Contributors

Huge thanks to @asymrisk, @mav, @Shima, @stzky, and all the members who offered their thoughts and stuck with us through the evolution of this proposal.

Summary

Introduce a minting rebate program for future GEN.ART drops. The program will allow members to deposit GEN.ART memberships and $GENART governance tokens into the GEN.ART Membership Vault to become eligible to receive a rebate on minting costs.

Note: This proposal supersedes vaulting and rewards details defined in GIP-0001 and GIP-0003.

Objectives

• Encourage early minting
• Encourage holding of $GENART governance tokens
• Encourage holding of GEN.ART memberships

Scope

The scope of this GIP is limited to fixed-price drops only. Dutch Auction drops could pose technical challenges because the mint price is unknown at time of mint.

We still intend to implement a version of the rebate program that DOES work with the challenges imposed by the Dutch Auction mechanism, but it will require a separate GIP.

Specification

Rebate Window

A rebate window is defined for each drop for purposes of rebate calculations:

• The window begins with the block in which the first mint from a drop occurs.
• The window ends with the block in which the drop is minted out, or after 36,000 blocks (5 days), whichever comes first.

Vault Deposits and Withdrawals

• At least one membership must be deposited in the vault to enable depositing of $GENART
• Members can use their vaulted memberships for minting
• Vaulted memberships and $GENART are locked during the rebate window

Rebate Percentage

After some discussion and debate, the rebate percentage, calculated for each drop, will be 12.5% of mint price.

Factors leading to this decision:

• Simplification of the rebate program and its explanation
• Consistency across drops, making the decision to vault assets easier to reason through
• Mint price, collection size, and the percentage of proceeds going toward GEN.ART operations remain as variables to be determined in agreement with each artist, providing Notion and the Curation Board with the flexibility to negotiate

Rebate Qualification

A rebate is paid on each qualified mint. Definitions below:

• Qualified Account- An account which has at least 1 membership and 4,000 $GENART vaulted during the rebate window
• Qualified Mint - Mints which occur within the rebate window by a qualified account.
• Unqualified Mint- Mints which occur outside of the rebate window or by an unqualified account.

Base Rebate

The base rebate is calculated as rebate percent multiplied by mint cost. The base rebate is paid to the minting account for all qualified mints.

Example: Rebate Percent = 12.5% Mint Cost = .15 ETH Base Rebate = 0.125 x .15 = 0.01875 ETH

Bonus Rebate Pool

The base rebate for unqualified mints is paid to the bonus rebate pool account. This rebate pool is used to fund the bonus rebate as defined in the next section.

Funding of Bonus Rebate Pool

Several months ago, when discussions of a rebate program began, funds from each subsequent drop (Hyperscopic, ≈ 3000, and Rorschach Meadow) were directed to a dedicated Ethereum address (0x1F7891efFD8A52f61DC1bd27D92e5d3c5Fe2d734), according to the existing 12.5% split.

Given that this proposal passes, the funds currently in this account (5.91875 Ether) shall be used as starter funds in the Bonus Rebate Pool.

Bonus Rebate

In addition to the base rebate, a bonus rebate is paid, based on assets vaulted by the member account. The bonus rebate distributes funds from the bonus rebate pool based $GENART and memberships vaulted by the minting account.

A minter's share of the rebate will be calculated only on their first eligible mint. If their bonus rebate is such that the minter's total rebate (base + bonus) exceeds the mint price, their bonus rebate for each such mint will be an amount that ensures the rebate amount is equal to (never to exceed) the cost of minting. Remaining (excess) bonus allocations will be paid on subsequent mints, subject to the same rule.

Formula for allocating funds from the Bonus Rebate Pool:

bonus_rebate =   bonus_rebate_allocation *      {[2 * (vaulted_tokens / total_vaulted_tokens) +        1 * (vaulted_memberships / total_vaulted_memberships)] / 3}

Definitions

• bonus_rebate = The amount of funds from the Bonus Rebate Pool that any given account will receive.

• vaulted_tokens = The lesser of the number tokens vaulted by an account at the beginning of the rebate window vs vaulted at mint time.

• vaulted_memberships = The lesser of the number memberships vaulted by an account at the beginning of the rebate window vs vaulted at mint time.

• total_vaulted_tokens = The total number of tokens vaulted the opening of the rebate window.

• total_vaulted_memberships = The total number of tokens vaulted at the opening of the rebate window.

• bonus_rebate_allocation = 40% of the total ETH in the bonus rebate pool account at the opening of the rebate window.

Conditions

• Vaulted gold memberships count as 5 memberships for purposes of rebate calculation

• A member’s total rebate (base + bonus) for each mint will not exceed the total cost of minting (gas costs are excluded from the cost of minting).

• To reiterate a point made in Bonus Rebate, the bonus rebate is paid up to a total rebate equaling mint price on the first qualified mint by a qualified account. Remaining bonus allocation for the account will be paid on subsequent mints.

• GEN.ART wallets are not eligible and will not be included in the calculation.

Voting

For: Introduce the minting rebate program for future GEN.ART drops as defined in this proposal

Against: Do not introduce the minting rebate program for future GEN.ART drops as defined in this proposal

Hypothetical Walk-Through

This section provides a hypothetical example to illustrate how the rebate dynamics defined in this proposal can play out over the course of several drops. The following example is neither part of the official proposal nor does indicate with any amount of certainty how the results of its implementation might play out.

REVIEW (recalculated example, including funds from the dedicated address to seed the bonus rebate pool)

Drop 1

Bonus Rebate Pool = 5.91875 Bonus Rebate Allocation = 2.3675 (5.91875 * 0.4) Mint Price = .15 Base Rebate Percent = 12.5% Drop Size = 500

In this first drop, the bonus rebate pool will be funded using the 5.91875 ETH from the address mentioned in the Bonus Rebate Pool section. We are also paying the 12.5% base rebate for each qualified mint (minter has 1 membership and 4K GENART vaulted). Let’s say we have 100 qualified mints within the 5-day rebate window, and the rest were minted out over the course of the following week as a combination of member and public minting. Each of the 100 qualified mints received a base rebate of .01875 (12.5%) for a total rebate amount of 1.875 ETH paid to minters. Minters would also receive their appropriate share (as determined by the formula under Bonus Rebate Pool) of the 2.3675 Bonus Rebate Allocation. The base rebate for the 400 unqualified mints is paid into the bonus rebate pool. So now we have 7.5 ETH (400 x .01875) to be added to the 3.55125 ETH (5.91875 - 2.3675) in the bonus rebate pool that we can draw on in the next drop for a total of 11.05125 ETH.

Drop 2

Bonus Rebate Pool = 11.05125 Bonus Rebate Allocation = 4.4205 (11.05125 x 0.4) Mint Price = .125 Base Rebate Percent = 12.5% Drop Size = 600

For this drop we have a total of 4.4205 ETH to allocate based on vaulted assets, along with the base rebate. There are 150 qualified mints in this drop. Each of these will receive the base rebate of 0.015625 ETH (mint price x base rebate percent). In addition, the first qualified mint from each qualified account will receive a bonus rebate which represents the account’s share (again, as determined by the formula under Bonus Rebate Pool) of the 4.4205 ETH Bonus Rebate Allocation.

The bonus rebate allocation (4.4205 ETH) reduced the bonus rebate pool from 11.05125 to 6.63075, but we also added the base rebate for the 450 unqualified mints (450 x 0.015625 = 7.03125) back into the pool. So now our rebate pool has 13.662 ETH.

Drop 3

Bonus Rebate Pool = 13.662 Bonus Rebate Allocation = 5.4648 (13.662 x 0.4) Mint Price = .2 Base Rebate Percent = 12.5% Drop Size = 300

The bonus rebate pool is getting pretty juicy, and we have more members staking and minting. So, in this drop, 200 of the 300 mints are qualified. The base rebate is 0.025 (0.125 x .2), so this time we paid out 5 ETH (200 x 0.025) in base rebates and paid 2.5 ETH of base rebate for unqualified mints back into the bonus rebate pool. The 5.4648 ETH bonus rebate allocation is also paid out to the 200 qualified minters. This leaves us with a bonus rebate pool of 10.6972 ETH (13.662 - 5.4648 + 2.5) for the next drop.