As we quite liked the suggestion of adding additional terms to the “teams” section (20% of total supply) in the original proposal, these numbers are a bit different if our terms are accepted in an amended proposal. Check above for that part!
We haven’t chosen our partners lightly or the allocation we want to incentivize them with to become successful as a new project. Auxiliary services quite understates what Merit Circle is bringing to the table. They are comparable in value to the rest of the current core teams and, after having worked with them for a couple of months on a professional level now in the anticipation of Project New Wind, are imo the best fit given the strategic direction we want to move in with PNW as both core teams. There’s no other project I know of that fills in the gaps we (have shown to) lack such as inhouse branding, design, marketing/go-to-market & legal support, which also has native enough folks on a web3 level to “get’ what we’re building with Project New Wind. With the adjusted team vesting terms proposed by Merits’ tokenomic folks (extra clause added based on value increase towards the projects’ token), the direct burning of all current native assets (including cancelled vesting schedules) and printing a lesser amount on the other end, there is no direct dilution of current token holders any longer.
We have seen first hand what Merit Circle is capable of and believe they will add value way beyond the portion of token value they are getting in return. As stated above, they bring a lot to the table and have an extremely active and passionate community that backs everything they are involved in. Further, Merit has a reputation for thinking long-term, so it’s unlikely effective dilution would materialize any time soon. And if it did, it means its’ caused by the new token being beyond succesful. In our view, involving Merit Circle is a win-win-win. For us, for them, and for the community. Ultimately everyone has one main common interest here as token holders.
Believe this was addressed in Discord by Caps but for the purpose of completeness; those 235,000 FLOOR tokens were not minted and would not be minted under this proposal.
We’re simply stating that, if the proposal is approved, every token holder that voted against the proposal or disagrees with Project New Wind always has the opportunity to liquidate their position on the open-market. If these token holders don’t believe that the combined structure and products of Project New Wind will yield significantly more value for New Token holders than the current state of NFTX and FLOOR, they can exit in the same manner as they would for any investment in a decentralized governance token in this space.
I can see why, from your perspective, it may look like MC/Beam are getting an allocation in New Token without contributing something in return. However, as stated in my response to TheRealMarx, behind the scenes MC/Beam has already devoted significant resources from multiple members of its team (and, if the proposal passes, we intend on devoting much more) to develop the concept of Project New Wind. These team members are also valuable contributors to our other projects, but we’ve chosen to redirect their efforts to Project New Wind. We strongly believe that by doing so, the result will be significantly more beneficial to the growth and success of the project as a whole than if we simply purchased NFTX and FLOOR.
In similar collaboration structures that MC/Beam is a part of, MC/Beam usually receives 50% of the equity or at least 10% of the token supply. For Project New Wind, however, there has been careful consideration and negotiation from both sides as to what is fair here (taking into consideration the existing token holders) and what would be most conducive to the long-term success of the project. To that end, 7.5% was mutually agreed for purposes of the proposal as it captured both the expected range of compensation for the unique services and expertise that MC/Beam provides, as well as the interests of existing token holders in both NFTX and FloorDAO.
Nevertheless, see the amended terms of the proposal with respect to the team allocation of New Token, including for MC/Beam.
Current token holders will get 50% of the newly minted supply (via an exchange process between NFTX/FLOOR and New Token according to the predetermined ratio). Current token holders will also directly control 20% of the newly minted supply via on-chain governance (meaning the token holders can determine, in their sole discretion, how and what they want to do with that 20% supply, including what you describe above). 10% of the newly minted supply will be held by the Foundation, which is bound to use those tokens for the betterment of Project New Wind (i.e., the team cannot unilaterally decide to use those tokens for a purpose that doesn’t benefit Project New Wind, and if they do, token holders can have the Supervisor take action against its misuse).
The final 20% is reserved for the team, but is subject to the amended terms of the proposal with respect to the team allocation of New Token, including for MC/Beam.
We are not in control of what happens with the Sophon project, as it is led by an independent team, but MC/Beam is one of the leading bootstrapping partners. We believe NFTX is a very good fit for Sophon, and that the Sophon ecosystem could benefit from its product. Therefore, we think we can make a very compelling argument to the Sophon team that it should deserve a special place in the ecosystem as one of the more select initial launch partners on Sophon. We expect, if this were to occur, that it would greatly benefit Project New Wind through more visibility and increased product use, but also through potential token incentives.
In similar collaboration structures that MC/Beam is a part of, MC/Beam usually receives 50% of the equity or at least 10% of the token supply. For Project New Wind, however, there has been careful consideration and negotiation from both sides as to what is fair here (taking into consideration the existing token holders) and what would be most conducive to the long-term success of the project. Nevertheless, see the amended terms of the proposal with respect to the team allocation of New Token, including for MC/Beam.
This part is misunderstanding what is proposed in the OP, so my apologies if it wasn’t clear and I’ll try to re-explain in full.
If the proposal passes, all the currently active vesting schedules except for the one from Alex which lie in the future (read: the tokens that are still locked in a contract for distribution over a pre-set period of time) are cancelled and taken out of circulation. Those vesting schedules won’t be accelerated, so there is no double-dipping here (or anywhere else for that matter - it’s in reality the opposite). The only vesting schedules that are currently active in the context of NFTX core contributors are the ones from Javery, Quag and Alex Gausman - the snapshot for Javery and Quag to set up this 4 year vesting schedule is here, Alex his vesting schedule was set up as part of the TGE back in 2021. To re-iterate, the vesting schedules of both Javery & Quag will be cancelled if this proposal passes and the left over tokens are burned. The already vested amounts are used in whichever way Javery or Quag want to (i.e. sell if they haven’t already, or migrated in the same way every other token holder would).
The Snapshot you’re linking towards in your response is how salaries work, which isn’t exactly like you’re painting it. 25% of each core team members’ annual salary is paid in NFTX tokens based on a USD value for work they have done. This is paid out on a quarterly basis (so not a year in advance as your post suggests), and is based on the spot price that day (i.e. for Javery, 10.9k USD worth of NFTX). Similar to above, if something has already been paid for the work they have done, it is up to the individual token holder to either sell or migrate it as part of all other token holders - there is no double dipping happening there.
To dive a bit further into this topic as I’m feeling this is a follow-up on the dilution topic, the pile of NFTX of which this is normally paid from on a quarterly basis (different dates for each team member) will be burned as part of this projects’ renewed tokenomics plan, which amounts to roughly 26.5% of total token supply. When you include the NFTX side of POL, which amount to 14.92% of the total supply, we’re looking at a total burned percentage of token supply of 41.42% while printing back 30% of total token supply to the New Projects’ treasury.
2/3rds of that can not be spent for anything without on-chain (enforceable) governance passing a vote. For ease of explanation, let’s call this “non-circulating” as it only moves once onchain governance allows it to. With the extra terms proposed for the team tokenomics piece, which effectively prevents selling any vested token until a certain FDV milestone has been met (check official piece above on details), the entire 20% of team vesting schedules can also be consider “non-circulating” at the start.
MC/Beam’s aim here is not to be a service provider to Project New Wind, but rather to collaborate with the NFTX and FloorDAO teams to both enhance and scale the current state of each project. By receiving a token allocation subject to the amended vesting schedule instead of a cash payment, MC/Beam’s incentives to grow Project New Wind are properly aligned with those of the NFTX/FloorDAO teams and the token holders.
Speaking for everyone on the NFTX & FloorDAO team here, I can confirm that none of us have been rewarded by Merit Circle in the form of token vests, reward streams or otherwise, nor are there agreements in place for us to get rewarded in such a manner in the future. For open market trading, whatever any of the current team members do with their personal funds, now or in the future, is neither my business nor something that should be disclosed on a public forum.
Our proposed token allocation would not be liquid, but subject to attractive vesting terms for existing token holders. I can see why, from your perspective, it may look like MC/Beam are getting an allocation in New Token without contributing something in return. However, as stated in my previous response to you, behind the scenes MC/Beam has already devoted significant resources from multiple members of its team (and, if the proposal passes, we intend to devote considerably more) to develop the concept of Project New Wind. These team members are also valuable contributors to our other projects, but we’ve chosen to redirect their efforts to Project New Wind for the past few months and are committed to doing so well into the future.
MC/Beam’s aim here is not to be a passive holder of Project New Wind, but rather to collaborate with the NFTX and FloorDAO teams to both enhance and scale the current state of each project. By receiving a token allocation subject to the amended vesting terms instead of simply investing in NFTX and/or FLOOR, MC/Beam’s incentives to grow Project New Wind are significantly more aligned with those of the NFTX/FloorDAO teams and the token holders.
To clarify, 20% of New Token’s supply will be in direct control of the token holders via on-chain governance. If the token holders disagree with how these tokens should be distributed (e.g., to team members and contributors, as you state) then they have the ability to actually block their spend via smart contract. There won’t be a method for the team or contributors to circumnavigate this right for token holders. The other 10% will be held by the Foundation subject to oversight from the mandated Supervisor.
Again, MC/Beam has expended, and will continue to expend, significant resources in the form of FTEs (and, in some cases direct, funding of costs) from its internal team on the development of Project New Wind. These resources could be reallocated to other projects in MC/Beam’s stable, however we see real potential in Project New Wind and have therefore made the decision to risk both time and these resources in an effort to see Project New Wind succeed.
Moreover, MC/Beam is bringing a lot of intangible value to the table, through its network, expertise and distribution/reach. We believe we can unlock more value for the project than any contributor would with the same incentive package or versus burning the tokens.
See the amended terms of the proposal with respect to the team allocation of New Token, including for MC/Beam.
MC/Beam’s aim here is not to be a service provider to Project New Wind, but rather to collaborate with the NFTX and FloorDAO teams to both enhance and scale the current state of each project. By receiving a token allocation subject to the amended vesting terms instead of a cash payment, MC/Beam’s incentives to grow Project New Wind are properly aligned with NFTX/FloorDAO teams and the token holders.
See also the amended terms of the proposal with respect to the team allocation of New Token, including for MC/Beam. This is an amendment we’re more than willing to make to add an extra layer of trust into the fact that the entire proposal is written in good intent and as a way to grow Project New Wind, while it also being an answer to current dilution concerns from the team allocations’ perspective.
Thank you for taking feedback here and for the updated proposal. This is a step in the right direction.
The updated proposal makes vested team tokens non-transferable unless the FDV of New Token reaches or exceeds 75 million, and are immediately transferrable thereafter.
I see two issues with this:
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The treasury has a high beta with ETH price. If the ETH price increases dramatically, 75m FDV could be hit with the team not lifting a finger. Yes, the ETH price could also drop dramatically, but in effect the team is receiving a free option on ETH, which has value (worth 0 if price drops, worth 6m+ if price increases). The solution to this is to use backing rather than a fixed value.
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There is price manipulation risk, where the team could maliciously remove liquidity, make a small buy in a low-liquidity market to increase FDV, and then transfer their tokens, without actually achieving the intended FDV.
This can happen maliciously, or just unintentionally, like here when the FLOOR price was 500 ETH for a few minutes: Ethereum Transaction Hash (Txhash) Details | Etherscan
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Using a solution with stock options with strike price at backing would address these, as it would force team members to buy their tokens at backing, which they would not be able to profit from if they could not sell into the liquidity at profit. Furthermore, it guarantees no dilution of treasury for tokenholders, as new tokens are only minted if the backing equivalent goes into the treasury.
I also echo @dcfgod that initial tokenomics should not include the 30% for treasury. There are use cases for treasury tokens, but these can be minted on an as-need basis via community vote.
Looks like we’re making some great progress
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Awesome update from the team and glad to see more alignment with reaching backing value. I assume the 75M number is because the combined treasuries are 30M and holders get 50% of the supply so it’s a 25% higher than if we reached 1x book value today.
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Agree with bino on the above, instead of 75M just make it like 1x book value by not minting 30% for the treasury, and considering team supply as options instead of circ tokens. That way the new project launches with 0 new dilution and backing value is easily calculated and even maintained as team tokens become circulating.
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This change certainly makes me more comfortable and willing to vote yes. Although I would still be a no because although we’ve now fixed one issue, we haven’t fixed some of the bigger ones. Could the team please also amend the proposal to solve these remaining problems:
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Be clear that the backing still exists in new wind. The legal changes and Gaus’ statements in nftx discord allude to holders completely losing their worst case outcome of 1x treasury value. The setup should be “worst case book value, best case multiples of it”, not “worst case 0, team success 1x book value, best case multiples of it”.
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If things don’t go as well as expected, have a backup plan. Right now we are being asked to risk it all on a merger and trust us bro scenario. If new buyers don’t show up and we can’t get to multiples of book in a decent timeline what do we do? For example something like “We agree that within 6 months new wind token will be trading. We will spend a maximum of $xx. If at no point it trades above 1x book value on a 2 week twap we will open a 1 time rage quit so everyone in floor and nftx will at worst get a 2-3x from here (assuming eth and nft values stay the same)”. This type of solution would let the team use the treasury as needed to make new wind work, give holders peace that they aren’t going to get a 0, and allow the merger to happen.
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Give us much more details on how this is going to look. Is the L2 sophon? will sophon be giving us incentives? How does flayer even work? How will we now use the protocol owned liquidity? What happens with nftx v3, is it done or do we care to launch it elsewhere? How does liquidity look for the new token? When does the new token launch? How does it earn revenues? What is needed so the revenues are enough to hold up the prices on a $30M treasury?
would also like to re iterate to plz stop telling people to sell on the AMM if they don’t like this. Both FLOOR and NFTX have been through their fair share of selling, the people here still holding were not willing to sell last week, this proposal shouldn’t make them want to sell now that it exists. They should be left exclusively better off for staying and trusting the teams for this long.
3 Likes
Yeah you’ve parroted this five times already doesn’t make it any more erudite or true.
Holders have the right to believe the team can’t deliver because:
- NFTX has lost in real terms to inflation and btc/eth and usd values since inception. The token has performed horrifically.
- NFTFi is effectively a dead and shrinking TAM. Floor and NFTx are a vehicle for siphoning funds right now effectively. Floor less so since they’ve cleanly satisfied all responsibilities to token and DAO members
- Given the above two facts I think you’ll agree that holders have the right to a little better than a lazy “go sell on a dex then if you don’t like it” answer - especially since this tired line of thinking has been proven out to be not the optimal way forward again (Floor) and again (Nexus Mutual).
Thinking about this some more
Can we also get some info on why the treasury is absolutely necessary for new wind to be a success?
Like could we not launch flayer and do this without also owning $30M of punks, milady, eth, etc.
And if we can’t do it without the treasury, then why do we think the product can ever be successful?
Would it be possible with just like $1-2M of stables runway to last at least 1 year of efforts?
If so, we could do something extremely bullish for the holders of both floor and nftx 
Lively discussion! 
Interesting takes on both sides.
Blockquote * Awesome update from the team and glad to see more alignment with reaching backing value. I assume the 75M number is because the combined treasuries are 30M and holders get 50% of the supply so it’s a 25% higher than if we reached 1x book value today.
By my maths it’s 5x (500% of) the current combined fully diluted marketcap of the projects and 2,5x (250% of) the current treasury value.
Treasury value 30Mish
FDV 15Mish
How do you arrive at your calculation? Did you remove native tokens?
I agree that generally an even higher hurdle could be better, at the same time, it’s more than 99% of other crypto teams handicap themselves with. Who usually only have a vesting schedule (that is generally shorter). Also, at what point do extreme hurdles become a disincentive to contributors?
If the team is good and true to their vision, they will pay with their blood sweat and tears, if they are not, that’s the risk you would have in any project you invest in. End of the day, you have to trust the contributors or move on. At least this shows they have a strong conviction that the project could be valued much higher than it is today.
Holders get 50% of tokens so that means 60M is the benchmark to reach compared to what our NFTX and FLOOR tokens are worth now when looking at treasury value.
While a ragequit on a high level might seem fair and attractive in theory, I see three big problems with the ragequit option. (Aside from potential legal risks which I assume are myriad, but I am not qualified to comment on)
1. Not in best interest of project in long-term and of average tokenholder
Any direct redemption from the treasury is long-term value destructive to all other tokenholders that want to optimize for long-term treasury value. The average tokenholder that holds for the longerterm would be much better of compounding a positive growth rate from a 30MM treasury versus, say for example, a 15MM treasury. This is also why startups or growth companies would never introduce mechanisms like it, it would be unfair to the average shareholder and hurt the long-term value potential.
It’s clear why it’s attractive to people who bought the token below treasury value with the sole goal of realizing the delta between treasury value as soon as possible, at any cost. However, this is only a subset of (I suspect vocal) people. There are a lot of people that want to see this project thrive in the long-term and want to realize a higher tokenvalue. Either because they had a different entry level, or because they have a longer time horizon, or stronger conviction in the vision (or a combination).
Ultimately it comes down to, do we believe something of value can be built here.
2 Liquidity is part of the product attractiveness
Unlike most treasuries, here the treasury actually serves a product function in the form of liquidity. Removing liquidity will not just reduce the base the treasury can compound from, but in fact could lower the quality of the product and by extension the future revenue potential of the DAO.
3. Ragequits are tricky - the treasury is illiquid
Adding a ragequit mechanism would severely impact actual realized values of combined treasuries of both NFTX and FloorDAO. Coordinated ragequits on such size, for a small selection of NFTs, after removing POL as both FloorDAO and NFTX, will have a detrimental effect on the floor value of holdings and might impact true value of the treasury much more severe than you’d like it to be (theoretical book value based on spot pricing is something completely different than liquidating distressed assets.
To add to this, it’s a very hairy process to begin with as to come to the true fair value, you have to sell everything unless the ones that do not ragequit agree with which assets are and are not sold. Optimistically the ones that stay choose to keep the treasury balanced in the way it is, but given the price impact on certain collections (the ones you hold a lot of, or don’t have any liquidity like the AutoGlyphs from NFTX) that’s not a realistic scenario you can expect remaining token holders that choose to not rage quit to agree with.
You would take an illiquidity discount on every sale, and then would be further discounted by putting pressure on the floor value.
I think it’s easier with certain treasuries, but even for more liquid treasuries you can see how often it has led to arbitrary unfairness (mechanism, timing, period) between groups and how generally, it has always been value destructive to projects as a whole (average tokenholders). Usually it means the end of a project. It sounds fair and easy in theory, but in practice I have rarely seen it work well yet and I suspect for the above reasons thats even more so the case here.
Thats not generally how its calculated. Generally one would take the whole supply to derive a calculation.
The other 50% of tokens could be used value accretive by the DAO, and then you could assume a lower base valuation than 30MM even. That would be a similarly strange base assumption.
If your argument is there shouldn’t be any DAO (controlled by all tokenholders - to be used value accretive) or contributor tokens then I am not sure why you have bought into this project to begin with. This is not an investment fund.
Totally agree with most of your points here on a rage quit not being the most attractive option for reasons named above. Also I don’t think most people (also the vocal ones that bought below treasury value) actually want the treasury to dissolve. Let’s be clear for everyone the optimal outcome is for the product to be a success.
Speaking about average tokenholders, the people talking here are the average (and only) tokenholders that are not team or team affiliate. From the perspective of the average tokenholder the past few years have been quite slow and painful with little traction. The reason for this could be team not executing/pivoting well or could just be a slow NFT market. I see the huge competitive advantage both NFTX and FLOOR have compared to other or new nftfi projects due to the liquidity they are able to offer on for example PUNKS. The harsh reality is that the average tokenholder is currently only here exactly because of that The treasury both for the options it offers from a product perspective but also the safety it offers in case the product or team might continue failing to deliver.
Now we are told time in time out again:
And yes that is exactly what we are saying: We are not sure the team can accomplish something better than treasury value because that has not been the case the past year(s). Why should we expect it to change all of a sudden? Now we are asked to give up our entire claim on the treasury under Project New Wind and ridiculed for not being moonbois and believing. I would like our safety net to remain. As said before your average tokenholder is asked to take all the risk with New Token and has to give away a part of their upside due to dilution on a trust me bro basis. This is not acceptible for your average tokenholder.
Point being most of us don’t want to force a rage quit. Only if the terms offered are not fair and largely skewed towards MC and team this is what the average tokenholder wants. I am willing to invest and willing to see if we can accomplish sth better than treasury value together but not on a dive-in head first basis.
It would be great to first fund project New Wind with opex for a predetermined period and only after we see some substance discuss committing the entire treasury to it. In combination with proposed option structure this would shift risks to a more balanced equilibrium between all stakeholders in my opinion.
It’s very easy to keep holding this DAO tokens and contributor tokens are value accretive oasis in front of everyone’s eyes. However, where is the proof? What value was created for tokenholders over the past years?