MIP-10 Framework around financial terms for games developed by Merit Circle DAO

Authors

DAO Core Contributors

Summary

To take a step towards bringing the Merit Circle DAO to the vertically integrated gaming DAO we envisioned, we would like to share some negotiations that have been going on.

Furthermore, we would like to use this proposal to create a framework for future projects that will live under the Merit Circle DAO. Edenhorde is one example, but in this same proposal we share the negotiations with two senior developers who have created a game that we’re aiming to launch under the Merit Circle DAO.

In this proposal we share the financial breakdown of these projects and thereby indicate the way we envision sufficient in the near future.

Abstract

Ever since we launched our plans for Merit Circle, we have strived towards making the Merit Circle DAO vertically integrated in the GameFi sector. This entails a wider set of activities than solely investing in partner projects and recruiting gamers for the DAO.

The first step towards showing what we are capable of is Edenhorde - the first creative project by the DAO: The Edenhorde world will be seeded from a series of interactive chapters written. Owning an Edenhorde NFT will allow you to vote and receive additional NFTs during this story arc. However, this will not be the final station, rather it is a start.

To make an extra step towards bringing the Merit Circle DAO towards the vertically integrated gaming DAO we envisioned, we would like to share some negotiations that have been going on.

By this proposal we want to ask the approval of the DAO to further negotiate the terms with two skilled senior game developers, who have been working on an interesting gaming project for the last year. More information about this specific game will be shared at a later stage, however we felt that it’s only right to include the entire DAO at this early stage in the negotiations.

Please note that this game we’re mentioning has no direct link with Edenhorde. It will have a separate entity and not include Edenhorde’s lore or visuals.

How does this all tie back financially to the DAO?

Beneath, you can find a list of bullet points supported by a visual that explains the way we currently envision the revenue to be split among the game developers, the Merit Circle DAO and those who support the Merit Circle DAO.

  • There will be a split of revenue between the Merit Circle DAO and the game developers (ratio will be in favor obviously of the DAO);
  • The DAO will provide a development budget which will be sufficient to get the game developed for a public release;
  • The initial DAO investment will be recoupable based on the revenue generated from mints, secondary sales and/or other revenue streams;
  • The developers will be responsible for the development of the game, the vision, the art direction and obviously improvements based on community feedback;
  • The Merit Circle DAO will be responsible for the other components such as marketing, in-game economy design, community building & smart contract development;
  • We suggest a percentage (f.e. 7.5% and 2.5%) of the revenue goes towards MC stakers & Edenhorde NFT holders - the remaining part will be headed towards the MC DAO Treasury (and thus MIP-7). – In the case these projects involve its own token, a retroactive airdrop can occur in a similar breakdown;
  • $MC holders and contributors to future projects (in this case Edenhorde) might have a preferential spot in future whitelisting rounds for NFT drops, land sales and others, this will naturally be decided upon per each game.
  • Last but not least: Obviously $MC holders and Edenhorde NFT holders will be our first group of testers of the game :wink:

Added based on discussion: For the avoidance of doubt, the proposal vote will limit itself to:

1. Intention to move ahead with the new creative gaming project
2. Mandate for the Merit Circle DAO to strike a high-level deal with the parties involved in the gaming project
3. Intention to create a form of value distribution from gaming project for Edenhorde NFT holders and $MC tokenholders”

More information about the team, the game direction, the branding, the timelines will follow at a later stage.

Naturally, each of these games and projects that we will house under the Merit Circle DAO will go through a separate proposal.

Motivation

We are in a phase of negotiating final terms and prior to finalizing it, we want to ensure it is in line with what the community wants… We want to share this development with the entire DAO and thereby confirm the direction we’re heading towards. We want to become a DAO in the GameFi sector that does more than simply investing and recruiting gamers. Imagine a future where the Merit Circle DAO develops games itself.

The above terms are meant as a wireframe for future negotiations with game developers, game studios and internal projects that will go through a similar process of negotiations.

Budget

The above visuals represent the flows of funds that go through each of these projects. As mentioned above, the game developers will receive a certain development budget to bring the game towards a suitable public launch.

As mentioned above, this is merely a framework for future proposals and therefore does not include any specific numbers, merely percentages.

Rationale

How can we agree on something that we haven’t seen yet?
We are creating this proposal to share what has been an ongoing goal within the Merit Circle DAO. That is, looking further than merely investing and recruiting gamers. Through creating our own products and thereby developing financial upside among all involved parties, we are creating a more robust and resilient DAO. It will allow the DAO to create more synergies (and by extension more value for-) with existing branches, such as the investment- and the gamers branche that de DAO has been scaling rapidly.

Each party involved in a game development partnership will be rewarded accordingly. The above breakdown of financial benefits for those participating in these projects can be seen as a framework that we can take and use for future projects. On that note, we will release a separate proposal for the game we have briefly discussed in this proposal.

How does the game discussed in the proposal relate to Edenhorde?
As a perfect example of the way we envision the future, we see a situation where multiple projects under the Merit Circle DAO all benefit from each other directly and indirectly, creating stronger games and a more valuable Gaming DAO ecosystem. However, Edenhorde is a completely different entity that has no direct link to this game. This game will have its own look and feel, lore, presence and anything in between.

The development of Edenhorde comes down to a series of interactive chapters written. Owning an Edenhorde NFT will allow you to vote and receive additional NFTs during this story arc. However, this will not be the final station, rather it is a start. The future of Edenhorde will be shared along the way, in its own fashion and manner.

Why don’t we focus on one thing instead of adding new projects?
The agreement is structured in a way that it will be mostly independent teams that can develop these games, the game will benefit from the DAO’s brand and expertise in smart contract development, design, marketing and community-building. In addition to a gaming community that can bootstrap and battle-test the games. Where-as the DAO benefits from the traction the game generates, by having a financial stake in the game and brand exposure to the game.

In this way, the partnerships shouldn’t take away a lot of time from the activities of the core contributors, while they will create a lot of value for the DAO. We will always aim for quality over quantity and therefore remain strict as to which projects we interact with. If anything, we want to remain focused on improving rather than increasing.

Copyright and related rights waived via Creative Commons CC0 2

26 Likes

Wow! Excited like never before!
Let’s go MC, let’s go EH, let’s go DAO!

Waiting for the new partnerships, new games. We should fullfill the first picture of the proposal with question marks by a lot of projects for the future of Metaverse. Let’s go!

6 Likes

Thank you DAO Core Contributors for another well written proposal.

I have to say the thought of the Merit Circle DAO making their own games excites me very much! From the beginning, we have all expected Merit Circle to develop beyond just a ‘Gaming Guild’ into something more expansive and powerful. This, alongside Edenhorde and other projects, is certainly on the path to achieving just that!

Hearing that $MC stakers and Edenhorde NFT holders might even begin to earn a share of the game revenue (depending on DAO voting direction with % to be finalised) is something I like the sound of very much. Anything that brings more value, utility and purpose to the $MC token is a positive in my books.

I will be gladly voting YES to this framework proposal, and I look forward to seeing more specific, and detailed, proposals regarding these topics in the future.

Sincerely,
Johnny Jawnz

wojak

7 Likes

Yes. Yes. Yes.

This is where I was hoping MC would go all along. Love the utility features of this and, more importantly, the ongoing sustainability of this.

Very excited about empowering talented individuals to make great games for the world to enjoy. Will be gladly voting YES on this.

6 Likes

Thanks for the well written and conceptualised proposal.

First of all it really makes me proud to see that I wasnt wrong in investing in Merit Circle when I saw the promise of something more than just another GameFi Guild. I think many of the MC investors feel the same way.

I think it’s great to, next to the other investments already made, see Merit Circle movin in this direction and leveraging assets and relations into new ventures.

I fully support and applaud this proposal and cannot wait to see the progress and what’s next!

7 Likes

That is very awesome, really looking forward to seeing the development of MC.

Hope MC create the first complete metaverse economic model in the blockchain market.

:grinning: Let’s go!

2 Likes

Greetings DAO Core Contributors, and thank you for the proposal.

This is Admiral Erik von Pumpson of the MC Enterprise. Since a few weeks now, we’ve been stranded in some dystopian low-tech world. The citizens here do not seem to be pleasing to the eye. We’ve also been unable to find any quality nutrition, not even a chocolate flavored bug bar. We’re not giving up, but it’s been tough. We did manage to fix our fuel rods, so we should be good to go soon. Now, to the topic at hand.

It’s with great excitement that I am reading these updates. I love the idea of not one, but multiple games. With both the $MC and $EH ( ? ) stakers/holders getting a share of gaming proceeds is a wonderful idea. As others mentioned both in Telegram, Discord and here in the DAO forum, I think it’s important to continue with modeling value around MC. This will keep everyone on the same page, and happy in the long run.

We will be voting YES as well in its current state, but we’re curious as to how the others would like to shape the specific details, percentages, and how the “7.5%” and “2.5%” are practically ‘given’ to the holders. I assume this also depends on the game ( s ), as each game likely has a different method of revenue generation. Whether that’s via tokens, NFTs, cash, and so on.

Signed,

Erik von Pumpson
Admiral of the MC Enterprise
Ascending Galactic Federation

4 Likes

Thank you Merit Circle team for such wonderful proposal.

It will be my pleasure to cast YES to this proposal. It does need some technical explanations regarding revenue sharing model.

It also excites me that we might be one of the DAOs who will shape the automated revenue sharing models for future generations.

5 Likes

Wonderful proposal. Thank you Merit Circle team for re-enforcing our faith that merit circle is more than just a guild.

Will be voting yes for this proposal.

Will eagerly wait for more details about the game as well as revdis of 7.5% & 2.5% to MC stakers and EH holders.

2 Likes

Thanks for the proposal team, which seems well thought out. Overall it looks good and it is easy to see how the proposal (if successful) will be rewarding for the DAO and both the MC and EH holders. Happy to vote yes on this.

Just a couple of questions to the proposal that I would appreciate clarification on:

  1. I note that the proposal states that the DAO will provide the development budget. I assume that the funding will come from the treasury(?) and that no additional funds will be raised for this purpose. Do we at this stage have approx. numbers on how much it would cost to fund the projects negotiated with the two senior game developers that you have been discussing with (ref. that you are in the process of “negotiating the final terms”)?

  2. I note that each of these games and projects that MC will house under the DAO will go through a separate proposal. As the DAO (if I have understood it correctly) is in the process of negotiating the final terms with the two senior game developers that you have been in contact with thus far, is it so that the DAO might commit to fund these projects prior to the actual vote for the game(s) to be developed by these? Just trying to understand at what point the DAO will be committing to fund development and whether there is a risk of the DAO committing funds (wholly or partially) prior to the separate proposal for the respective games/projects being put up to vote. I am for providing the team with a fairly broad mandate in this respect to secure efficiency (assuming that the progress and development will be transparent for the investors along the way).

Thanks again and looking forward to the vote.

P.S. on a separate note: I am somewhat surprised by how many (reading here, telegram etc.) seem to think that this very proposal is the one that makes MC stand out from other guilds. MC is already far different from the classic guilds, as its main revenue stream and deployment of funds goes to investments in the gamefi space (increasing treasury by divesting positions in profit). Developing own games is however surely another point making MC different in this respect.

5 Likes

Henlo,

I like the framework but it is unclear to me how much revenue a game, any game, could generate so it’s hard for me to see how much benefit we’ll get via MC and EH tokens at 7.5% and 2.5%.

Also, I agree with @Cryptolawyer that I expect all of this from MC already or I wouldn’t have bought it over say GF, YGG, Peelemos and others.

Do we know how the games will be funded? Is this pre-fund ,separate fund, or the treasury? Do we get cool NFTs?

Have a good day!

image

3 Likes

First of all, this proposal is well-intentioned. It completely opens up Merit Circle DAO’s approach to GameFi as a whole, not just to invest in and recruit guild players, but also as a game publisher. Such as GAMESTOP. And on this basis, every MC holder can enjoy the revenue brought by the game.

But I have the following doubts:

  1. How did the development team decide on the game? Can a lower-level game development studio collaborate and enjoy Merit Circle DAO funding?

  2. The development cycle of a game may require a long period of time from the development, launch and stable operation (profit) of a high-quality game. Is the fund of Merit Circle DAO sufficient to support this development cycle? Or will you do additional secondary funding for a single game development? I think there needs to be a lot of discussion about the development team and the development cycle and funding for the game, and the profit sharing for each game

  3. Think it is a double-edged sword, which may make Merit Circle DAO become a monster or fail. In the bear market cycle, every project will face the problem of shortage of funds and fail before dawn, so in the use of funds, I think the Merit Circle DAO needs in-depth consideration.

  4. Like YGG guild their founding partners, this is the game developers, so I believe that after the guild will walk on this road, not only investment game NFT and recruiting P2E players, more is how to become P2E game at the top of the vertical (which includes investment, launch, operation, P2E at an organic whole, the game infrastructure)

3 Likes

Hello friends,

I’m excited to vote yes on this one. In short, I think we’re going to be the go-to laboratory for native Web3 game design—where the game and the ecosystem around the game are seamless. Maximal interoperability/composability via APIs. Deep integration of ownership/trading/betting/paying/borrowing/esports into core gameplay loops and the culture around a game.

I could be wrong, but the big marketplaces/exchanges/studios are just going to want to collect fees when you buy their skins and items in their marketplaces/exchanges/stores. Because they’re big, they will have to keep from providing too many overlapping services, and the game design may be stale and less viral. They are likely to generate too many weak Kickstarter-type cash grab games (Fractal?). Or they will take too long making non-interoperable AAA games with little value-add over traditional games and more barriers to entry for core gamers.

With interoperability and vertical integration, I think we can turn games like Go Fish into The World Series of Poker. Flappy Birds into 24/7 esports. Counter-Strike into…WAGMI. As a vertically integrated DAO (not a pure play guild, marketplace, or studio) we might be in a better position to build the monetary activity “around” a game. And I think a game’s marketcap will reflect the monetary activity “around” a game plus the monetary activity “within” the game.

One viral hit, and the devs will come. (A viral hit being something that Twitch and Twitter likes—and makes Twitch and Twitter want to get on the MC dashboard.) Most of the best game devs probably don’t want to start a Web3 company from scratch. They just want to make great games, or else they wouldn’t tolerate game studio working conditions. We just need to lower the barriers of game devs to quit/skip corporate jobs, and we have all the deal flow we want and more upside than pre-seed. And we will get some very viral, addictive, weird, and fun games.

I’m summoning all my wheat spirits on this folks.

—Dolly

2 Likes

Hi, this is Bailey from Defiance Capital.

100% in support of the proposed framework that aligns all stakeholders.

Would be happy to put my trust in Merit Circle’s core team to evaluate projects and make decisions on behalf of token holders as they have consistently executed. This new development will position Merit Circle to be a web3 games publisher and strong partners of upcoming games - further improving our brand.

The revenue split parameters could be revised in the future as the DAO evaluates the success of projects.

3 Likes

Thanks for the well written and conceptualised proposal.

First of all it really makes me proud to see that I wasnt wrong in investing in Merit Circle when I saw the promise of something more than just another GameFi Guild. I think many of the MC investors feel the same way.

I think it’s great to, next to the other investments already made, see Merit Circle movin in this direction and leveraging assets and relations into new ventures.

I fully support and applaud this proposal and cannot wait to see the progress and what’s next!

2 Likes

Yes. The DAO continues to show that value accrual for its members and contributors is a top priority. Also demonstrating that the best way to capture that value as a member is to be involved in all the ventures taken, i.e. staking MC AND holding EH NFT.
I wholeheartedly support this propsal. LFG

1 Like

All efforts by the team in the direction of further investments is great. My only question is the role of the Edenhorde NFT holders in the renumeration / revenue share structure with these investments.

Edenhorde is an internal spinoff/project that should be treated as one of many 3rd party investment - it benefits from the MC community, but it doesn’t take part in the upside of the DAO’s other investments.

So why do you mix in the Edenhorde NFT holders in the revenue split?

Based on the above comments and after internal contemplation and discussion among the core contributors, I believe we should restrain from specifying the exact method of revenue distribution and the exact revenue split for now. In general, I think there is a consensus in the comments that both Edenhorde NFT holders and MC token-holders should benefit in some way. The way we do this could be the described method with the same split as in the above stated proposal, or a different method and/or split. By not specifying the exact details yet, we allow the DAO more time to find the best fit for financial incentivization based on: the exact game mechanics, internal ideas and feedback from the community.

For the avoidance of doubt, the proposal vote will limit itself to:

  1. Intention to move ahead with the new creative gaming project
  2. Mandate for the Merit Circle DAO to strike a high-level deal with the parties involved in the gaming project
  3. Intention to create a form of value distribution from gaming project for Edenhorde NFT holders and $MC tokenholders”
3 Likes

Meow,

We are grateful to the Merit Circle DAO Core Contributors for putting forward another proposal.

We are happy to see the Merit Circle DAO beginning the work needed to start creating their own games, as has been hinted at by the team for some time now. This is a topic that will no doubt require further proposals, debate ,and analysis as game development progresses, but we are broadly happy with this framework proposal. We are especially happy to see the idea of ongoing revenue distribution to MC ecosystem participants (holders, stakers, Edenhorde holders) as the DAO’s ultimate aim should always be to add more value to the MC token and the treasury.

As well as points raised by other community members, some queries which we look forward to seeing addressed in future proposals include:

  • How will game revenue be split and distributed? Options could be Ethereum, USDC, MC, other token
  • If a game has a native in-game token (eg. SLP within Axie), or has NFT rewards, how are these considered as part of revenue?
  • How do we protect the revenue distributions in favor of the DAO/community from centralized entities taking up a significant portion of the rewards?
  • Will the funding come directly from the DAO Treasury USDC reserves?
  • Are there any budget or time constraints for making a game? Depending on the level of game the DAO is considering, further funding rounds could be required, and we could be looking at months or even years of development to reach a finished product.
  • How will the game(s) be marketed? Currently we require ongoing marketing resources for Merit Circle and Edenhorde. If we have further products developed will they require additional marketing? Or will marketing be drawn away from Merit Circle and Edenhorde?

Again these are issues we do not expect answers to now (as @tommyq mentioned, exact revenue distribution methods), but are simply points we would like to see addressed as progress is made.

We are keen on the idea that MC stakers (and now Edenhorde holders) continue to receive preferential spots in future whitelisting rounds for NFTs and potential Lands. We always want Merit Circle participants to feel rewarded for participating in the ecosystem. Having MC and Edenhorde holders participate as the first set of testers is also a nice gesture which the community would appreciate.

Overall we are happy to put our support behind this proposal and look forward to future proposals where clarity is reached on some of the points, both we and other community members have raised in this thread.

Signed with left paw,
Björn Meowson

6 Likes

Thanks Tommy,

Some studios/developers might not need funding for game development from us but might be interested in contracting with us to design game economies, use our other products (e.g. player dashboard), and write smart contracts. Any thoughts on offering a sliding equity scale based on our contribution to the game development budget? For example, if a studio 100% self-funds, but we design the economy, smart contracts, etc. we could take a 40%(?) equity stake. Some MC holders might be willing to have less equity in a new game in exchange for reduced risk to our treasury. I don’t want us to undervalue our services, though.

Cheers,
Dolly