Should the Bankless DAO Utilize a Percentage of Its Revenue to Actively Bolster $BANK's Value?

Authors: @Davoice321
Squad: @Davoice321, @AboveAverageJoe
Date Created: June 9, 2021
Date Posted: June 10, 2021

SUMMARY

This proposal is to gather community consensus via a poll included with this proposal about whether a Snapshot vote should be initiated on the following question:

“Should a percentage of revenue generated by the DAO (when the DAO has generated at least $250,000 in non-$BANK revenue) be utilized to increase the inherent value of the $BANK token?”

BACKGROUND

Over the past several weeks, the community has been engaged in a vigorous discussion on Discord and the forum focusing on the nature of the $BANK token, i.e.:

  • Whether it should be viewed as a “valueless token that simply represents participation in the Bankless DAO community”

  • Or, if $BANK should be considered a store of value in order to more reliably utilize it as an asset that will be readily accepted by external partners, community members and others as a means of payment, or for commerce.

To help address this question, I (@davoice321) initiated a series of conversations on Discord and the forum (see Transmuting $BANK into a Store of Value).

I suggested that not only should $BANK be considered a store of value, but that the DAO should take affirmative steps to bolster its valuation utilizing a percentage of the DAO’s revenue.

To gauge community sentiment, I launched a poll on this question. 87% of respondents agreed that the DAO should utilize a percentage of the DAO’s revenues to bolster the value of $BANK.

The purpose of this proposal is to gather community approval to raise this question to a Snapshot vote.

One question we tackled early on was whether it is too early to begin thinking about diverting a portion of the DAO’s revenue toward increasing $BANK’s value given that the DAO has no significant revenues to date.

We believe that it is never too early to make a public commitment that the DAO will proactively work to bolster $BANK’s market value.

Having an early Snapshot vote on this question communicates that this is a priority for the DAO, and provides the team looking into the best method of Treasury utilization with the confidence needed to move ahead with this important and time-consuming work.

A second question is about whether boosting $BANK’s value will prevent individuals from joining the DAO due to $BANK’s rising price. There are already ongoing efforts to significantly reduce the amount of $BANK required to join the DAO, or even remove this requirement entirely. Doing so will reduce the barrier to entry and enable many more people to join the DAO.

To review additional conversation on this topic, please see my forum post.

SPECIFICATION

This initiative would be implemented in two phases:

Phase one would involve conducting a Snapshot vote with two options:

  • Yes, Utilize a percentage of the DAO’s revenue (when it reaches at least $250,00 in non-$BANK revenue) to bolster the value of $BANK
  • No, do not utilize a percentage of the DAO’s revenue to bolster the value of $BANK

Phase two: After the Snapshot vote (assuming it is yes), a squad of DAO members will:

  • Conduct research into some of the best methods of utilizing DAO revenues to bolster the value of governance tokens

  • Present strategies for community consideration (current conversations revolve around using DAO revenue to buy $BANK from the market and either burn these tokens or return them to the Treasury), initiating a staking pool for $BANK holders to receive a share of DAO revenues and other tactics

  • Gather consensus about which strategy makes sense to pursue from the community

  • Develop a formal proposal designed to achieve consensus on whether to conduct a Snapshot vote on the preferred strategy

  • Conduct a Snapshot vote to codify the preferred strategy into the DAO’s operational framework, and receive funding to implement the strategy (develop smart contracts, etc.)

From a timing perspective, this research and consensus building work would take between 2-3 months.

HELP NEEDED

@Davoice321 would champion this effort with support from @AboveAverageJoe. We would also need help with:

  • Researching how other DAO’s utilize their revenues to bolster the value of their governance tokens

  • Developing a technical specification for the strategy implementation

POLL

Please indicate your preference as to whether a Snapshot vote should be raised on the following question: Should the Bankless DAO utilize a percentage of Its revenue (when non-$BANK revenue is at least $250,000) to actively bolster $BANK’s Value?

As a reminder, at this point we are looking to conduct a vote as to whether the community feels the DAO should to do this (use the Treasury to support $BANK’s value) at all.

A second vote would be held to agree on a specific mechanism (once that is determined).

Raise The Following Question to a Snapshot Vote?
  • Yes, launch a Snapshot on the question of whether the DAO should utilize a percentage of its revenue (when non-$BANK revenue is at least $250,000) to actively bolster $BANK’s value
  • No, do not launch a Snapshot on the question of whether the DAO should utilize a percentage of its revenue to actively bolster $BANK’s value

0 voters

4 Likes

I voted :x: on this proposal, and I want to explain why.

Snapshot attention is a rare resource. My opinion is that we turn snapshot voting into a grand event, which can only be done when snapshot votes are scarce (once a quarter). This is the intention of the Seasonal Projects. Right now, snapshot #4 is sitting at just ~11-12% while previous voting records were 20+ %.
My point is, I’m terrified of that number going down. And if we start using Snapshot just to signal the direction we want to go in, we will assuredly lose that voting attention.

The point of this proposal is exactly that. To signal the direction of the DAO. Not to execute on a thoroughly scoped project. So when I read,

87% of respondents agreed that the DAO should utilize a percentage of the DAO’s revenues to bolster the value of $BANK.

To me, this means you have enough signal to move to the next step and start:

  • Researching how other DAO’s utilize their revenues to bolster the value of their governance tokens
  • Developing a technical specification for the strategy implementation

Naturally, the question is, well how do I make sure this isn’t a waste of my time!

  • If you’ve gone about the process correctly, you will have gathered a strong base of support that is representative of all voters. It’ll cross paths with scores if not hundreds just within the Discord and Forum.
  • Something like this is a good example of what a Grants Committee may fund, or even a Guild. For example, this is a research heavy topic. The Research Guild may fund you for 10,000 BANK to do the research and scope the project.:x:

In sum: I am in support of further research and due diligence on this topic. However, Snapshot votes for signalling will dilute the attention BANK holders will pay to Snapshot. Instead, we should use mechanisms from the S1 Roadmap Proposal to start executing on this research.

14 Likes

Respectfully, this is not just about securing permission to conduct a research project. It is about making a clear and bold statement to the community – and to others – that the DAO is taking the subject of converting $BANK into a store of value and actively bolstering its valuation seriously and has declared that it wishes to do so.

In fact, I argue that capturing the full attention of the DAO about this important issue is the point of requesting a Snapshot vote. $BANK’s tokenomics and use as a store of value influences everything the DAO is doing, from paying contributors to providing individuals with equity in the DAO.

Clearly we’re treating $BANK as a store of value and unit of accountand I believe it is critical that the community and others understand that the DAO is committed to supporting its value in the marketplace and is putting a process in place to do so.

This is the point of the Snapshot vote, which goes far beyond getting permission to conduct a research project.

3 Likes

I’m late getting into the forum, so missed the earlier discussion.

I voted no, I can see the attraction on demonstrating income going to token holders, stakers, etc. However, I’ve never been a fan of pool 2 incentives etc.

It will certainly give the token a pump and means that community rewards in $ amounts cost the treasury less, but it’s an addictive drug for a protocol. So unless you have optimal tokenomics (CRV ???), I think your better off spending your time building product - when people notice a strong product-market fit / see opportunities for future income, they will buy and hold.

3 Likes

I agree with @frogmonkee and also voted no on moving to a snapshot vote right now.

I think the snapshot vote should be for how the portion of the DAO’s revenue would be used to bolster $bank, and the funding mechanisms mentioned in the Season 1 post (assuming the snapshot vote passes) should be used to fund the research.

3 Likes

I have also voted no, because I think you should do your research first and Bankless agrees to a method then you put it to snapshot. Not the other way round.
In your first posts you detailed the methods to bolster the value of BANK. Now you have omitted it altogether.

1 Like

Thanks. Yes, the strategy is to determine first if the community, as a whole, via a Snapshot vote agrees to the premise of utilizing a percentage of the Treasury to bolster $BANK’s value.

If the answer to that question is a clear yes", then we can move ahead with determining the specific method.

Including that information in this post would have turned the conversation toward debate over a specific method, rather than focusing on whether it should be done at all.

1 Like

Thanks. This is what we’re looking to determine with this vote: whether the DAO should pursue strategies of bolstering $BANK’s value at all – with specific methods to be determined later.

1 Like

I understand why a snapshot vote would be useful as a more powerful confirmation of interest from the members, and we certainly don’t want a full squad to work on a complex proposal with the big fear they will get a “no” no matter what options they come up with. However I think a forum vote and a proper call on Discord to discuss it should be the standard “confirmation of interest”. The snapshot vote should be about the implementation of the chosen option, the final step!

1 Like

From what I understand, my thoughts on this actually come into place in the next phase (how should this be done?) even though they actually directly impact this phase (should this be done?)

To my thinking, there are two interrelated questions here:

  1. Should the DAO attempt to either bolster (or stabilize) the market value of BANK token?
  2. Should the DAO attempt to stabilize the market value of its treasury?

If we think about question 1 with respect to question 2, it becomes sort of obvious. The DAO will be much more capable of attaining its strategic objectives if the treasury value is somewhat stable and upward trending.
From the same perspective, any decision for the DAO to manipulate its own token value should be driven by its answer to question 2.

In effect… if the DAO passed a proposal to keep xx% of its treasury in ETH and yy% of its treasury in stablecoins, with rebalancing transactions required as part of every treasury spend, then it would automatically sell BANK when it is ‘expensive’ relative to ETH and USD, and buy BANK when it is ‘cheap’ relative to ETH and USD.
Since the initial action would be a sale of BANK (as the treasury currently sits at ~0% in ETH and stablecoins), any x and y values greater than 1 should be driven by revenue acquisition (some percentage of revenues stay in the tokens they are earned in and % of treasury held in those tokens is reset periodically to those levels in a stair-step fashion), which I think is where this proposal should actually come in - not as a standalone proposal, but as part of a broader treasury management framework.
And to that end… we should not snapshot individual pieces of the treasury management framework, but move forward with establishing the totality and snapshot the full framework proposal instead (including a view of how/why that framework might be changed).

Note: I have not been active in the Discord discussions in the last couple of weeks, due to personal circumstances, so if all of the above points have been discussed, hashed out, and discarded already then I apologize for that oversight.

5 Likes

Actually that was amazing, and I hope to see you more involved in that discussion moving forward, we’re looking at kicking off the ideas next week sometime so far

1 Like

I usually start things with the end in mine. I believe the Bankless DAO has the potential to become a crypto media organization unlike anything we have seen before. The value of the Bankless DAO token is at the heart of the matter, therefore any endeavor to increase its value is worth undertaking.

3 Likes

There are a few projects like alpha wallet who has lower attention than this proposal and are already debating and researching how to make BANK valuable even with no need for snapshot. Alpha wallet proposal it’s a good example of this

My feeling is we don’t need to “announce” that we are making BANK a store of value, we know we will in time and those who are in the dao and follow things up will be the most compensated for it. Let speculative non producer users be the last while actual BanklessDao participants get what they deserve for their good effort.

Thanks everyone for providing comments and voting on this proposal.

After 7 days of conversation and voting June 11 - June 18, the results in, with 66% of voters favoring a move to Snapshot with this question.

@AboveAverageJoe and I will now move this to the next stage of the process: the Snapshot.

2 Likes

Moving to archive. Please reply to reopen.