“Community Owned Liquidity” NFT Project Funding Request

I think that there is another point to be made. This Community Owned Liquidity NFT is not necessarily for the community but specifically for the liquidity provider. I think it should be called an Across Liquidity Provider NFT.
I say this because the Blueberry project on GMX is a Community Project and each NFT is a PFP and has different levels of swag. Furthermore, this project is limited to 2,000 NFTs rather than the whopping 10,000 of the other project.
If this is just a way to raise 500k I understand that, but I think there is merit to the production of a second Across NFT project with PFP’s on a Layer Two, priced in ETH or ACX. That would be a community project, but this proposes an NFT to pass value to LPs. I am a proponent of both of these projects.

I think it is important for a bridge protocol NFT project to encourage the use of a bridge protocol, and minting on mainnet only offers utility to LPs, while minting on layer 2 may favor community.

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Well put together proposal.
I do agree with Kevin. I just feel there needs to be a more solid detailed process when it comes to fund management. If the snapshot element is just a gauge or temp check why go through the hassle of snapshot. That can be done here .

A few things that I wanted to comment on, ask about and toss in some thought on :

  • Secondary sales (royalties) are baked in the contract usually set around 3% - 10% .
    That fee follows the NFT not the platform .

  • Are the plans to build a website for promotional purposes and to mint only?
    A marketplace where users can mint their tokens (assuming this is not a drop but a lazy mint) and trade/auction their NFTs might be something to look at.
    There could be a small platform fee set up in the initial contract as well .
    The accepted tokens for payment can also be set to almost whatever the DAO wants, which could be used as a strategy.

  • 100 - 150 unique traits for a 2,000 mint could be too many or not enough, how many layers?
    a good formula to figure out the layers/traits
    Number of NFTs = Number of traits ^ Number of layers
    You dont want to dilute the rarity formula .
    Will a number of rare NFTs be saved for the artist , devs, etc.?

  • The way it’s worded “Community Owned Liquidity” It implies a DAO Haus type of ownership where everyone owns a chunk of the entire treasury.
    With the ability to “rage quit” at any point in time, pulling their share of the treasury out and walking. If everyone redeemed at once, the treasury would 0 out. Or is it more of a community managed treasury, and even if everyone cashed out the treasury would still have enough runway to sustain itself?

  • Increasing value by $75.00 is inviting to day one dumpers and opens up opportunities for arbitrage. 30% for every NFT I can mint , and in one day.
    I think the contract should include a claim restriction when created to avoid someone from minting large amounts to only extract as much value as possible.
    It is possible to create a dNFT , open the NFTs up to trade in X amount of time. Switch from Non-transferable to transferable. But will it be more economically feasible to take your share and burn your NFT or to sell your NFT…have to wait for the market to decide that I suppose

  • 25% of LP rewards raffled off weekly .
    ACX is doing $119,672.00 / 24hrs (coinmarketcap)
    That could reach around $700 , thats a nice incentive to hodl your ACX !

  • Last but not least.
    Any consideration for keeping a honest, decentralized and transparent whitelist ?
    I know a guy . :grin:
    "Whitelist powered by decentraList "! :wink:

Again, great proposal, I can appreciate the time you put into this.

Thanks for your feedback Deadcoin, it is valued and thoughtful as always! Will try to answer your questions as best I can.

This website is intended to be a place to check whitelist eligibility, mint your NFT, view your NFT, and possibly see raffle results and have a raffle countdown. We will have to see how it all falls into place once we get to work but I hope it can check all these boxes.

Good things to think about in regards to the NFT’s trait’s and layers, we have some flexibility here and could probably increase if needed.
In regards to NFT’s being saved for the artists and devs, I do intend to include a purchased NFT to the primary contributors as part of the compensation package. These NFT’s would be paid for from the budget and have no impact to the treasury we will build from the mints (All NFT’s must contribute funds to the liquidity, no freebies that will dilute other members shares).

The way I see it your NFT represents your share in the treasury and if we bake in a redemption where people can burn their NFT to pull out their share then there will be a time period before redemption opens up. Redemption is still an open discussion so I will save the final details for our final proposal. Initially I intended to have no redemption option and the funds would remained locked until further down the road once exponential growth has been achieved, but after feedback I do think some redemption option should be built up front but with protection of the incentives for at least 1 year.

The raffle is a fun element that I wanted to include so that we could have some fun while we hold. Really excited about this element being included.

Would love to chat openly about whitelist ideas, we want to attract lots of great new people and OG’s to our new Across sub-community.

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Some final comments to the community as a whole. We are very happy with the positive response to our proposal and will take into account all of the feedback we’ve received here and come back with our final version soon “TM”.
Most important details we’ve taken from the feedback:
Governance:
We need to decide how governance will look. It sounds like osnap is something we can use and I’m excited at the idea of supporting this great new tool that UMA has made possible.
Liquidity Management
We need to draft up a plan for how our liquidity will be managed.
Active management vs Passive management.
We will weigh the pro’s and con’s of having our own liquidity management strategy vs using a service like Arrakis. I am a firm believer that this liquidity should be tied to Uniswap as it is the most trusted and widely used dex. (Dexs - DefiLlama)
Redemption:
We will discuss what redemption can look like. In this proposal Across treasury is putting up $150,000 in incentives and we need to protect those funds and be sure long term sustained liquidity is provided. We also need to be sure that the NFT is appealing enough for the community to raise $500,000 towards liquidity. If we put a 1 year lockup in place I hope we can do so in a way that makes people want to continue to hold this NFT beyond 1 year. It would also be nice to handle this in a way that encourages a trade market for the NFT on NFT marketplaces.

We will come up with a plan that tackles these 3 pieces and come back with an improved proposal.

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I am wondering what the incentive is for someone to buy such an NFT on a secondary market as long as the release of its value remains uncertain. Will there be a way to track the development of its value for the respective holder?

I think a good comparison would be trading KPI options based on speculation that goals will be met and the KPI options value will increase. Somebody may decide they need funds now and sell the NFT close to the purchase price which will be someone else’s opportunity to unlock the incentives at the end of the term. I also think that if we do offer some kind of redemption after a certain term, then not everybody will want to burn their NFT for the underlying collateral which will further reduce the incentives cost to our treasury.

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As far as I understand, there is currently no such “end of term” maturity/redemption envisaged or specified which would make this open ended (“for years to come”) and the assets potentially unretrievable. The suggestion of burning (but only after a certain periode of “vesting” e.g. on year) is essentially a reaction to this and meant to add a further option, a kind of “locking as emergency exit”, though at the price of the holder not realising the possible full NFT value upon maturity. Am wondering whether that could mean that the remaining NFTs’ returns could even increase in the process.

My initial reaction is that we should spend more time on the financial engineering and not spend ACX on NFT art.

The Across protocol has great financial engineering at it’s core and we should embrace that by creating a community-owned liquidity proposal that focuses on mechanism design and doesn’t spend money on art or NFT graphic design. By being a bit stingy with spending we emphasize how much we value ACX as a community.

Since we have our own team putting this together it will not take time away from the devs building Across. Also, this NFT has a clear utility in that it represents your share in the LP so I don’t think it’s fair to say that we are spending on art. This results in $650,000 in liquidity being raised at a cost of $190,000 (assuming all NFT’s are redeemed for the underlying capital). Deep liquidity of ACX comes at a cost and I believe this method is a big improvement and cheaper option than liquidity mining or protocol owned liquidity.

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The cost here of $190,000 is assuming a certain price for ACX which I think is below fair value so to me that’s not the actual cost. This is the point I’m trying to make - we should be stingy when spending ACX unless we think it is overvalued.

The goal of this proposal is to help solve liquidity of ACX. Protocol owned liquidity would require selling ACX in order to acquire stables or ETH for a liquidity pair and liquidity mining would require giving ACX tokens to liquidity providers who could dump the tokens and also may exit their position once the rewards end.
Getting ACX liquidity is going to cost regardless and I believe this is the lowest cost option from ACX treasury and guarantees that the principal deposit is locked in for a full year. I agree with you that we should be stingy when spending ACX but if we do not maintain deep liquidity for prospective buyers then we will remain undervalued.

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Before continuing on this I just want to say thank you for not taking my feedback personal and I’m glad we can have this discussion about the proposal.

Couple follow-on questions / comments from me:

  1. Isn’t this essentially selling ACX treasury for ETH? Why is this functionally different than selling ACX for ETH and LPing it?

  2. I think over time as the Across community grows market makers will become more interested and the ability to buy and sell tokens will grow.

  3. If the community really wants to deeper AMM liquidity, then we should remove reward locking for the ACX pool - which is probably never used to facilitate actual bridging - and use that to facilitate ACX/ETH or ACX/USDC liquidity somehow

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I would say it’s more of the opposite as some of the ETH raised would potentially be used to buy ACX in order to balance the ACX/ETH LP (Pending our liquidity management plan to be outlined on the final proposal). If ACX pumps against ETH then yes the LP is essentially selling ACX for ETH but it is generating fee revenue and deepening liquidity at the same time. Ideally ACX and ETH grow together and the liquidity becomes much deeper in the process.

I agree with this but believe that some actions now can help accelerate growth.

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Lovely idea! Will read it in details in the morning but everything looks spot on while I skimmed through the text.
You have my full support.

Sounds like a great idea! Will this proposal be progressing? Curious to know what next steps will be.

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Appreciate the initiative!
Though the conversation around this proposal seems to have faded, we @Arrakis are making an alternative proposal for Across community.

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Much needed! I would love to see the ACX NFT come to life soon!!! Cannot wait to see what the proposal looks like! I hope it offers minting on Layer 2 simply for a Community NFT & a Liquidity NFT Main net