Authors

ChopChop

Glossary

DAO ETH DeFi NFT

Summary

This proposal is intended to move forward launching all other DAO funds, by starting with defining the liquidity allocations for all additional NFT index funds, which were part of the community raise, namely Axies, Avastars, Autoglyphs, Cryptokitties, and Joyworld Joys.

Finding DAO consensus on the allocation of liquidity (in ETH) per category is the first step required to launch the additional index funds on Balancer & SushiSwap.

The liquidity spreadsheet listed under Specifications is final.

Effect

Opportunity

• By coming to a consensus on the total sum & split allocation per category we are able to move forward with rolling out the new funds to our & the broader DeFi / NFT community.
• Pushing the currently on-hold funds to be publicly tradable will bring focus for all DAO contributors to work on and improve the value of future products (i.e. gallery, new front-end, and liquidity farming).
• Having multiple NFT categories tradable will give NFTX a better sense and understanding of our current PMF is by listening to user feedback & monitoring usage.

Risk

• The liquidity spreadsheet assumes that liquidity allocations are to be split evenly across D1 & D2, while the current market may be more interested in deeper liquidity on floor / low-cost index pools (i.e. Punk-Basic, Avastars-Basic).
• Floor Prices per category are fluid and will change before we list funds. A severe floor price drop on one or multiple categories may lead to a situation of the treasury not having enough D1 fund tokens to stick to the proposed ETH allocation of a D1 or D2 pool.

Specifications

A liquidity spreadsheet has been made to split the allocation of liquidity over several NFT categories and specific funds.

How to read the liquidity spreadsheet: The row we are discussing in this draft proposal is Row G, which is the row that determines ETH collateral provided by the DAO. The current numbers are mainly based on historical trading activity on OpenSea, favoring liquidity towards categories with higher trade activity. The numbers in this row remain static once consensus has been found.

Row J defines the current floor price of a certain index fund category, such as Axie Mystic 2. The number put into this row will dictate the final D1 token collateral the DAO has to provide upon listing. As floor prices change all the time, this row is dynamic and must be changed according to an updated floor price number before listing.

Row H is the sum of Row G/J, giving us the amount of D1 tokens that are to be put up by the DAO.

Treasury Management: The combined starting allocation of ETH liquidity provided by the NFTX DAO treasury in this proposal, excluding the already available liquidity for CryptoPunks, is set to 320 ETH. This number takes into account the availability of D1 fund tokens available to the DAO.

This proposal takes into account the current balance of the NFTX DAO treasury. If this proposal finds consensus, all additional funds can be launched without interfering with other pools that the DAO currently provides liquidity for, i.e. NFTX/ETH.

The current treasury owns approximately 510 ETH and will hold approx 190~ liquid ETH after this vote passes & is implemented (with the rest being used for liquidity providing).

Funding request - Yes

This proposal, in its current form, requires 320 ETH and the equivalent amount of D1 index tokens to be spent by the DAO treasury, setting up all pools on Balancer & SushiSwap.

Communication

Forum: https://forum.nftx.org/t/draft-proposal-liquidity-allocation-for-all-additional-dao-managed-funds/114 Discord: https://discord.gg/xcJkxMXSR8

Quorum and Governance Notes

Minimum Quorum: More than 15% of circulating, non-treasury NFTX must participate in a proposal to Pass.

Passing Threshold: More than 50% of voting tokens must vote FOR for the NIP to Pass. For changes to the NFTX contract, more than 70% of voting tokens must vote FOR for the NIP to pass.