going to push it, not the end of the world. We have a strategy and it’s Moves. Then about a week after that, I heard from my friend and former Director, Jin, that he wanted to catch up and chat and pitch me on an idea. That idea was effectively sort of revisiting this “Axis should be using the Aion protocol for core components of what they were doing.”
I hadn’t even stopped to form an opinion on that project, nor do I want to form an opinion on that project. It’s frankly, a distraction for me to form an opinion on that project, but we agreed that, if we could find a way to collaborate on the open-source components of this codebase, it might be in everybody’s best interest to do so. It would explain why one of our former cofounders and Directors was working on something that some people might perceive as a competing project. That all boiled up to a proposal that I helped draft with Jin. Told him I’d be absolutely supportive of this proposal that we would bring back to the board, that the three of us could discuss, and that if everybody was aligned, we would move forward on.
That proposal had aspects of collaboration on the open-source codebase that Axis wanted to work on, that we would benefit from, but also had a condition around an asset slot, that The Foundation would take a percentage of its Aion give it to Axis and Axis would take a percentage of its Axis and give it to the Foundation with restrictions and with some lockups, et cetera. When we put that in front of the Board, when I presented it to the board, there was an immediate hesitation by our third board member, that the optics were not great, and that this was off-theme for where our strategy was heading, that it would look like a distraction, that this was not the direction that we had agreed to going with the strategy of the Foundation just one month prior in our board conversations.
Jin was sort of sitting quietly on the phone while I advocated for this proposal. Then we came out of that call saying, if all three of us aren’t in agreement, none of us are in agreement, and we agreed that this was not going to happen. Fast forward two hours and you know what happened after that. Jin took to the airwaves on Twitter and on Telegram. We’ve since exchanged some notes and I’ve sort of buried the hatchet. I have no ill feelings for him, and I wish him all the best. I mean, I’d spent years and years and years of my life working with Jin and frankly he has become a dear friend, but I think it’s unfortunate what happened last week and the way that happened last week.
All this to say that we decided not to proceed with the proposal of supporting Axis with our financial assets, but that if there was no ask for financial assets, we would be willing to talk about collaboration and sort of open-source work on the same codebase. From my understanding and expectation at this point, I don’t have any expectations that is going to happen. Fast forward to where we were last week: Jin resigned from the board of directors and from the Foundation completely and now moving forward, we no longer have any ties with the project. Genuinely I say this, I wish him all the best, I’ve spent years of my life working very hand-in-hand with this person.
Now I move into the end of 2020 and move into the next year with a huge amount of focus and optimism around what we’re doing with Moves and how that strategy will translate to a thesis that benefits the community of people that have supported us to this day. We published a couple of weeks ago, many of you saw there’s going to be more coming on how this thinking is evolving, that we’re around the corner from releasing something called Moves Crypto.
You’ve now seen a little bit of our thinking around something we call the Moves Collective, the idea of community based ownership and the gig economy and what it means to create a crypto based instrument that is an ownership instrument and how we intend to denominate that in Aion, as we grow our customer base into the gig economy. All of this is being done because one, I philosophically believe that this is the right path for our products, but two, because I am aligned with you as community members. I have a deep interest to seeing this project through to completion and to success and it’s what I’ve woken up every single morning for the last four and a half years doing.
I surrounded myself with a great team. Many of you have asked questions around what has happened to our team over the last few years and particularly this year. The only thing I can say about that is as strategies change, talent requirements change. As we shifted from enterprise to public blockchains, the types of people we needed to have on our team changed. As we shifted from public blockchain to consumer products, the types of people we needed to have on our team changed.
I still have a significantly loyal team of people that have been with me for many years. Some as early as employee number one and two are still with me. Of our first five employees, three of them are still here with me: Jay, Yao, Ali. Other employees that have been with us for more than three years, but yes, we’ve made new hires and yes, we’ve had to say bye to some really incredibly talented people, but the requirements of the business have changed over time. We’re no longer building virtual machines. We’re no longer designing consensus algorithms. We are maintaining our public protocol, we’re working to improve it when we find deficiencies, but we are focusing on building a product that will drive adoption into this ecosystem and that I will not apologize for.
I mean, I don’t look to the community to agree with my decisions, but I look to the community to at least recognize that we’re making decisions that we deemed to be in our collective best interest as a community. So I think that’s probably the long story. Hopefully I addressed many of the questions in the AMA. If I missed anything throughout, I didn’t intend to glaze over anything. I’ll try to go through some of the AMA questions a little more specifically in case there’s some points that I missed, but frankly, if there’s follow-up questions that you think, I sort of glazed over a little too quickly, I’m happy to address them.
Moving forward, I want to move forward on the same principles that we’ve been operating on today: one, mutual respect. We’re here to work together, to support each other and we have gotten an enormous amount of value out of our community. Frankly, as recently as last week, Twitter handle “Aion Mike” is just a good example of what I mean by community collective interest. Aion Mike saw a joke tweet from a venture capital investor in San Francisco or in San Mateo, I should say, who said something about investing in founders named Matt, and Aion Mike tagged me in that. As silly as this sounds, off of that tag on Twitter, I’m now talking to that venture capital investor who I wasn’t talking to before. This is community ownership. This is collective interest. This is what we do to see each other succeed. We need to do that on the basis of mutual respect.
I need to demonstrate to you and reconfirm as frequently as possible that we deserve your trust. If you don’t think we deserve your trust and we’re missing something that we haven’t shared with you, continue to keep us accountable, continue to ask us questions. To the extent that we are doing our part, which is to share with you our thinking, to share with you our strategy, to share with you more details than you’ll find in any other blockchain project in this industry. What I ask of you is some support, some belief that we’re heading in a direction that is being decided with your interest in mind, and to benefit of the doubt. You’re not always going to see every single detail of our internal discussions. You’re not always going to see every single detail of our budget, but I just ask that you trust that the way we’re making these decisions is with our collective interests in mind.
On that, there’s some questions that speak specifically to my interests in all this, my personal interests in all this, my personal interests in Moves and Aion, decisions that we’ve made in the past that maybe have benefited me. I’m happy to address those because I have nothing to apologize for. I mean, I look back over the last five years and I realized that I have given, given, given, given, given, and I have not asked for much in return.
I’m having a lot of fun. This is the challenge of my life and I intend for this to be a continued challenge for the foreseeable future of my life but this has been very much a predominantly one way street where I give, I’ve invested in community projects with no intent to see returns. I’ve given grants out of my personal Aion. I’ve invested in companies just so that they could come into our ecosystem and build again with no expectations that there would be returns.
I’ve spent money on services out of my own pocket so that the Foundation would not have to spend money on those services, and I’ve always maintained that my salary should be below market for a founder in a company of our size, at our stage doing what we’re doing. That continues to be true. I’m nowhere near the highest paid employee in our team and I don’t intend to become the highest paid employee on our team. I’ve done this with the interest of Aion at heart, and that’ll continue to be true for the foreseeable future. So if you can believe me on that, if we can see eye to eye on that, then I think we can make a lot of progress together as a community.
Let’s move on. Let me, let me pull up a couple of questions from the AMA and see where we end up with the time that we have remaining. I know I’ve been talking for almost 35 or 40 minutes. So let me jump in and forgive me if the sequencing’s a little different, but we tried to organize them into categories that were sort of thematically aligned.
So there were a couple of questions on transparency, some transparency around Moves statistics, some transparency around my relationship to August and some transparency around my personal Aion holdings and I guess with that, any other personal financial assets of mine that relate to this project.
So let me start with the questions about August. So yeah, as many of you have inferred, I mean LinkedIn as a public tool, as many of you inferred, you can see that I am involved with this business called August. It’s a business that I started a couple of years ago with my brother. It is a business that I funded with the sole intent to effectively be an arms-length service provider to The OAN ecosystem and to the Aion ecosystem. For the first year, year and a half of that relationship, I was paying for all of those services out of pocket, personally. Those were coming out of my Aion distributions. So, I don’t apologize for that.
We built some really interesting tools along the way. That means I’m the one who funded and paid for the development of Cranberry, I’m the one who funded and paid for the development of products, like Pocket ID, products like the Aion energy station, an Aion stats website. We had an Aion community, Aion Connected it was called, if you remember that product, and a number of other products. There was, Aion Surf, one of the mining pools that also operates a staking service. These are products that I’ve funded personally out of my Aion distributions and frankly at different times. These were expensive Aion distributions to spend because prices would have been depressed in certain moments, but I didn’t want to stop because I was investing in the growth of the tooling and the overall ecosystem’s health. That’s my relationship to August.
Today, August continues to provide services to Moves, and it continues to provide services to The OAN. The way we do that is that service relationship is managed by our COO, Ian Chan and our Chief of Staff, Megan Wheeler. I’m not involved in those discussions. The only thing I was involved in setting was the rates that we pay for that service. The rate that we paid for that service is a break-even rate to make sure that there’s no profit margin generated by August on the services that they provide to The OAN or to Moves. So we’re effectively paying August the exact cost of the salaries of the developers that August has. So there is no profit margin being generated from me through that services contract or for anybody else involved in August for that matter.
August has other clients. August does other work and on the other work, it occasionally has a margin. On any work coming from Moves, from The OAN, from the Aion ecosystem in general, it was intentionally designed with zero margin in that services contract. Hopefully that addresses that comment.
In terms of transparency surrounding Moves. So, I mean, this is a little bit of a more sensitive topic, and we’ve set some expectations because of how transparent we’ve been as a community, as an open-source project. I think one thing that I need to note, especially moving into next year with all of you, is that there are portions of this business now that are no longer open-source, and there are portions of this business that have competitive sensitivities and portions of this business that we need to position the right way at the right time to gain attention from investors, to not show our hands to competitors.
We are absolutely running into competitors in this space that we think that we’re a good distance in front of right now, but speaking too much about the specifics of how Moves is operating internally is going to be challenging and problematic. So I think maybe this will not satisfy the person asking the question and others in the community that wish they could see this information, but I think we’re going to have to ask that you give us some of your confidence and trust that the way we’re making decisions and the way that we’re prioritizing growth is in Moves’ best interests and in the best interests of Aion and The OAN. So nothing to disclose there.
As it relates to Moves’ impact through Moves Crypto or the Moves Collective, as these pieces get built and launched and shift, there’ll be a lot more visibility on those because there’ll be components of what we’re building that have on-chain aspects to them. Then, the sky’s the limit to how much you can sort of poke around and do your own homework on what’s real within the use of Aion and the use of the protocol itself. I’m not going to share anything more on that.
My personal Aion, so there was a question about why is there no transparency around my personal Aion. I’ve never hidden away from this fact. Again, going back to my timeline in 2016, I was the majority shareholder of a business that was then effectively swapped into the Foundation in exchange for Aion that everybody that was a shareholder in that business received. There was probably about 23 people at the time that were shareholders in that business, myself being the largest of those 23, but also external investors, employees that had stock options, angel investors, et cetera. Everybody had a proportionate distribution of what was their shareholding in exchange for an Aion distribution, myself included.
All of those Aion ended up, in the three year or 36 month TRS distribution that is ending in November, as many of you know. My distribution on a monthly basis was in the neighborhood of 760,000 Aion. The math of this person is not far off. If you were to do the math, looking back, you’d probably realize that that was just, just shy of, or just, just around the 30 million Aion mark. If I look today at what my Aion balance is versus what my Aion balance could have been, I attribute it to the amount of Aion that I’ve given into the community through grants and investments, the amount of Aion that I’ve given into initiatives, like getting Bicameral Ventures off the ground, where I put a very substantial amount of Aion into getting that fund off the ground,I’d say, to a result that I’m not super excited about, but that’s part of the learning process in this industry.
I still have roughly about half of that balance of that Aion still today. I’m still, I think, probably, if not the largest staker, one of the largest stakers with all of that balance. That being said, I’m no longer the largest holder of Aion in the ecosystem. We are aware of one or two other funds and individuals that own more Aion than I do, but I still have a material amount of Aion in my possession. Everything else, the vast majority of the Aion that I no longer have in my possession, has gone into funding projects that I deemed to be in the best interest of the community, August, being one of those projects and some of the others that I listed earlier, that were investments that I made out of pocket that were from my personal Aion possession to do that. So that’s, that’s probably a good answer to that.
If you do enough digging, you can probably infer who I am on the blockchain, but at this point you won’t see much liquid balance because it’s all being locked into staking. Frankly, one of the other things I never really realized along the way, maybe being more transparent than I should be here, is that there are tax implications to receiving cryptocurrency distributions that I’ve also had to deal with along the way that included some Aion that needed to be sold to pay off the tax man. So, nothing too shocking there, I think, for people who are familiar with compliance and tax rules.
There was a question about Kesem’s involvement in Mavennet. In fairness to Kesem, I still have a very good relationship with Kesem, we’re still very good friends, but this is also a question that really has nothing to do with what we’re doing today. I haven’t worked hand in hand with Kesem for several years at this point. Mavennet, it’s his own business and we wish them all the best. That continues to be true. We still chat every once in a while, but generally on a personal level at this point, rather than anything else. So there’s nothing really to speak of there. As it relates to Jin, I did share sort of the sequence of events just earlier, and I hope that what he goes on to work on next, turns into something meaningful for him. I wish him all the best.
Another question, “What’s your end goal? It seems like you are in control of everything from Moves to The OAN to August. Do you want to have the final say in everything? You fired so many people throughout the years that could have propelled this project to new heights.” So, I think I addressed the staffing question. Being a CEO in an early-stage business is the joy and pain of my life. Some of these decisions were very difficult for me. Some of these transitions and pivots and staffing changes did not happen lightly. People that I worked with for many years, we had to make make decisions to say bye to, but all with the interests of the business and the community sort of front and center. That’ll continue to be the case. My responsibility first and foremost is to the outcomes of this business. Employees and team members are brought on to help us accomplish those outcomes, myself included. I’m a team member throughout this process. I happen to be the team member that has to sort of guide the ship and make the ultimate decision on some of these things. So not always easy but 90% of those decisions, I think I would make again the exact same way if I had to do it all over again.
So my end goal, frankly, my end goal is to build a product that changes people’s lives. My end goal is to demonstrate to the world that what we’ve been working on for these last few years has been meaningful and has an impact. I think we can do that through our Moves initiative, this new product we’re building and I think we have the right people in the right roles and not to say, it’s never going to change again. If we start to find success, it’ll grow. Once we get to capital with new equity, venture capital investors, we’ll have more space to expand, to test new markets, to test new concepts. All with the intent and a final objective of impacting people’s lives. I’ve become particularly convinced that my mission, at least for the foreseeable portion of my life, is to make an impact in the gig economy and I think we have a very, very good opportunity to do that. I have yet to come across another company that is approaching it as comprehensively and as holistically as we are in approaching this set of problems. I’m excited about that. Hopefully that answers your question.
A few questions on Jin’s resignation. Let me make sure, I don’t want to reiterate stuff that I’ve already said. I’ll let you interpret comments that Jin has put online, yourselves. I’d say that last week was an emotional week for Jin, to say the least. Take these comments as you will. Take them with a grain of salt. Many of those comments have since been deleted because I think he probably came to the realization that some of these things he should not have said. That’s where that stands and we move on, we move on to focus on the future.
Next question, let me read it. So broadly, this question is about Jin and Kesem and about the pivot from interoperability, Jin’s comment that we’re building a zombie chain to how many more years Aion and The OAN is going to be relevant, and not just one main focus app. Well, I think one, I would challenge the premise. I don’t think relevant means infinite numbers of apps. I think, frankly, there’s lots of projects that have disproved that approach. I think relevant means that we have created an economic demand for an asset and a protocol that is allowing us to design a business model and a product in a unique way. That’s what we’re working on, that’s where we have a new kick at the can, if you want to put it that way, a new up-to-bat.
So I’m optimistic, financially we’ll be releasing our finances for everybody to see relatively shortly. The Q3 finances are going to be coming out the door sometime this month. Part of that is to reiterate to everybody who’s been following our financial history, knows that as a project who raised the money once in the past, and spends money every quarter, it’s a declining balance of cash. That declining balance was getting us to something like an 18-month runway when we started looking at the strategy. We’ve since made a few adjustments and made some reallocations of budget to turn that closer to probably 20 to 22-month budget. But that money eventually winds down to zero unless we find new sources of capital, new sources of revenue, new sources of growth, and that’s where our new structure comes in.
One way to look at this, from the perspective of the community, is that you have the benefit of being involved in a business strategy that could have other capital coming in from other sources, that will benefit you, benefit the growth of this ecosystem. What I can’t give you any predictions on or any perfect confidence in is what the outcomes look like. This is an early stage tech venture. Just like with every other early stage tech venture in the world, there are risks of failure, and I’ve never ever pretended there haven’t been risks of failure.
I mean, I think we all get carried away because crypto markets do this [miming peaks and valleys] and particularly in 2017 and 2018, they did that. None of that was real. I don’t doubt that certain people came in at different prices in our history, but none of that was built on real fundamentals. What we’re trying to build as a business that has a basis in real fundamentals. Are we going to win in this market? I don’t know, time will tell. Do we think we have a thesis that can win? Do we think we have a team that can execute on that thesis? Absolutely. Now we need to go convince investors and then we need to go convince customers that that’s what we’re working on. I hope that’s a good enough answer for those of you who follow the world of tech. That is the best you’re going to get. You’re not going to get any more certainty than that. I’ll try always to be honest about that with you.
Financials. So without getting into the Q3 financials, I’ll just say that they’re being released in in October. So once they’re out I’m sure there may be some questions or maybe some clarifications but, generally speaking, I think you should know what to expect. You’ve been looking at these financials for years. We’ve been doing this voluntary transparency for over two years now.
All this to say, if I go back to the Moves and Foundation structure, one thing that’s worth keeping in mind is: legal structures to a certain extent are, they matter because they imply a certain focus and they imply a certain strategy. The other thing to keep in mind about legal structures is that they’re also roughly arbitrary. Who’s working on the product, whose salary is being paid, who are the people doing this work. On September 1st, we officially launched this Moves corporate structure. On September 2nd, the same employees were getting paid the same salaries out of the same pool of money as they had been on August 31st. All that to say, the money that we have in the Foundation and how it’s being spent on executing our strategy and through which legal structure it flows, is not as relevant as, to what is it being spent on. It is being spent on people’s salaries to execute on our strategy.
It’s the same people’s salaries as a day before the restructuring and the same people’s salaries a day later, we’re working on the protocol, maintaining it and proving it, monitoring the network. We’re looking on tooling for the Aion community. We’re releasing a wallet this week for all of you to be able to stake and transact within the same product, we’re releasing Moves Crypto, we’re working on our Moves Collective thesis, and we’re building a consumer product called Moves. All of these things we were doing in August, and we’re still doing in September, and it’s still the same people doing it. This restructuring, nobody took money out of their pockets, nobody’s salaries changed. This is just a corporate structure that allows us to go out and raise money in a new way. I think that’s probably worth keeping in the back of your minds and frankly, this structure has also allowed us to create a vehicle where more money can come in and be layered on top of the money that the Foundation is spending on the strategy.
There was a question about me disclosing all my related party transactions in 2019 and 2020. I think the only relevant transactions that are worth talking about are transactions that I had, some of these date back to 2018; but August, I already shared with you, the nature of that relationship. Moves, you have a pretty good context on how that business is being structured and operated. Back in 2018, I was the single largest contributor to Bicameral Ventures. I was the single largest donor into the grant program that was funding projects. In some cases we were just doing one way grants and giving people money so that they could go and accomplish something for the benefit of the Aion community, which led to projects like BloxBean, and led to projects like many others. Anyways, all that to say there are no other related party transactions that are relevant to this question.
Here’s a question on Moves Crypto. That’s good. I wanted to get to our product strategy. So let me address this one really quick. “So given the guarantor and lender interest rates were the same at 8% and that guarantors would have to cover defaults. It looks like guarantors, take out a higher risk for the same reward. What is the incentive to be a guarantor rather than a lender?”
So a little nuance there that you’ll learn more about when Moves Crypto finally launches in a couple of weeks. The risk is actually not a hundred percent of the default. What we’ve done on the guarantor side, and again, guarantors contribute in Aion, lenders contribute in USDT. One of the risks that the lender in USDT takes is they take a volatility risk. So USDT stays stable, but their collateral that they could claim if the loan defaults is denominated in Aion, which is volatile. They’re taking on Aion volatility risk on their loan. Their loan, on day one, is being collateralized to roughly 100%. Of that 100%, 75% of that collateral is being put forward by us. 25% of the collateral is being put forward by community contributors. All of the fees are being paid to the community contributors. You get roughly you get effectively 8% for the collateral that you’re contributing. In the event of a default, you’re only covering 25% of the loss. We’re covering 75% of the loss. That’s the broad equation.
We don’t know that those numbers are perfectly right. The intent behind sort of the first version of Moves Crypto was to get a product out in market, see how you reacted to a “build the user experience.” The economics are going to become dynamic. They’re not going to be this static 8% forever. Right now this is a test we’re going to be running a 50,000 USDT, raise backed by a rough equivalent of about $50,000 of Aion in collateral. Those numbers will change and the interest rates may change and the risk profiles may change and the amounts we’re using Moves Crypto to raise in the future will change. Don’t get too caught up on the 8%. View this as a very public product test, even though it’s a real product. There are real rates and real fees being paid back to guarantors and lenders. The intent here is to use a live test in production. And then we’ll get feedback from people. If you do use the product, when it launches, you’ll be pulled into – our product managers and engineering team working on Moves Crypto will be very interested to reach out and understand your perspective and get your input on how we should be making adjustments for the next version that follows
Let me quickly catch up on a couple of questions that I want to make sure we address. There was one question that relates to the services agreement between the Foundation and Moves. The services agreement, as I mentioned earlier, covers effectively three major components: it covers the component of the core protocol, which is both maintenance and improvements of the core protocol of The OAN, it covers community marketing, liquidity, Aion management in one bucket, and then it covers building Moves in a way that benefits and uses Aion in The OAN in core parts of its business model. Those three things are covered in the services agreement. That’s the broad scope of what we agreed to. And again, corporate structure to effectively do exactly what we were doing before this corporate structure: spend money on people to execute our strategy.
And the other thing that’s worth mentioning that we haven’t yet announced which we’ll try to have it more fleshed out probably by the Q4 report at the end of the year. The Foundation is going to be implementing two new mechanisms to manage its treasury. The treasury I’m talking about is the Aion treasury of the Foundation. Those two mechanisms are going to be a long-term, budget management smart contract. Some specifics still to be flushed out, but effectively, we want the vast majority of Aion treasury and the Foundation to be locked into a smart contract that effectively restricts how much Aion the Foundation can spend or sell every year for a significant number of years. We’re looking at something between seven and 10 years and it’ll feel sort of like a TRS, but only for the Foundation’s own treasury. Right now the Foundation has a whole bunch of liquid Aion. We’re going to lock many of those Aion back up and make sure that we’re managing that over an annual budget so that we only have a certain amount Aion we can spend on an annual basis.
The other thing we’re looking at doing is building, out of a pool of that Aion that we have in the Foundation’s treasury, is building a community governed grant program to issue to projects that may benefit the Aion ecosystem. One of the original discussions, transparently here, in the Moves service contract was whether the Foundation should only move cash into Moves, or should also move Aion into Moves. We made the decision to not move any Aion into Moves, and that if Moves wanted to acquire Aion, it could do so on the secondary market. Or if it wanted to get access to any of the Foundation’s Aion, it should do so with effectively a vote from the community. So this product, this community governed grant bucket that we’re putting together will be with the intent that anybody can apply for it but that the community will ultimately decide what happens with those Aion. We’ll get into the specifics of those numbers as we get closer to the end of the year but we’re designing two functions there. We haven’t fleshed out the specific details yet though.
A question on turnover I think I addressed and I’ll move on from that. One thing that goes without notice is that if I look back to many of the teammates that I’ve worked with in the past number of years that are no longer working with us, from an outsider’s perspective, it’s tough to know what’s happening on the inside. I can tell you that like 9 out of 10 of these people or 90% I should say of these peopIe, I still talk to, I still interact with on Twitter, I still text. I still hear from them every so often. Decisions had to be made as the business changed. People’s lives change. People move countries, people move cities. That’s normal, but most importantly, the strategy and focus of the business has changed. I think we’ve done as good a job as we could have hoped to do to make team changes in a way that respects the contributions of the people that have been with us and maintains as much of a positive relationship as possible. You can never get it a hundred percent right all the time. But I think by and large we’ve done a pretty good job at that.
Going into the structure, into the strategy, we’re very well equipped with the talent that we have, many of whom, since the beginning of COVID-19, we’ve onboarded 14 new people in the last six months. 14 people that are primarily product focused, primarily design focused, primarily product engineering. Talent skillsets that we frankly, didn’t have before that we needed, if we wanted to take a shot at this strategy. We also still have a couple of people on it, like the core pillars of our team that have been with us for a long time. I mentioned some of the names earlier on the engineering team, Yao, and Ali and Jay. I mentioned Minh, our VP of Engineering. Sam, who’s been with us for years. Ian, who’s been with us for years. We have Karim, who’s been with us for years. There’s some really core people that have not gone anywhere that are still a very significant part of our strategy. I probably will miss a few if I try to go through the list. Farbod, Jesus, and Dennis, these are people that have been with us for years and continue to be with us in this new strategy and continue to have a skillset that is relevant to our focus. From the outside, looking in, it probably feels like it’s, it’s never ending turnover, but I can say that it’s being done thoughtfully and with purpose.
Next question is around plans to integrate with gig economy platforms – Uber, TaskRabbit, et cetera. It’s too early to commit to anything, but I can tell you that we do have a very significant portion of our strategy focused on partnerships. We brought on a very significant hire. He joined us on an advisory and consulting basis, but works with me almost every day. A person named David Albert. David was the managing director of a company called Foodora, which was one of the largest food delivery companies in Canada owned by Delivery Hero, out of Europe. David is now helping me spearhead all of our partnership discussions that we’ve now started with most of the big brands you can think of in the gig economy, we have either engaged with or are working towards engagement. That’s not to say that any of these are firmed up from partnerships, but we’re moving in the right direction. The early feedback that we’ve received has been extremely positive and there seems to be open doors everywhere we go to talk more about what we’re building. I’m optimistic that this is going to become an important part of our strategy.
There’s some questions on partnerships with companies like Maker DAO, Coinbase. I’ll say that on the exchange side, there’s definitely still some relevance for us to be pursuing exchanges. It’s part of our mandate to continue improving accessibility and liquidity of Aion on secondary markets. Coinbase is a complicated exchange to get listed onto, especially if you’re a North American project. There’s more sensitivities because of regulatory oversight. We did get onto a Binance-owned exchange last month, WazirX in India. We continue to have conversations with a lot of the primary exchanges in the U.S. and elsewhere around the world. This will continue to be a focus. Maker DAO, not so much. Maker DAO is, as you know, primarily focused on the Ethereum ecosystem. I will say that our first launch of Moves Crypto is is only supporting USDT as a stablecoin. We are very much looking at the roadmap of supporting other stablecoins, which could include Dai as we expand the scope of Moves Crypto. Stay tuned on that, but at this point nothing to speak up there.
There was some questions about Axis that I answered earlier as it relates to Jin. Let me make sure that I haven’t missed any meaningful topics here. I was a little overwhelmed with the number of topics that came up and the number of questions, but I’m glad that we’re able to get all this out in the open. So there was one comment that jumped out to me. Somebody used the language “I feel lost in this project.” And I think that’s fair. And I think that the onus is on us to do a better job of explaining to you where we’re heading. One of the challenges of managing a public community like ours is that different people have come into this project at different moments in our history and have a different interpretation of who we are and what we’re working on.
It’s a constant effort to align everybody, to remind them of why we’re doing this, what our focus is. Also frankly, this is something that we do every single day. Every single day we wake up and we work on this problem and we test hypotheses and we talk to customers and we work on our tech stack. And for most of you, maybe once a week, maybe once a month, maybe once every six months, you check in on what’s going on. The onus is on us to do a better job communicating our updates, but I’ll say, give us the benefit of the doubt that if you haven’t heard anything from us for a month, it’s maybe because what we’ve been working on for the last month is just not ready to share yet. This is a full-time employed team of people that are held accountable and are expected to be delivering and they are delivering. If you don’t hear from us, it’s not because we’re all beaching and vacationing anywhere. I have to say, of all the crypto projects I’ve come close to and gotten to know, we are still focused. We are still working our butts off for the collective benefit of this community.
You could have stumbled into a lot of crypto projects that you’ve probably stopped hearing from years ago, because they just got bored and walked away. We haven’t gotten bored, we haven’t walked away, we are as motivated, invigorated and excited as we ever have been. I’d say more, and a lot of that, has to do with the strategy that we’re undertaking right now and I’m looking forward to where it takes us to close off this year and we’ll do another AMA next quarter. Particularly 2021 is a huge focus for us with the U.S. Market. Getting into the U.S. Market, proving our chops, getting deep into partner discussions, onboarding with some U.S. Banking partners. I think the future is very very bright and I mean that. I might have a bias. I wake up every day and convince myself that that’s true, but I think every once in awhile, I go out and try to validate that I’m not crazy and then other people see it the same way. I think the future is very bright and I’m excited that you’re all coming along for the ride.
So I’m going to leave it there for today’s AMA. Hopefully I addressed most of your questions, clarified some of the issues and comments or events that happened last week and I look forward to hearing from many of you as a followup to this video. We’ll talk soon.
