Co-Authors:
- CitizenX
- Maven11
- Flow Ventures LP
- Sergei Chan
Summary
Merit Circle DAO raised $105,576,956 million in the Balancer Liquidity Bootstrapping Pool on Copperlaunch. The sale concluded on November 5th at 2 pm UTC after a 3 day raise period. After the conclusion of the sale, these funds were sent to the MainDAO in a 4 out of 7 multisig. We are proposing that the DAO have a broad investment mandate so as to enable our sizable cash position to be as productive as possible for the DAOs benefit. This mandate will be developed and may, at a later stage, narrow the investment mandate and may also create sub-mandates. All these future proposals will be voted on by the Merit DAO community, the $MC token holders, before they are enacted.
Abstract
After concluding a record-breaking Balancer Liquidity Bootstrapping Pool on Copperlaunch thereâs now a large cash position in the MainDAOâs wallet. This cash is currently sitting idle, and we are of the view that it should be being utilised to further the DAO and the Merit Circleâs objectives as soon as possible.
The mainDAOs main wallet: 0x7e9e4c0876B2102F33A1d82117Cc73B7FddD0032
As outlined in MIP-1, $5 million has been used to purchase Ether to provide liquidity in the ETH/MC pool on Uniswap together with 1,151,398 MC tokens. This liquidity has been provided to sustain trading activity after the Balancer sale concluded. This provided the market with sufficient depth and liquidity in the intervening period between the close of the Balancer sale and the release of our staking pools which further incentivized the community to provide liquidity. The LP tokens owned by the MainDAO will not be staked to increase the APR of individual stakers, unless governance decides otherwise.
We, the authors of this proposal, have made a list of short term changes that need to, in our opinion, be processed to ensure the smooth scaling of the Merit Circle DAO. These proposals have been considered and draw on the communityâs expertise which includes directors of funds and industry experts.
- Proposal 1: Replace two multi-signature signers and replace an existing signature key.
- DeFiance Capital to be replaced by Flow Ventures LP
- OPCrypto to be replaced by Mechanism Capital.
- Change the key of CitizenX from:
0x085843dbde124ab8babd558fea60534962628338
To:
0x7fA32E98C5f3C8594DE1785e23905FB0C74bcCd7
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Proposal 2: Seed all current and future multisig wallets (as and when appointed) with 0,5 ETH signing fees. The last signer pays a fee in Ether, by seeding these wallets with ETH will have more signatories that are able to be last signer and with it increase the flexibility of the 4-7 multisig. There are currently 7 signatories, therefore the current outlay would be equal to 3,5 ETH total. These will be bought with USDC at market price. The Ether can only be used for fees associated with DAO transactions. It should be noted that the DAO may purchase more ETH to fund existing signatories or newly appointed signatories as and when the multi signatory arrangement changes. Lastly, it should be noted that these funds are borrowed from the DAO to signers that are on the multi-sig or to signers that have been part of the multisig rotation. If a signer has been outside the multisig for more than 12 months, the Ether should be sent back to the MainDAO 4-7 multisig address.
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Proposal 3: Mandate for a combination of the following entities and persons: Flow Ventures LP, Sergei Chan, CitizenX and Maven11 to deploy up to 100 million in USDC out of the MainDAOâs treasury to utilize for DAO operations. The above parties will form a discretionary investment committee to make investment decisions. The DAOâs investment operations include and are limited to:
- NFT investments
- Token investments
- Crypto assets (including crypto assets in yielding positions - yield farms)
- USD stablecoins (including stablecoins in yielding positions - yield farms)
- Liquidity Provision token positions such as (but not limited to:) Uniswap or Sushiswap LP tokens
The permission detailed above is in addition to the main lutisig 4-7 multisig wallet. The newly formed investment committee will operate a 2-3 multisig wallet. The signatories to this wallet are the entities detailed above. The 2 out of 3 multisig wallet has 3 cold-storage signers. The operation 2-3 multisig wallet is authorized to use single sign cold-storage wallet for deployment. The single signer cold-storage wallets that are used can only be owned by any of the above listed parties. The single signature wallets are not used for long term holding or storage of asset, only for deployment.
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Proposal 4: Grant the MainDAO authority to fund ongoing Axie Infinity operations of the scholarship vaults and the breeding vaults with ETH.
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Proposal 5: Authorize buybacks of $MC tokens with $SLP (The reward token used in the Axie Inifinity gaming ecosystem) profits from Axie Infinity operations at market prices, conducted through the Uniswap V2 pool. It should be noted that until new governance proposals are accepted that specify a different use of funds, all (100%) profits from operations will be used to buy back $MC tokens for the DAO, to be held in the DAO treasury.
The above mandate has set specific rules to seek to ensure that the mandate is not breached and therefore prevent any unforeseen circumstances.
- Up to $5 million USD in asset value can be deployed in single signer cold-storage wallets. These are wallets that are earmarked as DAO wallets. Right after deployment, the assets will be transferred back to the MainDAO 4-7 multi-sig or the MainDAO operational 2-3 multi-sig.
- All used single wallet and operational multisig wallets will be transparently published in a live document.
- All used wallets are cold-storage and owned by stakeholders that are also in the 4 out of 7 multisig.
Motivation
Firstly, the change of multi-signature has been driven by our experience over the last few months where weâve been operating the multi-signature wallet in numerous time zones and therefore the signer availability with the current parties has been extremely challenging. It is our intention to have a healthy rotation of signers to prevent complacency and provide further transparency to the Community.
With the aforementioned mandate Merit Circle DAO âs current operations can scale in a much faster, efficient and exponential manner. Furthermore, the substantial cash position, currently idle, needs to be put to work in an efficient and coherent manner for the benefit of the DAO. By leveraging the DAO contributorsâ expertise on NFT purchases, Play-to-Earn investments and yield farming, we believe that this mandate can create a significant surge in assets under management and therefore would increase the operational funds and overall scaling of Merit Circle DAOâs presence in the metaverse.
Budget
- 3,5 ETH in total to be bought with USDC at market value, at time of writing valued at 16,5K USD
- Up to 100 million in USDC
Rationale
As explained above, the budget will be put to use (as described above) to scale and grow the operations and presence of Merit Circle DAO in the crypto-enabled metaverse. Despite the enormous success of the DAOâs raise, the operational funds arenât limited and consequently need to be put to work to maintain the desired growth that the DAO envisages.
Process
We are currently mapping out the exact processes for handling proposals, voting and implementing proposals if approved. Therefore, this proposal will follow its own process which cannot be seen as a blueprint for future proposals as this can evolve over time. MIP-2 will proceed in the following manner;
- This proposal will be open for discussion until the 13th of November 2PM UTC
- After the discussion concluded and any possible adjustments have been made, the proposal will be up for voting on Snapshot. This link will be provided in due course
- The snapshot voting will last for 24 hours after it goes live
- After the voting concludes and if the proposal is accepted by the token holders, the proposal will be ratified by the multi-signature signers
Copyright
Copyright and related rights waived via Creative Commons CC0