CULT DAO Discretionary Growth Fund

The Cult DAO proposal system is beautiful in many ways. Transactions in $CULT fills the treasury. Every proposal that is passed burns 2.5ETH worth of $CULT and sends 13ETH of $CULT to the investee wallet for funding. Upon realization of profits, $CULT is bought back and 50% is burned, and 50% is sent as rewards to stakers. The proposal process is immutable and cannot be changed. It’s renounced, which adds to the safety and brings in the same elements of OG Bitcoin.

While this is great, we’ve also endured many missed opportunities. In my humble opinion, the DAO is designed more as a venture capital DAO that invests in early stage projects, normally via seed rounds before launch. This requires investors in $CULT to have a longer term mindset, as it takes a long time for these projects to build as many are doing things in the space that crypto has never seen before. Things like Web3Wallet (Sons of Crypto), Wistaverse, Delvit (formerly History token), Hebys, Antara, Big Mother DAO, and more. Most of these haven’t launched their tokens or projects yet. The bear market, although difficult for builders, allows them to take their time and refine the product so when the bull market finally comes, they are way ahead of the game. Cult DAO is poised to benefit greatly off of these wonderful investments we’ve done that have been building this whole time.

However; over the last 18 months Cult has also invested in tokens that were already live, buying them off the market. Some of these were legit projects, others were scams, some had big ideas but failed to achieve them. The bear market is subject to a liquidity trap at the moment. Liquidity rotates from one token to another as no new money is coming into the space right now, so degens flip and move on, ultimately killing most new tokens. Us investing 13eth into some of these projects has led to investors front running our buys and ultimately exiting afterwards, leaving us holding the bag and giving sharks free money.

These were valuable lessons learned, but it’s important we continue to adapt.

I’m proposing an experimental idea to help solve this issue. Over time there have been many within our community that have built a strong network. This has allowed us to gain alpha into which tokens may be poised to do well and get in early. This idea doesn’t have to follow the guidelines of furthering decentralization and benefiting noble causes. The whole idea is profit maximization to ultimately benefit Cult long-term to continue fulfilling its mission.

We have leftover funds from the Xen proposal which ultimately would have been used to mint Xen on Modulus; however, with Modulus launch date still further out with no set date of launch, and no confirmation that Xen will even launch on Modulus in the first place, it might be a while. My proposed idea is to use those leftover funds to start a discretionary growth fund where we can invest in anything to grow the pie. Shitcoins, large caps, leverage trading, synthetics, private sales, etc. The benefit is we aren’t handcuffed by the traditional Cult manifesto guidelines and can move dynamically. There may be some investments we hold less than 10 minutes or some we hold for weeks. We may invest 0.25eth into something, or over 1eth. The negative? It requires trust in the people doing it to know what they are doing. It also is possible these funds go to zero if we make bad investment decisions.

We can take volunteers for a group to share ideas, but ultimately one person should be the one responsible for executing transactions and making sure they are always available to do so, to make sure we can move quickly and not get caught in delays because of disagreements.

This is ultimately an experiment but could bring in people with expertise in this space in the community together to help in ways they know they can. While there is a risk of loss, we aren’t risking as much.

The growth fund can be used to help Cult in whatever way we choose. 50/50 buy/burn, add to traditional cult treasury, assist with marketing, etc.

I don't expect it go smoothly to start off. We will need to adapt and find out what works best. This way we can keep the traditional Cult proposal system to projects that match the manifesto guidelines and ultimately serve as longer term seed funding for legitimate builders. And then have a smaller side wallet where we can take advantage of shorter term pumpertunities as they come and go.

I'm perfectly fine if this gets voted down. Like I said, it's an idea and an experiment. But this could be a good way to get sentiment from our community and new ways to get engaged as we wait for many of our longer term investments to mature and come through to fruition.

I look forward to your feedback!

• Mr. Cultmander