Proposal For NFTX To Acquire Degendata.io

Proposals Brainstorming
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Author: Hi! My name is Josh, I am a long time NFTX Hodler and one of the first NFT buyers in the world. Apologies, wrote this in a bit of a hurry. Discord: Josh | Tracer, @mynt_josh on Twitter

Summary:
An opportunity to acquire an OG NFT Data platform has come up with the sale of CryptoPunk 5761, the degendata.io platform and all of the accompanying IP are all up for sale for 420.69 ETH or ~$1.7 Million USD. Full Details and paperwork here: DeGenData

Rationale
I think their asking price is reasonable to acquire an OG Data project in the NFT space, with a decent following, CryptoPunk 5761 and all accompanying IP. I believe that the traffic from a site like this would create great synergies for NFTX and also believe it would be a headline grabber for a DAO to acquire a platform as such.

I am in touch with the seller who is an NFTX fan and has built some Dune Analytics Dashboards. He also thinks it would be a great move for both if the NFTX DAO were to acquire Degendata.

Effect

  • Opportunity: I think there is definitely financial upside, but more importantly the awareness of such an acquisition would demonstrate the power of DAO communities and the ability to execute M&A activity. I also believe Degendata itself could drive a lot of synergies and value back to the NFTX product suite and would add additional features/benefits that users will love. This is a good acquisition to add to a more competitive story as a Defi NFT platform leader has yet to emerge vs Opensea.

  • Risk: The major risk, is we don’t do anything with the site and it goes into obscurity or a VC firm comes along and bids it up high, but I think as fellow commmunity members we have the upper hand here.

Specifications
Full details at link in Summary

" On January 1st, Midnight UTC 2022 we will list the DegenData (5671) punk for sale. The new owner of this Punk will have the rights to claim DegenData.

We want to push the boundaries of what an NFT is. The sale of DegenData will be facilitated by selling the DegenData. This will be the first business sold as an NFT. The new owner of CryptoPunk #5761 will be able to claim the IP rights to DegenData and all supporting assets.

We truely belive that the future of IP, brand and ownership will be done via NFTs. They are more than just a JPEG. We think it is only fitting that a CryptoPunk is the first NFT to be sold with a product attached. As the world transitions from web2 to web3, it is important to highlight what NFTs truely are.

We are a US based company, so the IP assignee will need to check a few legal boxes. Obviously, we encourage any interested parties to contact us with questions!

The contract details are below. We have included a list of all assets that will be transferred to the new owner of CryptoPunk #5671."

Funding request

Yes ~ 420 ETH, and also open to a split of ETH and NFTX tokens
Finders/negotiation fee: 100 NFTX - Paid to Josh | Tracer upon completion of transaction (I added this in because I think it is important to reward proactive DAO contribution as it will encourage others to do the same)

Communication: Please discuss in the comments bellow, will add a poll

Notes on required Quantity and time for Quorum: Required input from DAO before Dec 30th

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Should NFTX consider this acquisition: (Send to snapshot for a formal vote)

  • Yes
  • No

0 voters

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Thanks for this Josh! I’ll sit this out as to not influence any opinions.

I should mention that I don’t think a community proposal has ever actually been pushed through governance, yet. We tend to run more like a dao-powered company than most other community-centric daos probably. But there’s a first time for everything :slight_smile: :blue_heart:

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Totally understand, I don’t involve myself on Tracer ones as well.

Awesome well hope to socialize this opportunity around the community and get some feedback. I think it is a really good opportunity and we are the ones to benefit.

Here is an update, potential monetization and or usecase for NFTX holders: DegenData Crypto Paywall - YouTube

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UPDATE:

Usecase for NFTX Holders: The creator of Degendata sent me this video on a potential monetization model or usecase for NFTX holders: DegenData Crypto Paywall - YouTube

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Gm Josh!

Thanks for drafting up the detailed draft proposal according to the usual governance flow we’re using at NFTX. Good to see more community members engaged with pro-actively pushing proposals aside from those coming from Core.

I’ll detail my line of thinking on this proposal below. Tried to do my best to stay as neutral as positive on this, weighing all the pros/cons stated and adding some additional arguments myself from a core team perspective.

Having read the entire proposal from top to bottom, my overall feeling is that this specific acquisition of DegenData.io (including domain, IP, the NFT, and all other stated material) is not a great fit for the NFTX DAO.

In general, I agree that the pricing seems somewhat reasonable for a web3 startup that is looking to compete in the crypto data analytics industry and/or is already market-leading and wants to take out the competition. One recent data point on this would be the leader, Nansen, raising an additional round valued at 750mm. Caveat on this is that they’re already a 6-7 fig dollar per month revenue-generating product, proving PMF.

Specifically applied to NFTX, I do not see how DegenData (the product, nor its brand and/or frontend) can add significant value equal to or over the asked amount to the current NFTX ecosystem of products. Knowing that the core team is working 24/7 building protocol and product (which already has MVP data analytics for NFTX-specific collections), adding an additional independent NFT data vertical onto their plates would most likely slow down progress on all primary products (i.e. protocol & nftx.io).

One of the leading arguments made is the PR associated with this “first of its kind NFT sales”, entangling a bluechip NFT (CryptoPunk) to the acquisition of a brand/business. I applaud the innovative approach to selling a business, but my personal view is that this isn’t a standing argument to engage in the sale by the DAO. NFTX is not here to “prove” DAOs can do acquisitions. The PR moment will most likely last a day or two (i.e. Inverse acquiring Tonic) and then get lost in the daily CT noise.

To put the amount asked by the DegenData team into perspective: for this amount of ETH, we would be able to scale the core team by approx 7-8 additional full-time positions for a year and/or extend the current core team for an additional 1.5 years. As most of our treasury is actively contributing to the utility of the product we’re building (as LP positions lowering slippage for other users), I feel it wouldn’t be sensible to spend 1mm+ on acquiring a product we’d most likely not sustain or integrate as core (as it doesn’t fit the product teams’ roadmap).

Will be voting against the acquisition in its current form.

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Hey chop, this is awesome feedback and I appreciate the context from the team’s POV. I have forwarded your feedback to the degendata team to see if they see something perhaps a bit different then then they have said publicly thus far and or to see their willingness to find a win win. If at all of course, they are huge fans btw.

My pov on this, having used NFTX and been around the NFT ecosystem since July 2017 is that, platforms like degendata play an important role in people’s learning, exploring journey and I think owning that first step in a community first way is pretty valuable. Organic traffic is gold.

Giving NFTX holders something special and unique that they can access with their holdings, such as the paywall opportunity they documented in that YouTube video is novel, new and already built.

While it is not core to the NFTX product now, that is ok and probably a value add tbh, as it broadens a bit what might be something the NFTX team would be interested in building/collaborating or adding in the future.

Looking through the quoted tweets: https://twitter.com/degendata/status/1473043728726122502/retweets/with_comments

This has gotten a bunch of interest and feedback, that I think will be more valuable then just the initial PR moment as you have described it. DAO’s are a new concept and while NFTX is not here to prove that it’s possible, it is potentially what the community would love to see, including from GaryV himself (who played a big role in Punks early run up).

I would love to see other NFTX holders weigh in here and share their thoughts, as this is part of how DAO governance should function.

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Here is a recent interview from the founders of Degendata and how they built the branding the business around the Cryptopunk that is the traction point.

This will be the first M&A acquisition using a punk and think it’s an interesting opportunity.

Watch from here to 19:30 - Pink Swan Trading: Building DeGenData NFT Analytics & Genesis Volatility (Crypto Options Analytics) - YouTube

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My initial feeling on this would be no from the cost vs opportunity.

Acquisitions I’ve been part of in the past is often targeted from the buyer looking to pick up a niche product that has captured a segment of the market and there is a natual synergy fit in for both increasing current users value in the product as well as bringing over a large set of new customers. The acquisitions were always the buyer targeting the acquisition.

A question that immediately jumps to mind is if NFTX wanted to acquire a data platform then we would look at something which the current owners see more long term opportunity in and try to acquire https://gvol.io/. When someone is selling off their existing data platform to pursue another the development of another data platform my immediate thought is they see no long term value in the current option, and the new venture is more interesting. In reviewing the “why are we selling” it looks like they’re after capital to help pursue this new project.

Personal thoughts aside… :wink:

Logistically speaking I’ve got some questions about the degen.io platform itself.

  • What are the ongoing web2 costs for managing the site (hosting, google accounts etc) ?
  • Is there any ongoing maintenance on the current site, and if so how much per week ?
  • How long does it take to create a new project (duplicating the BAYC project for example) ?

At the moment there is 24 projects listed on the site, if it were to be part of NFTX there would have to be another 275+ projects created for this so I wanted to get an understanding for the work involved to bring it to parity and maintain it moving forwards.

Lastly, thanks Josh for bringing this to the attention of the community and being the go between to keep the conversation going :pray:

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I view degendata as sort of a “micro saas” business — pros are that it is a focused and independent brand that could indeed be a supplement to products like NFTX; cons would be the high cost of paying that multiple of traffic (since there’s no revenue) and the requisite personnel and capital maintenance costs.

I think businesses like degendata needs a dedicated “owner” that is willing to put in the time and work to continue the development. I liken it to defi llama where it wouldn’t make sense for like Dune to buy them, but instead it needs a good steward to build out and execute on its own vision.