FloorDAO NFT-Fi Seasons Proposal

Governance
1

Summary

This proposal seeks to define the structure of a key addition to Floor and the Floor DAO. If passed, this framework will go live as part of Floor V2 and will allow the DAO to explore new treasury strategies by allocating capital to burgeoning NFT-Fi projects and protocols.

Floor will allocate a fixed amount of capital during a specified trial “Season” to a group of NFT-Fi projects that provide financial primitives following a specific theme, such as perps, options, or lending. The aim of this exercise is to gauge the yield generating capacity of these projects when granted a set amount of capital. Each “season” will last for 1 quarter, with capital allocated simultaneously across all projects. This capital deployment is intended to create a level playing field by eliminating the variable of fluctuating market conditions. We propose 100 ETH per year, or 25 ETH per season.

Upon the conclusion of each “season”, a comprehensive analysis of each project will be made public, providing data to FloorDAO community members voting in the Floor Wars. This not only improves Floor’s status as a source of knowledge in the NFT-Fi space but also enhances its prominence within the ecosystem as a tool for liquidity deployment.

Protocols that prove to be the most effective will be considered for integration into Floor’s treasury strategy. This could lead to larger capital deployments, bolstering the expansion of financial primitives crucial to the financialization of NFTs as an asset class and strengthening Floor’s position in the NFT-Fi landscape.

Motivation

Despite the emergence of numerous promising NFT-Fi projects, Floor’s treasury team has remained cautious in adopting new protocols due to concerns about smart contract risk and the DAO’s core philosophy of risk aversion.

However, as the NFT-Fi space continues to expand, the DAO risks missing out on potential yield generation opportunities and relationships with emerging top-tier projects.

This proposal outlines a systematic process that allows for testing of promising projects in a way that mitigates risk, enabling the treasury team to make data-driven decisions, achieve optimal yield generation, and cultivate an ecosystem of high-performing partner projects.

Proposal

The inaugural season will concentrate on perps/options protocols chosen by the treasury team. The protocols participating in each future season will be determined through separate proposals and governance votes, thereby allowing each project the opportunity to present their offerings to the community.

The first season will use 25 ETH to seed strategies. A total of 25 ETH in token equivalents (ETH, MILADY, USDC, etc.) will be allocated each season, distributed equally amongst projects that have passed through the governance process.

Liquidity deployment strategies will be custom-tailored to each project through collaborative efforts between Floor and the respective protocol’s team. This ensures that the strategies truly represent the unique value proposition of each project.

The key performance indicator will be Yield Generated, while Risk Control will serve as a secondary metric factored into the analysis.

In summary, this proposal introduces a systematic approach to deploying treasury capital, enabling the Floor treasury to make more data-driven decisions and bolster its relationships within the NFT-Fi ecosystem.

Throughout each season, Floor will retain full custody of all funds via a 2 of 3 multi-sig wallet managed by the core team.

Potential Risks

The following risks have been identified:

  • Sub-optimal yield generation due to experimental strategies.
  • Potential loss of funds due to system exploits.
  • Diversion of significant resources from the core team, potentially affecting other initiatives.

This proposal will remain live on the Floor forums for 4 days before moving to Snapshot.

4 Likes
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Other proposals have been rejected until after Floor V2 comes out. Why should we approve this before floor V2?

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hey maggy, this proposal, once approved, is meant to be a part of Floor’s V2, which is set to launch this week (before the Snapshot vote concludes). I am also curious which proposals you are referring to as being rejected?

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In order to make the test more impactful, and attract the best projects in each “theme”, the DAO should consider raising the amount for the inaugural season from 25 ETH to 100 ETH.

Another idea is for this initial ETH to be rolled over into the next season, creating momentum, and increasing the competition as the Season’s become more well funded and widely known.

In the best case scenario, if this honey pot become large enough, teams will be lining to make their case to be considered as part of the season. This will increase competition, and ensure that FloorDAO is working with the best projects providing each primitive.

5

My proposal to invest in NFTX pool with low liquidity and high general volume.

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I love this initiative and I think it’s something we will expand on as the DAO’s yield increases. The only concerns I have is around reporting, management and accountability. Who will be tracking and reporting performance data?

2 Likes
8

Very good idea. The question is where and how :slight_smile:

1 Like
9

I think this is something that would fall squarely onto the Treasury team’s shoulders. So, mostly Nobi!

In terms of reporting I would propose setting up a public Knowledge Database, accessible by anybody via FloorDAO’s website. Operationally this can be a Notion Board where each strategy is outlined and “progress reports” are created at regular intervals.

I would be happy to help set up this environment as I’m pretty fluent in Notion and have a solid sense of what an effective format looks like.

1 Like