Dear community,
With reference to @SadCatCapital’s open letter on the governance forum, dated 2 May 2022, we are happy to share the second community governance update for the DAO. The first community governance update was posted on 1 July 2022, and can be found here
This community governance update will seek to provide the wider community with a summary of the latest, and most notable governance related events, within the DAO between 1 July 2022 and today.
Updates on our DAO’s operations, including various information on our four verticals, can be found in our bi-monthly DAO progress update newsletters via Substack here.
Our latest August 2022 monthly treasury report which provides a breakdown of the DAO’s financial activities can be found here.
In order to avoid overlap between newsletters and updates, these community governance posts will only focus on the governance and community aspects of the DAO, and will only be posted on the governance forum.
We hope that the DAO’s community members, and other stakeholders, will find the below of interest, and that our post will encourage further friendly constructive discussions within the community.
DAO restructuring - MIP-17
On 28 June a proposal was put forward by @DaoCoreContributors regarding a restructuring of parts of the DAO’s contributing entities, and the formation of a purpose trust that would be granted rights to hold certain property for and on behalf of the DAO.
One of the key purposes behind the proposal was to seek that the DAO remains sufficiently decentralized, autonomous and efficient when engaging in all of its activities, including off-chain activities. As certain of the DAO’s activities occur off-chain (including certain activities relating to governance, investments, and product development), not all activities can be regulated solely through code, and the proposal emphasized that the formation of a purpose trust would be beneficial in this regard.
The proposal also sought to empower developing teams with powers to carry out certain R&D activities in stealth mode for the purpose of preventing leak of information that may result in the DAO losing its competitive advantage.
The proposal was put to vote on 7 July 2022 and passed with a clear majority - 99.85% voting “Yes” and only 0.15% voting “No”.
Discussions regarding possible changes to MIP-7
On 26 July 2022 the DAO community member @timour put forward a proposal where certain changes to MIP-7 were proposed.
The proposal firstly suggested that the criteria for buybacks and burns (as a result of buybacks), should be amended, so that buybacks should not occur if P/B (price to book) > 1 (i.e. if the fully diluted value is greater than the value of the treasury). Secondly, the proposal suggested that there should not be a price support above P/B = 1. Thirdly, it was proposed that the MC tokens stemming from the community rewards pool (the 75% of the unused MC tokens that are unlocked from that pool each month) should not be burned going forward, but rather used for staking v2 or moved to treasury. Fourthly, the proposal suggested that the generic rules to manage treasury should be based on treasury performance metrics instead of looking at individual proceeds from an investment.
This proposal raised thoughtful and active discussions both on the governance forum and in both Telegram and Discord. The majority of the participants to the discussions argued that the current format implemented through MIP-7 continued to be ideal for the DAO at this current point in time. After some back and forth discussions between various community members and the author, it was mutually agreed to not put the proposal up for vote as of now. The topic was however moved to the Discussion category of the forum and can be discussed in further detail there if anyone wishes to do so.
As stated by the author of MIP-7 (@sadcatcapital) in the proposal for MIP-7, the DAO should keep iterating to find the best solutions, and it is therefore good to see engaging discussions regarding tokenomics (token emissions, buybacks, burns etc.). We look forward to further discussions on these topics in the future as well.
Continuing discussions regarding staking v2 - MP-4
On 25 April 2022, @DaoCoreContributors opened up a thread regarding staking v2, which rendered vibrant discussions regarding various components concerning staking. Since the previous community governance update, the DAO has conducted one official DAO poll. On 11 August 2022, MP-4 was put to vote. In MP-4 the poll concerned the same question as in MP-1, i.e. which LP asset(s) should MC tokens be paired to for the main LP staking pool under staking v2. At the time of voting on MP-1, 77.47% of the votes were in favor of a MC/USDC pairing. Since that vote took place, a lot occurred in the crypto space and the various DAO members were discussing whether the DAO should conduct a new poll on the same matter. As a result, the MC DAO held a new poll on the LP pairing through MP-4.
The voting result under MP-4 ended with 95.34% votes in favor of a MC/ETH LP pairing. This result replaces the result in MP-1 and will form input to the proposal that is currently being worked on by various DAO community members. The proposal is expected to be posted in the near future, with an aim to enable the DAO to agree on a staking v2 module that can go live within the first week of November, in time for the one year mark of staking v1.
Proposal to develop a NFT security solution with doubleweb3.com (still active)
On 17 August @doubleweb3 posted a proposal which proposed that the DAO, together with doubleweb3.com, develops an NFT security solution that should enable p2p NFT lending and have other attributes. Pursuant to the proposal, the DAO would invest USD 50,000 and be rewarded with 5% of the tokens in the event that a token is created. Furthermore, the proposal asks for the DAO to help with bootstrapping and become a founding partner.
This proposal has only to a small extent been subject to discussions, but remains active on the governance forum and can be discussed further if anyone wishes to do so.
Proposal to allocate 5% USDC to GLP (still active)
On 25 August, @joebags proposed that the DAO allocates USDC 2 million to GLP, which is the liquidity token of the GMX platform existing on both Arbitrum and Avalanche. In this case, the proposal referred specifically to deploying on Avalanche. The proposal touches upon one important topic for the DAO, namely how to best allocate USDC in the DAO’s treasury.
The proposal has mainly been discussed on Telegram and briefly through the comments on the forum. The GMX team was also invited to educate the DAO community further on GLP. After these initial thorough discussions the discussions have slowed down somewhat, but the topic remains active in the governance section of the forum and anyone is still allowed to share their thoughts.
Proposal to invest in two projects with the code names “Firebrand” and “Roadslide” (still active)
On 5 September the DAO Investment Committee (formed through MIP-2) proposed to make a USDC 3 million investment in “Project Firebrand” at a pre-money valuation of $80M with a 1.25% advisory token allocation and a USDC 5 million investment in “Project Roadslide” at a pre-money valuation of $40M with up to 2% advisory allocation (based on performance).
Project Firebrand is a codename used to maintain confidentiality during fundraising. As informed in the proposal, the team is fully doxxed, a veteran 100+ person studio building a AAA Web3 shooter for PC and consoles. It is further emphasized that they have a successful track record in the PC/Console space, and that their past games have generated tens of millions of dollars in revenue.
Project Roadslide is a codename used to maintain confidentiality during closing of the fundraising. The proposal mentions that also this team is fully doxxed and have a significant track record in their respective area. Furthermore, it is noted that they had successful and profitable games for years and will bring fun, engaging sport mobile games to the web3 space.
The proposal has been lively and received tremendous support since being posted on the governance forum earlier this week. The proposal was put up for vote on 7 September and the vote will be active until 9 September 12:26 pm CET. At the time of writing, more than 99% of the votes cast have been in favor of the proposal.
Discussion thread encouraging participation, increased use of “Discussion” category and more
On 6 July 2022, @niesigreen posted a series of correlating posts in the “Discussion” category of the governance forum. The posts did, amongst other things, encourage all DAO community members to share ideas, perspectives, concerns and more. It is great to see community members encouraging further participation from DAO members and more active use of the “Discussion” section of the forum – both are obviously always welcome for our DAO.
Moreover, the posts raised some valid points regarding issues that may arise in two-stage voting processes, circumstances where there are multiple steps in voting and situations where people are voting on polar opposite views, in addition to ideas on how some of these could be solved in practice. As mentioned in one of the replies to the initial post, a contributor team is currently working on presenting improvements for the DAO’s governance, which are sought to be presented and voted on by the DAO in due course. The points raised in the mentioned discussions thread will be taken into account in connection with that work.
Closing remarks
The above multiple governance topics that have resulted in discussions, proposals and voting rounds show that our community continues to be highly active, despite the downturn in the crypto markets. We hope to see this strong momentum and activity within our community continue going forward as well.
As part of our closing remarks, we wish to remind everyone in the community of the important Transparency & Accountability section of the forum, where various forum threads from early stakeholders can be found. An overview of forum threads posted to date (with links to the respective forum threads) can be found here.
We hope that the wider DAO community appreciates these updates concerning the DAO. Please feel free to leave a response to address any information that you believe was lacking or that you wish that we shed more light on. As we intend to provide such updates on a regular basis going forward, let us know if there is anything you want done differently in the future – we are as always happy to receive your feedback.