Authors and contributors
Status
This proposal is live for voting here.
Summary
The development of the sovereign network Beam has been ongoing for several months and launch of the mainnet is imminent. Beam seeks to be a network specifically suited for gaming, aiming to enable game developers to easily, and at low cost, adopt and incorporate blockchain elements into their games. Activity on Beam will be centered around the MC token, as all transactions will require MC tokens to be utilized to cover gas fees. Large groups of contributors have been, and are continuing to be, involved in the development of Beam.
To take advantage of this positive momentum, this proposal seeks MC tokenholder approval to:
-
Utilize up to 75 million MC tokens from MC DAO’s treasury for various purposes on Beam, namely liquidity, grants to games / game developers (used to cover gas fees), and for validating and securing the Beam network(s). It is important to emphasize that none of these MC tokens may be sold directly on the market or otherwise; the only scenarios where such tokens may come into “circulation” and become owned by a third-party are (a) through the mechanics of how an AMM functions and (b) as a result of validators (including delegators) collecting gas fees in connection with transactions on Beam that are funded by a grant.
-
Utilize up to 2.7 million USDC from MC DAO’s treasury, to develop Beam and certain ecosystem products (should all allocated funds not be utilised they shall be returned to the MC DAO treasury). 200,000 USDC of the sum is proposed to be utilized for liquidity purposes on the AMM on Beam.
Specification of the proposal
Description of Beam and certain key features
Beam will be a sovereign network focusing on gaming. The development of Beam has been ongoing for several months and the launch of the mainnet is imminent, with the testnet currently live (see also the Github repositories for further information about the open source code).
Beam’s launch is aiming to expand Merit Circle’s ecosystem and strengthen Merit Circle’s position as the leading player within the blockchain gaming industry. Beam and Merit Circle will seek to handle the complexities that come with blockchain gaming, so that game developers can focus on game development and gamers can focus on the actual game experience. Through Beam, the ambition is to make the MC token the fuel that powers all blockchain elements in various games on Beam.
The intention is that Beam, amongst other things, will have the following key features (this is not an exhaustive list and all features mentioned below may not be in place at the date of launch of the mainnet):
- MC token will be the native token being used to cover gas (transaction) fees for every transaction that occurs on Beam.
- Beam will become a permissionless proof-of-stake (PoS) network, meaning that anyone with 2,000 or more AVAX tokens (as per the Avalanche mainnet validator criteria) and a “to be determined” amount of MC tokens may become a validator who validates transactions and secures the network.
- For those who wish to become validators (and thus secure the network and validate transactions) but do not necessarily meet the network criteria (i.e. do not hold the sufficient amount of AVAX or MC tokens) or do not wish to bother with the technicalities around running a validator node, may participate by delegating their MC tokens.
- As with other networks, many network elements and smart contracts (including protocols) deployed on the network will be immutable and not subject to upgrades. As for features that are upgradable (such as e.g. fee parameters in relation to the AMM), these may become subject to MC token governance. Various contributors are looking into how to adopt on-chain governance for such purposes, so that MC tokenholder voting can result in autonomous execution of changes on the smart contract level (in other words not relying on a group of persons to implement the changes) - i.e. increased power to the “DAO”.
- There are in principle “no limits” in terms of what type of smart contracts may be deployed on Beam. However, the network and certain smart contracts on it are being developed with gaming in mind, and infrastructure pieces are needed to make blockchain gaming work in a seamless and low-cost manner. Various game developers have already, or are in the process of, committing to utilizing Beam for their in-game blockchain elements. This includes the list of games mentioned here (not an exhaustive list).
- Sphere aims to launch in conjunction with Beam. Sphere aims to be a fundamental infrastructure piece to all games on Beam facilitating the transfer of in-game assets in a seamless and low cost manner.
- Beam will have in place a blockchain bridge developed by LayerZero. LayerZero is a straightforward messaging protocol that’s already deployed on approximately 30 EVM-based chains. There’s no platform fee, just a transaction fee captured by LayerZero when the bridge is used. They deploy the necessary relayer and endpoint when onboarding new chains. The relevant code is immutable, heavily reviewed and audited, and open sourced on Github.
- Openfort is currently building out infrastructure around smart contracts that seek to suit the need for blockchain games, rather than the more traditional wallets. Openfort utilizes account abstraction, a novel approach that prefers smart contract usage over conventional wallets, to create a solution tailored for the gaming industry. This makes Openfort a tool that removes barriers to entry, enhancing the overall gaming experience. You can read more about Openfort’s features and how their session keys work on their site.
- AMM on Beam. The fees chosen will be subject to change through MC DAO governance.
There are certain other products/features that are being developed by various contributors that are intended to be launched on Beam (funds requested would also go towards working on those), but which are slightly premature to share info about at this time. The authors also want to encourage other community members to provide ideas of their own and join the ever growing group of Merit Circle ecosystem builders - either as part of already existing teams or form autonomous teams of their own to build out the Merit Circle ecosystem by building on Beam.
Further details about Beam can be found in the following articles:
- Merit Circle DAO to launch gaming subnet ‘Beam’ in collaboration with Avalanche | by Merit Circle | Medium
- An overview of the games and products launching on gaming subnet Beam | by Merit Circle | Medium
- Why Subnet Beam provides continuous value to the Merit Circle DAO | by Merit Circle | Medium
- Merit Circle DAO to Launch Gaming Subnet with Tooling, Three Games, and Many More to Come | Avalanche Blog (avax.network)
- Beam development update July 2023 | by Merit Circle | Jul, 2023 | Medium
For additional general information about Avalanche subnets, see here.
Up to 75 million MC tokens to be set aside for Beam activity
Up to 75 million MC tokens held in the MC DAO treasury (approx. 11.8% of the total supply as of date) are proposed to be set aside for the following three purposes (activities to be conducted through the MC trust structure and transfer of tokens managed by on-chain multisig):
- Funding of node operations for the purpose of validating transactions and securing Beam. These tokens will not be “spent”, sold or otherwise transferred and will be returned to MC DAO’s treasury if the node operations cease. Validator rewards will in this connection be sent directly from the transacting party to the token burner contract (unless DAO decides otherwise). In this way all MC that is “loaned” from the treasury to the validators is to the direct benefit of the Merit Circle ecosystem, including Beam.
- Granting MC tokens to games / game developers for the purpose of covering their game related transactions on Beam. The aim is to support and incentivize initiatives that will grow web3 gaming and the Beam ecosystem. The MC tokens used for such grants will be held in MC DAO “sponsor contracts” (under MC DAO control) and only utilized to cover transaction fees on Beam in accordance with the grant conditions (up to a set USD amount and for a limited time period). When calculating the cost of a Beam transaction under such grants, the MC token price denominated in USD at the time of completion of the relevant Beam transaction shall be considered as the cost of the relevant Beam transaction; thus making sure that the grant isn’t affected by fluctuations in token price from time to time. Note that such MC tokens cannot be sold or otherwise transferred out of MC DAO custody, unless utilized to cover transaction fees on Beam (in which case they may end up in third-party ownership as validators and delegators collect gas fees).
- Adding liquidity in an AMM for the benefit of the AMM and Beam. The MC tokens used for liquidity purposes may only become owned by a third-party through the mechanics of how an AMM functions (as is always the case when liquidity is provided in an AMM).
The number of MC tokens requested to be set aside is an “up to” amount (the number of MC Tokens used could be much lower). The number of MC tokens used will be dependent on MC token price and on how the network will develop. By having greater latitude in this number, the DAO has more ability to seize new growth opportunities, influence the effective burn rate of the network and to ensure network security within the dynamic circumstances of a young network that tends to grow and develop. Eventual use of MC will be transparently disclosed in the treasury reports and possible to track on-chain. Over time the DAO should aim to link it to more concrete metrics and Beam network targets that align with the DAO’s stated goals and adopted proposals. Parameters can always be adjusted with follow-up proposals.
What the (up to) USDC 2.7 million will be used for
Large groups of contributors, including across both the Merit Circle and Avalanche ecosystems, have been, and are continuing to be, involved in the development of Beam. In order to effectively finalize the development for launch of Beam (including the Beam tech stack) and certain ecosystem products/features (referred to in bullet points above), in addition to cover certain costs already incurred by various contributors, this proposal seeks funding of up to USDC 2.5 million from the MC DAO treasury. Costs relating to the aforementioned can roughly be broken down into the following categories:
- Development and infrastructure concerning Beam and Beam related products/features, including those listed in bullet points above (75%)
- Security (10%)
- Service providers for products/features, including those listed in bullet points above (10%)
- Legal and regulatory compliance costs (5%)
Furthermore, in order to have base liquidity for MC on Beam, we propose to pair USDC 200,000 with an equivalent dollar amount of MC. The LP position will be held through the Merit Circle trust structure, similar to the LP positions on Ethereum. This means that MC DAO can always decide to unwind the position.
All costs will be accounted for, and unused funds will return to the treasury. DAO costs will eventually be added to quarterly and yearly reports that are shared publicly.
Motivation
With Beam, the motivation is mainly:
- To truly embrace the crypto and blockchain technologies and utilize them for the benefit of games, game developers and gamers.
- To get the Beam tech stack entrenched in a large amount of games that require or desire web3 elements.
- To become a trusted web3 brand and network for games, game developers and gamers.
- To expand the Merit Circle ecosystem and provide MC DAO and the MC token a key role in this new addition to the Merit Circle ecosystem, and thus elevate to a new level as a gaming DAO.
The ambition is to make Beam the “go-to” network for those who wish to implement blockchain elements into games and hopefully the wider MC DAO community will contribute towards that ambition.
Rationale
The rationale for Beam is already laid out in the sections above, in addition to in previous discussions and articles regarding Beam. Resources are required to complete the tech stack and “spin up” the chain. The benefit of having this proposal a bit later than usual is that it gave the different groups of contributors a better sense of what was needed and it allowed certain work streams to go on in stealth mode.
The proposal also offers an additional thread around the direction the DAO is heading with Beam, including an opportunity to discuss new potential ideas and to clarify any questions that may still exist among various Merit Circle stakeholders.
Budget
Up to 2.7 million USDC and up to 75 million MC tokens.
Poll
Are you in favor of the proposal?
- Yes
- No
Copyright
Copyright and related rights waived via Creative Commons CC0.
