MIP-13: Merit Circle: A New Era


Thank you for the thread, Honey. This post is on point, and I share the same sentiment as your position. Long gone are the days of seed adding zero value.

This will set a significant precedent that seed / VC need to start pulling their weight, as we have previously discussed.

You have my vote.



Subtraction of a value subtractor = net positive value. Totally agree with Honey here.
Voting yes for this proposal. There no place for YGG if they don’t add value.


Spot on with the dilution. +1
I also get the impression that the YGG’s response and standard regarding their contributions sets an unfortunate precedent.


First post from me but this one seems important so decided to jump on

I bought YGG early on and to be honest I feel a bit let down by them. The public sale last summer was stupid and since then all they’ve done is make more subdaos and more tokens. I was actually surprised YGG was an investor in Merit Circle in the first place. I didn’t even realize they stopped their monthly treasury reports last September until you mentioned it.

Hard to disagree with anything you’ve said in the proposal and tbh you’ve made me realize its worse than I thought. Will vote yes to this proposal purely because they’ve done nothing for the DAO and I don’t want them to profit off MC.



First off, I agree with the sentiment expressed by @HoneyBarrel and the rationale behind this proposal. However, I’m going to come at this from a different (more traditional VC) perspective. I will also be voting NO pending below info:

  1. Confirm if the proposed refund is permitted by the terms of the seed financing, and
  2. this proposal be revised to authorize the DAO to negotiate a buy out of YGG’s interests at a mutually agreed value

I don’t know how applicable traditional laws and investor protections work in the DAO world, but I do know that being compensated for taking risk and protecting this is vital to build long-term trust.

Like it or not, Merit Circle raised a seed round before they had a massively successful BLBP which broke all records raising $105M. There was no treasury before this and that treasury + the core team is what is creating the durable value. The seed investors contributed $4.5M in return for 141M MC tokens, at the time 14.1% of the max supply, or effectively a $31.9M valuation ($4.5 / 0.141 = 31.91).

You can not just look back 6 months later and be angry with someone who took an early bet on you and say “here is a refund”. We must uphold trust in compensating those who take early risks. Breaking this trust will destroy value, lead to early investors everywhere not take risks on great teams with good ideas. I deal with crappy co-founders and angels/VCs all the time. I’ve even personally bought these types of groups out as well at various startups. However, if I can’t trust the legal protections and/or governance around my investments, then I can’t make investments. This could very well be an unintended consequence of this decision.

Further, setting a precedent like that for other DAOs can come back to hurt MC with its own investments in the future. Maybe we invest in something and add value, but there is a governance vote where the majority say they want to refund MC 100x return investment at cost “just because”. This is a dangerous precedent full stop.

Maybe YGG has failed to live up to its promises, commitments, and expectations, but they still were there and wrote a check before Merit Circle fully became what it is. You can’t change this.

If you don’t want YGG in this DAO, I fully support it, but it must be done within the terms of the seed financing agreement or at a mutually agreed price with their consent.


Hey BambinoValue,

The seed investors agreed to adding value, and agreed to the decentralized nature of DAO decisions.



Thank you honey for your work and your good objections for the DAO. You and your friends bring an immense value and I am very glad that you are with us.

Very well written, easy to understand and clear. I will vote YES.


Thank you for writing this extensive proposal.

If YGG is not upholding their end of the deal because they are not providing any or not enough value to MC, then I see no reason for the DAO to still grant discounted tokens to YGG.

Your proposal has convinced me that YGG is failing their obligations.

I will therefore vote ‘yes’ on the proposal and I hope this sets an example for other VC’s and DAO’s all around web3.



I totally agree with this proposal. If you see how busy MC is with developing, investing and with full transparency, this doesn’t match with YGG. Please cancel the saft.


Hello Honey, blessed day.
I am in agreement with your points and objectives here. There is a clear difference between the value added by the other funds who have posted and YGG.
Their behavior in regards to their own DAO is borderline scammer with an underlying aroma of rugpull. As their community continues to get diluted a mere association with them can be detrimental to the reputation of Merit Circle.

I am in favor of revoking the SAFT, refunding the 175k, but think there should be some more discussion around what to do with the tokens. Simply returning them to the DAO is of course an option, but there may be more value in something more creative. Burning them, or perhaps adding them to the rewards stream for staking v2. Anyway I suppose that’s another discussion.

I intend to vote YES.


Just wow! This could be a massive moment for the DAO and it could show the true benefit of a DAO structure. Taking tokens away from VCs who don’t contribute and back into the hands of the DAO to hopefully be burned will be massive!

I think we need confirmation from the Core Contributors of the terms of the deal and whether this is indeed possible. If so, I will be voting YES as there has clearly been minimal/no value add from YGG. Also having $75,000 invested via a personal fund is extremely concerning!

Top work Honey


GM Honey,

I woke up today and saw the sun was bright outside. It was then I knew, today would be a good day.

From your very thorough proposal, it seems we have a seed investor who will not only be not helping Merit Circle, but actually causing active damage. Quite frankly, the lack of value they have brought to Merit Circle is shocking. We should not be paying them millions of MC tokens for Yahoo Finance and Coindesk articles.

You highlighted how poorly YGG treats its own community and $YGG token, and I’m equally appalled. Every new token, and new raise, they launch, just further removes value from the original $YGG token. To think that they have even MORE planned is a worrisome thought.

Also is there any reason why Gabby’s personal fund took $75,000 of the $175,000 allocation? Was that meant for the YGG DAO? Does the YGG community even benefit from these investments?

To be honest, I don’t want Merit Circle to be involved with YGG at all, and I would recommend the YGG community take a long look at how they are treated. The Merit Circle DAO welcomes all.

(PS: and publishes transparent monthly treasury reports…unlike YGG)

I will be voting a hard and firm YES to this proposal.

Yours truly,

Johnny Jawnz
Staunch Merit Circle Supporter


Good evening everyon, first poster here.

First I’d like to thank Honey for making the proposal. I was one of the few unfortunate ones who bought after the LBP but with the recent market I have been DCAing and managed to lower my cost quite some.

Second. When I trade or invest I always do some background research on what I am actually buying. I’m retired (pension) but how we used to do things back in the day was mostly looking at valuations, P/E, credit health, and so on. I won’t bore you with that. However, when looking at the circulating supply and the cost of investment early investors had, I beg to wonder how a DAO perceives all of this. So for me this proposal is not only a way of collecting investment data, it also acts as a way to learn more about the new technologies and governance models the future brings us. Excuse me for my side story.

Now to the problem at hand. It seems that we’ve had a number of angel and venture capital investors who have contributed 4.5m USD in an early seed round. It is to be noted that naturally not every party adds the same value. However, we need to stay away from harming the DAO by rewarding toxic firms who do not add value. Not because we missed their backing for over half a year causing us great harm and opportunities (zero deal flow, nft lending), but to preserve our VCs that DO add value. It is clear that YGG is taking advantage of our good will, and this is unacceptable.

I will vote yes on the proposal.

As an extension to this, I am with the others that after a future discussion the tokens should be burned.

Erik de Bruijn


First of all, thanks to @HoneyBarrel for this thorough overview on YGG regarding MC seed investment.

I agree with all the points noted in the proposal.

Simple fact is, YGG did next to nothing to support, yet alone to provide or add value to MC DAO.

Therefore I will vote YES on this proposal.

Robert No



Totally agree, right on point and sharing the sentiment, it’s been enough of 0-value seeds.

Voting YES on this topic.

Best regards,


Hi all,

Naturally, thank you Honey for formulating this thread and starting a perhaps well-needed discussion.

The arguments you bring are fair and if these are the only aspects that YGG would add to MC, then obviously they underperformed heavily and pale in comparison to the other seed investors. I am in agreement with you there.

However, I have to assume there are reasons that MC has taken on YGG as a seed investor. This is an aspect we might not get to see (easily), but it is a perspective we need to take into account. As the MC team, even though we are a DAO, they are an integral part to the DAO. Other reasons YGG may be taken on as a seed investor is as a strategic partner. This could be in the form of advice or a sparring-partner; how to spot opportunities, discussing certain projects/opportunities, perhaps advice on how to handle a certain situation, or whatever they might YGG for. I would like to hear the perspective of the team to hear about the value they might derive from it.

@BambinoValue does raise a very good point as well. We have to explore what cutting YGG loose means for MC in the long-term. If this perception about YGG gets out, it will naturally be bad for them as well, but we need to be looking out for ourselves. No, YGG has not met the standards of adding value that is being set for seed investors. If the DAO decides we want to cut YGG loose, then it shall be done, but it has to be done within the possibilities we have.

That being said, if the aspects Honey addressed is all YGG has done; the social media posts, the “co-investing”; the possibility of lending NFTs. Then of course, they have not pulled their weight. Especially as a strategic partner “whose values are deeply aligned with ours”, considering their limited transparency and split-focus of their own DAO with the subDAOs.

To conclude: No, they seemingly have not pulled their weight and have not lived up to the promises made. However, I would like to hear the team’s perspective on how they have derived value from YGG and if it is still a strategic partner.

1 Like

Thanks, Honey Bee for the detailed proposal and continuous contribution to Merit Circle DAO.

Appreciate your input and research done in this case. I don’t know the SAFT details but clearly can see that such value add from YGG is not only disappointing but actually embarrassing for such big project and the capital involved. It sounds like an amateurish runaway, extracting value from VCs that likely have no clue what they invest in. While I might respect their hustle, it certainly goes against our principles and our commitment to the space. As some people mentioned here I was surprised to see YGG as an investor in MC as they are direct competitors. But here we also have the CEO of YGG investing almost the same amount as YGG. Which is very weird in my opinion.

I’m coming from the 2017 class of crypto where I started as a bounty hunter as I had 0 capital to start with. And retweeting, creating tweets, and providing cross-marketing for projects and advertising are very easily achievable with the army of accounts at a very low cost. A lot of our community members are influencers or have Twitter accounts and they constantly contribute to the success of Merit Circle DAO (or at least we trying to be active). If a few retweets and tweets are the only value add from a huge capital fund I don’t know what to say here - it is even lesser than the bounty hunter level of value add. But they can extract more than 5mln tokens for such amateurish behavior.

I fully support this proposal and I will be voting YES for YGG seed refund (few thousand compensations on the articles? perhaps)

Also, I would suggest using extracted tokens and burning them to reduce the total supply.

This is an unprecedented case in DAOs history (2nd so far for Merit Circle DAO) which I’m excited about to be quite honest. I do believe all seed investors, angels, and VCs should stay accountable for their value added to the investment. Otherwise what is the point of them if any?

Thanks for my Ted talk and see you on the voting field,

Yours truly diamond hands bagholder Speedy :slight_smile:



The choice of YGG as seed investor might be wrong. From another side the question is: what were the commitments of seed investors ? Were they written somewhere, maybe formal agreement ? If yes and if they are violated - no doubts, I vote “yes”.

But if not or with vague wording - then we are talking more about expectations than commitments. And in that case it would be a slippery slope to take their tokens back. Not even mentioning lawsuits which are probably possible.

1 Like

Very thorough examination of the major seed investors, thanks for writing it up. After reading all of the above one can only conclude that there is an entity here (YGG) which has added little to no value and are attempting to present a version of events which is disconnected from the reality of the situation.

For me personally, the no value add is a key factor for assessing such a large investor which is indeed a disqualifying factor, but further, the even bigger point for me personally is that their credibility as a legitimate entity appears to be on a sharp downslide. They’re not transparent about their funds at all and they are launching several sub-DAOs each with their own LBP/raises. What could possibly be the reason for them to need to branch out to countless sub-DAOs and collect countless more funding? For me, those actions are predatory and harmful, they appear to be running cash grab after cash grab. Such an unethical entity doesn’t belong in association with Merit Circle in any way shape or form, as Merit Circle is a fully transparent, honorable, professional, and ethical entity whose reputation shouldn’t be tarnished by associating with filth like cash grabber / no value add YGG. All of this is made worse and is especially bad since they’re also technically a competitor of MC.

Vote is a hard YES for removing YGG from seed, they can tarnish their own reputation and run their cash grabs without MC association, without being able to use the MC brand for legitimizing themselves.


Sad Cat Response to YGG Proposal

Thank you Honey Barrel for this latest proposal.

Over the past 7 months, Sad Cat Capital has made a conscious effort to be as publicly active as possible within the Merit Circle DAO. Our public activism has included posting self-made Merit Circle content on Twitter, publishing proposals (MIP-6 and MIP-7) for the DAO, and even helping to moderate the unofficial MC Trading Telegram group. Our ongoing work with Merit Circle has led to Sad Cat Capital being added to the list of DAO Core Contributors.

We committed to this level of activism because we believe investors should seek to add value to the DAO, not extract it. Merit Circle will only succeed as the top Gaming DAO, if everyone within the DAO works together to make it so.

Our firm holds a strong belief in decentralization. The ability for the DAO to act in its own best interest, without being controlled by any single centralized authority. To date, this belief has been exemplified by the Merit Circle DAO, and we are proud of how far the DAO has come since its inception almost 7 months ago. Sometimes, the DAO will need to make difficult, yet important, decisions, to ensure the best going forward. We believe this could be one of those times.

Like many others, we have been glad to see the Accountability and Transparency posts from seed investors. We believe it is important that investors are transparent about their role in the DAO, and how they have contributed and added value. We enjoyed reading threads from Maven11, DeFiance Capital, and Mechanism Capital, about their contributions to the DAO and suggestions for the future. We hope other angels and VCs continue to follow your lead!


Unfortunately, we were also disappointed with YGG’s response, as it demonstrates how little value they have added over the past 7 months. We agree with Honey, that none of the 5 points YGG included in their response can be considered as adding value to the DAO.

It was correctly pointed out that there has been nowhere near enough social media activity from YGG for that to be considered as beneficial to the DAO. Likewise, anyone can become published in Yahoo Finance and Coindesk by using similar services to what Honey linked in the proposal.

Unless YGG can expand on “introduced Merit Circle to other helpful early stage investors”, then we also agree that this is far too vague. This could be due to the fact that there is nothing to expand on here, or no helpful introductions were actually made. We also do not consider ‘co-investing’ as contributing to the DAO, nor offering to lend assets which were never actually lent.

As projects and DAOs, the differences between YGG and Merit Circle are staggering. Merit Circle shares our love for decentralization, transparency and honor. Sadly, we cannot say the same for YGG, for all the reasons that Honey has mentioned. Today those traits, that Merit Circle embodies, will be tested to see how far the grasp of our DAO truly reaches.

Ultimately, as a VC firm ourselves, we take pride in the activism we do for projects that we love. The purpose of seed investing isn’t just to provide capital to projects - especially in the crypto space where there is an abundance of capital - it’s to provide ongoing support to ensure continued success. In our opinion, if a seed investor doesn’t do this, then they have failed in their role.

For that reason we will be voting YES to this proposal, and hope that we see continued efforts from all Merit Circle investors going forwards.

Signed with right paw,

Lord Leto
Sad Cat Capital