[AGIP34] AavegotchiDAO <> Pixelcraft Studios 1.75M DAI Token Swap

Author: Jesse | gldnXross#6482 GotchiID: 8497 Quorum requirement: 20% (9M) Vote duration: 7 days XP Reward: 20 XP for each Aavegotchi in the voter’s wallet Discourse Thread: https://dao.aavegotchi.com/t/token-swap-1-75m-dai-from-aavegotchidao-for-ghst-from-pixelcraft-studios/3769

Summary This proposal aims to swap 1.75 million DAI from AavegotchiDAO’s treasury with an equal value of GHST from Pixelcraft Studios’ balance sheet.

Rationale The launch of the Gotchiverse has introduced new and increasing infra costs for Pixelcraft Studios that cannot be paid for in GHST (or any crypto for that matter). These costs primarily consist of usage of AWS and Redis Enterprise for real-time gameplay in the Gotchiverse, and will continue to scale up as the game gets more popular.

To pay for these costs, we have outlined several options:

• Raise funding from VCs
• Liquidate GHST into DAI and swap for fiat
• Use GHST as collateral on Aave to take loans in DAI
• Perform a token swap with AavegotchiDAO

We believe Option 4 (Token Swap) is the best available option at the moment. We strongly value our independence from VCs, prefer not to have debt on our balance sheet, and do not want to market sell GHST acquired from sales.

Therefore, we propose a token swap between AavegotchiDAO and Pixelcraft Studios to ensure adequate fiat runway for several years of further development, no matter how bearish the market becomes.

Key Details At the time of this writing, AavegotchiDAO treasury holds roughly:

• 2.5 Million DAI
• 3.5 Million GHST
• 3 Million Alchemica

(Live source here: https://app.aavegotchi.com/treasury)

Pixelcraft Studios, on the other hand, is heavily skewed toward GHST with over 6.7 Million GHST in our primary revenue wallet while our only DAI is coming from the curve’s monthly 150k DAI faucet, 50k of which is already earmarked for GHST purchases.

Pixelcraft Studios has been able to effectively grow the team and support infrastructure costs without needing to liquidate any significant amount of GHST. But last month’s launch of the Gotchiverse and anticipated continued growth has pushed operating costs dramatically higher. Server costs for the April playdrop, for example, exceeded 40k USD, and that is projected to grow in the months ahead.

Such operating expenses are anticipated but we have to acknowledge that these subscriptions and invoices almost always insist on trad banking (fiat). We would prefer to not have to sell GHST in order to achieve the necessary growth budget.

The DAO’s revenue from the GHST bonding curve opens up the possibility of a large-scale exchange of assets between our two parties. With the game live, GHST off its all time highs, and a DAO treasury that is well established, we believe this is the right time to propose an OTC token swap.

For the purposes of this token swap, a valuation for GHST that all can agree on must be established. There are many ways to arrive at such, so in the interest of expediency, I am proposing an intuitive method that also tips the scale generously in the DAO’s direction:

GHST valuation methodology Pixelcraft Studios has calculated GHST’s average price from Tuesday, June 14 to Saturday, June 18 (duration of the SigProp via CoinGecko) with a 5% discount applied to the final price: USD 1.28. If DAO voters find the results agreeable, they may vote to approve this CoreProp.

Execution If the CoreProp passes, the token swap should process in a predictable way. I suggest the token swap occur with the following method of execution:

• Pixelcraft Studios shall first transfer the agreed upon amount of GHST (defined in the CoreProp) to the AavegotchiDAO treasury wallet.
• AavegotchiDAO treasury wallet (currently managed via multisig by Pixelcraft team) shall transfer 1.75 million DAI within 8 hours of receiving the GHST to the Pixelcraft Studios primary revenue wallet.
• Pixelcraft Studios shall make an announcement in Aavegotchi Discord confirming the reception of the DAI, thus concluding the token swap.