Financial support from the Onchain Foundation for Lisk

[system]

During the discussion and voting phase of the 100M vote, the community raised questions regarding the financial support for Lisk, especially:

• Why are you using newly minted tokens to fund the DAO, and not existing funds from the Onchain Foundation?
• Isn’t 45M LSK enough to grow the Lisk ecosystem? Do we really need an additional 100M LSK?

Before answering these questions, we as the Lisk team want to emphasize that the Onchain Foundation and Lisk Ltd. are independent entities with different management teams. As such, we from the Lisk team also cannot make an official statement on behalf of the Onchain Foundation regarding the questions above.

What we can say, however, is that the Onchain Foundation continues to fund all Lisk operations and its team, as it has been for almost a decade. As was shared at the time of Lisk transitioning to a Layer 2, parts of the former team were split into additional projects (Pass App and Onchain), which the Onchain Foundation also supports. An overview of these projects is available on the Onchain Foundation page and more details can be found on the Onchain Foundation’s About Us page.

Lisk is supported with far more resources by the Onchain Foundation than the other projects, however, each project is expected to drive revenue and become sustainable. The end goal being - like for any business - to cover all operational expenditures themselves. This ensures that each project prioritizes profitable business strategies and manages overhead appropriately.

Additional notes on funding for Lisk:

• In addition to the Onchain Foundation’s dedicated support, all LSK and OP tokens that are held by the Onchain Foundation or Lisk Ltd. (excluding the Foundation’s legacy wallet, ~7.9M LSK from the original ICO) are also solely for Lisk’s use. This includes the 30M LSK allocated for strategic investors at migration.

• As was shared in the LSK 2.0: Migration to an ERC-20 Token blog post, only 7% of the total original Lisk token supply in 2016 was reserved for community initiatives and growth campaigns. The lack of token standards and established best practices at the time ultimately limited our ability to incentivize a robust ecosystem and community, and to create liquid markets. Today’s leading projects no longer hesitate to allocate a significant portion towards their growth initiatives, with some even allocating up to 80% of their total token supply. Ecosystem growth activities were always paid primarily using Lisk tokens (as is the case in the majority of L1 / L2 ecosystems), while the Foundation funds are used to support the core team’s operations. Our intention is that the Lisk DAO, with its treasury, is the key driver of funding ecosystem growth going forward.

• As an example of the amount of native tokens other infrastructure projects use to incentivize their ecosystem growth, here is an overview of publicly available data on what Optimism (which launched in 2021) has spent so far:

  • Lifetime Airdrops: 266M OP (~200M USD at current value)
  • Lifetime Incentives and BD Grants: 410M OP (~350M USD at current value)
  • Budget for Season 8 (currently going on Season 8 Intent - Intents - Optimism Collective):
    • Up to 26M OP to fund core teams to develop the Blockchain
    • Up to 12M OP for DeFi Incentives
    • Up to 22M OP for Growth Programs
    • Combined that’s 60M OP (~47M USD at current price) in Season 8.

[wasabbi]

I have to be very honest here - the way this 100M LSK proposal is being justified feels unconvincing, clumsy, and deeply discouraging for long-time community members.

Lisk is much older than Optimism. By now, it should be far bigger, not still struggling to justify its existence while younger projects have raced far ahead. Comparing Lisk to Optimism isn’t reassuring - it just highlights how little progress Lisk has made despite having a huge head start, far more time, and significant resources.

Meanwhile, Max Kordek, once the face of the project, has largely disappeared from view. The DAO, which was presented as a new chapter of community-driven growth, has so far delivered almost nothing but failures. Even when the community expressed a clear will to burn tokens, the DAO itself stopped it - showing that “decentralization” here is more of a slogan than a reality.

On top of that, the token price has collapsed, investor confidence has been destroyed, and instead of building sustainably with the already enormous treasury, the solution is always the same: mint more tokens. That doesn’t look like strategy, it looks like helplessness and avoidance of accountability. To many, it even makes the project appear like a slow-motion scam - where money simply disappears, the token value keeps bleeding, and the project slides down the market cap rankings year after year. The treasury itself has been shrinking dramatically over the years - once holding meaningful real assets, now worth only a fraction of that - another sign of decline rather than growth.

Worse, there are no real ideas on how Lisk can be competitive anymore. It’s just another Ethereum Layer 2 now - something dozens of teams can spin up in days. There’s nothing unique, nothing visionary, nothing that explains why Lisk should stand out in an already overcrowded space. Today, the project has one of the worst reputations in the entire crypto space and, frankly, less potential than many random memecoins.

If the Lisk team truly wants support, then face these realities head-on: explain why after all these years the project is still lagging behind, why leadership has disappeared, why the DAO isn’t delivering, and why the community’s voice has been ignored. Without that, asking for another 100M tokens feels less like ambition and more like taking investors for granted.

And just to add one more point:

https://x.com/LiskHQ/status/1960330467296809109

Are you really proud of this? Flying halfway across the world, spending investor money on a trip to Kilifi - one of the poorest Kenya cities in an already poor region - to “teach kids about blockchain.” From the outside, this doesn’t look like strategy, it looks like wasting money. It’s hard not to see it as little more than funding a holiday for the team with some parties, safaris, and photo-ops dressed up as ecosystem growth.

If the project is genuinely struggling for competitiveness and resources, how can this kind of spending possibly be justified? It feels more like YOLO tourism than a serious attempt to make Lisk relevant in the global crypto market.

[janhack]

Thanks @wasabbi for your honest and critical feedback here. I try to respond to your points below:

I have to be very honest here - the way this 100M LSK proposal is being justified feels unconvincing, clumsy, and deeply discouraging for long-time community members.

Lisk is much older than Optimism. By now, it should be far bigger, not still struggling to justify its existence while younger projects have raced far ahead. Comparing Lisk to Optimism isn’t reassuring - it just highlights how little progress Lisk has made despite having a huge head start, far more time, and significant resources.

To be frank here, I think Lisk made the wrong technical bets in the past. Focusing on JavaScript and scaling via a network of L1 blockchains has turned out to be a path that the market did not adopt (as we shared when we transitioned to a L2). In an emerging and very dynamic new technology field these things happen all the time. Typically the majority of projects and technical solutions will not be successful long-term. In contrast to many other projects that have simply disappeared, Lisk still exists due to the commitment of the founders and long-term, conservative treasury management. We have also honestly acknowledged these shortcomings and switched to what we believe is the best technical solution and future of blockchain technology - Ethereum rollups. In contrast to that, other blockchain projects continue to hype their technology and token although it is not competitive and not being used. Still, I understand your frustration when comparing progress and token price to other projects that are much younger but managed to make better technical choices and achieve traction faster.

Here is also Max’s perspective on the history of Lisk.

Meanwhile, Max Kordek, once the face of the project, has largely disappeared from view. The DAO, which was presented as a new chapter of community-driven growth, has so far delivered almost nothing but failures. Even when the community expressed a clear will to burn tokens, the DAO itself stopped it - showing that “decentralization” here is more of a slogan than a reality.

It is true that Max and Oliver do not have an operational role in the Lisk team any more. Instead, the Lisk team is led by Dominic, Shu and myself as well as several other excellent colleagues as will soon be shown on a new team page on our website. Still, Max and Oliver are active in the Lisk DAO, very much aware of what is happening with Lisk and provide regular feedback and advice. Note that this change has been already in effect since the end of 2023 and was also communicated last year.

Regarding the 100M LSK burn vote and the decentralization of the Lisk DAO, I agree that we need to put more efforts making the Lisk DAO more decentralized. For more details, I refer to this longer detailed statement in the forum after the vote.

On top of that, the token price has collapsed, investor confidence has been destroyed, and instead of building sustainably with the already enormous treasury, the solution is always the same: mint more tokens. That doesn’t look like strategy, it looks like helplessness and avoidance of accountability. To many, it even makes the project appear like a slow-motion scam - where money simply disappears, the token value keeps bleeding, and the project slides down the market cap rankings year after year. The treasury itself has been shrinking dramatically over the years - once holding meaningful real assets, now worth only a fraction of that - another sign of decline rather than growth.

I fully understand the frustration around the price development of LSK. However, the minting of new tokens and reasoning for it was transparently communicated before the token migration giving token holders time to evaluate whether to continue holding LSK with the new allocation and token economics. As explained in the original post above, only a part of the Onchain Foundation treasury is available to Lisk which is also the reason that new tokens were minted for supporting the growth of the Lisk ecosystem. Considering the competitive space we are in, I think it is unrealistic to expect Lisk to be successful without significantly investing into growth, in particular, into founders building on Lisk.

Worse, there are no real ideas on how Lisk can be competitive anymore. It’s just another Ethereum Layer 2 now - something dozens of teams can spin up in days. There’s nothing unique, nothing visionary, nothing that explains why Lisk should stand out in an already overcrowded space. Today, the project has one of the worst reputations in the entire crypto space and, frankly, less potential than many random memecoins.

If the Lisk team truly wants support, then face these realities head-on: explain why after all these years the project is still lagging behind, why leadership has disappeared, why the DAO isn’t delivering, and why the community’s voice has been ignored. Without that, asking for another 100M tokens feels less like ambition and more like taking investors for granted.

Yes, we made the conscious choice to be “just another Ethereum L2” because we realized that it is better to pivot to the best technology available instead of continuing to build something different with 20+ engineers that may be unique, but is not what builders are asking for. We have been talking a lot with builders. Most of them prefer an EVM-equivalent chain so they can use the largest collection of tools, libraries and audited smart contracts. They also prefer to plug into Ethereum as the largest hub for stablecoins and onchain liquidity. As we are using existing technology (OP Stack), we substantially reduced our team size and operations cost. Instead, we are now following a founder-focused approach spending most efforts on what actually makes a difference for builders. I agree that the current website may not explain well enough why someone should build on Lisk, but an updated version is work-in-progress that should do a better job at doing that.

And just to add one more point:

https://x.com/LiskHQ/status/1960330467296809109

Are you really proud of this? Flying halfway across the world, spending investor money on a trip to Kilifi - one of the poorest Kenya cities in an already poor region - to “teach kids about blockchain.” From the outside, this doesn’t look like strategy, it looks like wasting money. It’s hard not to see it as little more than funding a holiday for the team with some parties, safaris, and photo-ops dressed up as ecosystem growth.

If the project is genuinely struggling for competitiveness and resources, how can this kind of spending possibly be justified? It feels more like YOLO tourism than a serious attempt to make Lisk relevant in the global crypto market.

To be clear here, the X post is a bit misleading and there are just a few team members (not the whole Lisk team) going to a press trip in Kenya. The participants are mainly journalists or KOLs, many of them local, as well as many local builders we work with. The main purpose is to show to journalists and KOLs what Lisk is doing on the ground as well as give our builders the opportunity to connect. As part of this trip, most participants are also attending ETHSafari, one of the largest African Web3 events sponsored by Coinbase, the Ethereum Foundation, Lisk and many others. ETHSafari also includes the trip to Kilifi that you mention. This is therefore far from tourism, but are important BD efforts in one of our key target markets.

[wasabbi]

To be frank, while I value the time you took to respond, I find many of your points incomplete or misleading when viewed in the broader context of Lisk’s history and present circumstances. Allow me to respond in detail:

1. The abandoned SDK and investor confidence
Lisk spent years developing the SDK only to eventually abandon it. This decision alone triggered a massive outflow of investors. Understandably, people lost confidence in a team that repeatedly shifted direction without warning, dropping long-promoted commitments overnight. This is not simply a “pivot” but a breach of trust that still weighs heavily on the project’s credibility.

2. Survival thanks to early fundraising, not uniqueness
You claim that Lisk’s survival is due to the founders’ commitment and conservative treasury management. In reality, the only reason Lisk continues to exist is because of the unusually large funds raised in its early days. This is not a unique achievement. A relevant comparison is ARK, which remained on L1, continued developing its SDK, and has consistently published detailed monthly progress reports. Over the years, ARK has surpassed Lisk in market capitalization, all while remaining true to its L1 path. This demonstrates that Lisk’s transition from L1 to L2 has been exceptionally unsuccessful.

3. Roadmap reduced to slogans
The so-called “roadmap” you present today is little more than a few vague sentences or slogans. A roadmap is supposed to be a concrete plan with timelines, milestones, and measurable goals. Presenting a handful of buzzwords as a roadmap only reinforces the impression that Lisk lacks clear direction or commitment.

4. Leadership changes and transparency issues
Lisk has repeatedly promised greater transparency, yet continues to fall short. A change of leadership is a highly significant matter, yet instead of open communication, the community only learns about it through a single obscure article that most holders likely never saw. Moreover, that article—dated August 10, 2024—does not even directly mention leadership changes, and it certainly is not “end of 2023” as you stated. This again shows a troubling pattern of selective disclosure and broken promises, making it increasingly difficult to trust the project.

5. Tokenomics and inflation
You argue that the new token allocation was communicated transparently. Yet this does not solve the underlying issue: aggressive inflation. From an investor’s perspective, the logical strategy would be to wait until the full 400,000,000 supply is minted before considering exposure to LSK. This undermines confidence in the token’s long-term value.

6. The “Ethereum L2” argument
Framing the move to Ethereum L2 as “the best technology available” is highly questionable. For years Lisk emphasized the importance of attracting developers and encouraging dApp creation, yet the blockchain has been effectively dormant. Could you please share concrete data:

• How many dApps have actually been built on Lisk since 2016?

• What does the activity chart of the Lisk blockchain look like today?

Without such figures, the claim that “builders prefer Lisk as an L2” appears entirely theoretical.

7. Lack of real development and Berlin headquarters
This raises an even more fundamental question: why did the team effectively stop working on Lisk’s own technology after the transition to L2? Since that shift, nothing meaningful has been developed under the Lisk brand. When was the last time anyone actually worked from the Berlin headquarters – 2022? According to L2BEAT, there are currently around 70 active Ethereum L2 projects, with another 80 in the pipeline. Against this backdrop, how does Lisk plan to stand out without a clear development strategy or even a proper roadmap for 2025? The lack of any tangible development plan only highlights how uncompetitive Lisk has become in today’s L2 landscape.

8. Out of touch with developers
You mention frequent discussions with builders and their preference for EVM chains, yet the reality is that few have ever built on Lisk. In practice, nothing tangible has resulted from these conversations. This reinforces the perception that Lisk operates more as a theoretical exercise than a platform with real-world developer adoption.

9. Website redesign – less substance, more gloss
The latest website redesign removed important technical and team details, replacing them with colorful visuals but little actual content. The previous version, while less polished, at least contained more useful information. Now, even basic facts such as the names of current team members are absent. Far from an improvement, the site looks like a children’s coloring book rather than a serious hub for developers and investors.

10. The Kenya trip and business development narrative
Finally, regarding the trip to Kenya: framing this as strategic business development does not resolve the underlying issue. After failing to gain traction in Europe and other developed markets, Lisk now positions itself in poorer, underdeveloped regions. To many observers, this looks less like an opportunity and more like an act of desperation, especially when competing projects continue to thrive in established ecosystems.

11. Past events and failed marketing promises
Do you remember this event, where so many ambitious promises were made that never materialized? Looking back, almost nothing announced there was ever delivered. This raises serious questions about Lisk’s marketing strategy over time. Do you remember Monica Tartau, who was brought in to revitalize marketing? How much was she being paid for presentations that often looked more like kindergarten-level PowerPoints than serious communication? She was supposed to give Lisk’s marketing a breakthrough, yet she is nowhere to be seen today. What exactly happened there?

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In conclusion:
The concerns surrounding Lisk go far beyond “price frustration.” They stem from repeated broken promises, lack of transparency, abandoned commitments, questionable tokenomics, absence of measurable development, a roadmap reduced to slogans, and communications that often feel misleading. Unless these issues are openly acknowledged and addressed with verifiable data, it is very difficult to see how Lisk can rebuild trust with its community or investors.