Dwarf Season 2 Investments

TLDR; Approve Degen Dwarf S2 funds to be used for investment in the new protocol.

After season 1 the Dwarfs voted on a couple of DeFi strategies and created a diversified portfolio. Times and prices have changed, and we may be entering a potential bear market. During bear markets, the teams that build survive. So in order to preserve the Dwarfs, this proposal calls for the Dwarfs to become a Venture Capital. Instead of investing in DeFi again, the Dwarfs would invest in a new project being built behind the scenes.

Pluto Pawn

Named after the newly recategorized Dwarf Planet. The contract is currently in its 3rd iteration and needs the funds for development and audits. Stinky has implemented the following features:

1.) The protocol accepts ANY compliant ERC-1155 and ERC-721 as collateral for a pawn loan. 2.) The protocol can accept ANY ERC-20 token as a loan token. The protocol also has the ability to limit what tokens. 3.) The protocol allows potential borrowers to create listings defining their own: loan amount, length, interest rate, token, and collateral 4.) The protocol allows lenders to accept listings or create counter offers, that the borrower can accept 5.) When a loan is created, the protocol will take custody of the NFT collateral, and mint a pawn ticket for the lender. The protocol will then collect the funds from the lender, and issue the loan to the borrower. 6.) As a unique feature, the Pawn Ticket NFT can be traded like an LP token. The holder of the ticket will either receive, the loan amount + interest or be able to claim the collateral if the loan defaults. 7.) Borrowers have until the end of the loan period + grace period to pay back the loan, or face default. Borrowers must pay back the loan amount + interest + fees, in order to reclaim their collateral. 8.) If a loan defaults, the NFT Pawn ticket holder can redeem for the underlying collateral. There is a custody fee charged for this action. 9.) The ability to mark certain ERC-721/1155 contracts as "Verified" or "Approved". Current discussions are, letting Dwarfs govern this. Potentially creating opportunities such as receiving airdrops for adding specific Projects. 10.) +20 Automated Test, all passing in its current iteration. 11.) Contract Documentation for audit generated using Hardhat DocGen.

This proposal would pledge the full Season 2 funds (~5 ETH) into funding Pluto Pawn. Please see below for our first use of these funds.

While there have been a few test deployments on testnet, the Development team still needs more help before getting to audit. There is a current need to bring in a second solidity developer part-time to help Stinky optimize and secure this contract before entering an Audit.

For a week now Stinky has been working with an experienced developer from the Fractional team. The developer has agreed to work at a discounted rate since they know Koala and Stinky. This dev has already started helping with code, knowing we haven't launched the proposal yet. This proposal aims to compensate Developer Swahili for previous work completed, and some for future hours.

Normal rate is ($250/hr)
$150/hr * 5 hours so far *($750)*
$150/hr * 5 hours future *($750)*

If this proposal passes, the Dwarfs would be considered investors in the Pluto Pawn project and be treated as a VC. Receiving a % of the funds generated into the Dwarf Treasury. This would diversify the Dwarfs with Bull market investments (DeFi) and Bull/Bear market investments like a fee-generating protocol.

Pluto Pawn may need to raise further funds, as ~5 ETH may not cover an audit. The current expectation is that 20%-40% of the generated fees go directly to the Dwarf Treasury. Best case, Dwarf mints pick up and we don't need to raise outside funds, securing a high % for the Dwarf Treasury. Worst case, we need to find outside investors, which would require diluting % share.

The remaining % is intended to build out the Pluto Pawn protocol. Developers work for free, expecting to be back paid when the protocol starts generating revenue. This has created an opportunity for Dwarf Community member, RightClick to join the PlutoPawn project as its Front-End Developer. We expect the protocol will create further opportunities for Dwarf Members who are looking to get more involved in Web3. Developers, IT, Marketing, Media, and all other departments will eventually need to be expanded.

Vote YES if you want the Dwarfs to help Fund the development of Pluto Pawn

Vote No if you do not want the Dwarfs to be involved in Pluto Pawn