GM50.1: gm.tezos

Author:

Diagonal, OTM

Proposal date:

18/01/23

Summary:

Proposal to fund the gm.Tezos working group to develop a curation platform on fxhash —cost estimated to be around $10,000.

Rationale:

The Tezos gen art community is one of the strongest in the web3 space, and includes many Dao members as active participants. It features some of the best artists (both established and up and coming) and some of the most fervent collectors, and has seen considerable growth in the last 12 months. Because of lower costs and an open-minded body of collectors, Tezos is better able to foster smaller collections and more unique styles, as well as rapid iteration. In its current state, however, the gen art ecosystem on Tezos clearly needs curated spaces given the sheer number of drops on a daily basis. At present, Tender is perhaps the only organisation that provides this to any significant extent. This affords gmDAO a great opportunity to use our expertise, and the brand awareness created by the studio, to set up our own curated platform – gm.Tezos.

Setting up a platform on Tez would complement the Studio in a number of ways: 1)By providing a set of more frequent (though lower profile) drops, it will keep the gm brand in the public consciousness during gaps between studio drops, which can sometimes be extended. 2) It would help bridge the collector communities between ETH and Tez, both by bringing Eth collectors to Tez, and by raising the profile of our Eth drops for Tez-focused collectors. 3) It would give us the flexibility to seek out up and coming artists that may ultimately want to drop with the main studio as their careers progress. 4) It would allow us to entertain smaller and/or more experimental drops that might not be economic on Eth, as well as collections that could not be put on chain. (IPFS is the norm on Tezos).

Specifics:

The gm.Tezos Working Group is intended to create a curation platform on the Tezos blockchain.

Our intention is to launch gm.Tezos as a standalone website that sits on top of fxhash —similar in many ways to how Tender functions. A rough analogy might be to see gm.Tezos as a record label, and fxhash as iTunes/Spotify… We do not believe that launching a competitor to fxhash is necessary or desirable. It would take a significantly higher investment that would be hard to recoup and it would fragment the Tezos space at a time when collectors are already incredibly hesitant to use platforms outside of fxhash. It would also most likely generate antagonism from a significant proportion of the collector base we would be aiming to appeal to. We believe partnering with fxhash is a better solution for keeping our costs low and engaging with the Tezos collector community. As such, and given that we will not be drawing any kind of salary from this, the launch cost for the project is essentially just that of creating the website, which we estimate to be around $10,000. Ongoing costs will be minimal, and should be easily covered by revenue from primary sales, assuming one moderately successful drop per month.

With respect to curation, we envisage two principal strategies. First, we plan to capture some of the efficiencies around the existing curation process for the Studio. The curation panel regularly reviews submissions that whilst appealing, aren’t the right fit for the Studio for one reason or another, including the size of the drop it would support or the nature of the submission. However, a significant proportion of these projects would be suitable for a Tez platform. As a result, we plan to allow artists that are submitting to the studio to decide if they would also like to be considered for gm.tezos. This would not add any additional work to the curation panel (there would be no additional reviewing), but instead would piggyback on work we are already doing. Additionally, we will be able tp proactively reach out to artists we would like to work with, since we do not intend to utilize a blind curation process. Additional curatorial work created by these two streams will be performed by OTM and Diagonal, potentially accompanied by others, but the intention is to keep this process streamlined.

Once a submission is accepted for a gm.tezos launch, the Working Group will work with the artist to refine the collection, provide guidance on drop size, pricing, etc. We will then also promote the collection for the artists here, Tender, and in the fxhash community, and we will help the artist create a write-up on the collection that can be launched as an accompanying fxtext article. These services will be completed on a voluntary basis—no payment from the DAO necessary. With respect to drop mechanics and DAO allocation, this will likely be drop dependent. For a typical collection, we would ideally use a dutch auction method with a small number of reserves raffled off within the DAO, to partner communities like Tender, and potentially the artist's previous collectors. But we could envision a scenario where a drop is sufficiently small that we might not be able to do any reserves (outside of the people that help with the drop). Or an artist might want to do a flat price. Plus, due to the dutch auction drop mechanics on fxhash, significant numbers of reserve spots hurt the mint price and the secondary volume for the piece. Ultimately, the strength of this working group is the ability to be more flexible than gmstudio. So, maintaining that flexibility and entrusting the working group to figure things out as we go is a key component of this proposal.

As part of this proposal process, we spoke with Cyphr, Rich, and Adam at Tender. All of them provided us with fantastic thoughts and guidance, but all were incredibly supportive. We strongly believe this would be of benefit both to the Dao and the Tezos gen art community. (Pending approval of this initial proposal, we will also discuss the endeavor with the fxhash team).

At current, we do not believe this will be a significant revenue generator. Assuming a cadence of one drop per month, this process would likely generate around $1,000 per month with a potential to go higher. As a result, we believe the initial investment would likely be paid off in 10 months or less. It is possible that these numbers might significantly increase if the size of the gen art market on Tez continues to grow, and/or crypto prices generally increase, but the viability of the platform would not depend on this. With that said, we do not believe this is likely to be a massive source of revenue for the DAO. But we do believe it will be more than self-sustaining and will provide a number of other benefits as described above.

Pros:

Benefits to the DAO: ● Expand the reach of our brand to the Tezos community ● Stay in the public consciousness between main studio drops ● Support more artists-especially up and coming ones that may ultimately want to drop with the main studio some day ● Ability to target artists we want to work with, which blind curation does not support

Benefits to artists: ● Promotion: ○ Existing art collecting community ○ Partnerships with other art collecting communities (Tender) ○ gmDAO is a recognized brand in the art community ● Guidance during launch: ○ Feedback in refining pieces for launch ○ Pricing for DA ○ Collection size ○ Preparing an FxText article for the drop to explain the concept ● Dedicated minting site that will stand out from noise of fxhash and better showcase the collab

Cons :

There are likely two potential cons, which we believe are significantly mitigated. ● Potential dilution of gmstudio drops given that they are both under the gmDAO banner. But, we think the fact that it is on a completely different chain will avoid the dilutionary mechanism that Art Blocks for instance has seen at times. It also would not necessarily rely heavily on DAO minters because we do not intend to follow the same allowlist mechanism the studio uses. ● The second potential con is there is obviously some risk that the product could hurt the studio’s reputation by being of a lower quality. We will have curation panel members part of this process, so we don’t think this is a significant concern. And, we think the different blockchain and the nature of fxhash avoids this being a major obstacle.

Payout recipient:

No funds will be retained by Diagonal or OTM or paid to Diagonal or OTM as part of this proposal. Payout will be made from the treasury to the website creator(s).

Payout amount:

Around $10,000. Final amount will be determined once we have finalized a deal to develop the platform.

1.8% of the current treasury ($536,582.31)

Sponsors:

OTM, Diagonal