Summary and Deliverables

In February 2021, Mycelium (Lion’s Mane) was engaged as a Service Provider to Mycelium DAO (formerly Tracer DAO) for a period of three years (ie, until February 2024). With this in mind, in recent months, Mycelium has explored strategic options for the future of Mycelium DAO.

This Proposal will decide how Mycelium DAO and the MYC token will move forward. In this Proposal, several options for the future of Mycelium DAO and the MYC token are put to a majority vote to determine the one option favoured by MYC and TCR token holders.

A detailed breakdown of each option, together with important metrics for token holders’ decision-making process, can be found below. Token holders are encouraged to read the options in their entirety prior to casting a vote.

Following the completion of the voting period and a successful outcome for one of the options, the preferred option will be implemented and further updates will be given to token holders and the community.

Mycelium would like to thank all community members of Mycelium DAO for the journey shared to date. Through ups and downs, it has been a massive few years of building, learning, and adapting.

Voting

Snapshot has been used to take a point-in-time count of MYC and TCR token holders at the time of posting this Proposal.

For the avoidance of doubt, do not try to acquire MYC or TCR, or move MYC or TCR to new addresses, to participate in this vote or Options #1, #2 or #3, described below. You risk not being able to participate in this vote or Options #1, #2 or #3.

In accordance with Snapshot’s functionality, eligible voters will include:

• addresses holding TCR and MYC; and
• addresses with staked MYC or TCR (i.e., sMYC, tMYC or tTCR).

The successful option will be chosen by a majority vote. The vote will be open for a voting period of seven (7) days from the time of posting this Proposal. During the voting period, new options for the future of the Mycelium DAO can be suggested. The option with the most votes at the end of the voting period will be implemented.

Once an option has been successfully chosen, implementation work for that option will commence.

About Mycelium

Please see this Blog post for a history and summary of Mycelium in relation to this Proposal.

Mycelium Treasury Assets

In total, as at 14 July 2023, Mycelium’s Treasury Assets (excluding MYC and TCR) are worth U$2,143,826.95, which is calculated as follows:

Token	SPOT Price	Token Valuation
Ethereum (ETH)	$2,018.83	$85,909
Wrapped Ethereum (WETH)	$2,016.46	$225,067
Staked Ethereum (stETH)	$2,021.01	$70,497
Arbitrum (ARB)	$1.24	$1,437,076
USD Coin (USDC)	$1.00	$13,872
Tether (USDT)	$1.00	$3,688
Dai (DAI)	$1.00	$184,703
Chainlink (LINK)	$7.27	$34,706
Balancer (BAL)	$5.01	$61,368
Tokemak (TOKE)	$0.71	$26,941
Total		$2,143,826.95

A Zapper link to the live value of the Mycelium Treasury Assets is here: Link (please note that Zapper does not exclude MYC and TCR tokens).

Deprecation of Products

There will be no new activity with Mycelium DAO products (including Perpetual Pools, Perpetual Swaps, TCR to MYC Migration Portal and MYC Staking), with only closing out positions and withdrawals being possible through mycelium.xyz, from the time this Proposal is posted.

Once an option is selected, the products will be deprecated and users will only be able to close positions and withdraw from them. A guide for closing out positions and withdrawing directly via Arbiscan will also be shared shortly.

Eligible Token Holders

Eligible Token Holders can participate in the outcome of Option #1, #2 or #3.

Eligible Token Holders means:

• MYC and TCR holders,
  • including:
    • addresses with vested, but unclaimed MYC or TCR; and
    • addresses with staked MYC or TCR (ie, sMYC, tMYC or tTCR).
  • excluding those identified as Ineligible below.

Again, for the avoidance of doubt, do not try to acquire MYC or TCR, or move MYC or TCR to new addresses, to participate in this vote or Options #1, #2 or #3, described below. You risk not being able to participate in this vote or Options #1, #2 or #3.

Ineligible means:

• TCR and MYC held by:
  • Unvested team and contributor tokens;
  • DAO Treasury;
  • Growth Fund;
  • Treasury Management Fund; and
  • Mycelium (the Service Provider).

Accordingly, the estimated number of Eligible Token Holders is as follows:

Description	#MYC/TCR
Max supply of MYC/TCR	1,000,000,000
Less: Ineligible	550,000,000
Eligible Token Holders	450,000,000

Options

There are three options currently under this Proposal, which are:

• Option #1: Proposal to Acquire LYRA by Token Holders; and
• Option #2: Treasury Redemption and Future Portal Gate Conversion for Token Holders; and
• Option #3: Burn Tokens for Treasury Tokens.

These options (as at 14 July 2023) are detailed in full in the sections below, and summarised as follows:

#1 Lyra

• Token: LYRA
• Market Cap: USD$94M FDV
• Total Supply and % of Supply in Option: 1,000,000,000 and proposed 3% of the total supply
• Exchange Rate: 15MYC:1LYRA
• Value of Tokens: USD$2.87M
• Vesting Period: 3 month linear vesting
• Additional: Must be seconded by Lyra DAO governance. Falling back to the second most voted option will proceed if the Lyra DAO governance does not approve. If the second most voted option is unclear, another 24 hours will be given to vote on the remaining options, noting that (due to Snapshot) voting weights may differ from the first vote.

#2 Portal Gate

• Token: PGT (launch ETA H1 2024)
• Market Cap: USD$15M FDV
• Total Supply and % of Supply in Option: 100,000,000 and 6.4%
• Value of Tokens: USD$960k of PGT and USD$1.07M of Mycelium Treasury Assets
• Exchange Rate: 35.2MYC:1PGT
• Vesting Period: 12 month cliff, 24 month linear vesting post TGE
• Additional: N/A

#3 Treasury Tokens

• Token: WETH, ARB
• Mycelium Treasury Assets that are currently ARB will remain ARB;
• Non-ARB Mycelium Treasury Assets will be converted to WETH;
• Eligible Token Holders can convert their tokens to a portion of the Mycelium Treasury Assets (as detailed above).
• Value of Tokens: USD$2.14M
• Vesting Period: N/A
• Additional: N/A

Option #1: Proposal to Acquire LYRA by Token Holders

About Lyra

The Lyra Protocol is a suite of smart contracts that create an automated market maker for trading options on ERC-20 tokens on Arbitrum and Optimism. The Lyra Protocol is governed by the Lyra DAO and its governance system, enabled by the LYRA token (LYRA).

Learn more about Lyra here: https://www.lyra.finance/

Mycelium has identified various synergies with the Lyra Ecosystem, these include:

• the skills and resources to build best-in-market smart contracts;
• long standing participation in the DeFi ecosystem; and
• a robust institutional user base.

Summary

Eligible Token Holders will acquire LYRA tokens in exchange for the Treasury Assets, at an effective rate of 15 MYC/TCR : 1 LYRA. The acquisition and settlement will occur via an interface on lyra.mycelium.xyz. In exchange for the LYRA offered, Lyra DAO will receive Mycelium’s Treasury Assets. See more details in the Acquisition of LYRA section below.

Acquisition of LYRA

Propose to the Lyra DAO an exchange of 30m Lyra tokens (as at July 14 2023, worth U$2,873,618, according to https://www.coingecko.com/en/coins/lyra-finance) for treasury assets. This results in Eligible Token Holders being able to acquire LYRA with their MYC/TCR at a rate of 15 MYC/TCR:1 LYRA.

LYRA will begin vesting to Eligible Token Holders on a pro rata basis over three months, starting on the day that this Option #1 is chosen (if this Option #1 is chosen). Asset claims will occur via smart contracts accessible directly or through an interface on the sub-domain, lyra.mycelium.xyz. Eligible Token Holders will be able to claim for vested LYRA tokens at any point during the 3 month vesting period, or for at least 21 months after the vesting period. In total, Eligible Token Holders will have at least 24 months to claim their LYRA tokens, from the day that Option #1 is chosen (if this Option #1 is chosen).

LYRA DAO Approval

If Option #1 is approved by Token Holders it will go to the Lyra DAO for approval.

In the event that the Lyra DAO approves Option #1, then Option #1 will proceed.

In the event that the Lyra DAO does not approve Option #1, the second most voted option will be deemed chosen. If the second most voted option is unclear, another 24 hours will be given to vote on the remaining options, noting that (due to Snapshot) voting weights may differ from the first vote.

Option #2: Treasury Redemption and Future Portal Gate Conversion for Token Holders

About Portal Gate

Portal Gate’s core tech team is comprised of experienced smart contract developers and cryptographers, led by the cofounder and CTO of a top tier cross chain protocol that safely secured over $1bn in TVL.

Portal Gate is building a decentralised dark-pool and leverages zero-knowledge oracles to anonymise KYC/KYB compliant digital asset transfers and swaps and break the link between users on-chain wallets. Portal Gate is targeting a robust institutional client base and has recently completed a seed raise at USD$15m valuation led by Apollo Crypto.

Summary

The proposal by Portal Gate is that 50% of MYC and TCR held by Eligible Token Holders are burnt for 50% of Mycelium Treasury Assets, and 50% are converted to future Portal Gate Tokens.

• Portal Gate is yet to release a token, Eligible Token Holders would receive an on-chain representation of their claim on future Portal Gate Tokens - this may be in the form of an NFT or a Portal Gate vesting voucher.
• The conversion will occur through an interface hosted on portalgate.me, with mycelium.xyz (or similar) linking to that conversion interface.
• The valuation of the Portal Gate Token for the purposes of this Proposal and conversion is USD $15m (which is the same as Portal Gate’s seed round valuation) which has a proposed total circulating supply of 100m PGT. The token generation event for PGT is planned for H1 2024.

Conversion to PGT

6,400,000 PGT tokens (which based on their seed round price of USD $.15 per token, is worth $956,160.75) have been made available for the conversion of Eligible MYC and TCR (450,000,000). This results in Eligible Token Holders being able to convert their tokens to future PGT at a rate of 35.2 MYC or TCR: 1 PGT (50% of 450,000,000/6,400,000). Upon the date of this Option #2 being voted a success (if successful), a 12 month cliff from TGE and 24 month linear vesting schedule thereafter would apply for the Eligible Token Holders, which is the same as their seed round investors.

Eligible Token Holders will be issued a PGT voucher. This voucher will enable Eligible Token Holders to convert to their owed PGT in exchange for MYC or TCR post TGE. Conversion will occur via smart contracts accessible directly on-chain or through Portal Gate’s front-end.

Option #3: Burn Tokens for Treasury Tokens

Summary

Under this Option #3, it is proposed that:

• Eligible Token Holders will be able to burn MYC and TCR tokens for Mycelium Treasury Assets (as detailed above);
• Mycelium Treasury Assets that are currently ARB will remain ARB;
• Non-ARB Mycelium Treasury Assets will be converted to WETH;
• Eligible Token Holders can convert their tokens to a portion of the Mycelium Treasury Assets (as detailed above).

Following that, Eligible Token Holders can convert their MYC and TCR tokens into a share of the Mycelium Treasury Assets (ie, ARB and WETH).

A Zapper link to the live value of the Mycelium Treasury Assets is here: Link (please note that Zapper does not exclude MYC and TCR tokens).

Conversion of eligible MYC tokens for Mycelium Treasury Assets

Mycelium Treasury Assets would be divided amongst Eligible MYC and TCR (as at the time of this Proposal being posted, 450,000,000 MYC and TCR tokens), meaning that each Eligible Token Holder would receive approximately U$0.0048 (as at the time of this Proposal being posted) per token worth of ARB and ETH or WETH upon conversion. This amount may change with Mycelium Treasury Assets value fluctuating. Conversion will be open for at least 24 months following this Option #3 being successfully chosen (if chosen).

Interpretation

Unless expressly agreed otherwise in writing by an Authorised Representative of the Mycelium DAO, all terms that are defined pursuant to the Participation Agreement will retain their meaning.

If this offer is accepted as a Proposal under the Participation Agreement, Mycelium may more formally document aspects of that Proposal.

The following definitions shall apply in this Proposal:

Commencement Date: the date that an option is successfully chosen under this Proposal.

Mycelium DAO: A decentralised autonomous organisation, an open-sourced blockchain-based protocol.

MYC Token: A measure of voting power in the Mycelium DAO that attaches to a specific Wallet Address, whereby the greater amount of MYC, TCR, tMYC, tTCR, MYC, TCR, or sMYC on Arbitrum or Ethereum Mainnet that a person holds in that Wallet Address, the greater the person’s voting power.

Variation and Termination

Mycelium acknowledges that the DAO may terminate or vary this Proposal in accordance with future Proposals and performance, up until the date the Option is successfully chosen.

Termination of the Proposal shall not affect any of the parties’ rights and remedies that have accrued as of the date of termination. Furthermore, any termination of this agreement shall not be effective unless the agreement either expires, all things required to be done by the Proposal is completed or the Proposal is terminated by a further proposal of the DAO prior to implementation of the selected option in the Proposal.

Copyright Waiver

Copyright and related rights to this Proposal are waived pursuant to CC0.