— by Evan McFarland
We’ve as a project been quite discrete about FP DAO plans since the release of the V0.5 Constitution, but DAOs aren’t created in a vacuum so it’s time to bring the plans we’ve been working on to an open discussion.
Next week, on 08/17 3 pm UTC, @cloudedlogic and I @evan_mcfarland_ will be doing a Twitter space AMA on the topic. This post is a briefing on our plans and their rationale made for the purposes of informing everyone ahead of time so the whole discussion can be done Q&A style.
We are really right at the starting point of the DAO part of FP DAO. The Flowers are functional in governance, and Ludo broke the ice with a successful launch of the Pineapple Punks, the first collaboration proposal. This is the time when community governance can begin to shine.
Here’s what we are thinking for next steps. What we want back is scrutiny and alternative ideas from the community. With any luck, we’ll come out with recommendations that can turn into DAO proposals and community decisions.
Now all the finer points are in a whitepaper we plan to release EoY. We’re open to discussing most of what we know during the twitter spaces, but to keep us agile, adaptable, and ahead of the competition, we’re forced to stick to the high-level details at this time.
Bounty for Participating
We’re allocating 10 ICP for up to 10 DAO proposals that created anywhere from now to one week after the Twitter Spaces. As a reminder, any flower holder can make a proposal and/or vote on fpdao.app. Here’s the criteria:
- Proposals must be submitted anywhere from now to 08/24.
- Proposal must relate to DAO development directions, i.e., Twitter Spaces topics or similar.
- Proposals must have “Accept/Deny,” “Yes/No” options. Multiselect won’t be considered because they don’t represent a unique idea of the proposer.
- Proposals must have a majority voting “Accept/Yes.”
If more than 10 meet the criteria, 10 ICP will be sent to the top 10 wallets with the highest percentage of voter participation. Since this is about crowdsourcing ideas, not structural DAO changes, it doesn’t matter for the bounty if voter participation is above or below 50%.
We’ll likely have more bounties like this or an permanent rewards mechanism in the future. This is an experiment to see if that’s a good idea so please respect it and vote accordingly.
This is your chance to get your idea out there or tell us which one of ours is wrong!
I will to the best of my ability be synthesizing and integrating this feedback with our whitepaper, V1 constitution, and future plans so your participation is meaningful and appreciated!
Now… let’s get into ideas we’re already working with.
2022: DAO V0.5
What we’ve done
We are currently in DAO V0.5 but will be moving to V1 in 2023. We have a decentralized base of flower holders. We have instituted flower voting rights in the DAO. We Launched the Pineapple Punks with Ludo as the first official Collaboration Proposal. A great start to a rather experimental DAO model, but we’ve still got a ways to go.
What we’re doing
#1 of the FP DAO Bill of Rights starts with a reminder of the DAOs founding mission.
“Finding and supporting quality art through wisdom of the crowd is the FP DAO’s foremost ambition.”
The remaining 5 fundamental rights describe the function of the DAO in pursuing this ambition, followed by the collaboration proposals section describing how to make this happen. Our immediate next step is delivering a 3rd party collaboration proposal as described in the constitution.
This will begin by delivering on the promise to open public submissions for artists with a collection. Ludo and the team will narrow these down to three based on technical feasibility and other factors, at which point the DAO will vote to pick the winner. That’s the immediate next step. The real changes come with the DAO’s next versions.
2023: DAO V1 Upgrades
The challenge for DAO V1 is decentralizing the proposal issuance and curation processes. Currently, any Flower can post a proposal, and separating the wheat from the chaff is currently a team responsibility. Further, the only formal DAO process is for collaboration proposals, and the issuance for those is constrained by the team to limit the number of collections.
Decentralizing proposal creation starts with the buildout of our community hub. An updated website, DAO page, governance forum, and place to view and trade DAO NFT assets will be aggregated to a single site. All NFTs will remain marketplace agnostic, but this hub will serve as their independent home base so all feature access remains available under a single link.
Decentralization of the proposals will be accomplished via a governance forum. Holder wallets will only get access to post a proposal after a particular forum post reaches a threshold of community attention. Proposals accepted by the community will grant ICP rewards to their issuer from a DAO treasury for their contribution.
This process for generic proposals can’t be applied to collaboration proposals because it could lead to a potentially infinite number of collections. In DAO V1, collaborations will undergo a separate process where any artist can post their collection idea as a proposal at any time. To limit community selection of the absolute best art, only SEED holders will be allowed to contribute to those decisions.
But what are SEEDs you may ask?
This brings us to our most significant suggested DAO upgrade.
Flower Utility
In FP DAO V1, DAO gardening is the means through which new art grows. Here’s how the process would work:
- Flower holders plant (stake) their flowers.
- Planted flowers generate SEEDs.
- Collectors delegate SEED to the collaboration proposal of their favorite artists.
- When an artist’s collection idea accrues enough delegated SEEDs, they are accepted into the DAO and development begins.
- At launch, those delegated SEEDs are burned in exchange for art airdrops or other incentives dictated in the original proposal.
- Left in place of the burned seeds is a memento Soul-Bound Token, commemorating the SEED collector’s contribution to that artist.
Beyond DAO V1
It’s hard to say what’s beyond the establishment of a DAO-governed community hub, because, well, it will unleash creative directions that we’d be naïve to try and predict. But the ambition we’d like to establish now is that of Soul-Bound utility.
Soul-Bound Tokens (SBTs) are an old idea recently popularized in the Web3 world by Vitalik Buterin. They are basically non-transferable assets that are valuable exclusively to their holder. This has big implications when applied to governance. Traditionally blockchain governance mechanisms give voting power to those that horde supply and take away from those who give up supply. Unfortunately, those who accrue voting power over time are the exact people you don’t want wielding that power. Soul-Bound attributes are the antidote to this conundrum because they stay with the holder forever and can only be earned, not purchased. This breeds a governance mechanism that cares more about who you are than what you have.
In a later version of the DAO, SBTs will give wallets a soul that can increase the SEED generation rate of flowers, thus expanding its capacity to produce art at the same rate as the community grows and participates. This allows FP DAO to scale indefinitely without ever increasing the number of flowers in existence.
Well, this completes our more fun next steps for FP DAO. If you’re an avid cryptoian, you may notice such DAO plans are unconventional, even by crypto’s standards. That’s intentional. Our team doesn’t see many of today’s DAO models staying true to the name, nor NFT projects staying true to their art. My aim is to be a contrarian among the contrarians, and it’s the only approach I take when creating concepts for something as radical as a DAO. Here’s why…
Problems Solved
Short-term Token Models
It’s shouldn’t come as a surprise that standard token distributions are arranged such that community liquidity becomes the founder and investor’s investment hedge against project failure.
Let’s say 10% of tokens go to founders, 10% go to early investors at launch; and 80% goes to the community via rewards or something over a 10 year period. Given that there’s rarely enough liquidity to sell even 5% of the total supply at any given point, the wisest thing founders and investors can do for their wallet is sell as much as possible as soon as possible.
When you extend this logic to its limits it becomes clear that utility tokens are a poor model because tokens never live long enough to be valued by their utility. You’re more likely to build a successful project off of rewards tokens than anything else, and so they have become commonplace. Looksrare managed to become very successful on this strategy, and it worked despite the eternal downtrend of LOOKs.
We chalk up the ~98% failure rate of crypto startups simply to a low probability of success, but I don’t buy it. That failure rate is simply a consequence of it being financially irrational to create a token that’s designed for long-term success.
Our token strategy offers and alterative. SEEDs are in some sense tokens and whether they’re fungible, non-fungible, soul-bound, or otherwise can be up to the community, but their will be no “distribution.” SEED’s initial supply will be zero, and it will grow only by flower holders that stake. That’s it, no founder or investor allocations. They have utility, but the difference here is the supply only grows with utility that’s actually usable, not some promise of utility in the future.
It’s elegantly simple idea based on how all things grow: Planted Flowers grow SEEDs, SEED generation grows with Soul, and SEEDs grow new art.
Short-term Art
Just like fungible-tokens, NFT collections have been shaped by their economics, which is further shaped by their marketplace economics. Typically, at least 90% of the money from NFTs comes from the initial sale. Very little is made on royalties. So, knowing this, the best strategy for any artist is to launch one collection after another at max price and then leave or move to another ecosystem. The best things for marketplaces to do is to encourage this strategy.
FP DAO stands to flip the model. Since launch details must be pre-approved by the community, voters will essentially regulate fair prices. Furthermore, rewards will give the SEEDing community free or discounted initial access, so earnings at launch will be low. This means the bulk of artists earnings will naturally gravitated towards royalties, rewarding those who stick around to deliver value to their communities and failing those who don’t.
Boring DAOs
Snapshot is a great sample of the existing blockchain governance protocols today. They’re often incredibly useful in helping make roadmap and protocol decisions while incorporating the community. But… they’re really boring. No one sits around all day pondering DeFi protocol decisions for fun. And that’s why voter participation in these “DAOs” is usually around 1–2%. And there’s not really a fix for this either until DAOs find a use case that makes people want to be a part of it.
We think we have found that opportunity with art. FP DAO’s core proposals have always amassed 55–85% participation. Voting has in the past, and will increasingly in the future, be coupled with incentivization. The most fundamental decisions have to do with collaborations, and asking art collectors which art they’d most like to have next shouldn’t be much of a chore.
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A lot of crypto OGs will remember the initial dream of using tokenization and community ownership to free individuals from the chains of financial and big tech systems. But up until now, a lot of those models just added more chains. If we are to continue making FP DAO an example that realizes the dream of Web3, we’ll need to carve our own path. Join us in making this happen. Bring your ideas to Twitter Spaces next week (08/17 3pm UTC) where we’ll discuss @Evan_McFarland_ @Cloudedlogic and remember to post them at fpdao.app to join the bounty program.
