HIP-2 - Long Live the Hairy Hodler

Background

The auction was planned to raise $50k at a $12mn valuation. We decided to wait until the token launch to determine the valuation, primarily because we wanted the initial token holders to ratify the valuation. We propose the buidlers should receive the same dollar value of HAIR they estimated to receive before the auction. Notwithstanding, we want the funders to receive an attractive valuation. Unironically, the latter sweetens the deal for the former, as the same dollar allocation with a lower total market capitalization renders the builders a larger ownership percentage of HAIR.

The Buidlers’ Protections

The buidlers’ previously agreed-upon token amounts can be found here: https://docs.google.com/spreadsheets/d/1gcbqhWgKWAfFUGdqcg5UBWs4lvM-UZ9vFJVMOho9bmE/edit?usp=sharing. In order to protect the dollar value of the buidlers’ tokens, each builder’s promised token allocations should be converted at a 0.175 ratio [$0.40 (the projected auction price) / $2.282602 (the actual auction price)], totalling HAIR in the new paradigm here: https://docs.google.com/spreadsheets/d/1wchZmeaZzxCRs8gzcprVMdhtfkH4BW75sijHH0besdM/edit#gid=1076164915. The buidlers’ total dollar value remains $744,537.51, the amount the builders thought they had earned in the old paradigm. Molecule’s constant 6.9% sits on the edge between buidlers and funders, due to the nature of the WAGMI and ACGT grants signed with them.

The Funders’ Protections

The funders of HAIR have continued the flywheel that we believe is essential to HairDAO’s exponential growth. The faster the flywheel grows, the faster we solve hair loss. After communicating with several funders, we propose a $3.5mn fully diluted market capitalization of HAIR, thus creating a total supply of 1,533,337.83 HAIR at $2.28602 USDC per HAIR.

• 125,000 HAIR was sold in the auction;
• 334,333.54 HAIR is allocated for today’s buidlers; and
• 6.9% (105,800.31 HAIR) is allocated to Molecule, totalling 565,133.85 allocated today.

Interestingly, the funders’ protections further increase the buidlers’ protections, as buidlers are now HAIR hodlers as well.

Future Allocations

At a total supply of 1.53mn, 37% (565k) is allocated today as outlined above, with 63% (968k) remaining in the treasury for future allocations to both builders and funders. Any future decision to create new HAIR above the 1,533,337.83 supply is governed by HAIR holders. HAIR holders are dually incentivized–both to limit their dilution while maximizing the market capitalization of HAIR.

Protections for Everyone - Vesting and Cliffs

In the best interest of all HAIR holders, those who receive substantial amounts of HAIR should be incentivized to continue to buidl in the future, proportional to the HAIR they are receiving. These incentives are ensured through HAIR cliffs and vesting. Notably, cliffs must to some extent be integrated into all issuances, in order to prevent sybil attacks on incentivized products (i.e. the Patient Portal; polls; etc.), discussed further in bot prevention.

WG Members:

• Andy1: 4 year vesting (monthly); beginning on 11/28/2021, the date of the HAIR server’s Discord creation. No tokens can be sold until 3 years after the auction date (2/26/2026).
• Averbs123: 4 year vesting (monthly); beginning on 11/28/2021, the date of the HAIR server’s Discord creation. No tokens can be sold until 3 years after the auction date (2/26/2026).
• Ralf Paus:
  • Tranche 1 (2,729.341339): unvested; no cliff.
  • Tranche 2 (8,761.930464): 1 year vesting (monthly), first issuance on February 10th 2023. 1-year cliff for each batch of monthly vested tokens.
• Cameron Sepahi: 6 month vesting (monthly); beginning on February 26, 2023, the date of the auction; no cliff.

Grant Providers: Molecule/bio.xyz: 4 year vesting (monthly); beginning on 9/20/2022, the date of the WAGMI and ACGT signing. No tokens can be sold until 1 year after the auction (2/26/2024).

All Other Members: Unvested; no cliffs.

All Auction Participants: Unvested; no cliffs.

In the future, tokens issued to Members may require vesting or cliffs. The reason we propose to waive vesting and cliffs for this round is the illiquidity many of them have already had to deal with–almost all of them would have been vested already.

Bot Prevention

To achieve sybil resistance, buidlers who are claiming tokens will have to prove to the DAO that they are a unique human. Certain members have already proved they are unique humans, through interactions when building in the past. Others will still have to verify their identity to the DAO to claim their locked tokens. For instance, we know Iron Breadd is a unique person, but we don’t know if Julieth is.

Members will be marked as a unique human based on a in-DAO social graph, based an in-DAO Discord handles (no real identity required). We will be able to automate our sybil resistance mechanism over time, but will do it manually at first. To claim your tokens, please DM @andy1 or @Averbs123 on Discord. If we don’t respond right away, please tag us in the #hairtoken channel.

Working Group Budget Restrictions

Since the establishment of Working Groups, HAIR and USDC have been issued according to approval by Working Group members in the #wg-task Discord channel. The Working Group Members seek to continue such practice, with a discretionary budget of up to $30,000 USD per month (if additional assets, such as HAIR or Ether are issued, the USD value is noted at the time of issuance). We propose that anyone with over 1,000 HAIR is invited to join our Working Groups, such that they can vote on any #wg-tasks. Working Groups will continue to self-organize on the time needed for a proposal to pass (1 - 72 hour voting period, decided amongst WG members per task).

Conclusion

In conclusion, the proposed tokenomics for HairDAO provide protections for both the buidlers and funders. The buidlers' dollar value of HAIR tokens remains the same, and the funders receive an attractive valuation for the risk they have taken. The proposal includes vesting and cliffs for substantial HAIR token holders, to incentivize them to limit dilution while maximizing the market capitalization of HAIR. In addition, the proposal addresses bot prevention through an in-DAO social graph, creating sybil resistance. Lastly, Working Group members maintain a similar freedom to operate as they did pre-auction, to ensure that HairDAO can continue to ship at a fast rate. Long live HairDAO.

For prettier formatting, please see the Google Doc here: https://docs.google.com/document/d/1VI2vYe4iWH7zWq8QfKcDR4y2vUXgiMOF7sT34JhKFqc/edit?usp=sharing.