Inspired by this post, @burrrata, @Yalortackson and I decided to take the leap and see if MetaGame could leverage Aragon Fundraising bonding curves to act as a market maker and liquidity provider for MetaGame SEEDs, allowing anyone to purchase and sell their SEEDs for “real money” (SEEDs are better than money, but don’t tell anyone that).
Some context: Aragon Fundraising is a platform for running a “DAICO” using bonding curves, which allows for people to buy and sell SEEDs on a deterministic pricing curve without the need for liquidity providers or market makers, resulting in a fair and decentralized mechanism for funding social good.
If we are to enact this, there’s a lot of things we need to consider to make it work properly and align the incentives / game theory with the goals of MetaGame. Here’s the design goals we discussed in our call:
- We don’t want to invite speculators who are only interested in making a profit from the market activity of SEEDs
- We want to use this to harmonize the “Founding Fam” and “Funding Fam” into one crypto-economic system
- We want this system to deliver the most value for contributors and active participants of MetaGame
Playing with the different parameters and settings for Aragon Fundraising on the testnet, we were able to come up with a system that fulfills these goals and will add a lot of meaningful value for the players of MetaGame. Here’s the rundown:
- The governance over the parameters and settings for the SEED market will be controlled by the Diamond rank players of MetaGame
- The Aragon Fundraising app will be initialized as a new DAO with the Diamond rank players as the “Council”
- There will be no “pre-sale” or “vesting schedule” of SEEDs.
- The Council will mint and distribute SEEDs based on the current allocations in the Google Sheets and current Aragon DAO
- A portion of the funding received from the Gitcoin grants will be used as the initial collateral pool for the SEED market
- The SEED market will then be opened up for anyone to buy or sell their SEEDs
- We will set a max slippage to prevent people from buying up a boat load of SEED at once. This prevent a whale from just dumping in a bunch of money and acquiring more SEED than the actual contributors
- SEEDs will continue to be minted outside of the market for quest completions and SourceCred XP
- A portion of the collateral pool will be siphoned off into the DAO bank every month. We have not decided on the amount yet.
The key piece here is the ability for the council to mint SEEDs outside of the market. This discourages speculators from purchasing a lot of SEED to just hodl and make money without participating since the SEED supply will always be growing as more people earn them through quests and XP.
SEED is going to be purely a utility / governance token, NOT a security or something that is expected to appreciate in value. What is the utility of SEED you ask? People buying SEED are essentially funding the development of MetaGame by creating a market for the people that earned seed to “cash out”. SEED will also be used as a governance token for voting on how the DAO funds should be spent.
In the future, the main utility value of SEEDs will be to influence the priorities and direction for MetaGame via SourceCreds “boosting” mechanic. People will be able to spend / burn their SEED to “boost” the things that they feel aren’t being prioritized enough, giving more XP and SEED to the people that work on that thing. More on that in another post!
Our plan is to play around with the test net version for 2-3 weeks while we integrate SourceCred and improve the UX around completing quests and receiving SEEDs. Once that is all done, we will launch it on main-net and migrate everything over to the new DAO along with the new, streamlined system for earning, tracking, buying and selling SEEDs.
Here’s a link to the call recording where we discussed all this and deployed the test DAO.
Please share your thoughts, comments, and concerns! This is a big step for the next phase of MetaGame and will be the basis of how we operate, so we want to make sure we get it right.