Should Fingerprints incubate RAW DAO?

Projects
#1

Incubation of new DAOs is one of the ways Fingerprints can scale beyond the current collection, giving some flexibility to its members to experiment and potentially capturing the upside if the experiments are successful.

We have a precedent with this with Emergence DAO, a DAO created around the Emergence project by initiative of a few Fingerprints members. This DAO started with Fingerprints, received some capital to purchase artwork, and eventually two other DAOs joined it — Flamingo DAO and Squiggle DAO.

The way I personally see this: incubated DAOs are a great way for us to have exposure in different thesis across the space, without:

  • fully building the organization within the current Fingerprints ownership, which is already a no go for many DAOs, given the high cost of admission

  • losing focus on our main collection

RAW DAO

The basic idea for RAW DAO comes from two observations:

  1. photography has value as an art form and NFTs can be a major improvement on the way the market has been operating since the beginning, with artificial physical scarcity (prints) being substituted by actually verifiable scarcity (NFTs)
  2. At the current state, the market is very disorganized and relatively small. My estimate is that the whole photography market is smaller than a single Art Blocks collection (Fidenza)

As I laid out in this blog post, the NFT photography market lacks structure. There are 3 basic issues:

  1. Onboarding is tough and there’s a risk of minting and not selling (failing)

  2. The need to form a community is very costly to an artist entering the space

  3. Collectors have to filter through the noise to find quality work

RAW aims to tackle the 3 problems.

The basic idea for RAW then is to de-risk the onboarding process for the photographers, providing a strong quality signal to the collectors and forming an early community for the artist. In the meantime, forming one of the greatest collections in the space, collectively owned by the RAW DAO members.

The DAO aims to have as members great artists, curators, collectors and DAO builders who:

  1. find fantastic photographers and helps onboarding them (advice on where to mint, how to price, how to market etc)

  2. purchases a significant portion of their initial drop

  3. Help bootstrap the early community

Apart from de-risking the onboarding process for the photographers, it also has the side effect of providing the market with a strong signal: people with great taste and skin in the game vouch for this particular artist.

The Proposal

The proposal is for Fingerprints to incubate RAW DAO. That means giving early community support to the project, helping it with organization and basically kickstarting the early community: active involvement of members, coordination of the multiple stakeholders, help with the initial raise. All of this until RAW can become its own thing.

The founding piece for RAW DAO is Twin Flames #49, the top piece of the (currently) most valuable photography NFT collection. The cost of the acquisition was 506 ETH. This piece will be donated by me and @flo.eth to the DAO’s treasury,

There will be 10M RAW tokens. To signal the commitment to the long term, I suggest 7.5M of the tokens goes into the RAW treasury

My proposal to Fingerprints is for it to buy at cost up to 750k tokens (30% of the outstanding supply)

Fingerprints members will have the option to buy 250k tokens (10% or the outstanding supply).

The rest of the initial outstanding supply will be left to photographers (small airdrop + ability to purchase more at cost), collectors, to myself and to @flo.eth a member who believed very early on the thesis and funded me on the purchase of the piece (500+ ETH), also helping brainstorm throughout this whole process around building this new DAO.

The ideia after the formation period is to actually raise money for the DAO itself to start operations, selling tokens from its treasury. Fingerprints can choose to participate in this raise or not.

The outstanding supply (2.5M tokens) should be priced at the cost of acquisition of the piece, 506 ETH. Cost per token then is 0.0002024 ETH

The proposal I planned to put on Snapshot isto have the following options for Fingerprints’ purchase. Any share of the 750k tokens not purchased by Fingerprints can be allocated to members. If members don’t want to, I can either find external collectors or keep the share.

  1. zero tokens
  2. 125k tokens (5% of outstanding supply, 1.25% fully diluted) at 25.3 ETH
  3. 250k tokens (10% of outstanding supply, 2.5% fully diluted) at 50.6 ETH
  4. 375k tokens (15% of outstanding supply, 3.75% fully diluted) at 75.9 ETH
  5. 500k tokens (20% of outstanding supply, 5.0% fully diluted) at 101.2 ETH
  6. 625k tokens (25% of outstanding supply, 6.25% fully diluted) at 126.5 ETH
  7. 750k tokens (30% of outstanding supply, 7.5% fully diluted) at 151.8 ETH
  • No. Zero tokens
  • Yes. 125k tokens
  • Yes. 250k tokens
  • Yes. 375k tokens
  • Yes. 500k tokens
  • Yes. 625k tokens
  • Yes. 750k tokens

0 voters

6 Likes
#2

Awesome! Already very happy with the amazing engagement we’re getting from photographers at raw channel in our discord.

I guess if we’re all very confindent that this will work (as I am), I see no reason not to allocate as much as we can from Fingerprints’ point of view, apart from competing for resources with our other priorities/initiatives.

After taking a quick look at our vault, it seems we have enough cash for going after the largest tranche. :slight_smile:

5 Likes
#3

Very excited about incubating RAW DAO!

More broadly, I really like this model where Fingerprints is the incubator of different projects, but we keep them as separate DAOs so we don’t lose our core focus.

5 Likes
#4

Let’s incubate RAW, good call. Would just leave some additional room to increase ownership as the initial stake seems too low. Cheers, good luck!

4 Likes
#5

Very excited to be involved with this one, as a photographer myself

#6

This is awesome! Would suggest a greater stake to Fingerprints tho.

#7

Super exciting Luiz! Congrats for the initiative.

Just a quick quetion. Traditional VideoArt could have the same benefits being structured as NFTs. Should/can RAW explore this thesis as well, or the idea is to concentrate on the Photography thesis?

#8

Excited to push for the growth of an under-looked medium in NFT art. I voted 15% because I’ve been trained to believe no one should have too much ownership of a DAO, but I don’t feel strongly. Also makes sense to have a bigger stake.

1 Like
#9

For the people saying the proposed stake is too low, what is an appropriate stake @Zamba @hddamico ? And what’s the rationale for a larger stake?

#10

That’s a great point. Although if Fingerprints doesn’t purchase tokens from future rounds it will eventually go down to 7.5%, which is an ok stake for decentralization purposes. Also, Fingerprints is a DAO, so this stake is actually already “decentralized” rather than a monotlithic one :laughing:

#11

Hi @luiz thanks for reaching out. @hddamico and I discussed this topic at length, and
the rationale below reflects our collective view.

We understand that Fingerprints DAO should have 50% of the outstanding tokens (1,250
tokens) at RAW DAO’s launch at Phase 0, together with the right to subscribe up to 100% of
new tokens coming at Phase 1 at a higher valuation vs. Phase 0 (i.e. 2x). After that,
Fingerprints would then have nearly a 12.5-15.0% fully-diluted stake, which is relevant, but
still leaves substantial room for new members who will join and contribute to RAW.

Rationale:

We believe that RAW will benefit a lot by having Fingerprints anchoring its primary offer because Fingerprints can quickly provide RAW with all the required resources (funding, core people, community, infrastructure, etc.) to accelerate RAW´s go to market strategy, thus reducing the inherent stress and operating friction of any fundraising process, at the same time it significantly alleviates the operating burden on those who will be leading this important new initiative. This would give RAW two important competitive advantages: 1) captive funding
from a credible DAO to accelerate and reduce the risk of its launching strategy; and 2) agility to
be the first mover in this new, fast-growing, but soon highly competitive market.

On the alignment side, the 50%-stake number seems to better align the interest of
Fingerprints’ existing token holders and the required effort of Fingerprints’ core members to
launch the new DAO. Since a successful launch of RAW will depend heavily on Fingerprints
core members’, particularly DT | Luiz, lucaspon and others, who undeniably have a key role at
Fingerprints, we understand that Fingerprints should have a more relevant stake at RAW as its
core people will be more devoted to a new, independent (and exciting!) new initiative. As this
core group of people will be more focused on RAW than on Fingerprints until RAW is born,
raised and fully operating, we think the outcome of this venture should benefit Fingerprints
more meaningfully, since it is indirectly “lending” its core brain, community and brand to make
RAW successful more rapidly and with less risk.

It is important to mention that Fingerprints goal should not and will not be to control RAW or
any other new initiative (indeed, quite the opposite). The goal here is to align Fingerprints as a
whole, its token holders, and other stakeholders to maximize the output for both DAOs, while
still leaving enough room for those who will contribute the most to RAW to increase their
relevance via RAW tokens. Fingerprints wants to be an incubation hub for new projects and
thus will always leave enough room for anyone who wants to launch and execute something
relevant there.

Finally, we also propose that Fingerprints members should not be granted access to buy RAW
tokens at this point. All exposure should be handled exclusively through Fingerprints DAO and
not isolated members. This is important to avoid any bias and subjective discussions in token
allocations, as well as operational friction as RAW needs to be up and running as fast as
possible. Those who contribute the most after Phases 0 and 1 will be able to get tokens from
the non-outstanding position, which is more transparent and meritocratic.

Cheers!

9 Likes
#12

I like the idea. But can we set it to 49%? I don’t like the idea of Fingerprints being the controller of another DAO

2 Likes
#13

I tend to agree with @Zamba, although I don’t have a strong opinion on that matter.

#14

What I like to see is *** “people competing to help” *** and that only happens when it’s driven by incentives (social, financial, etc).

So I’m willing to agree with you only if the “incentive mechanism” is not dead. I don’t want to see people giving up on helping in any way in future, due to any change in attitude towards allocations… The other risk I see on radar is “a sense of rules changing” (even if the rules have not been clearly defined). I don’t want anyone to get bored with this, changing their behavior towards putting some effort into helping the DAO.

#15

100% agreed. Our proposal main goals are: (i) keep incentives aligned among FP DAO and RAW DAO (i) while incentivizing people to contribute to both :slight_smile:

1 Like
#16

Loved the idea of incubating RAW DAO and the thesis behind it. Photographs are a huge market, and NFTs have the potential of helping the dynamics of it. I believe the alocation proposed by @Zamba and @hddamico best alignes the continous efforts for the grown of FP and also creates a good space for RAW DAO the gain traction with old and new members.

1 Like
#17

very exciting project - fully agreed with @Zamba on higher stake for FP maintaining alignment of interests to ensure we don’t end up diluting the community effect across both DAOs

1 Like
#18

@Zamba and @hddamico I couldn’t agree more with the suggestion and with the arguments presented.

I understand that it is absolutely essential not only for RAW’s own sucess but for the sake of Fingerprints’ governance and aligment of interests of all stakeholders.

I don’t mean to be repetitive, but I want to highlight that having a 50% stake initially brings no downside for FP nor for DAW, does not mean that FP will control RAW (as this will be diluted overtime), provides FP members an important aligment in interests as RAW’s success will have a relevant potential upside for us and enable FP core members to devote a good amount of their precious time without raising concern from current members of diverging focus.

We are definitely still too early in FP’s history to hold small stakes in other DAOS that will have a disproportionate amount of effort required from some of our key members.

2 Likes
#19

I strongly support your rationale. I was feeling uncomfortable with the amount of resources FP would contribute vs the % it would receive, given the amount of focus key contributors would have to put in order to created RAW.
This could be the modus operandi going forward for all incubations.

5 Likes
#20

So the recent proposals of 50% of the outstanding tokens allocated to FP would produce:

7.5m Tokens to RAW treasury
1.25mm tokens to FP treasury

what happens to the 1.25mm remaining tokens? I assume to the funders of the initial piece?

It bothers me that the hearts and minds of this project, aka Luiz/lucapons (and others I am missing) are not correctly incentivized here?