Type

Business - Project

Author(s)

Proph3t, Kollan

Overview

We are requesting the DAO’s permission to release a launchpad for futarchy DAOs. Such a launchpad could solve many of the existing issues with capital formation in crypto.

Mechanics

The launchpad would work in the following way -

1. Project creators raise project ideas and specify a minimum amount of USDC they need to execute on the idea
2. Funders have 5 days to fund those ideas in exchange for tokens
   1. Funders would receive 1,000 tokens per USDC committed
   2. Except in rare cases, the whole initial supply would be issued by this process
3. If the launch receives sufficient USDC, 10% of the USDC is paired against an equivalent amount of tokens in a constant-product AMM. Then, all remaining USDC and the ability to mint new tokens are transferred to a futarchy DAO. Contributors can then raise proposals to issue tokens to themselves or to pay themselves on some interval (e.g., monthly)
4. If the launch does not receive sufficient USDC, all funders would be able to burn their tokens to claim their original USDC back

Why funders will prefer this to the status quo

Rugging is a rampant problem for on-chain capital raises. In this system, it’s much harder for projects to rug because all of the USDC goes either to the DAO or to the liquidity pool. If the team walks away on day #1, anyone would be able to raise a proposal to the DAO to liquidate the treasury and return all money to the funders. This is also true on day #30, day #365, and day #1083.

Why founders will prefer this to the status quo

This system gives you two benefits as a founder:

1. Community involvement from day 1
2. Ability to raise money that you wouldn’t have otherwise been able to raise

As I’ve written about before, community involvement from day 1 is an unfair advantage for projects. The two biggest crypto projects, Bitcoin and Ethereum, both had it. Bag bias is real, and in this system it works for you as a founder.

This also opens up the door to founders from geographies where it’s historically been difficult to raise money.

GTM

We will canvas our network to find early-stage (ideally pre-raise) projects to launch on the platform. We already have a few prospective projects.

At the start, launches would be permissioned by us. We would reserve the right to transition to a permissionless system when and if we deem it beneficial.

Founder discretion

We would also have discretion to change the mechanics of launches (e.g. to adopt an IDO pool approach rather than the above fixed price approach) if we deem it +EV for MetaDAO