MIP-13: Merit Circle: A New Era

As some others are mentioning I think we need a better understanding of what the terms of the agreement actually were.

I think almost any early stage project would hope their seed investors would add value. The question is was that adding of significant value an actual requirement for participating in the seed round or merely the hoped for behavior of an early partner.

If YGG is truly in violation of their side of the agreement then I think we should take action including possibly canceling and refunding their seed investment. If however they’ve just been a disappointment but no explicit requirements were placed on them than I don’t think we’re in our rights to reclaim their tokens.

This isn’t just a legal question, it’s also a reputational question for us. Any organization, DAO or otherwise, needs to be able to make long term deals and partnerships.

As an individual for example when I staked my MC I did so assuming the conditions I was being offered would be upheld. If I had doubts that they wouldn’t, if I thought there was a chance MC might alter the terms after I’d already locked my tokens because it was unhappy with how the staking program was going, it absolutely would have affected my decision to stake longer term or not. Similar scenarios where we need to be able to make longer term agreements with outside parties are going to be crucial for the success of the DAO.

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Dear Meritians,

First, we (the main development team) thank you all for your opinions and for participating on the governance forum. It shows once again you have the DAO and community at heart. Thanks to everyone for weighing in, it is clear this is a hot topic and that we have a vibrant community.

Second, we spent the past 48 hours discussing various options internally and have been in touch with the Yield Guild Games team who are open to constructive solutions that will meet the community’s voiced sentiment.

Please allow us to spend some more time discussing these options together and to get back to you all with suitable suggestions.

It’s important to note that we cannot speak for the DAO. The DAO, with its many stakeholders, is ultimately the entity that will decide.

Because of the complexity of the situation, the gravity of the proposal and the range of views, it is our opinion this proposal should not be rushed to a vote. Not until all options have been weighed and all opinions have been heard.

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Thanks for your response and the work you all are putting in. I fully support this and appreciate the fact that you take the community’s concerns seriously

Firstly, I would like to kick off by thanking @HoneyBarrel for this thread and the thoroughly written proposal. Secondly, I’d like to give a shout-out to all DAO participants that have taken the effort to read and respond with their points of view.

I’ve been following YGG for a long while now, both from the sidelines and during times as an active investor. The reason I’m not an active investor anymore (for quite a while now) has been because of the many reasons that were addressed by people above already like the lack of transparency, no clear vision/mission and underwhelming actions in the interest of their DAO (or should I say DAO’s lol).

As a top LBP investor and LP provider, I will certainly be voting yes if this proposal comes to a vote.

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I support this proposal YES!

Yield Guild is not even adding value to their own token …let alone the badge (which was suppose to hold special perks) . Aside from their initial contribution with fund its clear that …that they are not adding any value to MC.

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Henlo,

Thank you for your response.

We’d like to remind the MC (dev) team and YGG team that we are operating under the flag of the MC DAO. In that sense, discussions from all sides including the teams, DAO participants, VCs, and general stakeholders are to be decentralized and (hopefully) transparent.

We understand that some things behind the scenes are more delicate than others, but we are a DAO and the DAO has spoken. As can be seen by the many opinions and proposed voting stances, we seek justice via our proposal. By the rulings of the MC DAO, we fairly and correctly created and motivated our proposal.

As such, we would like to reemphasize, that the vote should not require (unneeded) delays - as this too - can be seen as centralization and goes against the founding principles of the MC DAO. We hope you understand the grave nature of these matters.

Thanks,

Honey Barrel
Vanquisher of non-Frens
The Freefolk Fellowship

honey-with-wooden-barrel-vectors

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Honey,

The DAO hasn’t spoken yet but has had / is having a discussion. The team has responded and asked for time to work with YGG on a solution and promised to come back to the community after that. Why won’t you allow them that time and are pushing? Is there another agenda below the surface? If not just give them then time asked and if so, explain what you are aiming at?

Besides having control of a market that is down tens of percentages for ALL tokens and projects the team has been delivering tremendous results, put out a roadmap and deliverables that are not matched by any team in the space.

Yes there has been broad and thoughtfull discussion by the comunity on the topic but by no means does that imply the community (that is the actual DAO!) wants this to be a rushed job.

Give some credit and trust where it’s due.

Tyghh

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My friends and I built what we call, “The Fort”, here at YGG. It’s literally the best way for players like us who are used to games like Elsword since we get to build our own cmmunity in game while earning😉

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Dear @HoneyBarrel,
thank you for your proposal and research regarding this delicate topic. It’s just great to see the effort & time you put into this community/DAO.

Most points have already been mentioned in previous answers, so I to cut it short, I will be voting YES for this proposal as well.

In regards to one of the last answers: As mentioned before, some things are more delicate to discuss and handle and certainly require some time.

Despite that it has almost been three days since the topic was opened and we haven’t heard from YGG at all (except for being mentioned in the MC response), I start to ask myself why.

It feels quite sad that we haven’t even gotten a simple “We’ve read your proposal and are currently in discussion etc. how to improve” in the same matter the Merit Circle Team did, which is appreciated as seen in some of the answers. Although I might be wrong, personally it feels like the governance/DAO isn’t a priority for YGG. Also open to being proven wrong.

Looking forward to the vote on this proposal.

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So, @masterchief109 is it a NO or YES? Agree with @HoneyBarrel or not?

It’s literally the best way for players like us who are used to games like Elsword

The Fort is a really cool game tho!

Dear Meritians,

We felt like it would be right to shed some light on what has been ongoing, and as to where we stand in terms of logistics for this proposal.

Conversation-starter
Obviously, this proposal has been widely received throughout the Merit Circle DAO, YGG, Nifty Fund and even far beyond that. We’ve made headlines with this historic event and ever since, the DAO in its entirety has been in full conversation mode.

That means all tokenholders including the DAO Core Contributors, the development ltd, YGG and all other stakeholders, are interested parties. There are many angles and dimensions to carefully consider. Each new conversation brings new opinions that will likely result in a more positive outcome for the DAO.

Therefore, we are doing everything that we can to work towards a solution that works for all those involved.

Logistics
The governance of the Merit Circle DAO has been an ever-evolving process. Numerous proposals have been put forward over the recent months which have each varied in complexity. From proposal to vote, it has taken roughly five days.

That being said, we really want to provide everyone the opportunity to stand up and share their opinion before putting this up for voting. We are aware of the wishes of several community members to conclude this discussion through voting, and therefore aim to proceed to the voting stage in the near future.

Humbled
We are very proud and fortunate to have such an engaged community all thriving to work towards the most positive outcome for the Merit Circle DAO, thanks.

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Are we sure that the “Web3 DAO takes control and ousts early investor” narrative hurts MC’s brand? I think JJJJ… has some great points on how this could bite us in the ass vis a vis our own seed investments. But I also think that attention is the most valuable currency in the world today, and this would be an unprecedented demonstration of DAO power. It seems like there is widespread despair and rage over how crypto remains an insiders game right now. Just saying - imagine a scenario where there is a story in the popular press.

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Meow,

We wanted to thank the MC team, other Core Contributors, investors, and community for all the responses so far, and for taking the time to consider all available options the MC DAO has.

This is a first for all the worldwide DAOs, and it’s important we get it right. While the MC DAO ultimately does choose what course of action we take, its up to the MC team to decide how to best proceed with our chosen pathway and takes the time to address and weigh all the best options.

Signed with right paw,

Loaf
Sad Cat Capital

image

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Why did you not hire influencers then? Because you know YGG is a pillar in crypto and you can get more than what you can from influencers.

Good thing Merit Circle have YGG backing them up with all those funds :clap::smiling_face_with_three_hearts: So wat is with all these dramas?

I think they did their part in marketing our project. Having those posted in Yahoo Finance and coindesk is one form of marketing.

Dear Meritians,

Over the last couple of days, we have been intensively discussing this proposal with all interested parties. Needless to say the proposal has not just taken the web3 space by surprise, but has also taken us by surprise. In hindsight, it was inevitable that DAO governance would come to these crossroads between law and law of code. We expect the space will see many more interesting edge cases like these in DAO governance.

As we move forward with this proposal and we approach the voting stage, we wish to provide some additional context prior to having this proposal voted on.

Relationship with YGG
YGG was one of the first gaming guilds and therefore felt like a natural addition to the Merit Circle DAO. The ambitions were to unite our knowledge and capabilities in a collaborative manner trying to achieve a more sustainable future for the blockchain gaming industry. At this point in time, YGG looked like the ideal candidate for this.

Since then our relationship has always been friendly. YGG has showcased what they have done since they’ve invested here. At a surface level the post showed minimal involvement. However, to add on to YGG’s statement, we’ve received introductions to early stage investments by them, we did not end up investing in these. YGG also expressed they want to do more in the future to add more value to the Merit Circle DAO and signaled they intend on being a long-term supporter.

Considerations
Some community members have pointed out that the cancellation of an agreement (be it legally, or in the spirit of an agreement) could have serious adverse effects. We want to be seen as a DAO that can be relied upon to do business with.

Value-add was the selection basis on which the investors were selected, it is not part of the SAFT agreement itself.

As an ltd we would like to honor all agreements, however we have to balance that with the power of the DAO… The DAO holds the ultimate power here. This is why we should strive for an alignment of both forces in our governance model, through reason and continuous improvements to the governance system.

Proposal

Given all of the context above, we wish to ask the author of this proposal to;

  • Add a clause to the proposal that in the case of acceptance of this proposal (YES) which delays the proposed actions by 2 weeks and gives a 1 week time period for a counter proposal. In which we can issue a resolution for all parties in a timely manner after the vote.

This would give the following voting options

  1. Yes, with clause
  2. No

This clause will give us more time to work on an outcome that will leave all parties satisfied. An outcome that will also mitigate potential unforeseen second order effects.

In the case the author does not accept the clause suggestion, we will feel obliged to create a competing proposal in an attempt to give more options to the DAO community. In this scenario, people would have to vote between the competing proposals prior to any of the two competing proposals being able to go to vote

Closing words
The fact that we are having these discussions means we are a DAO worth fighting for. A DAO with passionate members on all sides. A DAO that is not just decentralized in name, but also in effect. As a DAO we should strive to direct this unbridled power in a way that is beneficial to all stakeholders. As a force of good.

We are doing everything that we can to find a solution that works for everyone involved. A solution that weighs all interests to create the best long-term outcome for the Merit Circle DAO.

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With the claims you presented you forgot one major thing if a company doesn’t have enough capital it would resort into the investor’s money so if there aren’t any partnership the Merit Circle wouldn’t be able to be where they are now. So classifying YGG as a burden for Merit Circle is far from reality.

Henlo,

Dear MeritLtd,

We come from a time where greed and need not always match. A time where smaller players are taken advantage of or even belittled to favor the larger players. The many tend to bend the knee to the few through conspired funnels of wealth, power, and control. Some situations are easier to notice than others. A friction between cultures, classes, nation-states and ideologies.

Decentralization
We think people need to look into the deeper meaning of decentralization. We have contracts and safts, yes. We have rules, laws and order, yes. What we do not have, however, is true decentralization. Decentralization is about freedom. The freedom to do as one desires, unbound by anything and everything. The freedom to transact, trade and decide for one’s self. Merit Circle is a way for the smaller people to have a stake, by choice, in investments otherwise not easily available to the “smaller players”. Do you see how decentralization is important here? Centralization removes our voices, our freedom.

Merit
Do you remember the term - merit? " It means: “a quality of being very good or worthy, so much so that a reward or praise could be given”. When we judge stakeholders, VCs for example, we do so according to their merit. Are some of them of high quality? Perhaps. Are some of them of lower quality? Possibly. We’ve read Twitter, Discord and Telegram. We’ve read the informative article by The Block Crypto. We’ve even read the chats in the lovely elitist community of Lobsters, where only the true altruistic builders and value-adders reside. Everyone has their own opinion about the event that is taking place within the MC DAO. We had to laugh, a lot. Many times we laughed. Why? Simple. The same “larger players” that often take advantage of or belittle the smaller players, went on the attack once again. Even larger entities are willing to set examples to defend their status quo.

Status Quo
You see, the moment there is even a hint of true decentralization, these larger players feel threatened that their status quo is challenged. We wouldn’t want the smaller players to have a voice, do we? Just imagine we can no longer use the smaller players as exit liquidity through vested bags, inflationary ponzi schemes and fancy protocols that make no actual sense. What would we tell our Board?! For the various circlejerks of influencers of many different token ecosystems who dump their bags into the smaller players, there is an equal amount of grifting NFT key-opinion leaders that do the very same. An equal amount of LUNAtics, SOLarians, or ETHerchads. An equal amount of VCs and hedgefunds extracting value from the many to the few.

YGG
YGG did not add much value, we can all agree on that. This thread is practically us giving them free advice to improve. Posting 2-3 articles and investing 100k (Yes, 100k. The other 75k was a private fund not by YGG) is now enough to be considered a value-add? We understand that some try and defend this (your replies shill your heavy bags), but it is laughable at best. We can talk about ‘legal contracts’, or we can talk about the uselessness of the average VC. As only the latter is the real issue. We wouldn’t have had this governance thread, if value was added. YGG is not our enemy, but we are gravely disappointed. The token deal was to boost a mutually beneficial bond between two giants in GameFi. All involved parties would do well to remember this, and to strive to improve together.

Free advice
For any current or future project owners reading this, you would do well in vetting and securing the potential value-add of your favorite VCs. They are there to serve you in exchange for (discounted) tokens. A simple money injection is not value. You will want to demand a strong network, extra developers, good marketing, strategy and advisory, and so on. Your VCs should practically go to war for you. If your favorite VC has 100+ projects, how much ‘love’ do you think that VC can give to your project? How much attention and work? We all know the answer to that… nada. The reality is that most resources are scarce, but money is a relatively easy resource to come by.

Reply
As for the topic at hand, it’s a funny one. So far YGG has not made any public comment whatsoever. Either they do not care, or there are powers at play that we cannot see publicly. In any case, our point has already been made. The larger players are - as usual - weaving their web and pulling their strings to extract value from the smaller players. They expect us to bend the knee and submit, to be happy with a little bone they throw at us. Back to your cage, little one. Don’t you dare to have a voice!

We cannot talk about decentralization while setting additional requirements for our vote, but we understand that the topic is complex and there are dark powers in the air. We are fine with a clause as in the end we seek mutual benefits and harmony across ALL involved parties. We therefore not only add the claus to the original proposal, but we also openly welcome YGG’s team to our forum to enjoy our DAO so we can all live in peace happily ever after.

Proposal amendment

In order to mitigate potential unforeseen second order effects, we amend the proposal with the following:

  • In the case of acceptance of this proposal (YES), the proposed actions are to be delayed by 2 weeks and creates a 1 week time period for a counter proposal.

We hope everyone within and around the MC DAO will be happy with the above resolution.

To conclude, why can’t everyone be Frens and create a synergetic partnership that helps the entirety of GameFi? Both MC and YGG are supposed to lead the gaming space, the GameFi startups, and the fruitful concepts of a digitalized future where play-and-earn can thrive. Get it done.

Thanks,

Honey Barrel
Vanquisher of non-Frens
The Freefolk Fellowship

honey-with-wooden-barrel-vectors

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I like the approach from @MeritLtd and @HoneyBarrel to allow for more time and counterproposals, especially from YGG. I believe the Navy SEALs say, “Slow is smooth, and smooth is fast.” And I’m glad we’re going slow with this but not chickening out of addressing the issue head on.

I have a clarifying question and possible recommendation: @HoneyBarrel, do you have a sense of which other VC’s do not pass the fren test? I think that if we don’t have a clear sense of who we object to among VCs, and treat them the same according to a principle, it’s not fair to target YGG only. It will be perceived as an unprincipled attack, even if it is principled. Then, our business will suffer. In fact, if I were YGG in this situation, I would wait for MC to overplay their hand and revoke the SAFT, so I could play the victim. It is in YGG’s interest for MC DAO to lose reputation as a trustworthy counterparty. Then, I would try to capture MC deal flow with the help of my traditional VC frens.

+1 to a counterproposal from YGG or a joint proposal from MCxYGG core contributors that explains how we can be mutually beneficial today. It could be through a buyout; co-building; inclusion in other potentially influential DAO’s like Alliance DAO, etc. This might be much better than revoking the SAFT.

Also, I still think we need a better audit of value-add of our partners across the board before taking action. I think this is the job of the core contributors. Yes, it’s uncomfortable for DAO core contributors to give our seed investors (and investment projects) a grade or objective review of progress. But it’s more uncomfortable when @HoneyBarrel has to do it LOL! If we don’t or can’t have such an audit, we can’t really blame YGG–it’s also our fault as a DAO for not having clear and transparent expectations regarding the role of a seed investor vs. co-builder and partner. Is this something that we could ask @SadCatCapital, @HoneyBarrel, and others to do as part of the analysis they are already doing? Maybe the DAO can vote for committee members who can do this task for some community tokens. But, we need progress/contribution audits from someone. Quarterly or every 6 mos. would be awesome.

No matter what, good on you @HoneyBarrel for not taking the easy way and “playing nice.” I continue to be true blue MC because we don’t settle for DAO larping.

Cheers,
Dolly

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