SIP-00022: Establish Noun Acquisition Targets & Bidding Framework

Authors: @Lamorak, @Sasquatch, @Dropnerd

Purpose:

In order to have a shared vision for what SharkDAOs future may hold, we would like to establish guidelines for how many Nouns SharkDAO will target acquiring. This will allow future funding rounds to follow a set cadence and target raise amount and will empower the auction committee to acquire Nouns while using discretion to preserve the treasury.

We propose that SharkDAO target ownership of at least 5% of outstanding Nouns at any given time, preserving our ability to bring proposals in Nouns DAO and encouraging the DAO to expand its member base while contributing to the Nouns ecosystem. We also propose that the auction committee, composed of the individuals defined below, be given the discretion to follow a bidding strategy that maintains this target ownership while ensuring that considerations from all Sharks wishing to share a view are considered.

Auction Committee Members:

• Dropnerd
• Sasquatch
• Lamorak
• Phuktep
• Synth

Summary:

• Target owning at least 5% of Nouns at any given time.
• Set the final week of each month as the fundraising window for the coming month. The Juicebox will be open to fund next month’s Noun purchases and operating expenses.
• Grant the Auction Committee autonomy in establishing bidding strategy.

Rationale:

1. 5% Noun Ownership

We believe that it is in SharkDAO’s best interest to always be in a position to raise proposals in NounsDAO, as this will allow us to help shape NounsDAO’s roadmap.

2. Monthly Fundraising Cadence

Because the Nouns supply increases daily, SharkDAO needs to continually raise funds in order to maintain 5% ownership of outstanding Noun supply. Establishing a regular cadence for raising these funds, rather than doing so on an ad hoc basis, has several benefits. A regular cadence ensures that the Treasury is not overdrawn. It allows us to create budgets and forecasts with greater accuracy, and ensures SharkDAO members and prospective members can prepare for the next funding window.

3. Auction Committee Autonomy

Acting with speed and discretion are required to acquire Nouns at a good value. The changing dynamics every day and our governance pipeline delay (48 hours) make it impossible to bring every prospective acquisition to a vote. Providing the Auction Committee with a mandate to maintain at least 5% Noun ownership at any given time while never spending greater than 70% of treasury on any Noun provides the Auction Committee the flexibility to succeed while providing visibility for Sharks.

Overview of the Proposed Bidding Process:

1. For each new Noun, a volunteer sends an emoji poll to the new Daily Bid channel, only accessible to SharkDAO members. The question: “Noun ## has just been released. Should SharkDAO bid on this Noun?” Each daily poll can be a thread for discussion or comment and will be read by the auction committee. Additionally, members can react with emojis representing a Yes vote or a No vote. This is a non-binding vote.

2. While the results are non-binding, the auction committee will weigh the SharkDAO membership sentiment in the following manner:

   • If 75% or more of the responses are in favor of bidding on the Noun, the committee will make best efforts to secure the Noun within reason.

   • If 50% or more of the responses are in favor of bidding on the Noun, the committee will actively participate in the auction for the Noun.

   • If less than 50% of responses are in favor of bidding on the Noun, the committee will not participate in the auction.

   • Note: The committee reserves the right to bid on any Noun in the event that the opportunity arises to purchase a Noun at below-market rates.

3. The Auction Committee, in conjunction with the multisig signers, will coordinate bidding strategy for any Nouns that are being bid on.

   • The Auction Committee will never suggest a budget of over 70% of the standing treasury.

4. The SharkDAO signers will submit bids on nouns.wtf on behalf of SharkDAO.

Risks:

1. Members may feel less involved in Noun bidding decisions than they did in the early stage of SharkDAO.
2. Disclosing our budget leaks more info than simply giving the auction committee full discretion over the budget.
3. Not being fully transparent about our bidding strategy may go against members’ principles and against the DAO’s principles in general - we would recommend that any member who wants to be more involved join the Auction Committee.