Membership token format - ERC-20 vs NFT

The topic of bringing Fingerprints membership to an NFT, from an erc-20 falls on a lump of big questions.

  1. What are we solving for?
  2. Does it make the difference we have inferred it will make?
  3. Security, contract building, etc.
  4. Cost - $ and reputational

(1) Solving for liquidity as glory mentioned, this is intriguing that we can move the platform from otc channel to Opensea for joining the DAO. As otc channel is a burden on many who wish to join. This would additionally solve other issues: bringing value to the members, making it easier to join, creating some exceptional art.

(2) If PRINTS are on Opensea (essentially) as a membership nft, will it change the amount of eyes on membership or will it be just another membership card nft?

(3) Security issues regarding the contract built by Fingerprints will need to be audited, this is a given, but the security issues regarding the user are on them. If someone loses their NFT or ERC-20, we can only provide so much help. If we see a large influx of members, I would suggest a security channel in Discord to provide technical help to each of our members.

(4) This is the largest issue. $10k is fine for the contract work, but what about the artist? Ideally this would be a donation from one of our collected artists or members, but this could get costly if done right. It should be a tier-1 artist who does the membership nft.
As far as reputation goes, an nft lasts forever, like our ERC-20, and it needs to be a monumental moment when FP releases one.

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I’m very skeptical that we could get an erc-721 implemented for 10k usdc including audit


Thanks Dollar!

All really good points and agree with you on point 4, we would need a high tier artist to design the NFT. This is what PixelVault FoundersDAO token did with Fvckrender designing the NFT

GmDAO did with their token and Rich Poole

Obviously I think FP artists are on a completely different level and precisely what our NFT can standout from all others

For those who dont know GMDAO here is a little write up on how their NFT token is used

“ The gmDAO is a community of NFT collectors, artists & investors created on September 2021 using a fair token distribution. The DAO was formed based on the principles of etiquette and mutual respect, making our community a haven within a typically hostile environment.

The DAO consists of members who are active within the NFT sector, with backgrounds ranging from accredited investors to renowned generative artists. Our primary goal is to foster & encourage the development of the NFT space.

The gm. token is our native governance token with artwork designed by legendary gen artist Rich Poole. These tokens entitle their owner to participate in the governance of the gmDAO, as well as granting additional benefits relating to ventures created by the DAO.”

there are many good points from this discussion!

Generally, I believe converting the membership into an NFT (maybe worth having some discussion around using an erc721 vs an erc1155) would 1) reduce the complexities of facilitating memberships, 2) add more visibility to the DAO, and 3) standardize DAO best practices.

  1. Token models, especially regarding governance for DAOs like FP, are still experimental. Using an NFT is more simple as the market continues to learn how exactly DAOs like FP should incorporate erc20s (in my opinion, erc20s are more suitable for defi protocols where liquidity is crucial). Plus, the advent and success of protocols like sudoswap and NFTX give us more innovative ways to distribute memberships and manage liquidity for them–there is room for interesting experimentation here. (In fact, sidenote, should we collect an 0xmon?)

  2. The DAO membership would have way more visibility (and likely trades) if trades are facilitated on OS as opposed to an OTC discord channel.

  3. I believe adopting similar governance models of similar DAOs, like Nouns and InfoToken, will help the space converge towards standardizing best practices for DAOs in this category as we iterate and learn together.

re security: I agree with dollar here. The DAO should not be expected to safeguard or provide insurance to members who get their tokens stolen. The most we can do here is make sure we have secure contracts and advocate best opsec practices.

re does erc20 have a different function than the NFT?: If the NFT is the governance token, then we would have to install reasons why an erc20 would be useful. Maybe the erc20 model becomes more useful if the market for it is big enough? Until then I can’t really think of any useful functions for the purposes of FP… but am curious what others think about this.

That would be just for development, excluding audit.

PRINTS buyback and DAO-managed OTC Desk - #22 by glory in lieu of this discussion regarding a prints buyback and DAO managted otc desk… if we were to convert the membership to an NFT, setting up a pool on sudoswap could be a great way for the DAO to ensure there is liquidity for sellers

Lot’s of good points made in this discussion. Let’s boil this down a bit.

EXCLUDING liquidity (because I think there are ways to solve that for the ERC 20) – are the reasons listed in responses above compelling enough to expend resources pursuing an NFT? Personally, I think it’s an interesting idea, but I’m not sure it’s necessary. I’m interested if anyone feels really strongly that it’s worth pursuing.

Excellent discussion. Building on what’s been said so far:

I think solving liquidity is a nice benefit but doesn’t necessarily warrant the trouble. More importantly I think we only get one shot at this. We don’t want to change the core token structure on the regular. That means we want a top artist and visuals, but I would go one further.

To me we should be solving for strengthening our brand. That means increasing our visibility, but more importantly strengthening our identity. What makes FP stand out in my opinion is the fact that our collecting is based on more than nice looking art. It’s about conceptual work that truly leverages the blockchain’s potential. We should have the same standards when launching a membership NFT.

What could that look like? I think decagons are the most interesting access token this space has seen so far. They combine beautiful generative art with dynamic development and gamified mechanics. Other obvious inspirations are MGS, Gazers, but also Finiliars. I think all of the current membership tokens, like proof, are so boring and web2. I don’t want a static skeumorphic card. I want a dynamic, living representation of my membership. That could mean changing based on:

  • My interaction with and role in the DAO: basically recording things like voting behavior and roles on committees
  • The DAOs collection: Can my membership “remember” or “celebrate” when we make a large purchase?
  • The price (or volume, …) of the token
  • My own collection?

In my eyes we have succeeded when the token feels so personal that selling it feels as or more emotional than selling your favorite art pieces.

I realize that something like this would take orders of magnitude more effort than a “normal” membership token, but I think it’s worth it to push the DAO and the space forward. If we think it’s not currently possible (e.g. because we want to do more on-chain than is feasible) I would rather wait until we can go big than blow our powder now.


Loads of good ideas here, thanks @glory for brining up the topic.

Using @dollar_monopoly’s structure above, my thoughs:

  1. I think we’re solving for liquidity and visibility.
    Liquidity is difficult to solve for on ERC20s for a DAO like ours. We’ve been battling this for a while. As an aside, I think the best medium-term solution is some form of automated OTC desk (Airswap have said they’re working on one but this has gone cold recently), but even that’s not ideal.
    On visibility, I think the problem is me demonstrating and someone else seeing I’m a Fingerprints member. Both are unarguably an issue if the membership method is ERC20. Yeah, you can go through my wallets on etherscan… but you never will!
  2. I believe moving to an NFT membership model does indeed solve the above. Liquidity is easy for NFTs (and with exciting options like our own marketplace); visibility is simple.
  3. For me, ERC20 == ERC721/1155 on security. Both can be stolen from a member using almost identical methods.
  4. On cost, I’m not expert enough to comment.

Some additional thoughs:

  • ERC721 is far preferable to ERC1115 in my opinion. Just ‘feels’ more exclusive – and anecdotally they do seem to trade at higher prices.
  • Agree the NFT itself should be somewhat special, but we can of course evolve this over time
  • Like some ideas of @Maxorgel that show DAO interactions in the NFT, although tieing it too much to the individual memeber may impact liquidity
  • Personally I’d prefer the ERC20 > ERC721 move to be one-way. I just think it’s a better option. Actually on refleciton two-way is best as it allows PRINTS to be used as a more flexible fungible token e.g. for payment to group members.
  • I think using NFTs alo makes the ‘builder’ membership – and other future ‘lower’ tiers – easier to market and understand (just issue additional NFTs for those roles and gate access / votes appropriately rather than faff around with different token levels)
  • Would be interested to get the views of our investors!

r.e. 721 vs 1155 – seems like I’m not the only one that values the former more:

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This really stands out to me and it’s exactly how I feel. If we do a membership NFT, it needs to be innovative.

On liquidity: we can solve for liquidity in other ways, so we should probably focus on the merits of having a membership NFT.

I really like the idea of staking PRINTS to get a membership NFT that shows you’re a staking member – and grants you perks over time as @mabot suggested. This would show the commitment of our community and give another reason for people to “lock” their PRINTS.

Perks could be airdrops by the Fingerprints Studio, access, and even simple things like merch.

The recent proposal by @renatoshira also goes to this direction, giving a utility for PRINTS, adding a new feature for the token and the collection.

I would rather add to this utility than deprecating PRINTS in favor of an NFT, as some people suggested. In a few months, as many other NFT communities launch their fungible tokens, we will probably regret having deprecated our own.

Agree with this.

Maintaining an interoperability between PRINTS and an NFT would allow us to get creative in how we structure things.

Eg. The NFT could be in very limited supply and act almost as a “Premium” membership pass that entitles the holder to value in the form of airdrops or other benefits/perks - holding the NFT could require staking PRINTS, and the amount of which could be determined via an auction system rather than a fixed price, to incentivize the market to determine how many PRINTS need to be locked up.

This is just one idea, but conceptually I think these are the types of things we should be considering.

I’m convinced we should be exploring this further. To tie together various ideas above, I’d suggest as a MVP:

  • Start with only one NFT for “Full membership” that requires locking up 5,000 $PRINTS
  • Dual operation of $PRINTS and a membership ERC721 NFT
  • Bi-directional exchange between the two assets at any time
  • NFTs have Discord privilidges and Snapshot voting power equial to 5,000 $PRINTS (so no impact on Governance)

This would allow us to test the hypotheses of (a) more liquidity (as memberships can be listed on OpenSea easily) and (b) more visitbility of membership (as memberships will show up in profile pages etc.).

I agree that the NFT itself should be more interesting than a virtual membership card, but I’d argue that’s going beyond MVP. Various ideas when we get there though, including:

  • commission a (Fingerprints collection?) artist to design a (generative?) work for the cards
    – potential for this to change over time, perhaps as a showcase for newer artists?
  • build some form of member data into the NFT, e.g. time since became a member, something about the member’s NFT collections (only issue here is this may negatively impact liquidity)
  • join up with the idea around ‘borrowing’ collection works (working name Picchi)

Other ideas for future consideration

  • Multiple tiers of membership, e.g. a 1k PRINTS associate tier, or a 10k PRINTS executive tier
  • Gate future Fingerprints Studios drops to those holding membership NFTs

I think we should try the MVP here assuming dev costs are low. There are few risks – we can always deprecate the NFT version at a later date and have those reverted back to $PRINTS.

a simple counter point to your hypotheses (a) - liquidity fragmentation, by adopting opensea as a marketplace for the membership nfts we risk exacerbating the issues around PRINTS token value and liquidity, if the nft is pegged to 5k PRINTS it is likely to create mostly down pressure to the price of both token and nft since there will (always?) be an arbitrage opportunity, if we pair the nft with a PRINTS pool on sudoswap we could kinda mitigate that, but not sure.

On fragmentation, it’s an interesing idea but I’m of the opinion that giving potential members more options to buy & sell is always a positive. Plus I suspect it would be a different crowd buying on opensea versus uniswap = more market mindshare overall.

On arbitrage, you’re right there should be some, but I don’t get why it would be down only – arb requires buying in one marketplace to sell in another. Indeed, arb oppiortunities should increase liquidity (as in traditional markets) which is part of our aim here.

I’m not up enough on sudoswap mechanics to understand the role it could play but happy to explore.

you’re not “giving more options to buy & sell” thought, you’re creating a second product, that in the end competes with the first one for demand and liquidity while the first product is already struggling, hence why the fragmentation is mostly net negative here.

the arbitrage is potentially a down pressure because there is no additional demand (especially at this price point and fingerprints TAM) while there will be additional supply competing for the same demand, and value to be captured between the two.

Sorry don’t understand. Where is the additional supply coming from? If I’m looking to sell 5k PRINTS, I can’t sell it both as OTC / exchange and also as a NFT – I have to lock up my PRINTS into the NFT in order to transact that. There is no additional supply.

People looking to sell 5k PRINTS OTC may choose to instead lock up into a membership NFT and sell that instead. But logically they’ll only do that if there is more demand from buyers for the NFT than the token (which I hypothesise there will be as Opensea is a very liquid exchange and the ‘membership card’ model is understood by a wide number of participants in the space). Surely that’s a positive?

And if it turns out there is no market for the NFTs, only for PRINTS OTC / on Uniswap, it’s a trivial operation to convert back to tokens.

For anyone looking to sell more than 5k prints, you’re now optionally selling both a 5k membership and an arbitrary amount on a DEX, not one or the other, you have both products to supply the market, there is no double the demand and anyone (with brains) looking to buy a membership should, in theory, look for the cheaper trade (membership nft vs 5k prints on a dex)

I personally wouldn’t talk about OTC, or mix it in this discussion, since it is a highly inefficient system that has already caused enough issues and hopefully we are moving away from,

I fail to understand how you consider “trivial” converting back into tokens if we consider the experiment a failure, it will be up to individual wallets to decide that on their own, and we risk not being able to really deprecate something like this once live.

I think there’s a fundamental misunderstanding of what I’m proposing here.

You create the NFT “membership card” by locking up 5k PRINTS. So if you have the NFT in your wallet, you don’t have 5k PRINTS in your wallet.

If you supply (list) the NFT to the market you cannot simultaneously supply to a DEX.

If you decide you’d rather have fungible PRINTS instead, burn the NFT and unlock 5k PRINTS from the contract. Now you don’t have the NFT but you do have 5k PRINTS in your wallet.

So you only have one or the other, you can only supply one at a time. You can choose to swap at anytime, but you never hold both products.

Agreed that forcing everyone to convert their NFTs back to PRINTS would be impossible. But let’s say we did decide the experiment was a disaster, we could vote and agree that only PRINTS tokens (not the NFT) now counts for voting. The option to redeem NFT > PRINTS still exists, so nobody loses out. But if someone in this scenario didn’t convert back for many years, who cares?

I think you’re fundamentally misunderstanding the fact that people can hold more (or less) than 5k PRINTS at any given time.