MIP-7 - Sustainable future vision

thank you sad cat cartel for always bringing thorough idea to MC.

fully agree with this two points. the FDV of mc always debatable, and many think its over price. people always compare with other “similar” guild project with the FDV subject, tho most are garbage. crypto participants love buyback also love burn, deflationary + superb project = bullish x infinity price discovery!

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Much needed proposal. Would definitely vote for it going forward. The buy back part has to be improved tho.

Also just an idea I have in mind to have % of unused MC for other L1 blockchains rewarding perhaps? Like that we can reach a bigger audience as its clear many people are now not even using Ethereum and we can drastically improve that by implementing reward pools on different chains. Food for thoughts.

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Thank you for this proposal Sad Cat Cartel. As usual, wonderful ideas. Broadly, I am very interested in moving this proposal forward.

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Thank you Mrs. Sad Cat for the proposal.

As the Play-To-Earn industry grows, and the Merit Circle DAO investments begin to give bigger and bigger returns (as has always been the intention, à la 'P2E index), we must think of what our optimal route is for dealing with these investment proceeds.

Until now I think most people either don’t know what we do with these proceeds, or think we add the USDC gained to the DAO and perhaps use it to buy back MC tokens. While this isn’t necessarily a bad option, similar to Mrs. Sad Cat, I also doubt that this is the most useful course of action.

Taking a quick look at the %s you have given for the splits for the proceeds the standout point is the 60% being used for limit order support. DEX limit orders can be notoriously unreliable in execution especially in times of large volatility but this would be the only way on-chain so I don’t see a way around this.

I’ve also been thinking a lot about the fact that people will know there are orders set at certain price levels and I don’t actually think the issue of ‘people using them for exit liquidity’ is a real one. There is enough liquidity on Uniswap to already exit fairly large positions and I don’t see why it would make sense for people to wait until these limit orders are placed before exiting. With such a large supply of the circulating MC tokens locked up staking already, there really aren’t that many liquid ‘MC whales’ who are looking for exit liquidity and would need limit orders like these. This might change in the future and will depend on how big these limit orders are, where they are placed and the distribution of MC. Also if someone did want to ‘dump into’ these limit orders (not that they work like CEX limit orders do), all this would mean is the MC DAO gets to buy back tokens at a cheaper price, rather than at a higher price by market buying, as well as helping to push the price back up.

With regards to the FDV ‘problem’, it clearly is an issue for many investors, after many of us (including some ‘influencers’) have had to spend time repeatedly explaining why we didn’t think it was as big a problem as some seemed to think. Regardless of which side is right, one of the first thing new investors see is the FDV. If they see an enormous number they can often be put off, irrespective of why the number might be that high. The only way to reduce this FDV (whilst maintaining a high token price) is to reduce the total supply, and of course, the only way to do that is by burning tokens.

15% of proceeds being used to buy back MC and burning them seems a reasonable enough number to me. It means the vast majority of the investment proceeds continue to be added to the DAO (including the proposed limit order funds) but we still get a noticeable token burn from these proceeds.

The 75% of unused tokens from the Community Incentives DAO portion initially seemed quite high to me but I’m hoping this will at least ignite a desire within the team, seed investors and DAO community as a whole, to start actually using these tokens rather them letting them sit idle, or otherwise letting them get burned.

One final comment I would give is that Sad Cat have come up with a series of logical percentages to use for these proposals and while they seem OK initially, I think its important to remain flexible on them, especially when it comes to burning tokens as this is an irreversible action. The main one I’m looking at is the 75% unused tokens monthly burn from the Community Incentives. As this could potentially be a very large burn each month, it might be worth reassessing this number at least once a quarter just to reaffirm that we still think this is the right decision. We wouldn’t want to be in a situation where we think we have accidentally burned too many tokens and suddenly need them for a large incentive undertaking at some point in the future.

Otherwise I will happily be voting YES to this proposal.

Gratefully Yours,
Johnny Jawnz

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I support it, but I believe there is a better solution. We can refer to TOKEMAK which is popular in the second half of this year. We can use part of MC to participate in TOKE reactor at the same time of buyback and destruction to get a very cheap liquidity pool. This is the token value of the long-term accumulated have absolute advantages, look at ILV also and TOKE cooperation, they have cheap reactor, reduced the tokens of dumping, everything is in order to be able to long-term development, not like many tokens model, there are also buy-back destruction of deflation, but also ensure the continued fall of tokens. Working with TOKEMAK, on the other hand, allows us to use our MC in a way that is more valuable than rewarding short-term speculators

Thank you, Sad Cat Cartel - your proposal looks solid, with thorough explanation. One feedback I have is to propose more flexible, discretionary % ranges vs. specified percentage as conditions may change from business to market condition standpoint. Generally speaking, i would vote in favor of this proposal.

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Having a more realistic FDV is something I can get behind, amongst the other suggestions. It has definitely been a turn off for a reasonable amount of investors.

I don’t have any suggestions regarding what to change with the proposal; looks good.

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Greetings,

This is Admiral Erik von Pumpson of the MC Enterprise. We recently came across your proposal.

We’ve decided to vote YES on this proposal, but we would like to leave some room for percentile adjustments voted on by the DAO if needed. So perhaps one day a 75% unused MC token burn is not enough and needs to be 80%, we can vote on that. Or 70%, and so on.

Signed,

Erik von Pumpson
Admiral of the MC Enterprise
Ascending Galactic Federation

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Dear Cats,

I appreciate you taking the effort and time to come up with such proposals, much appreciated.

While I agree with the proposal mainly, I do want to raise some concerns that I’ve seen across the board from some community members. You could view this as an addition to the ‘rationale’, would much appreciate a response to these before pushing through voting.

Thanks for putting in the work to write this! I’m not sure I follow the rationale though. In the end MC is a business operation that needs to deploy capital to grow - burning tokens seems like nothing but cosmetics and the has a huge opportunity cost.

What’s your stand regarding the above statement? - Doesn’t burning tokens simply stimulate a certain type of investor, or did Ethereum embracing burning tokens immortalize the burning mechanism?

Remaining flexible with the percentages in the above proposal

The common sentiment across most replies in here is to maintain the ability to use these percentages in a flexible manner. Would you be able to adjust your proposal in a manner that it suits this thought, maybe by implementing a range of percentages instead of a solid number?

The main one I’m looking at is the 75% unused tokens monthly burn from the Community Incentives. As this could potentially be a very large burn each month, it might be worth reassessing this number at least once a quarter just to reaffirm that we still think this is the right decision

I think this is very important. Personally, I find the 75% of unused tokens for this category quite high. However, given the fact that it’s such a large portion of the total supply. While this is one of the main catalysts of a decrease in this total supply, thus tightening the gap between the current circulating supply and the FDV, in the long-run there might be some opportunity cost here.

Eventually, Merit Circle will grow very large and thus have a larger interest in holding a large position for incentives coming from within the community. On that note I agree with the above, and to have this implemented within the proposal; a quarterly review of the burning percentage by the investment committee - taking into consideration the opinions of the community as a whole.

Those were my thoughts, meow, bark, woof!

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Meow everyone,

Thanks for all the thoughts, feedback and kind comments. I’ll do my best to summarize.

@saisback Are we thinking about using 1InchExchange or Matcha.xyz for this or are there also other methods to use limit orders on Uniswap?

As @MC_MARK mentioned, the most optimal way would be an on-chain protocol that is transparent and verifiable. Matcha is indeed one of the better ones out there, and being used already.

@tyghh @JohnnyJawnz @kidragon423 @AdmiralErik @freekiebreakie Adjustable burn rate

An adjustable burn-rate can be created, yes. The investment committee can review the burn-rate percentage on a quarterly basis - with any changes being voted on by the DAO. We believe that further showcases the importance and value of strengthening community activism.

@SpeedyG Reward incentives for other L1 blockchains

You mean for staking rewards on other blockchains such as BSC, Avalanche, Solana, Harmony, and so on? If so, we think that might be best suited for a future or different proposal. It’s a fun idea, though! There’s some feedback on the BSC blockchain in one of the other threads.

@freekiebreakie What’s your stand regarding the above statement? - Doesn’t burning tokens simply stimulate a certain type of investor, or did Ethereum embracing burning tokens immortalize the burning mechanism?

We believe exemplary token/coin systems such as BNB, FTT, ETH but also many others, show that burning (generally) has a positive effect on the value of a token due to an increase in scarcity. We think it’s important to understand that FDV is one of the largest concerns for the community and investors. See the first paragraph at Rationale.

For Proposal 2, I have added the following paragraph in regards to future adjustments:

  • The percentage (75% of unused MC tokens) is to be reviewed on a quarterly basis. This review is based on the collected feedback of the community and the investment committee, and then voted on by the DAO participants.

As for Proposal 1, we personally don’t see a need for ‘range of percentages’. As written earlier, 25% is meant for hard assets (20% USDC, 5% ETH and WBTC). 60% is for general price support, and 15% is for buying back MC and burning that. That should be sufficient to keep our steady stream of proceeds as future-proof as possible, while creating a strong baseline.

Thanks for all the thoughts! They are greatly appreciated.

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Thanks for the solid proposal. As for the “strong support” I’d rather if the aim was getting as much value as possible for $MC than having a price support or even reducing volatility. So I’d favor more spot buybacks than a fixed % drawdown trigger.

Surely it’s hard to mention valuation when we’re talking crypto, but surely purchasing at a lower price (US$ 4) purchase is preferable to paying a high price (say US$ 16, if the price went into the 20s and fell from there). So I’m more skeptical about having solely market value as a reference.

MC might have better results investing the $ than paying a high price on its token during up markets. On the same hand, very agressive buybacks for MC in periods in which the token is overly discounted makes a lot of sense for long-term hodlers.

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Sad Cat,

Thanks for putting these thoughtful proposals together. I agree with the ideas and would also vote in favor. My only comment is we should leave the DAO with some flexibility to alter course when needed as market conditions change or opportunities present themselves.

Also someone mentioned Tokemak liquidity. I think that is worth exploring and a number of the projects we have invested in have tapped into that liquidity pool. We have a decent amount of voting power in the Tokemak reactor and would be happy to vote in support of directing the liquidity towards MC should the team and the community think it makes sense to go down that path.

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How MC benefit by supplying liquidity via tokemak reactor? This subject needs to be explained a bit better as there are so much projects in crypto that we obviously are not aware of some. Perhaps it isn’t the main subject of this proposal and can be discussed separately?

Yeou Jie from DeFiance here. I think this is a great proposal that addresses some of the concerns from the community regarding Merit Circle’s treasury and the price of the token. Other guilds with large treasuries can also learn from this proposal.

Particularly liked the buyback idea which will strengthen community sentiment and support. Doing it on a dex will also provide more transparency and accountability.

This proposal essentially enables the MC team to build a robust treasury, and also invest aggressively in early stage gamefi and NFT projects at the same time which can potentially maximise returns

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Thankyou for the proposal.

If I understand it correctly, it proposes to use 75% of the proceeds from realized gains to buyback/burn tokens in support of the token price.

If this is correct, I will not support this proposal.

My reason is MC was created as an investment vehicle, in a growth sector. And so the focus should be on maximizing that: invest and grow.

My support is to use 100% of proceeds to reinvest and compound.

IMO the community proposals are too focused on tokenomics, price supports, liquidity support… missing the ethos of this project.

The focus should be investing more and better. If we do that well, don’t worry the token price will follow.

Huo

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Greetings Huo,

I’ve opened a channel with you and your Shuttle class vessel. This is the Admiral Erik von Pumpson of the MC Enterprise - a Dreadnaught class warship. It took a while to open a communication channel, as you seem to be carrying a damaged B-01 tier radio equipment that we’ve not seen in many star cycles.

You are operating within neutral territory, so you are safe, for now.

I strongly advice you to read the two proposals again. The first one is related to what to do with the proceeds of Merit Circle’s revenue drivers e.g. investments, yields, trades, and so on. The second proposal has to do with the community budget, of which 75% of the unused tokens will be burned. You are mixing the two together, and this is incorrect.

I will converse with your Council of Elders to discuss this matter further. We will stay in touch.

Signed,

Erik von Pumpson
Admiral of the MC Enterprise
Ascending Galactic Federation

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Hi, thanks for reaching out.

My understanding is:

-Proposal 1 relates to proceeds from investments: 25% (20+5) available to reinvest and 75% (60+15) used to support token price (via buybacks).

If my interpretation is correct, my original view remains, which is that I prefer to use 100% of funds to invest in growth, rather than just 25% and the rest for engineering to support price (both are totally valid uses, it is not criticism, but I am more long term supporter, and just prefer to give the DAO maximum ammunition for growth and compounding, and if we do it well the price will follow).

If my interpretation is not correct pls let me know.

-Proposal 2 relates to treasury tokens, the suggestion is to cancel 75% of them (with mechanics around it etc).

I’m indifferent on this one, since this doesn’t use funds that could go to investment (the way I understand it). If you ask me, the cleanest accounting is to burn all, and approve an issuance budget annually, say 5-10% max dilution a year, renewed every year by vote. This way is not a gigantic pot of tokens sitting there to give away, but an annual controllable budget, subject to anual vote (same as in a typical company).

Hope this clarifies, and again if I got it wrong I would appreciate someone to correct me, this way I learn.

huo

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Vote is up. There is no need to argue anymore. Its up to people now to decide and its going one way so far.

https://vote.meritcircle.io/#/proposal/0x412aa19cc429214afa1cf72f0257f5c80695540c84bb9b84b724715a87e882db

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Post closed since the proposal has officially been accepted.

Thanks everyone for voting, much appreciated!