Floor Games — Let NFT eat NFT and then we shall pick the pixels

1

Abstract

Each gauge epoch, pit the two lowest voted collections against each other in a shifting Balancer pool that starts neutral (50:50) and ends based on their relative voted ratio.

+

  • Motivates collection advocates to be involved in governance
  • Markets itself (PvP always fun)
  • Provides ongoing signaling of what governors consider worthy
  • Allows ongoing rebalancing of treasury
  • Stimulates volume and attention to the collections

-

  • Fatigues governance
  • Pisses off collections & advocates
  • Makes more work for noblet

Specifications

  1. Calculate relative voting ratio of bottom two collections every epoch
    a. Eg. Punks got 4% and Miladys got 2% of the gauge vote overall. Then ratio would be 2:1 Punks to Miladys
    b. If the ratio is +/- 5% of 50:50 then the collections live to see another epoch

  2. Allocate 10 ETH worth of each collection
    a. If there’s only LP, then can use 10 ETH worth of LP, so only 5 ETH worth of NFT available. Make sure this matches for both sides though, so take the minimum amount of NFT that can be allocated from each side.
    b. If there’s less than 10 ETH for a collection, then they are ALL IN and the other collection only has to put up the same amount
    c. Up to Treasury Council to determine where to pull the allocations

  3. Start a Balancer shifting pool from 50:50 Punks to Miladys and end at the target ratio over the course of 3 days
    a. In the above example it would end at 33% Punks to 66% Miladys (adding more Miladys to the pool so we net buy Punks with Miladys)
    b. Need a quant to math this out

  • For
  • Against
  • Abstain

0 voters

1 Like
2

Hi @aeto. This is one of the more interesting potential strategies devised to consolidate the treasury while potentially adding value to Floor. I’d suggest having the first snapshot vote determine the two collections at risk of being sold and then have another snapshot vote for people to vote on which out of the two collections to sell for the other. That way it’s collection 1 vs collection 2 instead of a 1v1v1v1v1… etc. Furthermore, I think this strategy would work even better if it was more aggressive. If we allocate 10 eth worth of each collection for each gauge epoch (1 every 2 weeks), that’s only 260 ETH of rebalancing per year ((52/2) x 10). An all-or-nothing approach forces NFT collection community members to get involved, but if we’re auctioning off a collection slowly, it may not draw much attention. It also might get pretty redundant if the same two collections are ending up the least voted multiple weeks in a row since we’re only able to liquidate positions 10 eth at a time. That being said if we’re selling large amounts of a position, it may completely destroy the Floor of a collection which is why I think the balancer pool should run for more than 3 days. Maybe you can have the pool run for the entire 2 weeks? I also do think it would be nice to reserve a portion of the sale as ETH so that our ETH allocation grows. Sidenote, can we charge fees on the balancer pools?

2 Likes
3

My suggested edits:

Edit #1: The addition of a second voting phase for $FLOOR holders to decide on which of the two least voted collections should not be sold. The first vote will identify the collections at risk, and the second will be a final decision between the two, making for a more interactive vote (possibly driving more demand for $FLOOR).

It may be a good idea to introduce a third option, “abstain,” to the second vote in the scenario that two of the better yield-generating collections are pitted against one another.

Edit #2: One NFT collection should not “eat” the other. Using funds from the sale of the least-voted collection to buy into the second least-voted one doesn’t seem logical. Instead, the funds should be redistributed based on the vote distribution in the first vote (excluding the votes for the collection that won the second vote)

Options for the redistribution of ETH in line with $FLOOR gauge votes are as follows:
The ETH from the redistribution is used to repurchase $FLOOR
It could be deployed in single-sided NFTfi strategies like Spice

Edit #3: Given that one of the collections won’t be traded for another, the NFTs are sold for ETH through a two-week Copper Launch LBP.

Edit #4: When a collection loses, 20% of FloorDAO’s holdings of that collection are sold. If the value of this 20% is less than 20 ETH, the entire position is liquidated and the collection will no longer be eligible for sweeps unless it is revoted in by the DAO.

Example: Snapshot

Saudis and Squiggles are the two least-voted collections
Squiggles beat Saudis in the second vote
Saudi position < 20 eth therefore, the entire Saudi position is liquidated (5 ETH)
5 ETH (the value of the Saudi positions) is reallocated to $FLOOR (63.39%) Bastard GAN Punks V2 (17.22%) Milady, (7.99%) CryptoPunks (4.1%) ENS: 10K Club (2.54%) Redacted Remilio Babies (2.21%) Forgotten Runes: Wizards Cult (1.48%)

1 Like
4

reposting my reply from Disc:

nice stuff bagel, a few comments

  • agree heavily that we shouldn’t use the worst collection to buy the 2nd worst collection and should instead use the liquidated parts of the worst to buy the best (or the same as the gauge results like you suggested)

  • might cause governance fatigue since we’d have a vote every week: gauge → (eat, eat) → gauge → (eat, eat). Instead I’d have 1 (eat, eat) vote a month combining the past 2 gauge vote results with a weighted avg or something. Also this way we don’t have to do so much rebalancing & liquidating & buying.

  • I like the 20% stuff, slowly chip away our holdings of the worst collection instead of all at once. Would suggest we set a max eth value in case something like punks are on the chopping block so we don’t end up with a 1m rebalance. Perhaps 100e max?

  • when a rebalance goes into floor buybacks or nft sweeps we should make sure these are done via a twap over two weeks or so as well. In the case of floor buys they should not be done if mc > tv since it would be a waste - perhaps we should think about some policy of what to do in this case. Either just hold the eths to be used in gauge wars later, use it for limit orders to protecc, or throw it into the other voted items.

1 Like
5

While I like the idea, we have to be mindful that voting is onchain and the outcomes need to be easily executable so that anyone in the DAO can execute without trusting a small centralised team.

I think the Sweep War itself does a good job of identifying those that should be considered at risk i.e. the bottom N collections.

There should be some trigger mechanism that schedules a vote for which collection to exit from so that it’s not a constant vote to sweep and rebalance every week. Again, these are onchain votes and not free to execute - governance fatigue is multiplied when it also costs to vote!

Larger and slower movements are desirable.

Agree, although I think the ETH proceeds should move into the next Sweep War which is a good use of our existing mechanism which lets FLOOR holders decide and creates more buzz around this particular war.

Agree with the LBP mechanism.

20% seems arbitrary and doesn’t allow DAO members to express the strength of their desire to rebalance. If we enable something like negative voting, then we can apply a proportional sell-off based on how vehemently FLOOR holders want that collection removed.

For example, if a user wants to see CryptoPunks sold off, but currently the voting indicates that 30% of the collection will be sold off when they would prefer to sell off 10%; then they may in fact vote in favour of CryptoPunks whilst still wanting them to be sold for something else.

TL;DR

I think what you’re putting forward is great and mostly agree, I’d just add the following:

  • Create a trigger for “rebalance” votes whose outcome sells off the most downvoted (or least voted) collection proportional to how downvoted it was
  • Swap ETH proceeds and transfer to the “yield” of the next Sweep War
  • Allow for negative voting to let FLOOR holders fine tune preferences (and more PvP)
6

You raise a good point that 20% might be a little too arbitrary and giving holders the ability to state how much or how little of a collection should be sold is great.

I do however believe there should be a minimum (and maximum) amount of a collection sold - we can discuss something reasonable.

This for a few different reasons:

  • Firstly, in the case of a rebalance vote the majority of participants will likely feel ambivalent between selling vs not selling. One must feel quite strongly to want to sell part of a collection and thus blocking a sell via a positive/negative style vote will typically result in 0 of the collection being rebalanced.
  • The above is counterproductive to FloorV2’s Gauge Wars. If a collection knows it’s unlikely to have any significant part rebalanced then there’s no need to bribe / buy floor to influence the gauge votes.

This is why I think a non trivial minimum amount of a collection must be sold in a rebalance event to actually push collections that care about floor’s holdings to participate in the gauge wars and their own fate. Perhaps a minimum of 5-10% rebalance and a vote is used to push that number upwards if the dao feels strongly - there should be no opportunity for 0 rebalancing if we want real pvp encouragement.

7

Excellent point, minimum amount sold makes a lot of sense. I think you could cap off the maximum amount sold using proportional weighting i.e. negative votes / total votes.

So to sell off 100% of a collection all voters would have to vote negatively for that collection. This would of course likely never happen, and so a minimum amount sold (e.g. 5 ETH) would ensure that enough losses would result in a full rebalance over time.

8

Just adding my comments from the discord to this channel for posterity.

=========

I’m going to dump a bunch of thoughts about the Floor Games that @ItsOver90 posted on the forum and has been added to by @zon and @BurstingBagel. Forgive me that they’re more of a stream of thoughts rather than a cohesive/coherent statement. Please pick it apart and let me know if things aren’t correct or misfounded and then I’ll put something more formal as a reply on the forum :pray: . I’m assuming that the gauge wars stuff will still be around all the existing collections plus the floor token as options to sweep/cull. Some of it’s just playing out the process with some examples, others are questions if we should have more rules/boundaries around approaches.

Negative voting

I like the concept of this but wonder if there needs to be any mechanisms around it. There are a few scenarios which I was thinking about for this.

If I’m against voting for Floor for buy backs and want to see the 10ETH fed back into collections am I better to vote AGAINST Floor with 50% of my vote and FOR BGANS with the other 50%? This would give all NFT collections more ETH (because of the detracting vote for Floor), and BGANS a bit of a pump, however if I was solely concerned with buying back BGANS then I’d be better off putting all my 100%

On the last vote there was a break down of approximately 80% buy FOR Floor, 10% for Milady, 6% for Bgan and 4% for the other collections. With a negative voting approach the FOR Floor voting could be changed to be 10% worth AGAINST Milady, 6% AGAINST Bgan and 4% AGAINST the remaining collections and then a 60% FOR Floor. As I understand it this would negate the sweeping of collections and the full amount would then go to buying Floor for that week (assuming that a 60% vote FOR with everything else netting a 0 FOR/AGAINST would result in 100% of the sweep amount going towards Floor). Is this something that should be able to occur? I’m using Floor as the example because of the last vote, but this could be true of any majority. At the moment no matter how small your vote is, if you want some collection to be bought you have your say.

Sell off proceeds

I’m not a fan of selling off collections completely that have been added to Floor, but I do like the selling off of a minimum amount (i.e. if 1% of a Bgan is voted to be sold off it’s not worth the transaction, so you’d make it maybe 1ETH worth of Bgan).

I’m thinking of the opposite impact, and I’m not sure if this is a potential outcome… but here’s the scenario.

Let’s say that in week 1 a large enough group of voters vote PUNK as the collection that should be sold off, and the amount equates to 5% of the collection or around $200k (or 108eth). If this amount then rolls over to the next week sweep the same group of voters could then vote to sweep the cheapest collection, let’s say it’s the Saudis. A sweep of 100 would cost 42.96 ETH and take the floor price up to 2eth. Planned well, the group could have slowly acquired cheap saudi’s in the lead up, or make a pre-emptive sweep of 50 for 8.6ETH to a floor of 0.25. While I’m not 100% sure if that’s the mechanics of how the follow up sweep would work based on the proceeding week cull, you can see how the system could be gamed for short term gain at the peril of FloorDAO. I wonder if a maximum ETH amount should therefore be imposed in addition to a percentage amount for the sell off, or other mechanisms to stop this kind of approach.

That’s it. Apologies it’s focussing on the negative aspects. I do like the approaches that we’re talking about, I just think we should consider different mechanics that could be used within these strategies and decide if we think it’s the best approach. Looking forward to any comments. :pray: