Community Fundraise - Approval of Final Terms

Summary/Abstract:

Proposal to approve the final terms of the sale of $RLY by the Rally community to increase the Community Treasury

Background: Previously, the Rally community passed a proposal to approve the sale of up to 500M $RLY by the Rally community to increase the Community Treasury, and authorized the Rally Genesis Team to engage a third party agent to effectuate the fundraise.

The Rally Genesis Team has appointed a third party agent to act as the Rally community’s agent to sell the approved $RLY through its trading counterparties (“Community Agent”). The Community Agent has committed to engaging participants in this fundraise who are interested in a long term stake in the Rally Network and its vision to operationalize social tokens and enable creators to build digital businesses.

In addition, to facilitate the work of the Community Agent on the community’s behalf, the Rally Genesis Team has authorized Rally SEZC, Ltd., the parent organization of the company behind the launch of the Rally Network, to take operational actions required to effectuate the community fundraise, including but not limited to (i) release of up to 500M $RLY to the Community Agent from the Rally community allocation for sale to participants in the fundraise, and (ii) arrangement of payment of a fee to the Community Agent for services rendered.

The initial proposal specified that no sale will be made until final terms are approved by the community. This proposal details those final terms for approval.

Terms: Price: The price for all $RLY sold will be a negotiated price based off the reference price, calculated as either (i) the spot price of $RLY on the day of the transaction, or (ii) the thirty day average price of $RLY trailing from the day of the transaction, in both cases based on the price(s) of $RLY as publicly accessible on CoinGecko.

Lock up Period: The lock up period for each transaction, during which any $RLY purchased may not be traded, will range from 6 to 24 months. In addition, vesting restrictions will apply.

Community Agent Discretion: The specific terms for any sale will be decided in negotiation between the Community Agent and its purchaser counterparty, based on its counterparty’s interest, its status and prevailing market conditions. In all cases, the Community Agent will act in the best interest of the Rally community.

Community Agent Fee: A fee of 3.5% of the total amount raised from this community fundraise will be paid to the Community Agent for services rendered, payable in $RLY and subject to a 90 day lock up, and paid through the proceeds earned through the community fundraise.

Note that a few terms differ from the placeholder terms outlined in the initial Snapshot proposal, which contemplated (i) a reference price based off the average price in the last 7 to 30 day trading period, and (ii) lock-up periods between 12 to 24 months. These revisions to the terms have been made in consideration of current market conditions.

A Yes vote for this proposal would accomplish the following: Approval of the above terms to enable the Community Agent to proceed with effectuating sales of up to 500,000,000 $RLY from the community token allocation, where the proceeds of any sale will be directed to the community treasury.

A No vote would result in rejection of these terms.