Neon EVM: Expense Overview 2023

November 15, 2022 – October 31, 2023 | Neon Expense Overview

In the dynamic world of blockchain technology, transparency is not just a principle — it’s a commitment. As part of our pledge to keep our community and stakeholders informed, we’re excited to present a comprehensive breakdown of our expenses for November 15, 2022, through October 31, 2023. The financial statements have been prepared on the accrual basis of accounting.

This report delves into every facet of our operational expenditures, from core functions like compensation and contracting to specialized areas such as legal expenses and technical integrations. By sharing this, we aim to foster a deeper understanding and strengthen the trust that’s been the cornerstone of our growth.

Table 1 offers a comprehensive insight into the aggregate expenditure over the past 12 months, encompassing operating costs denominated in stablecoins (USDC) and NEON tokens. The cumulative expenditure for the initial one and half months of 2022, starting from the Neon Foundation incorporation, and the subsequent ten months of 2023 amounted to approximately 1.3 million USD and 709 million NEON tokens.

Table 2 offers an insight into allocations of 35 million and 5.45 million NEON, and 150.000 USDC designated as a loan rather than actual expenditure.

Table 1: Operating expenses, November 15, 2022–October 31, 2023

Table 2: Loans, November 15, 2022–October 31, 2023

Expense forecast for November 1–December 31, 2023

Funding contributions were deposited into a company-approved multi-signature (multisig) wallet. Our Finance team acts as the Finance Manager, executing payments and ensuring rigorous oversight of expense management.

To drive the development of the Neon EVM ecosystem, we will allocate NEON to identified partnership and improvement avenues. Details of these allocations and partnerships are announced publicly to maintain transparency, as per Table 3.

Table 3: Expense forecast

Compensation & contracting plans

Funds are currently assigned to compensate 13 individual contributors (not employees), of which 5 are planned engagements that have yet to start.

Travel & Expenses

A dedicated travel budget has been established and crafted based on industry benchmarks and our team’s travel needs. This budget predominantly supports our commercial and technical teams while also being flexible to the unique needs of each department.

Marketing Expenses

Table 4 presents our marketing budget. This encompasses activities like events and sponsorships, with a specific allocation of 1,500,000 NEON tokens in conjunction with USDC earmarked for the Neon Community Sale, ensuring adherence to all relevant regulations.

Table 4: Marketing expenditure

The current marketing strategies are in a phase characterized by experimentation and exploration. These strategies are still evolving and will likely undergo a significant shift in priorities during the next budgeting cycle. This transformation will be driven by the insights and data gathered during the current phase, enabling us to make more informed and targeted marketing decisions in the future.

Grant Agreements

The Grants Program provides funding based on clear milestones. The projects mentioned have clear agreements detailing token and USDC allocations and their respective deliverables. Here are examples of our latest partnerships:

Poolz Finance is a blockchain platform and launchpad specializing in Web3 technology and providing access to early-stage crypto projects. The project has been allocated a sum of 80,000 USDC for the successful completion of deployment milestones and for incubating early-stage projects.
zkUSD is a decentralized lending and borrowing platform. The project has been allocated a sum of 35,000 USDC for the deployment milestones achieved and 140,000 NEON tokens once the TVL milestones are reached (subject to a 6-month vesting period).
LeverFi provides a full suite of DeFi solutions that combines on-chain spot swaps with lending and leveraged trading. The project has been allocated a sum of 15,000 USDC and 460,000 NEON tokens to be distributed based on deployment and TVL milestones (subject to a 6-month vesting period).
Sobal.fi is a DeFi platform leveraging adaptable smart contracts to offer optimal experience across multiple chains, including Ethereum, Neon EVM, and Solana, for users to explore the process of increasing TVL, engage in community discussions via Discord, and manage various token balances. The project has been allocated a sum of 100,000 USDC and 800,000 NEON tokens, with half of the tokens to be provided subject to the TVL milestone achievement.
Blockscout is a tool for inspecting and analyzing EVM-based blockchains, i.e. is a blockchain explorer for Ethereum Networks. The project has been allocated a sum of 69,950 USDC and 119,800 NEON tokens for the milestones achieved (locked for 1 year and vested during the subsequent year), and for providing maintenance and support services.
Allbridge is engaged to provide EOF compatibility to Neon EVM — ensuring compliance with the Ethereum roadmap as per updates to how smart contracts are compiled, deployed, and executed. The project has been allocated a sum of 30,000 USDC for the milestones achieved.

Legal & Professional Expenses

We assigned a legal budget for external legal services. This caters to our anticipated legal requirements and any unforeseen legal contingencies.

Within the category of professional fees, our financial records encompass a spectrum of essential services. This includes, but is not limited to, the acquisition of Know Your Customer (KYC) provider services, engagements in services to support Neon EVM growth, technical integration services, cross-chain interoperability integration services, and various other pertinent professional services crucial to the seamless functioning of our operations.

Audits and bug bounties

Our 2023 expenses are aligned with product development milestones. These include crucial activities such as third-party audits and defined bug bounty programs, ensuring our products’ quality and security. A budget has been allocated to both a bug bounty and an external technical audit during Q4, to improve the security of this recently-launched product.

Software Subscriptions

Our toolkit includes licensed finance tools, Atlassian solutions, Google Workspace, etc., which empower our team’s collaboration and innovation.

Other Operational Expenses

Operational expenses include infrastructure costs, minor fees, and other necessary charges. A detailed ledger is maintained for transparency.

Service Agreements

In November 2022, we entered into a partnership with Neon Labs Ltd to collaborate on the development and delivery of the Neon EVM platform. Neon Labs Ltd completed its obligations by January 2023, successfully delivering the Neon EVM platform. In July 2023, as compensation for the services provided, Neon Labs Ltd received 704,891,400 NEON tokens.

Neon Labs Ltd is currently providing continuous support and maintenance services for the Neon EVM platform, and in return, they receive an annual compensation of 2,000,000 NEON tokens for these services.

In the month of May 2023, a formal agreement was established with a contracted professional who undertook essential services related to the deployment of the Neon EVM platform. In acknowledgment for the services rendered, a compensation of 100,000 NEON tokens was remunerated per the mutually agreed terms.

All NEON tokens paid to the mentioned service providers have a 1-year lock-up starting from the token genesis event. After that, the tokens vest monthly for 12 months, becoming fully available on the second anniversary of the NEON token genesis event.

ECP Program

The Early Contributor Program focused on encouraging ecosystem growth. It is now completed. The program consisted of two parts:

The first component was designed to boost Neon EVM’s web presence, activity, engagement, and brand following. The campaign was conducted using the automated community/bounty service, Zealy (allocated budget: 500,000 NEON tokens with 1-year lock-up and subsequent 6-month vesting period).

The second component recognized and rewarded Neon EVM’s esteemed Veterans and Council members of Discord. This award acknowledges their enduring support and active involvement within the Neon EVM community communications (allocated budget: 500,000 NEON tokens with 1-year lock-up and subsequent 6-month vesting period).

Loans

In the current fiscal year, our financial initiatives have encompassed the provision of two loans, both strategically directed towards fostering the growth and development of Neon EVM. The first loan of 35,000,000 NEON was disbursed in July 2023. However, in October 2023, the loan agreement was terminated, and the principal amount was duly returned in accordance with the stipulated terms. Subsequently, a second loan, totaling 5,450,000 NEON tokens and 150,000 USDC, was provided and subsequently extended in October 2023. Presently, the second loan remains outstanding. These financial maneuvers reflect our commitment to facilitating the advancement of Neon EVM through judicious and timely financial support.

Conclusion

As we look back on the period of this report and the intricacies of our financial allocations, it’s evident that each decision, big or small, was taken with the broader vision of innovation, growth, and community engagement in mind. We would like to extend our heartfelt gratitude to our community for their unwavering trust and encouragement. Together, we’ll continue forging ahead, staying accountable, and leading the charge in this transformative era of decentralized technology. Remember, with Neon EVM, you are not just a spectator but a vital part of this journey.