FIP#42 - Nascent Strategies Addition Proposal

Summary

This proposal, if approved, establishes a formal framework for testing new yield generation strategies in the Floor treasury through the allocation of capital to emerging NFT-Fi projects and protocols. Floor will deploy a set amount of capital over a predefined “season” to a cohort of NFT-Fi projects offering financial primitives.

Individual "seasons" will run for a predefined set amount of time (to give all projects a fair chance at displaying effectiveness) determined by each season's individual proposal.

Following the defined testing period, these projects will be assessed by the treasury/core team based on yield generated, and the most effective/yield beneficial ones will be integrated into Floor’s treasury strategy with the goal of supporting the growth and innovation of NFT-Fi.

This allows for new financial primitives to emerge with Floor liquidity as a base layer, placing the DAO and its treasury in an advantageous role for progression in the NFT-Fi ecosystem and cements the DAO’s voters as key voices in the future of the market, all while earning the treasury real yield.

Motivation

Despite the availability of numerous high quality NFT-Fi projects, the Floor treasury team has been cautious in adopting new protocols due to potential and confirmed added risk, one example being the Euler Protocol exploit. Though assets were returned to the treasury, the exploit demonstrates the risk the DAO takes on. This proposal allows for the team to test new strategies and contribute to the NFT-Fi ecosystem’s growth while maintaining an active, risk-conscious approach.

Proposal

The first season will focus on the liquidity primitive. Floor will allocate $50,000 to five projects, totaling $250,000 USD in token equivalents (ETH/MILADY/USDC and so on). Liquidity deployment strategies will be tailored to each project through close collaboration between the Floor treasury team and the nascent protocol teams.

The protocols in each "season" will be defined by the Floor treasury/core team in separate governance proposals alongside a set time that each "season" will run. This proposal presents a concise format to establish a testing environment where the effectiveness of emerging NFT-Fi protocols can be measured.

This proposal does NOT allow for the immediate deployment of $250,000.00 (token equivalent) and the start of a "season". Each season will be approved by FLOOR governance and will be presented by the Floor treasury/core team.

Floor will maintain custody of and manage all funds through the use of a 2 of 3 multi-sig wallet.

Effectiveness will be measured based on:

• Yield Generated (ETH)
• Risk Control (the ability to control impermanent loss and other risk factors)

At the end of each “season”, a write up will be publicly shared, contributing to Floor’s role as an NFT-Fi knowledge database. The protocols with the most positive results will then be integrated into Floor's treasury strategy with the goal of supporting the growth and innovation of NFT-Fi.