Proposal 011 - Authorization of Contrax Seed Funding Round

Disclaimer: This proposal is intended solely to seek approval from the DAO for initiating a seed funding round and should not be construed as an offer to sell securities. Detailed information, including comprehensive disclaimers and terms, will be provided to potential token purchasers following this proposal's approval.

Proposal Summary: Contrax DAO, LLC is poised to launch a seed funding round in response to positive feedback from our community and advisory board. This round aims to secure financial resources for scaling the project, focusing on marketing, operational expenses, development, security enhancements, and legal costs. This proposal is requesting DAO approval to proceed with a token purchase agreement for xTRAX tokens, conditioned on its alignment with regulatory guidelines and conditions as legally counseled.

Details: Leios International, Inc. initially developed the Contrax platform and handed it off to the Contrax DAO with a service agreement for ongoing financial and operational support. This agreement expires with the tradability of the TRAX token, a milestone the DAO is actively working to approach. This is a proposal for a seed funding round by Contrax to sustain its growth and transition it toward financial and operational independence.

The proposal authorizes raising $1.5 million at a $10 million valuation through the sale of xTRAX tokens to potential token purchasers under a token purchase agreement. The initial terms include immediate disbursement of xTRAX tokens, with an upgrade to TRAX tokens following a one-year cliff and a three-year vesting period. These terms are subject to adjustment based on negotiations or legal counsel recommendations.

Furthermore, in conjunction with the disbursement of xTRAX tokens to potential token purchasers, a corresponding allocation will be made to Leios International, Inc. This step initiates the fulfillment of Contrax’s obligations under the existing service agreement and enabling Leios to gain voting rights alongside token purchasers. Leios and token purchasers are still subject to vesting periods with regards to receiving the TRAX version of the DAO token, as laid out in their respective agreements.

The Contrax Board, in collaboration with the Tokenomics and Finance Committees, will ensure the sale aligns with the DAO's broader objectives, while also engaging legal counsel to ensure the DAO adheres to applicable regulations.

Upon approval, the Contrax Board will initiate the sale at its discretion, with a commitment to transparency and updates based on legal advice to protect the DAO and its members' interests.