Should we reopen JuiceBox at 350k Shark per ETH?

SIP-00020: Reopen SharkDAO Juicebox for Funding Cycle "DeepSea" Authors: @Synth, @Lamorak, @dropnerd, @RYGA, @kb1900 (on behalf of Tokenomics Committee)

Purpose:

We propose to reopen the SharkDAO Juicebox membership platform to continue fundraising for more Nouns, increase membership, and grow the treasury to set up SharkDAO for success. The SHARK per ETH rate offered on Juicebox is determined by market conditions with a transparent formula outlined in this proposal.

We propose to raise up to 400 ETH this cycle and believe this will allow SharkDAO to acquire two additional Nouns before needing to raise further funds.

Summary:

• Funding cycle "DeepSea"
• Open Juicebox ASAP if this proposal passes, September 1 at the latest
• 400 ETH cap
• Exchange rate will be 350,000 Shark per ETH this cycle

Funding Cap:

We propose to raise 400 ETH this cycle because this allows SharkDAO to acquire two additional Nouns before needing to raise additional funds. After our fourth Noun (the next Noun SharkDAO buys) is purchased, the Tokenomics Committee may work on the proposal for funding cycle "E." This proposal should go live shortly after our fourth Noun has been acquired.

Contingency Plan:

We plan to leave the SharkDAO Juicebox membership platform open for as long as needed until the 400 ETH goal is met, if it is not met in a timely manner we will work on ways to complete the funding needed in further proposals.

Exchange Rate:

Earlier this week, SharkDAO approved SIP-00016. This proposal allowed us to create and fund a SushiSwap pool. We base the new exchange rate on the signals from this pool.

The exchange rate will be based on a discount to the ETH weighted average exchange rate over the trading period from the opening of the SushiSwap pool through to 21:00 UTC on 8/29. This period represents 36.65 ETH of inflow across 68 transactions. The weighted exchange rate over this period is 324,586 Shark per Ether. Tokenomics committee recommends opening the Juicebox pool at a rate of 350,000 Shark per ETH, a 8% discount to the weighted exchange rate, which we believe is a fair entry point for new purchasers and also incentivizes existing Shark holders who may have purchased through SushiSwap to decrease the average price of their holdings by buying more Shark through Juicebox, providing them potential for further future upside.

SharkDao strongly encourages buying on Juicebox over SushiSwap in order to further the development of the DAO with new funds. SharkDAO will be targeting substantially more volume on Juicebox over SushiSwap.

We would like to note that the proposed exchange rate of 350,000 Shark per ETH does represent a premium to the current price on SushiSwap, which at time of writing is 392,994. We believe that this is justified by the improved buying experience provided by Juicebox, and also do not believe that there is risk of an insider or other party arbitraging the SushiSwap pool as they would not be able to sell their SHARK tokens for profit until there is more buying interest inside the pool.

Reopen Date:

SharkDAO aims to open our Juicebox with the exchange rate of 350,000 Shark per ETH. We estimate this will happen a few hours after this proposal passes, targeting 0:00 UTC on September 1, 2021, as the multisig needs to coordinate, create, and sign the reopen request. The reopening will be announced on all socials (Twitter, SharkDAO Discord, and more).

Risks:

Juicebox does not support capping funding amount. Overflow funds will generally be accepted until SharkDAO closes Juicebox. Large funds or whales could acquire the majority of SHARK tokens. The DAO's multisig will close the funding cycle when the 400 ETH limit is reached, but in extreme cases may need to consider forking the token to prevent an actor from taking a majority stake in SharkDAO.

Issuing this funding cycle will dilute voting power for existing members.

Links:

SIP-00016 https://snapshot.org/#/sharkdao.eth/proposal/QmT7y9h6QrSXz79PPbYftYtNvPG83ybXFSmUzxhzWKvPHw

SharkDAO on JuiceBox https://juicebox.money/#/p/sharkdao

SushiSwap Pool https://analytics.sushi.com/pairs/0x2240ef04bb3e2601977d2d47aa3287628ad71156

Footnote: Funding cycles will now be alphabetical going forward. (i.e next funding cycle will start with the letter "e" to represent the 5th funding cycle.)