Proposal to Deploy and Facilitate ITO (Wave 1)

Voting ended over 2 years agoSucceeded

Context: At this point in time, Epoch Island has zero assets in our treasury. To fuel our mission to build the crypto capital of the world, we must begin raising capital/resources to fund these ambitions.

While Epoch Islanders have the ability to mint EPOCH to fund development, we feel it is important to have a wide variety of crypto assets in our treasury to diversify our holdings. In doing so, we will reduce dependency and downward pressure on the EPOCH token.

To accomplish this, Moai Labs has created the "ITO" protocol (short for Initial Time Offering). In short, the ITO protocol allows anyone to get their hands on the EPOCH token without risking their ETH, USDC, or other assets.

For example, a participant can lock up 10 ETH for 2 weeks and receive 9.8 ETH worth of EPOCH. Any time during the two weeks, the participant can return their EPOCH for ETH. However, if the EPOCH increases in value relative to ETH, the participant can choose to keep their new (more valuable) tokens.

In doing so, the original 10 ETH goes to the Epoch Island treasury.

In summary, this ITO process is a risk-mitigated crowdfunding mechanism made to help anyone in the world join the Epoch Island ecosystem without the risk of getting rekt. It aligns the incentives between Epoch Island, EPOCH holders, and ITO participants.

If you vote to approve this proposal...

2,000,000 EPOCH tokens would be minted to facilitate Wave One of ITO
100% of all EPOCH tokens would be used to create 6 ITO positions
Each position would consist of a unique token: ETH, USDC, rETH, OP, ARB, BAL

While the numbers are are subject to change based on price changes, the 2,000,000 EPOCH is proposed to be divided into the following positions if based on today’s market price:

USDC: 800,000 EPOCH at a $3M mcap
ETH: 800,000 EPOCH at a $3.25M mcap
rETH: 100,000 EPOCH at a $3.50M mcap
ARB: 100,000 EPOCH at a $3.75M mcap
OP: 100,000 EPOCH at a $4.00M mcap
BAL: 100,000 EPOCH at a $4.25M mcap

It is at Moai Labs discretion on what to set these prices to based on calculating the market price just prior to uploading the supply of the ITO positions. Moai Labs will be actively seeking feedback and discussion on discord on how to structure these positions relative to market prices.

Additional questions and information:

Q1. Why would Moai Labs help facilitate this and not the DAO directly?

The current governance system of Epoch Island has a 7-day window for making any onchain adjustments. This leads to many potential issues and delays for launching and adjusting positions in an efficient manner. For example, if the OP token sells out quickly during the ITO but the ARB position is not getting traction, it would take an entire week (+3 days if you do sentiment check) to rebalance and resolve this issue.

Moai Labs facilitating this portion of the ITO would allow us to resolve this in a matter of hours.

Q2: What if there are unclaimed EPOCH and Wave One does not fill up?

If the EPOCH from Wave One is not filled up during the first run, Moai Labs would create a new position with new starting and ending times. If Wave one does not fill up by February 15th, 2024 -- 100% of all remaining EPOCH would be burned.

Q3: Why do the different tokens start at different prices?

If we put all tokens starting at the same price, this leaves us vulnerable to more volatile price swings around and during the expiration of Wave One. In staggering the prices like we have, we hope to alleviate and smooth out potential volatility. Additionally, as all 6 tokens + EPOCH will be constantly changing in prices during the ITO, it's not possible to peg/fix a specific market rate.

Q4: What will the fees be set to for Wave One?

The supplier fee will be set to 0%, making any participation in Wave One to be “risk free” for the taker. The protocol fee is also set to 0% but Epoch governance can vote to enable this to a higher value in the future.

Success-Based Compensation:

To ensure Moai Labs and Epoch Island is fully aligned, Moai Labs is proposing a success-based fee relative to the total capital raised through the ITO. This means if Epoch Island doesn't raise any capital into the treasury, neither does Moai Labs.

The proposed success-based thresholds are as follows, for all waves of the entire ITO:

$500M+ Capital Raised = 1.5625% Success Fee
$250M-$500M Capital Raised = 3.125% Success Fee
$25M-$250M Capital Raised = 6.25% Success Fee
$2.5M-$25M Capital Raised = 12.5% Success Fee
$250k-$2.5M Capital Raised = 25% Success Fee
$0k-$250k Capital Raised = 50% Success Fee

In structuring the success fee in a front loaded manner, Moai Labs will ensure it has the proper runway and incentive to facilitate a successful ITO. At current prices, a fully claimed Wave One would net the treasury ~$38,000.

Moai Labs plans to propose additional waves in the future. This first wave is just the beginning.

Questions

As always, we are happy to answer any questions or listen to any suggestions to improve this proposal during the Sentiment Check on Discord. We ask that conversations are kept with open-minds and always remain respectful towards others.