[DAO Discussion] Avalanche Liquid Staking Proposal 🔺

[Bishop]

25% to AVAX is high. 15-18% makes more sense. If WONDERLAND team is overworked, hire somebody. You can’t outsource everything and maintain control especially projects/programs of this size. With the money saved at a lower 15-18% to AVAX, that could pay for several people that can be used across projects to service the entire program.

[Bishop]

I like this but would change the payment structure to:

$1 million up front and for delivery
$1 million once 1% of market cap is reached
$1 million once 2.5% market cap is reached
$2 million once 5% market cap is reached

This way the large payment at the end incentivizes forward momentum but there is enough in between to keep funding and profits achievable.

And of course, the 15-18% revenue share for first 5 years locked.

[Shrop_99_Degen]

@Bishop
25% for 4 years, then 15% afterwards is probably fair based on other projects with Lido. Shared Labs got 20% forever doing Poly on Lido. Chorus One also got 20% for Solana on Lido.

Lido for Polygon - Proposal by Shard Labs

Lido for Solana - Proposal by Chorus One

[Saborami]

Would love to know more about the team working on this before we decide

[ThunderDuck]

I can’t believe I have to make an account just to tell people this is a half baked idea

Please fellow frogs use your own brain to form your opinion and not blindly said “let’s do it”

First of all I am a loyal wonderland follower, I’ve been staking here for a long time and I think Time is the best Defi DAO right now

But this proposal seems very one sided and problematic, why?

1. The payment should only be in TIME, this way the team has incentive to make Wonderland better as it correlated with their income
2. Who is this “team” they’re getting income like they are the top crypto engineer and programmer in this space, even beyond engineer at Google, do they deserve it ? What’s their portfolio
3. 75:25 split in 4 years term is absolutely ridiculous, no matter how good the team is, for that price I expect top engineer from Google/meta/amazon

[asosao_2416]

I agree in theory, however, they would already be comp’d with the 25% rev share at each milestone anyway. So we’d have to increase comp for each milestone hit to match or go over what the 25% rev share would give. I’m assuming a deal structure is complicated - and the team prefers to front-load the agreement - which is why it’d just be easier to pay them upfront. (Half now, half upon delivery).

My question would be why $6 mm? Shard labs only requested a $100,000 payout if they didn’t hit any of their milestones (to cover dev costs/audit costs).

[asosao_2416]

Thanks @j_rana! Appreciate the feedback and answering our questions.

After seeing a similar proposal (that was passed) by Shard Labs … my obvious question would be “Why $6 mm (or $9 mm $TIME)?”. Shard Labs was only asking $100,000 for dev + audit costs.

That’s a staggering difference with what you’re asking for. Don’t really have an issue with the rev share ask; ,y personal preference is for rev share to be higher and a lower upfront dev cost so that we know you guys are vested strongly in this.

[gator]

I fully support this proposal and appreciate the proposer answering the major questions that have been raised so far. With our treasury size the risks negligible and the rewards for being the first mover in liquid staking for two up-and-coming chains could be very lucrative. I would love to see this proposal moved forward quickly. Let’s get a vote going and start off 2022 with a great bullish catalyst for Wonderland.

[Shrop_99_Degen]

Well we are paying them $6 million because they are essentially guaranteeing at least $12.5 million in revenue. That would be a great return on our investment. Our biggest risk is not capturing that market share. Which is why I think it’s better to pay them as we hit key metrics - either based on market share share or revenue generated. And pay them the revenue share to maintain the platform. That’s essentially what was done in the Shard Labs deal. We can negotiate how much up front and milestone payments.

And just a reminder this also covers work for FTM.

And we could tie some of that compensation to TIME tokens. Either all or a mix of TIME and MIM. @j_rana any thoughts on this mix of compensation of TIME & MIM?

Few questions. None of which aren’t necessarily important in my decision making @j_rana

1. Are there any additional fees/expenses that we would need to cover or does the revenue share cover any of that?
2. If there are additional fees that Wonderland has to pay, are you taking the 25% from the gross revenue or our net revenue?

[0xPayton]

I agree. Milestone-based incentives always work out better for both parties in my experience.

[The-owl]

I don’t believe this proposal is to buy the avax simply to create the pool for other investors to stake on without the lockup effectively we build the toll road for 10mm and collect 100mm in fees over time and use of the new stake protocol

[asosao_2416]

That’s the thing … I don’t see how there’s a guarantee of $12.5 mm revenue for the $6mm expenditure?

What if we fail to capture any market cap and/or there’s absolutely no (or minimal) interest in liquid staking on AVAX? Who then will guarantee us $12.5mm in revenue?

I would assume at that point we’re out of $6mm. We’re all under the assumption that AVAX will do really well over the next 4-5 years but I’d like to see protection against that assumption, IE., what if AVAX doesn’t do as well over the coming years? Are we protected if that happens?

With that said, I’d actually rather a higher rev share than a $6mm upfront payment. This would mean more skin in the game for @j_rana and their team.

And TBH if this was a hot hot opportunity, IMO, Sifu & Dani would’ve capitalized on this opportunity already prior to us becoming a DAO.

Just my 0.2 sats!

[Shrop_99_Degen]

There’s no guarantee. $12.5 million is based on 5% market share of AVAX stakers. If you’re bullish on AVAX and if we can be first to market, or relatively close to first to market, we would be able to capture a portion of those stakers.

@asosao_2416

What if we fail to capture any market cap and/or there’s absolutely no (or minimal) interest in liquid staking on AVAX? Who then will guarantee us $12.5mm in revenue?

I would assume at that point we’re out of $6mm. We’re all under the assumption that AVAX will do really well over the next 4-5 years but I’d like to see protection against that assumption, IE., what if AVAX doesn’t do as well over the coming years? Are we protected if that happens?

Yes, if we were to pay them up front the full $6 million, and if AVAX explodes, we would lose that investment. That’s why I suggested we DO NOT pay them $6 million up front. We pay them as the platform hits key metrics around market cap or revenue. This incentive structure seems to be pretty standard in all of these deals that Lido.fi has done. See my previous post where I link to these proposals.

The 25%/15% revenue share is essentially payment to maintain the platform going forward

@asosao_2416

And TBH if this was a hot hot opportunity, IMO, Sifu & Dani would’ve capitalized on this opportunity already prior to us becoming a DAO.

Dani has been talking about this for a couple of weeks now. He tweeted the proposal out.

[KarePan]

@asosao_2416

And TBH if this was a hot hot opportunity, IMO, Sifu & Dani would’ve capitalized on this opportunity already prior to us becoming a DAO.

Its not any proposal, its key piece of the ecosystem envisioning as Dani stated in here:
Frog Nation final component tweet

Fading this will basically handicap ourselves

[asosao_2416]

I’m in alignment here with your sentiment regarding not paying upfront. If we go in full alignment with the Shard Labs/Lido.Fi proposal, then the upfront dev + audit costs will only be $100k.

Even if the implementation is much more complex (and costs more than $100k) … why then is @j_rana and team charging $6mm?

[asosao_2416]

Okay that’s fair and I’m incorrect on my assumption that this was an older proposal in the works for months and only recently released.

[Skrilla]

So basically your saying your not willing to negotiate on the numbers? I don’t know how well this will go over.

The one thing you have changed my mind on this post is the length of the contract. I thought 4 years is to long but since reading this post I have changed my mind. 4 years makes sense now.

[john-k]

Thank you Sir, you help me understanding more of the proposal and I agree what you pointed out too.

[mikebcity]

Fundamentally great idea. However, we’re not the financiers and devs to fix an AVAX native matter. Our efforts need to be focused on solutions that provide our treasury with arbitrage opportunities and stable returns through transparent means.

Anything involving any form of black-box temp custody is a recipe for disaster. We need to be deploying our capital towards enhancing the frog nation eco-system full stop.

[Shrop_99_Degen]

@mikebcity

However, we’re not the financiers and devs to fix an AVAX native matter.

What do you mean? The team already has a work around for lack of AVAX functionality until AVAX is ready:

@j_rana

In the initial version, the subset of operations which cannot yet be managed by smart contracts (such as cross-chain transfers and staking) will be carried out via operations requiring multi-party approval using MPC to ensure security of staked funds. These approaches will then be phased out as the Avalanche blockchain matures.

@mikebcity

We need to be deploying our capital towards enhancing the frog nation eco-system full stop.

This is less than 1% of our treasury. We can make back the initial investment within a week of our other revenue generating sources. Also this is very much in line with “frog nation” per Daniele https://twitter.com/danielesesta/status/1476263619927187464?s=20