Title: “Community Owned Liquidity” NFT project funding request
Author: The Real Tuna
Contributors: Britt, Daywiss, EASports, TheRealTuna, Underthesea
Related Discussions: N/A
Submission Date: 03/07/2023
Our team will manage the design, distribution, and treasury associated with our unique avatar style NFT collection that will act as a governing share over an ACX-ETH LP position. This Liquidity will be locked in long term and NFT owners will take on the risk and reward of that LP position for years to come. NFT holders can benefit from LP growth, private discord channel access, weekly draws, and ownership of a fun collectible that proves commitment and loyalty to Across. If a holder wishes to exit they would do so by selling their NFT on the open market.
- Unique NFT collection of 2000 avatar style characters
- ETH proceeds locked in to an ACX/ETH UNI LP, some ACX from treasury and some converted using the ETH.
- Proceeds from LP fees split 65/25/10 between funds rolled back into LP(65%), weekly raffle(25%), and future development including paying multisig managers(10%).
- NFT holders have access to a private discord channel
- NFT receive a larger value than their purchase price by having ACX treasury provide some ACX tokens
- Treasury controlled by a multisig for flexibility needed to manage an LP
This project has been inspired by protocols such as Pooltogether, CityClash, EVMavericks and more. It aims to help solve the issue of having deep token liquidity without some of the disadvantages that come along with other methods(liquidity mining, protocol owned liquidity, etc). It is a sustainable solution to long term liquidity, once the NFT’s are minted, that liquidity will remain locked in long term. By owning an NFT you own a share in the community owned LP and can benefit from its long term growth. These unique NFT’s have an avatar style personalized aspect that the community can rally behind and prove their support of Across while collecting. NFT holders also don’t have to deal with the hassle of managing an LP as those management efforts will be taken care of for them by the community managers of the multisig. If ACX and ETH rise together then so does the value behind each NFT, perhaps one day this sub community of Across will manage millions of dollars in ACX/ETH liquidity due to market growth and fee revenue(DYOR, Not Financial Advice). This NFT mint is a public good that enriches the Across community as a whole by committing the tokens received from mint straight towards long term community managed liquidity.
Specification & Implementation
This project will have a 3 stage process. Stage 1 is the design stage, where we’ll settle on several of the visual and logistical pieces of the project. This includes NFT design, mint website design, raffle mechanism, marketing plan, and LP fund management plan. Stage 2 is the launch stage, where contracts go live and NFT sales begin. It also includes deploying LP funds according to the fund management plan. Stage 3 is the management stage, which will involve maintaining the LP positions and executing raffles according to the raffle schedule. Our goal is to reach the launch stage 3 months from being funded.
- Artist: We have a design artist chosen for the NFT’s but for now we would like to keep that a surprise. Will provide teasers during the process leading up to launch.
- Technical: @daywiss and @underthesea are currently assisting with the technical design and we will hire a web designer and contract out the work for any needs that arise.
- 2,000 NFT’s with 100-150 traits and varying rarity.
- Webpage will allow users to mint and view their NFT’s may possibly also include raffle information if it falls within the budget(alternatively raffle info will be maintained on discord)
- Whitelist eligibility checker leading up to launch.
Plan to deploy Liquidity
- Financial managers:Multisig members with input from community members who can provide insights and advice.
- ACX/ETH LP parameters to be determined by the team leading up to launch stage. Initial thoughts are to either do a nice wide UNI V3 range and adjust as necessary or to setup in 3 tiers(one for rise, one for fall, and one for current range).
If the community accepts this proposal then the requested funding will be sent to our multisig address. From the multisig we will pay our contributors which include those designing the website, designing the NFT’s, developing the mint contract, and managing the project.
We have already secured an NFT designer and developers to help but will also need to higher a web designer and possibly contract more tech help in the lead up to launch. The NFT collection is meant to be 2,000 unique avatar style characters that will be minted by sending ETH ($250 USD value) through the webpage to the project multisig.
- Hype Plan
- Pre-launch collaboration opportunities, Across official marketing, publish article on community owned liquidity, Twitter space or AMA
- NFT mint opens up with whitelist followed by public mint.
- Deploying LP Funds
- The multisig wallet will manage the LP with the mandate of providing long term and deep liquidity for ACX while also acting in the best interest of NFT holders. Owning an NFT represents a share in the treasury that is being used to provide Across liquidity.
Prior to launch we will market the NFT sale on twitter and other necessary social platforms to generate hype. Minters should be aware that the underlying value behind each NFT will start out at $325/each which is more than the mint cost ($500,000 raised from mint + $150,000 provided from Across treasury). Since the treasury will be illiquid to NFT minters this will act as an incentive for locking in long term to support the growth of Across. This adds up to a 30% value boost right up front. NFT’s will be minted by whitelisted wallets for the first 24 hours and then open to the public. Whitelisted wallets could Include ACX holders, staked ACX holders and ACX liquidity providers. We could also discuss including UMA holders and potentially other communities we are aligned with.
Upon launch the multisig managers would convert funds from mints to the LP in batches, this would also be paired with $150,000 in ACX tokens to be requested from ACX treasury, this will ensure the initial value backing each NFT will be higher than the mint cost and acts as a way to reward purchasers for locking in long term. Managers will transfer the batches at their own discretion and I’d imagine the transfer of funds will be dependent on the speed of the NFT’s minting out.
- Ongoing fund management
- Review LP position monthly and make adjustments every 1-3 months.
- Eventual governance improvements if necessary. Potential switch from multisig to Optimistic governance down the road.
- Raffle details
- Mechanism: TBD
Frequency: Weekly draw
Results announced on private discord channel
- Mechanism: TBD
- Other Regular Perks
- Access to NFT holder only discord.
Once the LP is in action the managers will conduct the weekly raffle and roll the fee share back into the LP. This could be an automated process but may require manual action in the beginning.
- 65% of weekly LP fees to be rolled back into the NFT creating a perpetual growth cycle of the LP.
- 25% of the LP fees will be awarded to a random winner of the weekly raffle. Details of how the raffle will be conducted are not yet sorted but can be worked out during the design stage.
- The remaining 10% will be distributed to the LP managers for their ongoing management of the treasury. If this amount exceeds what is required then any excess can be returned to the LP or held in treasury.
- NFT royalties on platforms like Opensea will be split between the community treasury address(75%) and the NFT designer(25%). The treasury portion can be rolled into the LP or used to cover any future costs associated with the project.
The 4/7 multisig that manages the treasury would ultimately determine what strategy to use for the LP but would take feedback from the community. Liquidity would use UNI V3 but could also explore options like Arrakkis finance to manage LP funds. LP strategy can be looked at more in depth after the launch stage. Upon Launch the multisig will have the final say on implementing changes to treasury but our mandate will be to act in the best interest of both the Across community and NFT holders, both of whom will have contributed funds towards this project. A snapshot voting mechanism will be added to help gauge community sentiment. (1 NFT=1 vote in the snapshot).
The multisig will start out as a 3/5 during the design stage but will be upgraded to a 4/7 before launch.
4/7 multisig would include the following signers:
- TBD Community member(to be added prior to launch)
- TBD Community member(to be added prior to launch)
Part 1: Build budget for contributors. This portion will be used for payment to website designers, contract creator, NFT designer, and other contributors. We have an NFT designer and several contributors to the webpage/UI + contracts but may also hire out as needed.
$40,000 USD equivalent in ACX tokens(550,000 ACX)
Part 2: Contribution from Across to the NFT community run LP. To be transferred from Across Treasury just before launch and used as an added incentive by adding to the liquidity.
$150,000 USD equivalent in ACX tokens(2,000,000 ACX)
Current liquidity options such as liquidity mining can come with some disadvantages:
Liquidity mining is not sustainable as it requires distributing tokens from treasury that can end up being dumped on the market and when the rewards end the participants exit the LP.
Having POL “Protocol Owned Liquidity” requires raising funds and if the only funds in the treasury are the protocol token you would have to dump tokens in order to fund the LP and on top of that the protocol token side of the LP is essentially selling tokens which will compound the downside.
COL “Community Owned Liquidity” via NFT sale is funded by the community and ensures the funds will be locked in long term. Incentives from Across treasury are deposited directly to the LP which further guarantees there will be no dumping of ACX rewards. Having trading fees split between going back to the LP and being raffled to holders both ensures the LP continues to grow and the NFT holders have an added fun way to win some of the LP fees.
Uniswap V3 is the dex of choice for liquidity at this time as it is the most secure and trusted exchange in the DEFI ecosystem. The choice could be made in future to deposit to another platform but we feel it is best to start in a safe and trusted place that already secures Billions of dollars in funds.
LPing comes with risk and there are no guarantees that the LP will rise in value. There is also risk that the NFT collection does not sell out immediately and that could lead to ongoing additional management and delays in reaching full liquidity. There is also no guarantees of getting fair market value for the NFT’s if trying to exit.
- No, cost is too high.