Early Investors - Accountability & Transparency

Dear DAO community,

Let’s start off with expressing our gratitude to the beloved DAO community. We’ve come a long way together and the community is getting increasingly diverse and decentralized.

As the bootstrapping entity (Merit Circle Limited - MCL), and now one of the core contributors to the DAO, MCL is in frequent contact with both early stakeholders and the broader community.

For this reason, we started an initiative on behalf of the DAO. We want to propose a solution that both addresses frequently voiced community concerns around the early stakeholders and seizes an opportunity to strengthen the DAO. We suggest the following thread can serve as an ongoing transparency and accountability thread. MCL believes that it’s in the interests of all MC participants to achieve a balanced outcome that benefits all stakeholders. The best outcome for the DAO. This is what we are aiming for with this initiative.

The DAO is all about transparency and therefore, we would like to provide some more insight on the funding rounds done prior to the DAO’s public launch. We are referring to the seed round closed early October 2021. These were the Dao’s earliest contributors, and some of them have distinguished themselves as core DAO contributors (active and consistent supporters). Now, let us dive in deeper.

Who are the DAOs early stakeholders?
A full list of all the seed investors can be found here; Gitbook

All of our early stakeholders have been hand-picked as the stakeholders that would be able to bring most value to the Merit Circle DAO in the long-term. Based on our best estimation at that time. The round was 4-5 times oversubscribed, meaning we had the luxury of choice. Not a single dollar of allocation has been granted to friends and family. We wanted to avoid free-riders or parties that were primarily interested in flipping an investment. We’ve made the need for funding secondary to the need for a strong cap-table, as we felt these stakeholders would form the foundation of our DAO together with the wider community.

To divide the total allocation, 80% of the allocation has been granted to entities, mostly crypto venture funds. 20% of the allocation has been granted to Angels. Almost all of them are working full-time in the crypto industry and/or have their own crypto projects, therefore offering the DAO a lot of valuable network and advice.

How much tokens do they hold?
140,625,000 tokens have been sold to early stakeholders, representing 14,06% of the total token supply.

How long are these tokens vested?
The tokens have a 6M cliff and 36M lineair vesting period. The cliff will end on 5th May 2022 and the tokens will start to vest.

Addressing some concerns
The community has voiced concerns around the early stakeholders ‘value add’ and their long-term intention to support the project. Especially given the significant delta between the seed price, the LBP price and the current market price. Part of the community is afraid our early stakeholders will sell their tokens indiscriminately into the market when these tokens vest. Having carefully considered and selected the early stakeholders we do not believe this to be the case. They are long-term $MC bulls.

Prolonged vesting
The community suggested prolonging the vesting. A practice other projects have adopted. The DAO has the ultimate power to do this through governance if it so wishes. Several proposals to this end have been suggested by the community and some of the core contributors. Nevertheless and if this were to be the case, it would only delay the inevitable. Rather than garner support it may in fact have the opposite effect.

We are of the view that the current vesting schedule is not unreasonably short and is significantly longer than the average crypto project (by design). Amending the vesting schedule may be interpreted as an “agreement breach” which may harm the DAO’s reputation. Especially in light of the fact that the early stakeholders have added significant value. For this very reason, we advised the community members against such a proposal. We believe any early-stakeholder should hold $MC based on the project’s merits. The DAO has shown significant progress and is one of the best-positioned web3 projects to capitalize on the growth of the GameFi sector.

We are advocating a different approach. We want to incentivize our valuable early stakeholders to add even more value to the DAO. We want to open an active dialogue between early stakeholders and community members. This should lead to a deeper understanding of the contributions on both sides and thereby bridge the current gap. We hope that this will also lead to the development of new ideas, increased engagement, increased amount of valuable contributions, transparency and accountability. Values the DAO, the Early stakeholders, Merit Ltd and the community all ascribe to and therefore benefit from.

Proposed solution
We have issued a call to action to all of our early stakeholders. This call to action aligns with our ethos to strive for maximum transparency and accountability. It should also bring our broader DAO community and our early stakeholders closer together. Moreover, it should lead to more value being contributed to the DAO.

To this end, a call to action has been requested from the Early Stakeholders with the following 3 points in mind:

    1. Transparency
    1. Accountability
    1. Staking

1. Transparency - All streams to entities are made public.
Each entity will be linked to the ERC-20 receiving address where their vested tokens will be streamed to.

We have chosen to protect the individuals since they are more vulnerable to doxxing and privacy/security concerns. However, we have called upon each of the individuals to also voice their opinion on the forum. They are also free to publish their stream, if they want to opt-in.

2. Accountability - All early stakeholders open a dedicated topic
The topic will be placed in the “accountability” section of the forum (section this post is in). The goal of these topics is to show the community in what ways they’ve contributed so far and how they plan to add value to the DAO in the future. The community can ask the specific entities questions here or interact with the entities.

The topic (optional for individuals) will have the following format;

  • Topic title: “[Entity name] - [Entity sort] - Contributions” For example: “Maven11 - Fund - Contributions” Or “individual name (anonymous if preferred)”
  • Name (can be anonymous for individuals)
  • Website link
  • Twitter link
  • ERC-20 Receiving address
  • Short bio entity

- Value added to the Merit Circle DAO so far:

- Currently working on for the Merit Circle DAO:

- Plans to work on individually for the Merit Circle DAO in future:

- Things we like to contribute on with others for DAO:

- What ideas do you have for the Merit Circle DAO:

3. Staking - Call to stake all MC tokens that vest over the next 6 months for at least 6 months in locked staking.
In this way early stakeholders can show their ongoing support and we mitigate potential supply shocks. By absorbing a significant piece of the unlocked supply, we are lengthening the release of these tokens on the open market.

On this point there is no distinction between individuals and entities, since there are no privacy or doxxing considerations.

To conlcude
The requests have so far been received with a lot of positivity. Almost all early stakeholders have already voiced active support and endorsement on all 3 points. We hope these action points will create more accountability, transparency, understanding, engagement and most importantly result in value being contributed to the DAO.

We, MCL, believe early stakeholders should be able to take out profits like any investor should be able to. This is very natural. By showing they’ve contributed and when they are taking profits, they can do so in a way that is transparent and not damaging. These topics are simultaneously a great opportunity for all investors to publicly display their capabilities. In the end, skin in the game and real contributions are what distinguishes the weak from the great.

What’s next?
As it stands now, this is a voluntary initiative by MCL. No one is forced to participate. We can’t nor do we want to force anyone. We think it is better if these kind of transparency & accountability initiatives happen voluntarily. The DAO community could always use force through an official proposal if it deems it necessary for transparency purposes. Anyone is free to bring other ideas or suggest changes. We will start collecting the input needed to publish the list of streams and staking intentions in this topic on behalf of the DAO. In the meantime, we invite all early stakeholders to publish their accountability topic. We’ve also reached out to all early stakeholders by mail.

We’d like to remind everyone that all stakeholders are part of the family of Merit Circle DAO contributors. All working towards a shared goal. Let’s keep that in mind when we engage with each other on this topic, to make this a constructive and positive initiative.


Great initiative. Fully support it. This is something that has never been implemented by DAO before ^^

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Thanks for the post and for reaching out to seed.

It’s promising to see interest in transparency from early investors. I think this will weed out who is a faithful supporter of the DAO and who is not. We can work from there.

The questions are great, and it seems we are changing the standard of what is expected from VCs rather than just capital. Steps in the right direction.

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Thank you for this post. I would fully support this extra transparency from the early investors. This is the main thing I want as a community member is input from the early investors so we can better understand how they are helping the DAO aside from the initial investment.

I do certainly agree that it would not be a good idea to prolonging the vesting. Having seen this exact same thing happen with ILV and then the early investors shorting the project, I do certainly not want the same thing to happen with MC. If some early investors want to sell then I would rather they just sold and moved on, which they are within their rights to do so.

I look froward to hearing from the early investors on the 3 sections outlined.



Thanks for the post. I understand the reasoning behing the post but as I’ve invested in other projects in early rounds there are some points I’d like to make;

Most of the seed investors probably invested at a point where succes of the MC Dao was not a guarantee. They took risk and in early stage investing that can bring upside. They shouldnt be punished for being early imo.

In some channels is see toxic behavior as the market is turning red and I hope this isnt just done to cater to a few who dominate certain channels? Chances are that on another day they find something else to bitch about.

Are there any measures taken that investors who dont want to commit to these points will not be doxxed?

Again thanks for a well written post.

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