LIP-19 Seed Round Capital Raise and Terms

Authors: Animositas, Lu Date Created: 28th November, 2023

RECOGNITION

Advisors such as Kieran, Thor, inDAOwetrust, the current Ethlizards Portfolio Sub-DAO council (Danny, adamdawson.eth, JP | Arcade, Lizident, and Haitzu), Kent (Directive Games), and others were essential in establishing the positioning of the round featured in this LIP.

ABSTRACT

This LIP proposes the purpose and structure of the Lizard DAO seed round capital raise, next phase of product development and partnerships. If approved, the Lizard DAO Core Contributors would commit to executing the approved activities on behalf of the DAO.

MAIN CHANGES

Seed Round Capital Raise

The Lizard DAO authorizes the execution of a capital raise of $5M at a $20M valuation. This Seed Round will be for 25% of Lizcoin tokens equaling 25,000,000 at a price of $0.20 per token.

The raise will be offered to Ethlizards holders first via the basedVC platform as approved in LIP-17. The maximum allocation of funds for Ethlizards holders will be $5,000 per Genesis Ethlizard and $2,500 per Venture Ethlizard.

The remainder of the seed round will be offered to selected VCs and angel investors evaluated by the Core Contributors. If approved, further details will be shared and discussed with the community via formal pitch deck and AMA.

Terms for all seed round investors will be identical. If for any reason, the seed round is unable to be completed at the intended valuation, any adjustments will be retroactively effective for all round participants.

Token Allocations

The final token allocations for Lizcoin will be: Pre-seed – 10% Seed – 25% Team/Advisors – 17% Public Sale – 2% Yield Farming – 12.5% In-Game Rewards – 5% Treasury – 21% Holder Airdrop – 7.5%

Token Distribution Schedule

The token vesting schedule for pre-seed and seed investors is adjusted to the following: 10% of seed and pre-seed tokens to be unlocked at TGE 90% of seed and pre-seed tokens to have an 18-month vesting cycle, with linear daily unlocks over the following 24 months

The token vesting schedule for team/advisor tokens is adjusted to the following: 100% of team/advisor tokens to have an 18-month vesting cycle, with linear daily unlocks over the following 24 months

Airdrop will be distributed 50% at TGE and 50% at a later date to incentivize long-term holders.

The Yield Farming distribution curve of tokens will follow a 1.5% weekly reduction in emissions resulting in the following percentage of tokens per year: Year 1 - 56.7% Year 2 - 30.8% Year 3 - 12.5%

Token Staking & Yield Rewards

Following the launch of the Lizcoin token, a staking and yield rewards structure will be implemented. Key factors to earning participation reward points will come from: · Amount of Lizcoin staked · Duration of staking · Liquidity pool staking (i.e. ETH/$LIZ pairing vs. $LIZ) · Genesis and/or Venture Ethlizards staked in the same wallet · *Ecosystem participation

*A minimum level of participation will be required for eligibility for receipt of any participation rewards. Examples of are listed in the Lizard DAO Whitepaper with further details to be determined in a future LIP.

Product Development and Partnership Establishment

The Lizard Labs Core Contributors are tasked to use the seed round funds to evaluate and build the next round of Lizard Labs products after Battle in the Beyond and the Elemental Lizards collection. This includes options such as Match-3, Top Trumps, or Imposters type games, Guilds as a Service offerings, or other experiences, products, or platforms with top-tier Web3 gaming studios identified in consultation with the Liaison Lizards and project advisors. Having obtained a mix of verbal and written MOUs with these Web3 gaming studios, the Lizard DAO Core Contributors are authorized to finalize partnership agreements on behalf of the Gaming Sub-DAO.

RATIONALE

The seed round should proceed as intended following the road map and planning established in the DAO Whitepaper. The proposed raise amount and valuation follows Core Contributor evaluations taken with project advisors of the project funding needs and current market conditions.

The increase in seed round allocation for Genesis and Venture Ethlizard holders is to allow a roughly equivalent amount of funds to be put into the Gaming Sub-DAO as the value of the current NFTs in the Portfolio Sub-DAO. The long term support from holders has been vital to the Ethlizards success and it makes sense to start the raise with the loyal holder community first, then offer the remaining amount to outside investors. Having a maximum allocation is still important as there should be an advantage in the allocation for having more than one Ethlizard.

Token allocation proposed changes include the following Reductions: In-game rewards -> due to higher than expected partner rewards being offered from our early partners Public sale -> due to 10% liquidity premium likely increasing number of liquid tokens for public markets at TGE Treasury -> needed to offset seed percentage increase

And Increases: Seed -> necessary to offer appropriate valuation Team/Advisors -> to allow token allocation to critical advisors of the project with appropriate lockups (previously advisor payments were planned to come from treasury)

To avoid investor concerns with a lack of liquidity for such a long lock period, a 10% premium is used to provide flexibility for pre-seed and seed investors to hold some liquid $LIZ for staking or liquidity purposes prior to the end of the vesting schedule. Additionally, the shortening of the token distribution schedule reflects feedback from advisors to align the team, pre-seed, and seed schedules and reduce the total duration for all 3 groups to be more in-line with industry practices.