Dear Cats,
First and foremost, thank you for this letter.
The way this letter addresses the concerns that have arisen from within the community is truly beneficial to the overall DAO. Whereas most of these concerns have been shared frequently over the past couple of months, it’s good to have everything summarized and written down for everything to read what’s truly going on.
As indicated in the above letter, the team will always strive to act in favor of the overall DAO’s health. The goal is to build a sustainable gaming DAO that will outlive many of us, if not all. We are constantly in-check with our community to ensure our vision aligns with the sentiment of the DAO’s supporters. The mutual feeling remains optimistic for the longer timeframe, but the short-term concerns should always be addressed.
Unlocks from Angels, VCs, Retroactive Rewards and Team
From the very beginning we communicated about the Merit Circle DAO and its economic structure, it has been made clear that at one point, these tokens would hit the market. We have heard the concerns the community have raised about this point, and therefore opened this topic to increase accountability and transparency in terms of what’s happening with these tokens.
Besides the aforementioned points, we would like to raise some further discussion points that we’ve seen rising in both private groups, and public discussion groups;
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We believe that each party (in any category) that has added value to the DAO has every right to secure any investment they have made. This should however be done in the right manner and not affect the overall market too harshly and abruptly. Therefore, the DAO may always suggest purchasing tokens at a discounted price from such investors to remove this liquidity from the market. MCL has made it clear to all the aforementioned parties to approach MCL first for OTC possibilities when requesting liquidity. Investors that have never shown their face nor added any value can be treated differently and publicly challenged by the DAO with whatever consequences the DAO deems necessary. Naturally, these consequences should be decided upon through DAO governance.
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There will be situations where the DAO can secure funding from new investors, notable partners that are willing to enter a large position in return of value for the DAO. This will create another cycle of locked tokens that will eventually start unlocking. We are aiming to let this first cycle create a healthy way of morphing these locked tokens with the currently circulating supply. Simultaneously, this will become the breeding ground for future cycles to follow that same pattern.
MCL would like to hear the general opinion of all the other DAO participants on a construction as described above. As a rough example: sell $MC at $1 to strategic parties with a 3 year holding period, OTC (buy) tokens from individuals/entities for $0.7 (creating a positive arbitrage for the DAO + relocking tokens for a significant period of time).
Liquidity
There will be more votes coming up in the coming period to determine the details for the Staking V2 portal. The transition is an open conversation in the DAO and should be treated accordingly. We’re all ears to any suggestion, and aim to open discussion for each step along the way.
Staking rewards
The staking V2 Program is aimed at locking in a large quantity of these unlocked rewards with additional benefits besides $MC. In the position that we are, we can allow stakers to receive airdrops from partner games, DAO’s projects (Edenhorde was an example), and many more. These details are yet to be decided, but this will hopefully convince a large number of stakers to not use these rewards to affect the market price, but to stake and earn additional rewards. Additionally, further utility for $MC is being discussed and explored such as purchasing in-game assets and more.
Decentralization vs. Centralization
As indicated before, we are always acting in favor of the health of the Merit Circle DAO. The early investors (some of them also core DAO contributors) have been selected based on this exact same vision and therefore, we believe that each party will vote accordingly when being able to participate in outstanding proposals. We believe that these additional tokens will only further incentivize governance and increase the DAO’s position.
Anyone with an interest in harming the DAO’s health would have a much more difficult time to have a proposal voted in with such a strong force that’s vouching for the DAO’s future. We understand the concern for centralization, but given the track record of the DAO in terms of transparency, accountability, openness and willingness to collaborate with the community, this is no concern to us Merit Circle Limited.
We need to prevent a situation where the overall sentiment is that the community’s voice doesn’t matter anymore. In essence, a DAO needs to be community driven, and not institutional driven (like f.e. ApeDAO). We will keep monitoring the ratios of circulating tokens and suggest a change if deemed necessary.
Portions of Community Feel Unheard
We regret to hear that a portion of the community feels unheard. We are doing everything we can to create an open and welcoming community where everyone feels proud and comfortable to raise their voices. To emphasize once again, the governance forum is open for every single person on this earth to create a proposal or discussion, even those not holding $MC. However, to improve, we agree with the proposed suggestions, and would like to address these below.
Suggestions
To answer the proposed suggestions;
- A monthly or bi-monthly ‘What’s Going On?’ discussion on the governance forum would help keep the community informed about the current on goings of the DAO, and would encourage friendly discussion. This could also be a dedicated section in the Medium articles Merit Circle posts, in a summarized format - describing the most commonly mentioned community topics or concerns. At the same time, the team would be able to more effectively gather data from the communities.
This is a lovely point. Therefore, we would like to propose the following;
Create a monthly summary of everything that’s going on in the DAO’s communities. This summary can simply be a draft of all the ongoing discussion in the format as this letter. One month will be more extensive than the other. After the draft, MCL will invite several key community members such as the Sad Cat Capital to assist in the final touches and collaboratively publish it on the governance forum.
Reason for doing this in collaboration with community members is because of their strong position within the community. Bringing this as an in-house effort would possibly mean neglecting certain aspects that only live within the community that might be overlooked.
This format is open for discussion and time will tell what the right way to approach this will be.
Thereafter, we’d like to host a Q&A in the Merit Circle official Telegram channel answering all outstanding questions.
- We want to ensure that the governance forum, the Discord, and the Telegram channels, have an open and relaxed spirit. We want everyone to accept that others might feel differently, and have different motives. Some are interested in profit, others are interested in decentralization or making strategic investments. Some just want to enjoy the DAO community or are interested in gaming. Everyone should feel welcome. We therefore hope to create more unity between all the stakeholders, to make the Merit Circle DAO, community, and ecosystem, the best it can be.
We 100% agree on this topic, hence the reason we have taken such an open and transparent stance in all of our actions so far. We would like to remain operating in this fashion, and continue fostering this open environment.
- While some community members and parties are more drastic in proposed ideas, we’d like to ask the aforementioned parties (VCs, Angels, Retroactive Rewards etc.) to voluntarily stake for 6-12 months. As mentioned above, we’ve already seen Mechanism Capital write an excellent post on their good intentions, past and future. They mentioned they are going to publicly stake their investment tokens. If others would follow, it would give the Merit Circle DAO extra confidence that all parties are working towards bettering the DAO.
This is something we have suggested to all of the involved parties as indicated in our earlier posted topic.
- All MC community members should take their token security extremely seriously. Everyday we see countless hacks elsewhere, most of which are preventable by sticking to some basic rules. Always ensure you are using a hardware wallet for storing funds. It is acceptable to use a non-hardware hot wallet for certain types of transactions, but you should never be using a hot wallet for storing significant funds. Any funds which you do not immediately and urgently need to deploy, ensure they are kept on a hardware wallet. The security of your MC tokens protects the entire Merit Circle DAO too.
We agree and will always include safety as one of the main topics in any of our educational outlets. Think of the DAO’s Gaming Platform and NFT Marketplace for instance.
A closing word
Miauw.