In this Quarterly DAO report, we will be discussing our financial stability, as well as our accomplishments within the past three months. In addition, we will outline our plans for the next quarter and beyond. Our DAO has been steadily growing and we anticipate continued success in the future. We want to thank all of our community members who have helped us get to where we are today. Without you, we would not be able to continue striving for excellence.
Automated Investing Products
SW Yield Fund active addresses grew from 9 to 21, and SW Alpha Portfolio active addresses grew from 15 to 19 over the course of the past three months. TVL under these combined strategies totaled $390,698 at the end of Q1 2022 compared to an adjusted $205,729.5 or $955,729.50 unadjusted from our 2021 December report, which included a cash injection of $750,000 by SW Capital. This initial capital injection by our founding team was then withdrawn over time and used for monthly mobile and web development fees as well as general operating expenses which were borne by the founding team.
March Income Statement
During the month of March, SW DAO had a net profit of $0.00 and a sum of $16,250 in net profit during Q1 2022. SW DAO paid a total of $6,500 in Dividends during Q1 2021. December 2021 marked our first transparency report and during that month for comparison, SW DAO netted $83,370.04 with $14,550 in dividends paid out. SW DAO’s Treasury closed Q1 2022 with a liquid balance of $180,198 compared to $81,242.02 in December 2021. Liquidity Provisions during this time period declined from $319,106.25 to $48,802.97, resulting in the total treasury value declining from $400,348.27 to $229,000.65.
Line Item Differentials
There were three major differences between the December 2021 income statement and that of our Q1 2022 report that has resulted in this decline in net profit quarter over quarter. A one-off dHedge fee capture which was the aggregate fees of several prior months, our stellar December performance on our MarketPeak algorithms, and SW Capitals' withdrawal of their initial injection to SWYF.
Many of our StackedInvest products began producing negative returns (-20% to -35%) in Q1, reducing the demand for new subscriptions. Additionally, as crypto market conditions began wearing down, the retail frenzy we saw behind our automated investing products slowed down as well. With errors on the UI of StackedInvest, several of our algorithms are marked with false -100% total returns preventing natural discovery in their browsing feature as well as discouraging further research into our products by those referred to our products.
With our MarketPeak partnership currently relying on the questionable execution of StackedInvest, our base of several thousand MarketPeak members missed many important trades in Q1 on our Discretionary and Quantum Momentum strategies resulting in a negative return over the past three months. As our revenue comes from a 7.5% performance fee capture on this partnership, every trade counts and matters to our bottom line. Missing just a couple of trades on the $7.5M in capital allocated to our strategies can be a costly mistake.
Custom White Label Solutions
With the coming addition of a white-labeled yield farm and in-house decentralized investing solutions for our 2,000 existing MarketPeak clients in Q2, we are confident we will begin building a stable base income for the DAO. We expect these custom-fit business-to-business solutions to be one of SW DAO’s greatest revenue drivers over the coming quarter as they will instantly kick-start fee generation to highly active communities.
As we prepare our tokenized offerings, and head closer to custom-built white labeling solutions with accurate historical data and timely execution for our product partners to advertise, we are sure that these previously highlighted issues will be a thing of the past. We will continue to provide automated investing services on the StackedInvest platform going forward, however, we will not actively market these solutions, and instead focus our attention solely on our in-house offerings which we can trust and rely on.
March 2022 Expenses
During the month of March, the founding team bore $179,966 of expenses, mainly for the continued development of Sun Wallet as well as the finishing touches on our desktop dApp. Our December 2021 estimate of Q1 expenses at $390,000 was just shy of the $408,890.91 of expenses our founding team in reality bore in Q1 2022. As our milestones on the dApp come closer to an end, expenses will shift from product design and development to upgrades and evolution of our products. The founding team will continue to bear a significant portion of the expenses for continued product development for the foreseeable future.
Q2 Anticipated Expenses
Over the next 3 months, SW DAO’s anticipated total expenses per month will decline to $56,900.20 compared to the previous 3 months' $130,000 bill as both dApp and Sun Wallet development diverge from their initial capital outlay for design and initial development to only supporting ongoing development costs. Sun Wallet development expenses through January 2023 will total 210,000 EUR or $227,101.77 which the founding team hopes the DAO will begin bearing as its own expense in an upcoming SW Improvement Proposal. These $25,233.53 monthly payments to the Robo Cat design team are significantly lower than the $50,000 to $150,000 monthly expenses the founding team has been paying as the founding team will continue to bear a majority of the expenses till revenue increases.
Marketing & Community Management expenses are flexible and will vary with the availability of products and platforms that we have to advertise. A fixed $65,000 budget was assigned for Q2 however the real number will likely be dynamic from month to month and the current figure is nothing more than an estimate as our advertising media and products to advertise continue to evolve.
The SW Yield Fund has seen steady growth in active addresses over the past three months, from 9 to 21, a +3 increase since last month's report. TVL in SWYF increased from $224,000 to $325,698 this past month but decreased from a previous TVL of $676,655 in the December 2021 report. NAV per token during March increased from 1.147429297 to 1.164027937, or a +1.45% increase this month, and a +10.06% return over the past quarter.
This is the fourth straight month since the December 1st fund inception of positive returns for SWYF, outperforming Bitcoin by an absolute +46% during this time, as Bitcoin declined by -30% during this same period. Returns on SWYF were minimized this month compared to prior as all of the funds capital was placed on the Uniswap DEX for capital redemption during the final weeks of this quarter, preventing the fund from generating yield during that time.
The steady increase in active addresses showcases a strong interest from investors and highlights the potential of the fund. SW Yield Fund offers promising opportunities for those looking to invest in a fully insured, market-neutral portfolio of yield farms, with a solid track record of producing consistent returns.
During the month of March, SW Alpha Portfolio NAV increased from 84.92 to 95.34, a return of +12.27% while Bitcoin returned +7.20% during this period, an absolute outperformance of +5.07%. SWAP's total return since December 1st fund inception is -13.24% as tokens were exchanged from Mainnet to Polygon at a rate of $91 per token, and reissued at $100 on Polygon. SWAPs -13.24% performance is an absolute +16.76% outperformance compared to Bitcoin’s -30% return since December 1st.
Active addresses of the SW Alpha Portfolio grew from 15 to 19 over the past 3 months and from 10 to 19 since last month's report. This significant growth indicates that our products are gaining popularity with customers as we ramp up advertising efforts. We are thrilled to see such positive engagement and will continue to work hard to provide the best possible investing experience for our users.
December 1 2021 was an eye-opener for SW DAO — truly a day our founding team will never forget and hopes to never repeat. That’s why in Q1 2022 we leaped forward in our commitment to providing a user experience on a design so elegant but simple that you don’t even have to know what the word web3 means to know how to operate our website or interact with our platform. From our newly designed homepage, our upcoming dApp, to our mobile app coming later this year — we will put user experience first.
SWDAO.org Gets a FaceLift
The new design of the SW DAO website creates a more engaging and easy-to-navigate experience for users. With informative copy, targeted calls to action injections throughout each page as well an updated layout that is simple yet professional looking; we’ve made sure you can find everything on our homepage without any hassle at all.
End of Q4 2021 Appearance
As with many new startups, we had an in-house designer create our entire webpage sitemap. However, this HTML code was full of bugs down to the core and did not display the sophistication that is expected from investors looking at our brand page or any type of website for this matter. After feedback from community members about how the design appeared on their end as well as internal discussions regarding scaling issues — we knew something needed to change before things got more complicated so here’s what happened next…
End of Q1 2022 Home Page
…we kept the aesthetic but changed almost everything else. Over the course of Q1, we contracted two experienced UI/UX designers from ShillShop who helped us change nearly everything on our web pages. From social qualifiers, a clearer brand identity, the addition of a Content Management Suite for announcements and educational pieces, to the shift of our dApp to its own subdomain, and so much more. This revamp is part of our commitment to our community to keep building, but most importantly keep evolving as we receive feedback and understand what does and doesn't work.
Dividend Call to Action
The SWD token has a great value proposition beyond its governance ability. Every month, that we produce a net profit, we provide our holders with airdropped USDC dividends straight to their wallets. And with SWIP-05, this only requires holding $5 worth of tokens in your portfolio! What’s better than this?
With the launch of our “Get Paid” section, we made it clear at first glance for anyone visiting, that they can claim these rewards just by purchasing, participating, and claiming.
Product Feature Pages
We designed our new Product Feature pages in February because we knew that the volatility and differences in strategies of some products would be difficult for customers to understand. We will offer +25 different types of investments, all with varying risk and reward characteristics — how do you know which one is right for you? That’s where our new 1–5 risk/reward icon with informative descriptors can come in handy.
dApp pages are often not static, making them hard for Google and various search engines to cache and index for discovery. With our newly designed static product feature pages, the SW DAO community and the team improved the ease of the product discovery process for new investors searching for key teams like “crypto robo advisor” or for more specific terms related to individual strategies from NFT Indices to Yield Fund portfolios.
Additionally, these pages require no wallet connection, allowing for non-crypto investors to learn more without taking the deep web3 plunge of creating a meta mask wallet.
Last but not least, these pages are great for advertising. With an informative video, a clear demonstration of its unique value, and a clear call to action above the fold, we don’t have to worry about landing pages when our own website looks this good.
SW DAO will offer its users a seamless experience from product discovery to user engagement. This is achieved by having a one-stop website with all our unique investment functionalities built within, so people can easily discover and invest in these products without being redirected through multiple sites or waiting for pages to load which in turn leads them away from engaging with what we’re trying to promote.
After the launch of our dApp we will begin pushing public change-logs for our website and dApp, identifying the constant upgrades and patches we are making to our platform, as they are not often easily identifiable. We are aggressively reviewing patches and building behind the scenes preparing for our stable launch, and we can’t wait to reveal upcoming product features beyond what we are building today.
Sun Wallet Development
There are only 2.7M dApp active users in the entire world. Have you ever wondered why? You could turn on the TV last year and within any week, you were likely hearing about NFT sales or innovative blockchain companies on the mainstream or local news. There are hundreds of millions of personal investors across the globe but only 2.7M dApp users — this is bound to change, and SW DAO will lead the charge.
We know that teaching people to bridge from Mainnet to Polygon, to store their seeds somewhere secure, then to find legal fiat on/off ramps can all be a pain. Sun Wallet fixes all this. Never worry about what network you’re connected to, never worry about storing your seeds (unless you want to), never worry about fiat on/off ramps, and never worry about transactions failing ever again! It should simply “just work” right?
We are working on it — we are committed to changing the landscape of modern crypto investing to be so much more than the simple Dollar Cost Average method or using margin trading and eventually winding up liquidated. We know there are ways to exploit market inefficiencies and profit, no matter your time preference, and we will be there to help you stretch every investment dollar as far as it can go in this space.
We are continuously working with the RobotCat team to make sure they successfully implement and design the game-changing mobile app that we have visualized and we are so glad to have you along for the journey. Following our community Alpha launch at the end of Q2, in Q3 we will launch our public v1.1. We are preparing marketing material and information for institutional fundraising related to the Sun Wallet Token which will eventually be airdropped to all SW DAO token holders, with the majority of the Sun Wallet Token balance held on the SW DAO balance sheet. We believe this two token approach will allow for Sun Wallet to focus on its unique tasks at hand, while the parent/holding company, SW DAO reaps the financial reward and continues the development of cutting-edge financial products.
Over the coming months, we will launch a new brand-building campaign for Sun Wallet within its own silo, from social media pages to email captures to educational content, we will start a “retail friendly” coinbase-esque campaign that removes all the jargon and technicalities, and address all the concerns that are currently holding back users from moving away from their 0.01%-4.0% traditional savings accounts and into our high yield and fully insured yield generating products. With Alex, our Chief of Strategy having developed Mobile Apps for 14 years as a passion, we are enthusiastic about this vertical and the potential impact it can have on the ecosystem of investors who choose to invest alongside us.
Marketing & Community Management Group
Q1 began our first real push to digital brand building on a global scale. From ramping up video content production, building automated email marketing campaigns, and working with digital ad campaign specialists to press release publicists, we have heavily built out an online presence to match the seriousness of our intentions within this industry.
Video Production for TikTok, Twitter, and YouTube
There are thousands of eCommerce studies that suggest that conversion rates improve when video content is available to the viewer, and with 2.6 billion active users on YouTube and hundreds of millions on TikTok and Twitter, there are many reasons to produce visually satisfying cross-platform content that both engages and informs new potential customers. With the addition of new video production software in-house we are able to produce as much content as we need without having to pay exorbitant fees to video production or animation third parties for regularly delivered content.
Our video content on TikTok is currently being used for advertising for individual product gitbook pages as well as behind our discord links. We have found these paid marketing campaigns to be consistent in their ability to drive continued interest in the SW DAO community. We are working on ways around moving the “financial services” restriction we face when putting advertising behind our newly generated product features pages.
In Q2 we will begin using content delivery networks like Bitmedia and Coinzilla to promote these newly generated product feature pages as these CDNs are not restrictive of crypto companies. We are currently using CDNs for our homepage, but have not begun product-specific advertising which will likely be more effective than broad investment product advertising. As soon as our dApp is ready, we will flip this ad-spend switch and let ~$15k in paid ads run per month behind these feature pages.
There’s no point in having a website if no one can find it. Over the past quarter, we have worked on improving our Domain and URL Ranking to better our chance of a high ranking on Google searches for the plethora of keywords we can hit across the variety of our products. At the close of Q1, our web team started working on building out our sitemap .xml or crawlable alternatives. Such features are essential for page indexing by google, as currently only 7 of our web pages are indexed, circumventing all our newly published product feature pages almost nullifying their effectiveness unless found through paid advertising or clicking through our home page. We hope to have this issue addressed shortly and to begin populating under several new organic keywords.
As seen in the Google Search Console image below, we are still primarily only being found under direct search terms. In Q2 we hope to diversify these queries and begin gaining impressions and clicks under relevant but non-direct terms related to the niche investment products we offer. Terms like “polygon index” has low competition, thus a high potential for us to rank well on such a term which would align with our upcoming Polygon Ecosystem Index. As a fully digital product, we would like organic discovery to become a primary driver of growth as we offer the solutions to problems that people are actively searching for.
Email Automation Campaign
In February we received delivery of our MailChimp email template for SW DAO. We have begun using email marketing and promotional inbox media for our current audience of 966 newsletter subscribers based on their interaction with previous emails and where they were sourced from. We are finalizing our automation campaign which will over the course of several emails after signing up on our website, greet, inform and persuade subscribers to take action within our community and within our investment products. Given that email marketing is incredibly low friction (easy to opt-out and free to send) we will increase this avenue of content distribution over the coming quarters.
Our team of traders, programmers, and design experts are working hard behind the scenes and we can’t wait to publish more information about many of our product developments. In Q1 we overcame design and online brand identity complications that have resulted in an ongoing evolution in our conceptualization of products and what it means to be a part of SW DAO. We have begun finding our stride within the online community for content production, user experience, and marketing. Over the coming quarter, we seek to leverage these past 4 months of community feedback, along with product design and development evolution to stand on a much better financial footing with a much stronger bottom line. It is clear there is demand for automated investing products and we are working to constantly evolve and optimize our platforms for conversions from those actively seeking solutions.
In Q2 we will launch many of the products we have been working behind the scenes on for the past several months. Additionally, we will improve the digital onboarding procedure for SW DAO as we attempt to attract a larger team of financial engineers and developers in-house who can see the vision of SW DAO and seek to help us build the industry-defining company we aim to build. The web3 space is still in its infancy and SW DAO is ripe to be an all-in-one institutional-grade investment bank that can service both crypto projects and retail investors alike.
Thank you for being part of our journey. We’re excited to have your continued feedback and support as we move closer and closer toward releasing these products so that everyone can enjoy an improved way of investing!
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