Bankless Card Pre-Seed Funding Request

Bankless Card Pre-Seed Funding Request

Take the first step into the web3 renaissance with the card for tokenized communities

Summary

We’re Bankless Card, the first card for tokenized communities and the first step for the future DAO contributors to enter web3. Today, we’re asking BanklessDAO for 4,405,020 BANK to retroactively fund our work, and to proactively fund the next round of tasks.

Background

We’ve been busy since our last post. Since April 1, we’ve…

…created assets to help us secure investment

…forged relationships with potential partners

  • Met with over a dozen card issuers and secured offers for service from 3 of them
  • Met with VISA and Mastercard about joining their accelerator programs
  • Had DAOs like PoolTogether and Maker DAO express interest in becoming launch partners

…kickstarted our marketing machine

…iterated on our MVP

…refined our identity and processes

And most importantly…built our team!

  • We now have over 25 contributors from 6 continents (no one from Antarctica…yet). These contributors have experience in design, finance, marketing, product, development, UX, infosec, project management, card launches, writing, and much, MUCH more!

We’re excited about the progress we’ve made, and we hope you are, too! We’re here to request a pre-seed funding, which will:

  • Retroactively fund all the efforts above
  • Fund Bankless Card development for S5

Mission and Value Alignment

Bankless Card seeks to bridge the UX gap in crypto by creating an easy onramp into the world of web3. Through a simple UI and empathy for the average non-crypto-native user, we’re building a card that will onboard the next wave of DAO contributors.

We’re also decentralized at our core. To us, it’s important to build this card within a DAO and to be 100% transparent while doing so.

Mission: Bankless Card will build easy-to-use tools to connect users with web3. Bankless Card will serve as a bridge between the IRL world and the crypto world—helping more users go from web3-curious to web3-native.

Vision: The vision of Bankless Card is for web3 to work as seamlessly in your everyday life as swiping a credit card at the cash register.

Values: Bankless Card values transparency, work sustainability, empathy, community, decentralization, and building tools for the long term.

Beyond our mission-alignment, we’ve also explained in our previous post how Bankless Card could increase the value of the BANK token by creating demand pressure on BANK through our rewards mechanism, increase the number of individuals holding BANK, and reduce the barriers for new contributors to enter the DAO.

Scope of Work

We’ve been working on Bankless Card in several phases:

  • Stealth phase (BanklessDAO Season 3) - the initial team of six worked on this project in stealth, validating whether or not it was even possible.
  • Validation and team-building phase (BanklessDAO Season 4) - we built up our team to over 20, made the partnership connections we’ll need to succeed (i.e. with card-issuers and VISA/MC), and gathered the info we need to take this product to launch.
  • Fundraising phase (BanklessDAO Season 5) - we’re looking to get the funds we need to launch this product. We believe we’ll need the equivalent of $1M-2M USD to get us to the point where we are self-sovereign (i.e. making enough revenue to support our team).

Our fundraising phase will gear all of our workstreams towards producing assets that will help us raise money. We’re looking at raising from the following sources (in order of priority):

  1. BanklessDAO Grants
  2. External web3 grants (i.e. Polygon Grants)
  3. Private investment (i.e. crowdfund, angels, or VCs)

To maximize our chances of obtaining grants and private investment, we have some work ahead of us. We’ll need to solidify our legal entity, financial plans, sales relationships, and marketing materials, as well as continue to execute on our product. We also hope to launch our own token to facilitate private investment that matches our ethos as a DAO (more on this below).

We are seeking a grant from BanklessDAO to help pay for the efforts of our contributors to acquire other grants and investment. This grant will also give more credibility to our other grant proposals (i.e. it would be difficult to ask Polygon to fund Bankless Card if BanklessDAO has not yet given a grant).

Value Alignment Part 2

In addition to allowing us to obtain other grants and investment, we believe that a BANK grant could create another value-alignment mechanism via a token swap.

There has been much talk about how projects should give back to BanklessDAO for received grants. Typically people talk about revenue kickbacks and BANK buybacks, but a token swap could create long-term alignment between BanklessDAO and Bankless Card with less ongoing overhead.

There are various ways this could work. We haven’t figured out the best approach yet, but here are some ideas:

  • Icedcool has been working with Bankless Brasil on a subDAO tokenomics model which would create an entry liquidity pool of BANK/brBANK, meaning that BANK value would increase for any external investment in brBANK
  • Bankless Card could disburse 10% of our initial token emissions to BanklessDAO
  • Bankless Card could swap our token for BANK any time we get a grant from BanklessDAO

Whichever way we decide to go, the end result is an alignment of BANK with Bankless Card’s token either via a pairing or by mutual treasury positions. If Bankless Card token appreciates, so does BANK and vice versa.

Specification

We break our work down by workstream, and each workstream further executes on projects that help us pursue our mission.

Governance Workstream

Responsible for building a team that can sustainably pursue our mission.

Projects:

  • Launch a Bankless Card token
  • Create a value-aligned method to connect on-chain and off-chain entities
  • Attract and retain the talent that helps us execute

Operations Workstream

Responsible for legal and financial compliance, card partnerships, fiat business creation, and financing.

Projects:

  • Obtain financing (grants/investment) of $1M-2M USDC
  • Set up a fiat legal entity and infrastructure that allows us to issue credit cards
  • Evaluate and mitigate compliance risks related to launching our card in the US
  • Create a roadmap to help us launch in other jurisdictions (EU, APAC, LATAM, etc.)
  • Finalize a deal with a card program manager to allow us to issue credit cards
  • Deploy internal tooling (i.e. project management, emails, etc.) to help us get the job done

Communication Workstream

Responsible for sales, marketing, and brand foundation.

Projects:

  • Finalize our brand foundation and create a brand handbook for use across the team
  • Deploy a marketing funnel (website, email, lead generation, etc.) which helps us predictably obtain new users. This would include automated, hyper-targeted campaigns to help us scale sustainably without much operational demand.
  • Build a content funnel to help explain our ethos and attract users and contributors
  • Create assets required for fundraising (i.e. pitch decks, website, illustrations, etc.)
  • Create sales funnel for DAO partners and finalize deals with five DAO launch partners

Product Workstream

Responsible for building extremely easy-to-use products that our users and partners love.

Projects:

  • Continue to refine our MVP via user-testing and rapid prototyping
  • Build out a secure and easily-maintainable backend
  • Decide upon initial chain to use and deploy required smart contracts
  • Build deployment and Quality Assurance infrastructure

Financial Implications

Bankless Card asks for a total of 4,405,020 BANK

  • 2,793,020 BANK for Season 5, to help us obtain external funding
  • 1,300,000 BANK for retroactive funding for Season 4
  • 312,000 BANK for retroactive funding for Season 3

Brand Usage

Our team truly believes in the power of the Bankless brand. The trademarked “Bankless” name, DAO logo, and colours will all be used by us to help promote our product as well as the mission of BanklessDAO.

KPIs

  • Amount of external grant/investment received
  • # pre launch email signups

Next Steps

Whether or not we receive this grant, the Bankless Card squad will keep working towards our goals outlined above. If funded, we’ll be able to move much faster towards obtaining external funding and launching our initial product to help bridge new users into web3.

Squad Background

Bankless Card has been a massive effort across tons of different BanklessDAO groups. Our contributors include:

  • links: Product strategist, technology leader, startup artist. He’s led teams to create award-winning products and seeks to build products that millions of people love. He’s a powerhouse DAO contributor and extremely thoughtful about building sustainable teams.
  • Rene: Operations workstream lead. He is an economist, has experience in audit, accounting and many years of driving change in teams through digitization.
  • NF Thinker: Biz Dev lead and product / user experience advisor. A leader within BanklessDAO and other Web3 communities. Focused on improving lives through digital ownership and comprehensive user experiences.
  • Jasu: Product Coordinator: Product Designer and Business Consultant for LATAM tech innovators companies. With experience in agile design and implementation of business models, leading teams in design, technology, marketing and sales. Currently I advise different companies to scale in a sustainable way.
  • Reinis: Communications workstream. Experience in media management and marketing for Musicians, Videographer and day one BDAO contributor and coordinator.
  • Rascole: Product workstream. Tech consultant and product manager with experience building new products and designing and executing business strategies.
  • Tomtranmer: Tom is an engineer by training and a builder by nature, with a focus on making useful things that do good work and makes lives easier. For over a decade I have been running my own web development and hosting business in small-town Canada, doing full stack web development and specific coding and application building projects, and I’m looking forward to making my entry into Web3.
  • Eze: From Argentina, and have been working in fintech (mobile apps for neobanks) for the past 5 years. I am part of global fintech communities around payments and infrastructure.
  • Richa: Partnerships & Operations workstream + writer. Experience in building fintech businesses from the ground up, leading large cross-functional teams and scaling growth. Some past roles include Product Management, Business Development, Operations. Past roles at Wealthsimple and Moneyworld.
  • Samantha: Comms workstream + writer. Samantha has experience in UX writing, content marketing, and web3-native communication strategy.
  • Israel Rex: Product Interface design & Visual design, with experience in designing fintech user interfaces and web2 products, more into web3 now, with a goal of ensuring web3 newbies have the best user experiences.
  • ZimTeemo: podcast hatchery liaison, marketing liaison, branding.
  • Cisco: ​​Francisco Jr, a West African based Visual Artist, Designer, and Illustrator. Worked on diverse design projects for a variety of projects and startups, currently Full time DAOing it!
  • Chameleon: Product and visual designer
  • Fiyin: brand and visual design
  • BogDrakonov: Security and DevOps
  • Bo: Fintech advisor
  • Rony: Communication squad
  • Andy: Communication squad
  • Sticklo: web developer
  • Senad: Partnership Workstream. Executive Director of Bankless Research & BanklessDAO coordinator.

Poll: Fund Bankless Card 4,405,020 BANK?

  • Yes
  • Maybe (I’ll tell you why in the comments)
  • No (I’ll tell you why in the comments)

0 voters

4 Likes

I recommend no for now.
Love the concept, but there are some deep tokenomics problems.

I’m fairly certain this proposal will tank the value of Bank for quite some time.

I suggest you move forward and try to get more funding from outside grant resources. If that is an option it should work to get things started.

You’re entitled to your opinion, but it would be more helpful if you explained why you feel that way.

1 Like

Would you please provide evidence for your thesis re: the tokenomics?

1 Like

I don’t want to speak for him, but I’d guess maybe that he’s maybe coming from the same perspective I had with WildfireDAO since this amount of BANK is even more than that initial proposal was asking for.

If that’s the case I’d counter with almost half this proposal is asking for is allocated towards retroactive funding of work already completed. So there’s no subjectivity about the results from that work. Plus the remain 2.7m BANK already has a body of work to back it’s credibility.

As far as it tanking the price… Can’t speak for the team but I’d imagine maybe some would hold the BANK they’re paid and some would sell as needed(bills), but this does seem like a project where much of the expenses would need to be paid for legal costs, etc. So initially I’d have to agree that this might have a negative impact in the short term on BANK price, but depending on the tokenomics it seems the intent of the porject once it is off the ground should balance that out and continue to assist lifting the BANK price.

I’d imagine that much of that S5 funding would also be retroactive since we’re passed the half way mark and some of that would carry over into S6 perhaps? That’d be my one first question.

I’ve got a few others that came up while writing the summary for the newsletter just now.

  1. How much was awarded from the DAO Punks grant? I went looking in their snapshot but the link to the IPFS content doesn’t seem to be available anymore that would have that info.

  2. What’s the status of the Delaware legal entity? If for some reason that doesn’t happen, not sure why it wouldn’t, is there a backup plan?

  3. How many sign-ups are there so far?

  4. Ragarding tokenomics, and apologies if this repeats some things that have been covered in other places from this forum, I am a little concerned that simply paying rewards to card holders in BANK won’t create the upward pressure we’re looking for. I have a Crypto[dot]com card and they have a similar model with their CRO token, and personally I sell off those rewards periodically. What does create an incentive to hold the token is a staking mechanic where the more CRO you lock up you can earn more rewards. They even let me pick what I get paid back for those rewards, not just CRO, I can opt to get them in ETH. Have their been talks it implement a similar lock up feature?

A bit long winded, but I’m voting yes, just a little unsure of the current tokenomics model.

2 Likes

If you take a look at the spreadsheet linked in the financial implications section, you’ll see most of the grant (>90%) is geared towards peoples’ effort. The reason we are seeking this grant is to compensate effort towards finding financing for other costs like legal, etc.

We’re not planning on ever being part of a seasonal funding round, so we won’t be asking for funding from BanklessDAO in 6 weeks for S6. We are financing this project like a startup - each funding round has a specific purpose. This round’s purpose is to the secure launch funding ($1M-2M USD) while strengthening our team’s bond with BanklessDAO. The funding we get from this grant will help us secure that launch funding from other sources.

1 ETH. We use that strictly for marketing.

We had a small flag during registration, but it’s been solved, and the advice we’ve got so far says we shouldn’t be too worried about this step. There is a backlog of Delaware incorporation requests, so it is taking more time than “normal”. We expect it should take a few more weeks for this step.

630 unique prelaunch signups

The difference between our card and crypto.com is that people can choose which DAO’s reward token they want. Our first market is DAO contributors, so they have a strong incentive to hold the token, assuming they are members of the DAO. According to our survey of >100 DAO contributors, the top reason they are interested in Bankless Card is to help support their DAO.

Does that answer your concern or are there other parts of our tokenomics you’d like to know about?

3 Likes

Kinda sorta answers my question about tokenomics. It leads into another question I guess.

What does support mean? If it just means getting token rewards in the card holder’s preferred DAO token I’m not entirely convinced that this actually translates into support for the DAO in question.

Correct me if I’m wrong on the following:

  • Rewards are generated per purchase
  • Visa/MC issues that agreed reward amount back to the legal entity’s backend in fiat
    • Maybe there is no Visa/MC middle man and the fiat just goes directly to the legal entity’s bank account, not sure
  • BC translates that fiat into the DAO token of the card holder’s choice at an AMM and deposits the token into the in-app wallet of the cardholder
    • This creates buy pressure for the token, this is “supporting” that DAO
  • But then the cardholder has to to decide what to do with those rewards
    • My impression is the tendency for most will be to sell the rewards for more spending power in stable coins or other

And it’s that step, where my impression the vast majority of card holders redeem those rewards to spend back into other things, creating sell pressure. Essentially net 0 “support” for the DAO. Again, unless I’m missing some part of the process.

Which is why I asked about the lock up mechanic, to incentivize greater rewards in tiers.

1 Like

Oh and I did look at the spread sheet. Very well done for S5, should probably be used as a reference for future proposals. I just wasn’t sure how to read it exactly.

Is it just the 2 rows where the bank equivalent is measured in BANK/USDC that aren’t towards contributor comp? If I’m reading that correctly.

Big fan of budgets following this level of detail as a standard.

Support means different things to different DAOs. It could mean demand pressure on the token, holding the token, transacting in the token, sharing the token with friends, or even direct, on-chain revenue. Or a combination of any of the above.

We can facilitate all of these over time by adding functionality (like staking, lock up, etc), but for BanklessDAO, some combo of buying BANK from a DEX and on-chain revenue is likely best.

If people are purely profit-driven, then they will optimize their rewards using a loss-leader card like crypto.com. We can’t beat their rewards, because the card is mainly a lead generator for all of their other services. It’s natural that people would sell their token as soon as they get it - they have the card specifically to make the most money, not because they believe in the cronos chain.

But Bankless Card is being built for people who aren’t purely profit-driven. It’s being built for people who are purpose-driven. DAO contributors.

DAOs were made for purpose-driven individuals to band together to be the change they want in the world. Bankless Card gives these contributors a tool to help fund their efforts. Our users are not the same as crypto.com, so you shouldn’t expect them to have the same behaviour

Yes!

Hi links, nice work! Two issues:

  1. What is the break-even point of this project, taking into account the 10% revenues redistribution to bDAO (in what ever form this may happen, seeing your chapter of value allignment).

  2. It is a big ask, around 4 mil BANK. I am not sure whether retroactive funding is something bDAO should establish as a principle, though this is a “political” decision. I suppose you initially did not ask for funding upfront because it was not clear whether the project would take off. Question is, who should bear the expense of such phases in future: the project team or bDAO. But of course I acknowledge, a lot of work has been poured into the project.

4 Likes

Assuming by “break-even point”, you mean cash-flow positive, then it’s possible in 6 quarters (i.e. 1.5 years from launch).

There are lots of assumptions built into this, including our users (assume 10-15K users), revenue (assume revenue from interchange and swaps), and costs (assume $8 acquisition cost, 10 part-time employees). You can see a list of assumptions in our slide deck: Bankless Card Pitch Deck v1 - Google Slides

Retroactive funding is already established at BanklessDAO - some big projects have already requested and received it (i.e. Bankless Academy, Crypto Sapiens, probably more).

I do believe that retro funding could greatly align the Bankless Card team with BanklessDAO. Just like doing a token swap between BANK and Bankless Card’s token will create alignment between the two DAOs (i.e. they both have a stake in each others’ success), having our contributors hold BANK will make them want to increase the price of BANK. Bankless Card has a lot of potential ways to bolster BANK price, and I’d like our contributors to be personally motivated to do so.

Thanks for the feedback!

Thank you for clarifying. Given the funding request size I am just throwing some (principle) thought and concerns I have at you, which in no way are meant critical towards the tremendous strides you, the team or the project itself have made.

So being cash-flow positivity may take a while and if and when it will be reached is uncertain - could be earlier, later or never. I acknowledge that one has to make assumptions here. Though its good to spell this out, as this in the worst case could mean perpetual funding.

I understand that retroactive funding has been applied more and more, though I am not sure on what basis (probably I am just not aware of the governance proposal here). But I am also not sure whether it would not be healthier to have a sharing of risk here between project and bDAO, in particular at the beginning when a group of motivated and bright enthusiasts investigate whether a project is actually a project at all.

I see the alignment aspect, whereby this could also be achieved and maintained by receiving funding at a later stage in the process. It may also be a question how one wants to classify bDAO funding: self financed initiative, friends and family, crowdfunding, (angel investor, vc etc. probably not by your own account).

In particular, retroactivity includes salaries to be paid to contributors. We cannot control how salaries are used by individual contributors, in this respect this may actually add to the sell pressure. I don’t see that as such this serves to align to the project per se, other than that everyone likes to receive compensation for work put in (which brings us back to the risk sharing thought - and that realy only touches the beginning of the project). There is a very long list of contributors. Where are the salaries specified (amounts, share of the overall ask, role holder compensation, if any)?

I like that you are addressing the 10% treasury revenue redistribution requirement (probably given the project will not be cash-flow positive within one and a half years) with innovative concepts and it is probably something one needs to investigate. bankless Brazil come to mind here, whereby this is a DAO.

1 Like

I stated this above and it’s worth stating again: we’re not going to use the typical seasonal project funding cycle for this project. I.e. we are not going to ask for funding perpetually

Instead we’re going for a startup model of funding where we ask for funding in rounds (pre-seed, seed, series A, etc). For each of these rounds, we will have either made big strides towards the project success and be able to convince people to fund us, or we won’t get funding.

We can’t make this project work with funding from BanklessDAO alone. We need outside funding. Getting ourselves in a seasonal routine wont help us ship Bankless Card, and it’s not good for the DAO either.

AFAIK, bDAO funding is all grants, given to contributors to pursue the BanklessDAO mission.

I believe our card is indeed building a user-friendly on-ramp to help people onboard to the Bankless life, and that’s why we are requesting this grant. To help us pursue our shared mission.

We ran a coordinape for both S3 and S4. They are, in large part, how we will distribute retro funding. We have only 4 roles: project champion, and 3 workstream leads. Everything else is based upon people’s desire to contribute to the change they want to be in the world.

You can see the role compensation in the financial ask section - each role is compensated at 5hrs/wk.

1 Like

This is an ongoing problem with our grants funding model. There’s no way to determine who will hold and who will sell. This is more of a DAO wide compensation model issue than a project specific one. Until we build a treasury of ETH and stables, we will continually have this problem, and we will struggle to find talented contributors, because not everyone wants to work for just governance and hopium.

For me the big questions are:
Will Bankless Card help onboard millions of people to DAOs and decentralised finance,?

  • Yes, by leveraging the power of DAO alignment we will help bridge the gap between traditional finance and Web3.

Can Bankless Card turn a profit?

  • Only time will tell, but the model looks sound and we carry the name of one of the most powerful brands in crypto!

Can Bankless Card find other ways than the transaction fees to profit?

  • Yes. We can explore earning fees on swaps, Web3 passive marketing integrations, and other unique ways of leveraging the communities that we connect.

Will we allow staking and other token uses?

  • Yes, these features are in the long term road map. We want to provide a simple and hassle free transaction application, then introduce voting, staking, DAO onboarding, and much more.
2 Likes

Great work. All the best and full support.

1 Like

I think the others who have shared their concerns have done well in drawing attention to areas that may need a little more detail to bring full community support to bear on this proposal. In all honesty, I’m not too concerned about the details, as this team is chock full of DAO enthusiasts and bDAO natives who have spent enough time in the DAO and understand our culture well enough to show up with receipts. Also, the fact that three card issuers are willing to commit their services to a venture like this is not a thing easily dismissed.

As all of the above is covered elsewhere, I think this project is worth backing entirely for one reason alone: if it succeeds, this will be a massive win for BanklessDAO and the DAO contributor space in general. To this end, 4.5M BANK is nothing.

Regarding external funding, I’m surprised to not have read about Fight Club in this proposal.

2 Likes

Bankless Card is one of the DAO projects I am most bullish on because of the interoperability potential with other projects, and the amount of value this could generate for BANK.

The amount of money you’re requesting in dollar terms (~$40,000) is reasonable considering the amount of work that has gone into the project. In BANK terms, I agree that this will have a big impact on the token price. At Academy we have been trying to figure out how to deploy our BANK in sustainable ways, but beyond OTC deals and avoiding BANK dispersal for external services / large dispersal for internal services, there’s only so much that can be done outside of tokenomics :man_shrugging: And to fix that we need to take calculated risks.

So my main focus turns to efficiency. From my experience, the size of the Bankless card team must be leading to massive coordination/communication overheads. Could you talk a bit more about the team and why you have ended up sharing certain roles between 2-5 people in some cases?

1 Like

Thanks for the feedback!

I’m a bit confused as to why you said we are sharing certain roles between 2-5 people…we’re not planning on doing that. We have had people step into roles when others were unavailable. For instance, eze took on Ops Coordinator while Rene was off for a few weeks. We believe that this kind of team resilience is a plus and mirrors the blockchain: when one part of our team falters, the rest can fill in the gap.

In terms of coordination and communication overhead, I don’t think that we have massive overhead. In fact, many contributors have commented how smoothly the project seems to run from their perspective.

We have 5 30-minute meetings every week which have specific levels of granularity: Workstream Lead Weekly (project milestone perspective) , All-Team Weekly (project perspective i.e. pursuit of milestones), and a tactical meet for each workstream (ops, product, communication) where we have a task perspective (i.e. pursuit of projects). There are also ad-hoc meets that popup for projects and tasks, and these are created by our contributors as needed.

By scoping meets by level of execution and delegating authority to our workstreams and projects, we can achieve high coordination without a ton of overhead. You can see a baseline for our strategy on team organization in this post: How to Use Asana to Work Asynchronously

Glad to dig into this more if you like!

i love the ambition of this project and i believe in this team!

1 Like