FIP57: Time to Move the DAO Forward with Rage Quit

can’t see any TGE participants (myself) jumping in on RQ. hostages

hello lux thank you for the proposal this is very substantive and you put a lot of work!!!

I have a few questions:

  1. what is the timeline for v2 launch! and does v2 do anything to bring mc = tv more than what is currently done with charm and buybacks?

  2. charm and buybacks have helped the price come up, no? do you have concerns with it? If buybacks and charm are doing the job maybe we just wait a little bit and there is no need for time / resources on behalf of twade spent on rage quit!

I will also say - in terms of who is able to access the rage quit if it happens, I think FLOOR would be classified as a security legally, in which case it would be unlawful to distinguish holders by factors like how long they’ve held, their active status, etc. So every holder would have to be treated alike! which is the right way imo, I like to think everyone agrees that all FLOOR holders are equal :slight_smile:

I see these RQ attempts as nothing more than opportunistic traders that bought the lows when they saw a potential treasury redemption arb. Given that Floor MC is almost equal to treasury … what exactly is there to argue about other than providing them an exit ?
The only reason now seems to be to provide exit liquidity at protocols and remaining holders cost (most early holders bought quite higher). These traders are already in great profit. Why should the protocol suffer a liquidation at the lows just to provide them sufficient liquidity so they can sell for even greater profit.

Floor dao did mention some mechanism to honor redemptions and there is perhaps a case that it should be included in V2. However it shouldn’t take the form that is provided above which is merely to liquidate the protocols treasury so these opportunistic traders can have a highly liquid and profitable exit (wtf even lmao) … floor dao never promised on demand exit liquidity.
A slower mechanism that involves paying out from yield and maybe slow liquidation of underperforming assets (via v2 voting) should be explored.

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To extend this, there is a whole legal can of worms that needs proper thought with a RQ mechanism.

If @Lux (or the group that advocates for RQ) are happy to write, deploy and activate the rage quit contracts and take on the full legal risk then this proposal would be easier to discuss.

In the meantime, working towards full decentralization is the safest way for token holders to activate whatever they choose to vote in, which I think is a reasonable alternative and a goal that the DAO has held from the outset.

In response to your other points @doodee

We’re targeting end of September if all testing goes well. First code review complete, Omniscia audit starts on Monday, and front end is currently in development.

I know this is directed at Lux to add some context the price chart shared in the OP is also quite misleading as it doesn’t account for rebases (explained further here: Discord)

Thanks for the continued discussion @javery - as hard and as binary as they may seem to be I think they’re always productive.

On top of moving to on-chain governance, the attempts and desire from the team to remove holder’s claim to the DAO’s treasury need to end.

The DAO isn’t centralising treasury, it is moving towards a decentralised approach which will allow community proposals to be executed and protected.

The DAO is only partially moving to decentralisation since sweeps and nft collection additions are the only onchain mechanism at moment. Actual DAO governance is still off chain and is still considered ‘signalling’ by the team. Removing the ‘signalling’ caveat would improve the image of aiming to be decentralized.

Anything you’d change there? Or reasons why the holders that have opted to hold should have a say in where the funds come from?

I think how the RQ is funded should be a whole-of-DAO decision rather than a siloed decision from folks who are remaining in the DAO. I’d love for there to be a conversation around that piece here in this discussion forum.

Don’t follow those please, I’ve mentioned this a number of times. There should be a for, against, amend, abstain as a minimum, with multiple for/against options as needed

I’m happy to explore adding additional voting options to the snapshot, but this is a reoccurring pattern of ‘Do as I say, not as I do’ when it comes to presenting options to holders in governance votes. I hope going forward you (team) make good on your statement above to add No options and be more flexible to voting option feedback from holders.

The best way to separate the two groups would be to have a vote to enable RQ, and a second for who wants out on the first RQ tranche. IMO this separates the two. But I also think the tranches should be organised to benefit long term holders first.

One could look at RQ as a positive for the long-term prospects of the DAO. 1) it shows to holders (current and future) that backing is not a meme and the DAO offers some financial protection mechanism and 2) it clears out a tranche of holders who are less aligned with V2 and likely future versions.

I’m under the impression still that 1 Floor = 1 Floor regardless of the time of entry as there are no differences in share classes among $FLOOR holders and time of entry doesn’t give someone preferred status.

From my point I’ve voted against non-NFT related yield strategies because it goes against the original purpose of FloorDAO.

Many NFTfi suggestions have been proposed.

If the 3% slippage isn’t part of the process do we use the 10% RQ fee? I’m not well versed in the RQ mechanisms for other protocols, are there any standards for this?

I think any penalty beyond slippage/operational costs to implementing RQ might actually be viewed as unlawful. I think RQ penalties are discussed on a case by case basis and there seems to be no status quo. Most do not have a penalty though.

overly complicating this to punish a small number of last-minute arbers does not make sense in my view.

My point here was that a 10% penalty is steep, and implementing this to punish last minute arbers also punishes community members.

Tranches are an interesting concept - how would you go about it?

Hello Caps,

To extend this, there is a whole legal can of worms that needs proper thought with a RQ mechanism.

What legal can of worms do you foresee from RQ? The DAO is already in a very legally precarious position since $FLOOR is an unregistered security that has been sold to investors in the US and other regulated geographies. The team is also based in geographies that have securities laws. And the DAO isn’t incorporated in any jurisdiction, yet it pays salary and probably no taxes. If anything a rage quit solves many of those issues.

Regulatory risk is not zero here.

I’m not sure how community members writing and deploying the contract solves things here but if that makes the concept of an RQ more palatable, this is something that can be explored.

edit: I see DCFs response below and wouldn’t be opposed to using the devs he knows to create the contract since their contracts are battle tested.

  1. charm and buybacks have helped the price come up, no? do you have concerns with it? If buybacks and charm are doing the job maybe we just wait a little bit and there is no need for time / resources on behalf of twade spent on rage quit! @doodee

Charm is fine and a value add to price protection.

Buybacks via sweeps are anthetical to the mission of FloorDAO in some way, and while they help bring price up they take away from the main selling point of participating in the DAO which is to have the nft community sweep their collections. So while buyback impact is overstated (it wont take us to valhalla) its helpful and somewhat effective but it comes at a cost.

Hey all

Just created my forum account, I didn’t want to use this space after learning nobi is tracking IP addresses and would figure out exactly where I live if I goofed up and didn’t use an IP. So I’m hoping to discuss more in discord and less on here.

But after reading everything I wanted to chime in on some stuff:

  • On how we got here / token holder rights: I think every party (holders that want backing and team) are being a little petty with the background. Fighting about this will get us nowhere and it doesn’t matter. At the end of the day FLOOR has always been a treasury backed ohm fork that advertised a backing. OHM itself protects this backing, and its only the ohm forks lead by shady teams that trade below backing and do nothing about it. From what I saw this team is literally the nftx team so I bought having no fear that the team would be acting against explicit promises.

  • Legal: It’s a bit crazy to me that after running a bonding event, selling ongoing bonds for eth, advertising a backing price, tweeting that v2 would have a rage quit, being the one to provide liquidity, conducting buybacks, and advertising and giving yields… the rage quit is the “legal risk”??? A rage quit (either now, in v2, or after v2 if needed) would more likely be clearing out legal risk on past promises rather than creating new legal risk. Regardless, if the team wants I can introduce to lawyers that will provide an opinion for not a lot of money.

  • Shipping / auditing a contract: I know 2 devs that will do this for about $10k. This will be on fully audited contracts, and may even include frontends. One of which did the rome rage quit contract (processed more than the floor treasury) and the other which did the rook rage quit contract (also processed more than the floor treasury). Both can ship with 1 - 2 weeks of effort.

  • Fee: I dont think there should be any fee. But I agree the team / stayers should be able to decide how to fund the rq (which assets to sell off). Leavers are floor token holders who own a pro rata piece of the treasury, they have done nothing wrong and shouldn’t be punished for being floor holders. The people who distrust the dao / team sold and left. These are people still holding, trusting that the dao will do right by them and make due on its promises. If the team wants, a proportional amt of every asset (nftx liquidity, eth, punks, milady, etc.) could just go into the contract but I feel that would hurt v2 and not help it.

2 Likes

This sounds like a route that may be feasible, and a handful of community member addresses can be whitelisted to allow them to fund and initiate the contracts.

Javery has thoughts on breaking this into steps, the first being a vote on whether to add rage quit before V2 or TBD again at a later date. What do other feels about this?

A few quick thoughts on the above proposal:

  1. Not really interested in getting into an argument about who promised what when. But I think it’s pretty clear we need a better mechanism in place to ensure MC >= TVL. The votes in the recent floor buybacks are a strong signal of that. So I would support most proposals that look to solve this.
  2. I also think selling punks is a bad idea. I think allowing the DAO to vote on this is a no-brainer.
  3. As a community member, I am frustrated with the progress the DAO has made. The dependency on V2 to solve all the things, the lack of support for community proposals, and the lack of collections added.
  4. I’m also super concerned about the DAO’s ability to account for their assets or provide an accurate picture of total ROI. But that is likely a discussion for another time.
  5. I also continue to feel that we are giving a lot of value to NFTX for not much in return. I know there is a lot of support from the NFTX team to floordao, but think we would benefit from this arrangement being more formalized if it’s going to continue to exist and with so much governance and control coming from NFTX or people who work for them.
  6. If we do implement a RQ, I would support some penalty. But this could hurt the ultimate goal of bringing MC in line with TVL.
2 Likes

Hey @javery - does Floor have any other positions that would allow for a tighter range, like Milady, Squiggle etc? Perhaps we can take this approach across a few pools and preserve the NFTs rather than need to sell. @zon also suggested reducing liquidity in the PUNKWETH pool to remove the eth but preserve the PUNKS. We also have unstaked NFT inventory. That could be sold to make up the difference if there’s a gap in the amount of ETH needed.

I’m coming around to this approach. It makes sense to bring a vetted, outside dev to support w/ the rage quit contract and to fund rage quit with a vetted/approve community-led
wallet if the team desires distance/separation from the process. @dcfgod could you let us know if the dev you had in mind is available?

I’m not a big fan of putting a timeline/restriction around a ‘no’ outcome - ‘no’ to me signals ‘not yet, more to be discussed’. Also if ‘yes’ wins, I think it should follow the proposed timeline/stages outlined above rather than go back to a discussion stage. We have till Wednesday to discuss funding mechanism etc in more detail here.

@Maggy thanks for your insights and your perspectives here.

Yah this is a tough one… A penalty kind of goes against the whole $FLOOR is backed at TV argument.

first post on this forum so bear with me. Im fully in support of a rage quit, in whichever form it will take, considering floor was always supposed to be fully backed and past documentation and discourse implied the same.
Regarding what assets should be sold, I think we can leave this discussion till after a general ragequit vote has passed. In principle I agree with @Maggy that it should be up to a DAO vote with several options including one that gives the team full autonomy on how its conducted which would be my preferred choice as to avoid frontrunning.
Im also in agreeance with @Lux concerning time restrictions should a no outcome fail, especially if it gains sufficient votes as to make up a significant share of the community. In my opinion that would only serve to alienate those members for that time period and just in general not really be conducive to reaching a solution that works for everyone.

oh ya that’s a good point!! I like having an option that gives team autonomy (within a voted-upon or agreed-upon time period) on how any asset liquidations would be conducted. this would prevent frontrunning and minimize losing money for the DAO. So something like:

  1. Whitelist to determine those who wish to exit
  2. Based on whitelist and current valuations, a rough valuation of how much assets need to be prepared
  3. Team has autonomy over liquidation of assets to reach that amount
  4. After assets liquidated, BV recalculated and firmed, and assets sent to redemption contract

@Lux probably much easier to do deal directly with PunksOTC. Doesn’t require any governance or delays.

Simplest outcome seems to be something like:

  • Run a ‘RQ’ vote (yes/no/abstain)
  • Calculate treasury % required to liquidate for ‘yes’ addresses
  • Remove the necessary PUNK/ETH SLP (sell PUNK ERC20 directly to PunksOTC for ETH)
  • Place ETH into a claim contract (with UI) for yes voters, spun up by @dcfgod contacts.
  • Peace on earth

It would need to be made clear/decided whether this was a one-time event or something that is done at a regular cadence.

2 Likes

gm all -

@quag - thanks for sharing here. I like the simple approach. I think PunkOTC is the way to go instead of NFTX right of first refusal. I’m treating this RQ as a one-off based on extenuating circumstances. I think a recurring RQ cadence should be explored/discussed more by the DAO in a separate conversation. And yes, peace on earth for all when/if this passes.

Given the discussion and feedback above, the following changes will be made to the rage quit method when posted to snapshot tomorrow.

Rage Quit Process:

  1. This proposal will be posted to the FloorDAO forum for 7 days of discussion. Going on Snapshot Aug 23rd.

  2. After 7 days of discussion on the FloorDAO forum, a rage quit Snapshot will be launched on FloorDAO’s Snapshot page asking $FLOOR holders to signal their interest in rage quitting the DAO - the snapshot will be up for 7 days.

  • Snapshot Vote:
    • Do you approve of a FloorDAO rage quit before V2 is live? (Voting yes doesn’t mean you’ll Rage Quit, just that you approve of the concept. You’ll need to whitelist in a separate vote if you wish to Rage Quit).
      • Yes/No/Abstain/Amend
  • Vote shall pass if yes receives the highest % of votes.
    • In the event that no/amend wins, we’ll go back to a 7-day discussion period to fix the proposal and take into consideration community changes.
  1. If Rage Quit is approved, a Whitelist Snapshot will go live within 24 hours. This asks holders to whitelist their wallets for redemption - this will be up for 7 days.
  • Voting options: Would you like to whitelist your wallet for FloorDAO Redemption? Yes/No
  1. After RQ is approved, @dcfgod will engage with his developer contacts to build the Rage Quit contract. DCF will mention the price of development in the FloorDAO discord to be approved by the DAO. The estimated cost is $10,000, estimated time to develop the contract is 14-days.

  2. At the same time, FloorDAO will enter into a 5-day discussion period about funding the redemption event. After 5-days, a 2-day snapshot will go live asking the DAO to vote on their funding choice. If no consensus is reached in the discussion period, or no alternative funding methods are presented then the original plan of removing PUNK/ETH LP will proceed. Punks will be sold to PunksOTC as close to floor price/trait price as possible (whatever is higher). If not all punks are sold OTC then the rest will be sold into Blur bids.

  3. The DAO has approximately 14 days after the funding discussion to procure the funds necessary to fund the RQ contract proportional to the amount of gFloor that has been whitelisted. Procuring funds can come from rebalancing LP positions, selling Punks/other NFT collections, removing stETH position, any combination of the above etc etc. Any slippage or costs from the funding process will be incurred by the DAO and factored into the rage quit price.

  4. At this stage, contract is ready to deploy and contract is funded. Whitelisted $FLOOR holders will be given 30 days to swap their $FLOOR for treasury ETH. All unclaimed assets after that period would be returned to the DAO.

Change Log:

  • Add: Voting options - Yes / No / Abstain / Amend
  • Add: Text about community-sourced devs working on RQ contract w/ cost and time estimates
  • Add: 7-day funding discussion period occurring in tandem with 7-day whitelist period. 5-days of funding discussion followed by 2-day Snapshot vote.
  • Add: PunkOTC sale option
  • Remove: NFTX right of first refusal
  • Remove: Any mention of Twade working on RQ proposal

Given this is going to snapshot, I wanted to give my take as well.

tldr: for rq

I’m torn between the timing of RQ and whether it should happen now or in the future once V2 has a chance to prove itself.

I fully agree that the past year of trading below backing has been a poor look on the DAO and outright should have been protected, it is unfair for any holder to get less than the share of the treasury they are owed. The best time to do this would have been back in April when RAMOS was first proposed, which would have required less treasury funds and provide lasting backing protection into the future FIP#39: Implement RAMOS - #5 by Lux.

I think V2 could have a chance to entice more actors into playing the game and push users to floor but like I had mentioned in the Locking pt2 discussion I’m not sure it drives additional value to the floor token itself - which is my primary concern as a floor token holder. There is always the ability to wait and see.

I think one of the strongest arguments Lux has made is that a RQ before V2 is the best way to set up V2 for success. If a RQ were to not happen, I believe status quo would simply continue whereby every gauge vote results in a significant share being for FLOOR buybacks - this clearly nullifies a core benefit of v2 which is to have it be enticing enough of an opportunity for NFT collections / fans to come allocate 10e a week to sweeps.

The DAO would simply be hindering it’s ability to bring in a new community of engaged and active participants due to past promises unkept. Why do this? It is easy to see that the most fair and beneficial thing to do would be to RQ and move forward with V2. Further, if the DAO wishes to remove backing as a concept to untie MC&TV entirely it should do so after letting people exit or stick with it and protect it - this is real people’s money…

Oh also: Redeemed FLOOR should be burnt of course XD

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I agree, and we have a whitepaper to drop on Floor’s next product once the time is right, but it can’t be shared right now due to the risk of being front run. If required, a handful of people who have helped feedback on the draft could attest to it having the potential to innovate the NFT-Fi space significantly and drive ETH fees and yield to the Floor Wars.

I think it would be reasonable to switch off the gauge once FLOOR is meaningfully above treasury and turned on again if it were to drop.

While I’d love to think that Lux is writing his proposal with the best intentions for Floor’s future in mind, I find it very difficult to see where such an alignment is coming from given the glaring conflict of interests.

@Lux on the topic of the rage quit mechanism. I think this calculation below is the maximally objective. The amounts and values below are just for illustration, but put simply this would give everyone a pro-rata claim on all tokens in the treasury (all NFTs would be fractionalized to enable this).

This would avoid any need for selling/slippage issues and the giant complexities and differences of opinion that would come with it.

You can copy the sheet and play with the data: RQ Formula - Google Sheets

I covered some feedback in Discord but wanted to add this bit specifically here. If yes receives more than 50% of the votes it proceeds to the next stages, if no receives more than 50% then it does not proceed. There should be a >50% majority…

I don’t think you can lump Abstain into the no camp as it isn’t a vote for yes or no.

Amend also doesn’t mean yes or no. I think in a vote like this plurality is fine as all vote options are differentiated enough.

This FIP has been put on pause to explore alternative rage quit options.

For future reference, Abstsain doesn’t get counted for any vote, it is there to achieve quorum without putting a vote towards a specific option.

So if there is 51 votes for yes, 49 votes for no, and 200 votes for abstain then yes would win 51%/49%.

That’s right, amend would mean to amend the options. The way your proposal was written had if No received an 80% vote it would return to discussion to go up again which isn’t the right next steps in this case :ok_hand:

Sounds like another discussion is happening in the mean time.