Provide a grant to Artis for pre-LBP advisory services

Shutter DAO DAO Proposals
1

Status: Proposed
Forum Proposal Author: Cornelis Theodorus van der Klooster, Artis

Forum Proposal Created: 29 Jan 2024

Summary

Provide a grant to Artis for pre-LBP advisory services

Proposal

Shutter DAO 0x36 recently voted to run a Liquidity Bootstrapping Pool (LBP) on Fjord Foundry in mid February. It is important for Shutter DAO to work with an experienced advisor to craft a strategy to optimize the LBP for Shutter DAO 0x36’s desired outcomes and to configure the LBP parameters accordingly.

Artis, part of Faculty Group, has experience advising projects prior to their LBP (see Spool DAO here and here) and creating liquid markets after their LBP (see Valory here and here). Furthermore, Artis receives outstanding reviews from its clients (see here).

Artis will provide the following pre-LBP advisory services to Shutter DAO 0x36:

  • Conduct due diligence and analysis of Shutter Network and Shutter DAO 0x36

  • Provide an assessment of a SHU LBP on Fjord Foundry in mid-February

  • Draft a Shutter DAO 0x36 proposal regarding SHU LBP parameters

  • Reply to questions and requests for additional information during the Shutter DAO 0x36 proposal and voting period

Shutter DAO 0x36 will disburse 300,000 SHU tokens to Artis - Ethereum Mainet address 0x108769199a98C65e68D2B9b5edc8d9464853A729 - transferred immediately, but locked until 18 March 2024.

Context

A Liquidity Bootstrapping Pool (LBP) is a complex and highly technical token liquidity and price discovery method.

LBP parameters include (but are not limited to):

  • Network

  • LBP Type

  • Project Token Quantity

  • Collateral Token Quantity

  • Start Weights

  • End Weights

  • Start Date & Time

  • End Date & Time

  • Token Vesting

  • Geo-Blocked Countries

  • Owner Rights

  • Swap Fee

LBP parameters impact the following before/during the LBP:

  • Price Range

  • Price Discovery Curve

  • Implied Market Cap

  • Participants

  • Volume

  • Liquidity

  • Collateral Raised

LBP parameters impact the following after the LBP:

  • Market Cap

  • Supply

  • Liquidity

  • Token Price

  • Holders

Voting Platform

Fractal (on-chain transaction details to be added)

Vote

  • Vote “YES” to provide a grant to Artis for pre-LBP advisory services

OR

  • Vote “NO” to not provide a grant
4 Likes
2

I do not have anything against Artis, but I am voting no on this proposal:

This proposal is a self-dealing proposal for Artis, and voting yes on this proposal would be bad governance. The proposal does not represent the best interest of Shutter DAO, but presents only the interest of Artis, and does not have fair and balanced information for the delegates to vote on the spent on 300k.

Instead, any spent on market making advisory should be voted based on rated public offers that can be compared.

4 Likes
3

More discussion on Telegram:

image
image1116×1556 226 KB

3 Likes
4

I am not a specialist in market making, so I can’t definitively comment on the price’s appropriateness. However, I believe the lockup period until March 2024 is too short and does not fully align with the best interests of the DAO, holders, and others involved. In my view, the lockup duration should be reconsidered and extended to match that of everyone else, encompassing both early contributors and SPT purchasers. I am open to different perspectives on this issue, and this is simply my opinion on a matter that seems too complex to be thoroughly addressed with the current information. I also find myself in agreement with some of @miohtama’s points.

1 Like
5

Just to be clear: The proposal above is for pre-LBP advisory services - not market making services.

1 Like
6

For starters, I appreciate you not having anything against Artis :slight_smile:

Happy to keep this discussion open-ended and apply a sum that resonates with the community better for the pre-LBP services.

1 Like
7

I would happily go out of my way to prove that the services are middle of the road for what you can expect from market making and considering this has been (publically) done before for the likes of the Spool DAO, it’s by no means a malicious offer. A lockup extension is perfectly reasonable, no issues with that.

1 Like
8

Thank you for the proposal! I think it is very well structured and seems reasonable in general.

On the pricing: I think giving out grants in the form of SHU generously during these early days should be in the interest of the DAO in order to align interest with strategic partners.

2 Likes
9

Liquidity is important, yes for this proposal :+1:, will be helpful for Shutter :slight_smile:

2 Likes
10

I will say yes for this proposal, I agree that it will be better to have more choice but based on the timeline that we have I vote yes(because we really need to start the work now). One more thing will be helpful is longer the lockup period because the lbp design will affect the following market making strategy and listing on cex, I think it is reasonable to unlock unitl we make sure the work is done great. Maybe we should also come up a evaluation standard for their work.

3 Likes
11

Happy to hear the lock up period that would make everyone more comfortable along with evaluation standards. This should in no way be seen as “my way or the highway”.

1 Like
12

As far as this is the servise fee, I would not expect too long lock up period for u. But as far as u will continue doing MMr for shu. I expect 3 months lock up after the lbp(or if we can list on big cex before it) or maybe u can do otc trading to the ppl who want buy to avoid the token price affected by ur action

1 Like
13

Yes. If Artis agrees to lock-up periods that are aligned with the project, that is a good sign and very important at this stage.

1 Like
14

From my point of view, the proposal makes sense and is in the interest of the DAO, but the pricing justification is lacking and warrants further scrutiny. A performance-based component (e.g., fixed/variable ratio: 70/30) should be included. Furthermore, I would appreciate a similar lock-up period to that applied to other DAO members. This ensures alignment with the DAO’s interests and incentivizes performance.

5 Likes
15

Artis seems like a good fit for Shutter at this point on the journey. Artis has a decent reputation and can likely give Shutter the proper attention needed at this point. If they agree to lock-up periods aligned with Shutter, I would vote yes.

2 Likes
16

@Cornelis - voting has opened on this, but I don’t know that I see a revised lockup period commitment from you. Could you please be explicit in your commitment here regarding the lockup period if this proposal passes? It would help inform the voters.

3 Likes
17

As Frank said, a lock up for 3 months after the LBP has ended. Additionally, alignment with other DAO member unlocks makes sense. For the sake of clarity and being non-malicious we can set it to 9 months.

2 Likes
18

This proposal was approved by Shutter DAO 0x36 on Snapshot.

However, the question regarding the unlock schedule for the 300,000 SHU is still open.

I spoke to Artis earlier today. Artis confirmed that are fine with any of the 3 unlock schedules discussed above, specifically:

A) 10% on 18 Mach 2024 and 3.75% each month for 24 months (same as Genesis Allocations)

B) 100% unlock on 30 May 2024 (3 months after the LBP)

C) 100% unlock on 30 November 2024 (9 months after the LBP)

Please comment A, B or C below to signal your preference. The option with the strongest signal will be used in the Fractal vote to trigger onchain payment.

3 Likes
19

Thanks @Loring for having this agreed with Artis. At Kleros Labs we believe option A makes more sense. This is aligned with the Genesis allocation and will prevent a “one shot sell event”.

2 Likes
20

I am in favour of option A because it aligns with the Genesis Allocation/other contributors and promotes long-term commitment towards the Shutter DAO. Thanks for preparing and aligning this, @Loring.

2 Likes