Normally, in a VC fund, the fund often have a 2% management fee per year on the amount of capital, which is the case here, although it is capped to 5 years. However, you then have a carry that is split between the LP (investor that are passive) and the GP (people who run the fund). Typically, most of the returns goes to the LP, and a 20% in most cases goes to GP to compensate them for doing a good job... in this case there is no carry, and based on reply below, every LP is also a GP... however if the team has a % of token allocation, then that's similar to a carry except it's not based on financial performance... not ideal. I'll skip the other details, but the point is, in this particular case the team allocated 14% of the token supply to themselves which has nothing to do with financial performance of having picked the right investment targets...

Why are there advisors (even though a reply is below as to why, I'd prefer if these advisors would buy tokens instead of getting them... it's like giving money to Bill Gates for being an advisor, I'm not saying his advice would be worthless, but why would he not just invest, it's not like giving him pennies would matter to him!

GPs typically have to contribute their own money 1% or 2% of the total fund capital (is this the case here?). LP in any investment funds own essentially 98% of the capital and obtain 80% on the growth of the capital (simple math to make things easier to understand). In this case, the LP's (or GPs) own only a small 21.85%, so the question is when investors invest in a project, does the ROI of that investment goes back in the token economy, or it goes directly to the investors based on their investment? (if it's the later, then everything is ok, if it's the first then it's a lot worse than a carry fee).

Crypto funds sometimes generate massive returns compared to non-crypto investments, and becomes liquid much faster (average returns for tech is 25% per year). The question comes back, are the returns distributed through token buyback or something similar, or the returns goes straight to token holders that have made an investment (in which case the token is not directly related).

If I give my money to be managed by an investment fund to manage it on my behalf, I will not be giving it to them so they spend it on marketing and giving out free rewards and incentives to all kinds of people. I want the money to go into generating returns, not chasing after more investors. It's like giving money to red cross and finding out they spend 50% of it on marketing and paying out huge salaries to their executives. (reply below mention that 100% of the invested capital goes into the project, but once I get clarification over where the return of the investment fund is given back to investors I'll have more peace of mind).

If I invest $10,000 how much of that $10,000 actually goes to be invested in a project?? How much of the return of that investment goes back to me? 100%, or it goes back into the token economy through buyback? I suspect this information might be there in the whitepaper and I didn't notice it.

* updated - added 1 star *
Based on the reply below, many of my concerns above have been clarified and resolved. However, to get to 5 stars, I'd like to see the team token to be based on financial performance... similar to a carry structure.

All Street, Not Wall Street. Once reserved for the rich - welcome to the Genesis of Access. We are the 99%. A powerful, all-in-one platform that makes investing in Web 3 simple.

Common Wealth

Normally, in a VC fund, the fund often have a 2% management fee per year on the amount of capital, which is the case here, although it is capped to 5 years. However, you then have a carry that is split between the LP (investor that are passive) and the GP (people who run the fund). Typically, most of the returns goes to the LP, and a 20% in most cases goes to GP to compensate them for doing a good job... in this case there is no carry, and based on reply below, every LP is also a GP... however if the team has a % of token allocation, then that's similar to a carry except it's not based on financial performance... not ideal. I'll skip the other details, but the point is, in this particular case the team allocated 14% of the token supply to themselves which has nothing to do with financial performance of having picked the right investment targets... 

Why are there advisors (even though a reply is below as to why, I'd prefer if these advisors would buy tokens instead of getting them... it's like giving money to Bill Gates for being an advisor, I'm not saying his advice would be worthless, but why would he not just invest, it's not like giving him pennies would matter to him! 

GPs typically have to contribute their own money 1% or 2% of the total fund capital (is this the case here?). LP in any investment funds own essentially 98% of the capital and obtain 80% on the growth of the capital (simple math to make things easier to understand). In this case, the LP's (or GPs) own only a small 21.85%, so the question is when investors invest in a project, does the ROI of that investment goes back in the token economy, or it goes directly to the investors based on their investment? (if it's the later, then everything is ok, if it's the first then it's a lot worse than a carry fee).

Crypto funds sometimes generate massive returns compared to non-crypto investments, and becomes liquid much faster (average returns for tech is 25% per year). The question comes back, are the returns distributed through token buyback or something similar, or the returns goes straight to token holders that have made an investment (in which case the token is not directly related).

If I give my money to be managed by an investment fund to manage it on my behalf, I will not be giving it to them so they spend it on marketing and giving out free rewards and incentives to all kinds of people. I want the money to go into generating returns, not chasing after more investors. It's like giving money to red cross and finding out they spend 50% of it on marketing and paying out huge salaries to their executives. (reply below mention that 100% of the invested capital goes into the project, but once I get clarification over where the return of the investment fund is given back to investors I'll have more peace of mind).

If I invest $10,000 how much of that $10,000 actually goes to be invested in a project?? How much of the return of that investment goes back to me? 100%, or it goes back into the token economy through buyback? I suspect this information might be there in the whitepaper and I didn't notice it.

** updated - added 1 star **
Based on the reply below, many of my concerns above have been clarified and resolved. However, to get to 5 stars, I'd like to see the team token to be based on financial performance... similar to a carry structure.

Crypto Rookies

* Rating Has Been Edited *

I will not edit my review content below as I want anyone to see my initial concerns and how the project addressed them. --See Comment Section.

All my concerns were addressed and answered, allowing me to move this from a 3 to a 5 rating.

I particularly like the ideas of...

Standardizing the vesting of the fund to 5 years from TGE regardless of the underlying vesting schedules. This should also help the speculation value of the NFT in the open market.

The potential "liquidity outlook" feature that can give investors an idea of the time required or projected for the revenue returns.


The Original Review --------

When I spotlighted this I was still thrilled to be the analyst covering all the exciting aspects of the project, including tokenomics and the unique features of the NFTs. Unfortunately, things didn't go as planned... lol

One of our fellow analysts, Jeppopo, decided to cover the project, and I think he did a fantastic job.

 As analysts, we try not to duplicate another analyst's perspective as it adds little value to the project. Therefore, I commend Jeppopo for delving so deeply into the project and articulating his reviews so well. If you need a comprehensive understanding of how things work and why we are both excited about this project, I recommend reading his work.

There is only one concern I can think of that hasn't been covered, and it's my only worry. It's a complex issue to explain, so I hope it makes sense to those who are not as familiar with presale and OTC.

While the funds can encompass any type of investment, the primary use case is to provide the 99% (all Streeters) with investment opportunities in early presale rounds, particularly Seed or even Pre-Seed rounds.

This is fantastic, but based on my experience in hundreds of presale rounds, the incubation period from when you fund these rounds to the Token Generation Event (TGE), where the token goes live, can be years (especially in current market conditions). I have investments at much later rounds (private stages) dating back to 2021, and I'm still awaiting their launches.

Furthermore, the earlier the funding round:

The fewer tokens you receive at TGE.

The longer the Cliff (the time from TGE to when vesting starts).

The longer the vesting period (the time it takes to receive all of the tokens).

They have ingeniously mitigated most of my concerns by offering NFTs representing your contribution to the fund. These NFTs can be sold speculatively on any NFT marketplace. However, based on my extensive experience with presale OTC (Over-The-Counter) transactions, these NFTs will likely lose some value, as potential buyers often pay less than the full price when sellers want to exit their positions. Yes, in some cases, they sell for more than face value, but not in most transactions.

Also, I realize this is not true presale OTC as the NFT is an On-Chain asset, but the principle is the same here.

Let's set that aside for a moment and address the core of my real concern. The money contributed to funds is used to purchase investments, and there is no revenue earned or real return for the Common Wealth community until these projects launch and generate revenue. Adding to this challenge is that they have generously offered to make investors whole before the heavier "carry fee" comes into effect, which is the real value capture in the tokenomics.

I am genuinely concerned that it will take a considerable amount of time to get this amazing project off the ground, and I hope that somehow the revenue from the NFT sales and the sale of the $WLTH token can provide enough runway for lift-off.


Median Time Between Funding Rounds (Source: Carta data)

"Without controlling for right-hand censoring, the naive approach provides estimates that range from 14 to 19 months between funding rounds. Only once we include all data points do we get estimates closer to the two-year timeframe. The data also indicates that CEOs need to plan for a longer runway with later funding rounds, as the time span between rounds increases. The differences between series Seed-to-A, A-to-B, and B-to-C are statistically significant at 5%."

** Rating Has Been Edited **

I will not edit my review content below as I want anyone to see my initial concerns and how the project addressed them. --See Comment Section.

All my concerns were addressed and answered, allowing me to move this from a 3 to a 5 rating.

I particularly like the ideas of...

+ Standardizing the vesting of the fund to 5 years from TGE regardless of the underlying vesting schedules. This should also help the speculation value of the NFT in the open market.

+ The potential "liquidity outlook" feature that can give investors an idea of the time required or projected for the revenue returns.


-------- The Original Review -------- 

When I spotlighted this I was still thrilled to be the analyst covering all the exciting aspects of the project, including tokenomics and the unique features of the NFTs. Unfortunately, things didn't go as planned... lol

One of our fellow analysts, Jeppopo, decided to cover the project, and I think he did a fantastic job.

 As analysts, we try not to duplicate another analyst's perspective as it adds little value to the project. Therefore, I commend Jeppopo for delving so deeply into the project and articulating his reviews so well. If you need a comprehensive understanding of how things work and why we are both excited about this project, I recommend reading his work.

There is only one concern I can think of that hasn't been covered, and it's my only worry. It's a complex issue to explain, so I hope it makes sense to those who are not as familiar with presale and OTC.

While the funds can encompass any type of investment, the primary use case is to provide the 99% (all Streeters) with investment opportunities in early presale rounds, particularly Seed or even Pre-Seed rounds.

This is fantastic, but based on my experience in hundreds of presale rounds, the incubation period from when you fund these rounds to the Token Generation Event (TGE), where the token goes live, can be years (especially in current market conditions). I have investments at much later rounds (private stages) dating back to 2021, and I'm still awaiting their launches.

Furthermore, the earlier the funding round:

+ The fewer tokens you receive at TGE.

+ The longer the Cliff (the time from TGE to when vesting starts).

+ The longer the vesting period (the time it takes to receive all of the tokens).

They have ingeniously mitigated most of my concerns by offering NFTs representing your contribution to the fund. These NFTs can be sold speculatively on any NFT marketplace. However, based on my extensive experience with presale OTC (Over-The-Counter) transactions, these NFTs will likely lose some value, as potential buyers often pay less than the full price when sellers want to exit their positions. Yes, in some cases, they sell for more than face value, but not in most transactions. 

Also, I realize this is not true presale OTC as the NFT is an On-Chain asset, but the principle is the same here.

Let's set that aside for a moment and address the core of my real concern. The money contributed to funds is used to purchase investments, and there is no revenue earned or real return for the Common Wealth community until these projects launch and generate revenue. Adding to this challenge is that they have generously offered to make investors whole before the heavier "carry fee" comes into effect, which is the real value capture in the tokenomics.

I am genuinely concerned that it will take a considerable amount of time to get this amazing project off the ground, and I hope that somehow the revenue from the NFT sales and the sale of the $WLTH token can provide enough runway for lift-off.


Median Time Between Funding Rounds (Source: Carta data)

"Without controlling for right-hand censoring, the naive approach provides estimates that range from 14 to 19 months between funding rounds. Only once we include all data points do we get estimates closer to the two-year timeframe. The data also indicates that CEOs need to plan for a longer runway with later funding rounds, as the time span between rounds increases. The differences between series Seed-to-A, A-to-B, and B-to-C are statistically significant at 5%."

D3Young

Things are starting to get exciting and truly heat up now with Commonwealth. They have finally created the world’s first ever Free Venture Fund with zero royalties for the 99% of us that have struggled to gain access to very early stage deal flow for new crypto projects.

The Common Wealth VC Fund will have approximately around $2.4 million worth of early-stage allocation in 15 yet to launch projects. There looks to be some great gems of projects within these projects that Commonwealth have selected to be a part of their first fund. I have to give a shout out to Cookie3, Asymmetry Finance, Fairside Network and Mavryk in particularly.

Remember for this fund there is going to be no fund managers, no general partners, and no management fees. This fund will also be fully non-custodial and always liquid.

The Commonwealth App is currently in beta mode and has undergone rigorous testing from its community. The app will go live on the zKSync ERA mainnet before 8th April 2024 and TGE of the project’s $WLTH token will be on the week commencing 8th April 2024.

A lot to look forward to coming up very soon with this project! My eyes are certainly peeled.

Things are starting to get exciting and truly heat up now with Commonwealth. They have finally created the world’s first ever Free Venture Fund with zero royalties for the 99% of us that have struggled to gain access to very early stage deal flow for new crypto projects. 

The Common Wealth VC Fund will have approximately around $2.4 million worth of early-stage allocation in 15 yet to launch projects. There looks to be some great gems of projects within these projects that Commonwealth have selected to be a part of their first fund. I have to give a shout out to Cookie3, Asymmetry Finance, Fairside Network and Mavryk in particularly. 

Remember for this fund there is going to be no fund managers, no general partners, and no management fees. This fund will also be fully non-custodial and always liquid.

The Commonwealth App is currently in beta mode and has undergone rigorous testing from its community. The app will go live on the zKSync ERA mainnet before 8th April 2024 and TGE of the project’s $WLTH token will be on the week commencing 8th April 2024.

A lot to look forward to coming up very soon with this project! My eyes are certainly peeled.

Jeppopo

Commonwealth’s tokenomics are some of the most interesting, efficient and balanced I think I have seen in crypto. Commonwealth’s economy forms a truly closed loop that constantly creates value for the protocol, its users and investors.

If you are looking to create a sustainable economy you want to create a system where the profits generated within the ecosystem are not extracted by the team or others but instead flow back into the economy, which in turn should continue to grow the value of that economy - this is what I believe Commonwealth have managed to achieve.

To accomplish this Commonwealth have created a well thought out, closed loop system which incentivises users to buy and use their token and also show how to control the value that is extracted from this system.

This is how Commonwealths system works:

Value Into Commonwealth Economy:
Platform transaction fees on all WLTH transactions (1%)
Fund management fees (2% per year, capped at 5 years)
A dedicated community fund funded by transaction fees and secondary NFT sales
Carry fees from investments (10–50% depending on staking levels)

Value Out of Commonwealth Economy:
Revenue-share payout to genesis NFT holders (15% of protocol profits)
A deflationary buy-back and burn mechanism on investment returns
Rewards & incentives programs such as Investment returns payouts & Community Fund returns as rewards for active community members (50% returned, 50% burned as deflationary mechanism)

As you can see from this and more clearly in the visual diagram below, there are no unnecessary leakages from this system. As long as the protocol continues to get used it should preserve and hopefully increase its value over time.

From a supply and vesting perspective I also think this is one of the more balanced and fair schedules I have seen. The vesting periods show a long term commitment and approach to the project and I think this is why some of the cliffs are shorter than I would personally like them to be as they have tried to balance these shorter cliff times out with only a small percentage of unlocked vesting each month.

Commonwealth’s tokenomics are some of the most interesting, efficient and balanced I think I have seen in crypto. Commonwealth’s economy forms a truly closed loop that constantly creates value for the protocol, its users and investors. 

If you are looking to create a sustainable economy you want to create a system where the profits generated within the ecosystem are not extracted by the team or others but instead flow back into the economy, which in turn should continue to grow the value of that economy - this is what I believe Commonwealth have managed to achieve.

To accomplish this Commonwealth have created a well thought out, closed loop system which incentivises users to buy and use their token and also show how to control the value that is extracted from this system.

This is how Commonwealths system works:

Value Into Commonwealth Economy:
-	Platform transaction fees on all WLTH transactions (1%)
-	Fund management fees (2% per year, capped at 5 years)
-	A dedicated community fund funded by transaction fees and secondary NFT sales
-	Carry fees from investments (10–50% depending on staking levels)

Value Out of Commonwealth Economy:
-	Revenue-share payout to genesis NFT holders (15% of protocol profits)
-	A deflationary buy-back and burn mechanism on investment returns
-	Rewards & incentives programs such as Investment returns payouts & Community Fund returns as rewards for active community members (50% returned, 50% burned as deflationary mechanism)

As you can see from this and more clearly in the visual diagram below, there are no unnecessary leakages from this system. As long as the protocol continues to get used it should preserve and hopefully increase its value over time. 

From a supply and vesting perspective I also think this is one of the more balanced and fair schedules I have seen. The vesting periods show a long term commitment and approach to the project and I think this is why some of the cliffs are shorter than I would personally like them to be as they have tried to balance these shorter cliff times out with only a small percentage of unlocked vesting each month.

Common Wealth

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