The thing that originally drew me to Wonderland was the concept of an investment DAO. However, as @daniele explained the overall Frog Nation ecosystem, I couldn’t help but notice that Wonderland was often more of an afterthought. I believe this is partly because the strategy he described is somewhat cannibalized by Abracadabra and Popsicle in it’s business strategy. As shown by the merger proposal, Abracadabra is capable of performing most functions of the current iteration of Wonderland. As such, I believe that our overall governance, incentive structure and strategy must change in order to differentiate from Popsicle and Abracadabra.
I would like to propose a multi-stage rebuilding of Wonderland that accomplishes 3 main goals.
- Allows those who wish to exit the DAO to redeem their wMEMO for treasury equivalent MIM.
- Creates a greater product differentiation within the Frog Nation ecosystem.
- Alters the incentive structure to reduce overall volatility of the underlying asset.
Obviously there are details that should be ironed out, but in broad strokes the overall roadmap would look something like this:
Phase 1 - Unwind existing Wonderland token with 2 options
First, those who no longer wish to participate in the DAO may redeem their wMEMO for treasury equivalent MIM. The snapshot for redemption should be taken from prior the 0xSifu doxing in order to make sure that long-term holders are rewarded proportionately to how long they’ve been in the project. Obviously this will likely still be a loss for most people.
For those who would like to continue with the investment DAO concept, I would propose allowing the wMEMO to be exchanged for a new non-inflationary governance token. For simplicity’s sake I’ll refer to it as gMEMO, for governance MEMO. The exchange would be TIME equivalent, so if you have 60 TIME inside of 1 wMEMO, you would receive 60 gMEMO. This would just be held for the time being until a new application can be developed.
Additionally, the snapshot should also serve to determine who will receive the Betswap.gg and Cross the Ages air drops.
Phase 2 - Development of new application layer, governance structure and strategy
Application and Incentives
The second phase would begin after the initial unwinding once we understand the approximate value of the remaining treasury and who is interested in remaining with the DAO. A new application layer would need to be developed to allow users to stake their gMEMO in exchange for a percentage dividend of MIM. This would initially be derived mainly from existing investments.
The new application should allow all investors the choice of an hourly payout to their wallet or auto-staking their MIM back into the treasury. Autostaking should be incentivized in order to grow the treasury by paying out a treasury-claim equivalent token to the users wallet, again for simplicity, I’ll refer to it at wSHARE (Wonderland Share). In order to reduce volatility, this treasury-claim equivalent token can be redeemed at any given time but with a 20% sell tax that goes back into the treasury.
The final mechanism would be to develop an application layer wSHARE to gMEMO swap to allow for changing wSHARE to gMEMO without the sell tax, immediately stake to receive a MIM dividend, however require a 5-14 day vesting period in order sell the gMEMO. The vesting period would be determined by the application itself based on the rolling average of price volatility for the last 14 days.
Governance
On a governance level, the DAO would create a set of 5 new roles that would be voted on. Underneath each of those 5 roles, the individuals would be able to build, select or hire their team as desired. Individuals in each of these 5 roles must be fully doxed/KYC via a 3rd party (but not necessarily to the DAO). I would also recommend that the 5 positions have publicly visible escrow wallets for the tenure of their leadership.
The 5 roles would be:
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Chief Strategy Officer - Responsible for managing the overall product development roadmap, ensuring the vision of Wonderland DAO is being adhered to and actively pursuing new business and investment opportunities for the DAO.
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Chief Operations Officer - Responsible for working directly with development team to create new integrations, execute on airdrops, improve the overall product and create new features.
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Chief Marketing and Community Officer - Responsible for rebuilding the public image of Wonderland, engaging with the community, creating extremely in-depth documentation for the protocol, updating the community and answering questions.
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Chief Financial Officer - Responsible for executing on the investment and business opportunities approved by the DAO community, maintaining farming strategies and given a certain amount of flexible budget within the treasury to execute on fast paced opportunities that will generate revenue for the DAO (i.e. arbitrage) without express approval via a vote. This “non-approval” budget would be dynamic based on the same 14 day volatility measurement for vesting period.
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Chief Policy Officer - Responsible for both internal DAO policy, development of Snapshot votes and Tally votes. Also responsible for working externally to propose governmental policy to invested businesses and potentially develop a lobbying team for real world DeFi activism.
Underneath each of these 5 positions, would be a set of employed individuals. Each of the 5 roles would put up their team and desired working budgets for approval via a Snapshot vote on each. Roles would be up for election every 6 months and can also be called for a snap election with approval of 2 officers and a majority of the DAO.
AMENDMENT #1: Team would not receive a token allocation and would instead receive a salary in MIM via farming revenue. Salary would be determined by DAO vote as part of budget and portfolio approval process.
Strategy
From a strategy perspective, I believe there should be a certain amount allocated to farming, particularly when the market is more volatile and there are more options available for profitable trades and providing liquidity at a higher profit. However, the main purpose of an investment DAO like this should be to provide a decentralized alternative to the VC funds and put treasury funding towards developing net-new applications, business strategies and developing new industries in the crypto space.
I am proposing that a vote be held in order to determine the overall portfolio of the treasury, rather than individual investments.This would give the DAO the ability to determine the “portfolio” we would like to see executed on and it would be the job of the 5 officers to execute on that strategy. For example, I believe we need to be developing a better crypto & NFT-based real estate application that can be utilized in the real world. We likely shouldn’t be investing more than 6-10% of our overall treasury into a real estate project, but perhaps the DAO disagrees and would like to pursue that more aggressively.
From the point of portfolio vote, the team would work to bring projects and investments forward that would align with the desired portfolio and the DAO can approve or reject the proposals. As the team is an elected or hired group, they will be required to be blacklisted from receiving air drops or incentives, but will still be allowed to purchase the token with their own funding. Air drops would also be distributed 30% equally to all holders, 70% proportionally to holders and would be distributed at the same vesting period determined by volatility.
Finally, there should be a quarterly audit of the financials with a full risk assessment, a live dashboard showing all treasury funds and a weekly report given to all investors at least 24 hours prior to a weekly scheduled AMA with the CFO and team. Treasury management should be audited at a regular frequency as well.
Phase 3 - Growing the DAO
Unfortunately, I think it’s likely that it will be a while before the DAO’s reputation is fully re-established, however, I do believe that there are a number of measures that can be taken in the immediate and some things that should come later. Admittedly, this is the least thought out portion of this proposal (ironic, given I’m a marketer).
Firstly, we need to invest some funding into communicating with our community more effectively. I believe that most of the issues we’ve had with liquidations could have been better communicated to try and deleverage the community in a healthier way. While I respect @daniele for wanting to ensure that those who invest in his projects are taken care of, I will strongly note that this was avoidable from a technical level and a communication level. It’s also creating the issue where those of us who didn’t leverage are feeling hurt that we’re down 50-90% while those who were irresponsible with their risk management are seemingly being rewarded.
Thus, I believe we should be investing 5% of the treasury at any given time into full-time community management and marketing operations. Early on, this means paying our community team to create better documentation, explain issues, get out in front of PR issues, communicate with the media and develop more frequent community AMA times (each of the 5 roles should be speaking with the community on a weekly basis).
Eventually, I believe that this funding will grow large enough that we can spend money on marketing to acquire new investors and perhaps grow large enough to allow us to lobby for more favorable crypto and DeFi regulation. I also believe we could do a lot to help our reputation by creating a fund to help the small frogs who have gotten rugged or otherwise are hurting because of bad actors in the DeFi space.
TL;DR
New token structure to incentivize holding more strongly and designed around reducing volatility of the governance token. New governance structure that’s more vote centric. Treasury management still done somewhat independently in order to capitalize on fast paced opportunities, but guided by public vote. More audits. Invest more in community and marketing.
Now rip this apart and let’s figure out all the ways this proposal won’t work so we can fix them and make it work.