Emergency Financial Proposal

In light of recent market/world events, the founding team has deemed it necessary to present the option of an emergency re-allocation of community funds. Please note that this proposal is not financial advice, nor a market prediction. This proposal is deemed necessary due to previous allocation proposals being voted on during significantly different market conditions. Our priority is to deliver on the roadmap we have advertised to our holders from the beginning. It would be irresponsible of us to not allow holders opportunities to adjust their risk tolerance as risk tolerance can affect our cash position which plays a role in execution. All Holders are within their own right to want to either increase their tolerance, decrease it, or keep it the same. This will take place as either keeping our current holdings, selling some ETH, or even all of it.

Let’s first establish clarity on how the balance of the community wallet plays a role in our deliverables. Currently the wallet is holding 70.22 ETH and 79,000 USDT. With an ETH price of 1945$ at this time, the wallet is worth $215,000 in total. It is safe to say that we have raised enough funds at this point in time to secure a formidable airbnb property even with further drops in the ETH price. Swings in price can have an effect on the financing methods we will be able to use on the property acquisition. We are actually sitting at a balance that would satisfy a 100% cash purchase of a current holder’s property(Skyypenguins) which is already a cash flowing AirBnB. It has 73% occupancy year-round. This is one of several real estate options on the table of course. Volatility downwards could force us to look into homes with less cash flowing ability, or being forced to use traditional leveraged financing. In the event of obtaining a mortgage on a home, the equity would not all lie with the hands of the community in all likelihood, as an external guarantor would be needed for the loan. On the other hand, if ETH rises in value we could afford an even better home.

In the short-medium term there are especially some considerable factors to argue that the value of ETH could go down heavily. Inflation rates are currently at record highs, with rates to borrow money also trending very much upwards. Global events like the Ukraine-Russia situation are still at bay, and we are currently 14 years since our last recession. Historically since the 1900’s, some sort of recession has taken place every 12 years or so. Crypto’s have seen incredible gains from 2020 til a few months ago. Our real estate purchase is a goal for the short term and currently there are short term factors that could decrease the quality of the purchase we make. It is safe to say that ~$200,000 is a home value on the lower end as far as AirBnB prospects in the US. More significant downward price action could jeopardise the quality of home we can afford in cash and even force us to seek traditional lending. In that case we could afford a much more expensive home but retain less equity in it. This would be due to needing an external guarantor who would have to be compensated their undertaking of risk for us.

There is an equal chance that the value of ETH could rise, in which case our opportunity cost could be high if we liquidated our ETH. It is safe to say that you would not be an investor into NFTs if you did not have some long term faith in the project. Nobody can predict the market reliably and price risk is something we must accept whether bullish or bearish on ETH. The community must decide if they feel more comfortable attempting to cut their losses and liquidating some or all of our ETH, vs retaining our holdings and accepting the consequences of price action whether they be positive or negative. Make no mistake, this is an important decision for the future of our community. The founders will give their objective guidance below.

Founders Opinion:

We personally believe that the most appealing option for the community is buying a house in cash, rather than having an external guarantor and losing out on equity. We feel there is a large risk of bearish volatility in the short term and that this could hurt our cash position. In turn this would then affect the quality of our real estate purchase. We do not see this potential bearish action as a killer of our project but it is definitely not ideal. On the upside, We would need quite a large upswing in ETH price(probably around 100% from here) to even consider more than one home at this time. The upside does not seem to match up with the downside and we feel like we are at a solid point to cut our losses and continue to advance the future of the Watering Hole. Please again note that this is not financial advice, nor a market prediction. This is advice on the execution of our roadmap as defined in our whitepaper. We give our best guidance but we do NOT have the final say. The community does.