Alternative Honeypot Strategy - A Simplified Approach

I agree with simpler strategy, but disagree with allocation. Metaverse is YEARS away from generating any significant revenue, and its dependence on processing power (at a time when chips are scarce) makes it non viable for most of the worlds population at the present - and for years to come. Metaverse investment should be no more that 5%, while NFTs should make up the bulk of our efforts - as they are essentially eth accelerators. Investing in blue chip NFT’s with 50% of the portfolio will be a huge benefit.

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If this is indeed how it does work, than I would agree that not as much is needed in the Spending Reserve. I would still recommend that the Spending Reserve holds at a small allocation, maybe 10%. I still like the idea of using the Spending Reserve for new areas of allocation that Bears propose, such as collaboration ideas, NFTX Index, Floor Sweeping, etc.

Hey adam. Thanks for the well thought out feedback.

We can certainly dial back the allocation amount to Metaverse Content. Again, my reasoning steams from the potential I see in the space. I understand though if others are not as bullish and wish to allocate less. I certainly understand your concerns.

Please keep a couple things in mind:

  1. The Honeypot will generate profits for us, once we put it to work. DeFi Content should give us a steady return of ETH if we choose to stake (which I would recommend). In addition, rebalancing will be needed from time to time to keep the pots at their proposed allocation percentages. This is another part of the strategy that needs to be considered. Rebalancing of those pots could be used to fund a operating expenses account. For that matter, it can be used to fund whatever type of account we as a community vote for.

  2. Worrying about 10-20 years from now is great but this strategy is for the present. I am proposing this Honeypot Strategy to simply get us started. Also, the Honeypot Strategy today will look much different in a year from now, let alone 10 to 20 years from now. We will adapt to the ever changing crypto space to ensure we capture exposure to whatever we vote on as a community. Honeypot Strategy alterations will be proposed and voted on.

I am glad you can get behind this enough to be happy if this were to pass. Depending on others voiced opinions here, I could decrease the Metaverse Content. Maybe I will throw a poll up on this shortly.

Thanks again for the feedback. We do have an excellent community here :grinning:

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Thank you fellow Bear!

Another part of this strategy that has not been considered is what to do when the pot allocation percentages grow beyond what is proposed. Rebalancing of those pots could be used to fund a collaborations account. It could also be used to fund an operations account, such as what I suggested to @adam.

I see value in collaborations and agree that the Honeypot needs some allocation there. I thought once we put the Honeypot to work for a few months, we can rebalance and talk about what funding is needed next. I also wouldn’t disagree with shifting 10% from Metaverse Content to a Collaborations pot.

Glad to hear you can get behind this. Thanks for being active and providing the valuable feedback.

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I would have to respectfully disagree with this. I don’t think the Metaverse is years away from generating significant revenue. People are already making money in the Metaverse by simply buying, holding, and flipping land, playing games that generate revenue, and simply holding Metaverse coins. Games like Axie Infinity, in my opinion, are going to flood the market. If anything, the Metaverse is going to be magnitudes larger years from now than it is today.

Having 50% of our Honeypot in anything is a bad idea. You are proposing blue chip NFTs. Our portfolio than would heavily track the NFT market. In the event of a NFT market downturn, our Honeypot would fall with it. I wouldn’t put any more than 30% into any one pot to help mitigate risk.

Appreciate the feedback all the same!

This is all great, big respect for all the opinions and analysis here bears.

There seems to be general agreement on a few basic principles of the honeypot, and some possible merging of @OverAnalyser’s initial proposal, and @aBinaryMind’s one here.

Just to link the other proposal, here are some of the early suggestions in OA’s breakdown:

So if we simplify and group allocations up to four main areas, I think they could almost line up with the proposal above, give or take…

To OVER simplify - I’m seeing a basic quartering the pot… to each area →

  1. Income Generating ETH / StETH / General Spending Reserve
  2. Other DeFi tokens / Partner Projects / ?
  3. NFT stuff
  4. Metaverse stuff

On the assumptions that we can actually use the stETH for DAO activities and new proposals as the spending reserve, and just pull it out as we need it (perhaps keep a small % of that allocation kept in cold ETH anyway). And that we might adjust these percentages a touch according to our ongoing priorities… (i.e. I’d personally probably bump the ETH allocation up to 30%, and the Metaverse or alt DeFi tokens down 2.5% each, or 5%). This would give us more liquid ETH to spend on future initiatives as they come up…

Are there any other main areas / allocations we need to include? Are these four divisions too simplistic, or do we need to be more explicit?

This is just my buzzed over simplification. So no need to hang on to these suggestions, just trying to see an overall picture, give or take a few %

PS. While I’m at it… I think we should vote these committees into existence one at a time by BB wide vote. I think there is agreement that at least 20% of the Honeypot should go into DeFi activities… We can probably get that vote going on soon and start allocating some DeFi strategies… My opinion would be a committee of 10 bears get elected to manange the DeFi positions… Then we can set-up and vote in the remaining committees as and when there is consensus…

Let me know bears!
Peace!

:mushroom: :earth_africa:

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Also I think $ETH will increase in value just by holding it! I don’t think we need to risk a great amount t if capital in possible risky projects. We are in a bull market after all. Staking $ETH is also a great idea. However, I do like both of your proposals and I think diversification us key. Thank you for all of the effort you put into it!

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This has been a very interesting strategy to see develop from start to finish. I really appreciate how the strategy has matured through community engagement and dialogue.

There is a time for simplicity; initial action, ability to find common ground in broad principals, etc. There is also a time for complexity; more nuanced structure, implementing checks and balances, focusing into more specific strategies, etc. I believe recognizing how to balance the two will be very important moving forward and I applaud that we as a community had the self awareness to tailor this proposal accordingly.

I will vote to support this and personally thank aBinaryMind and everyone for everyone who contributed to the dialogue that brought us here.

Hi Hardly,

I think you are pretty spot on with the pots the Bears want the Treasury to allocate to. We collectively want exposure to DeFi, NFTs, Metaverse, and reserve some for when new initiatives come to mind. This actually makes a lot of sense as Defi, NFTs, and the Metaverse are the three main pillars in crypto today. To have exposure in each is a no brainer.

Yes, we certainly can put the Honeypot into other initiatives outside of the crypto space, such as marketing, merch, and whatever else we can think of. Keep in mind, this Honeypot Strategy is just to get us started. It will be restructured at some point (3 to 6 months from now or maybe sooner) to capitalize on the trends within the space.

I have been adamant on the committees and the need for them. I am currently working with a group to help structure what this might look like.

As always, the involvement and feedback is much appreciated :pray:.

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Thank you for your feedback :grinning:

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Thank you @drmsxmchns.eth.

I agree a simpler approach was warranted. I appreciate all the Bears that brought that to my attention via feedback on my original proposal.

Happy to know I get your support on this :grinning:

I think all of the above is good.

Per Meta exposure. many NFT’s come with META exposure. Kongz VX Mutants/BAYC etc. sure. character, but in many projects meta extension is built in.

So, meta exposure in and of itself is more land. treeverse/dcl/sandbox/cryptovoxels.

best to be nimble in the space in general.

as far as community proposals go. I have set up some rough drafts for a adifferent group (smaller) that I am in. Processing: PROPOSAL.docx…

PER DEFI . DO WE HAVE SOMEONE WHO IS KNOWLEGEABLE? its magic, but only if WE understand. and do it in chunks that dont get eaten away by gas and IL. I, personally, dont understand it well enough.

I think some misunderstanding is this is simply allocating max locations at a start. things can be adjusted.

Are we assuming full allocation at all times per bucket?

Good stuff, Thanks!

It would also be my suggestion to target land and content related to the virtual projects you have suggested. My knowledge in the Metaverse isn’t as good as others in this community. @CryptoChicca seems pretty well versed here. I am familiar with Decentraland and Sandbox. Not so much with the other two.

As it is currently proposed, 80% of the Honeypot is to be put to work by being invested into NFTs, Defi, and the Metaverse while 20% remains as cold ETH. The idea is to take the spending reserve and allocate it as proposals come in that warrant its use for productive initiatives.

I am familiar with DeFi but also not well versed enough to give any direction. I do not have experience with staking. I do, however, know a good deal of DeFi projects that might be worth considering. @ansteadm might know a good deal about DeFi. I am hazarding a guess here from his NTFX Index suggestion.

Thanks for the feedback.

collectively someone knows. this is the power of the cave!

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I think the new proposal is really sound. The only thing that has come to mind is do we need to leave a segment of pie for the royalties aspect? Sorry to throw another spanner in the works.

In terms of the alternate proposal put forward, i’ll make comments based on the listed numbers taking into account feedback left so far.

  1. Metaverse land. I think this is good recognition for the future space. The Sandbox has 166k parcels and Decentraland 90k. That isn’t much considering we have over a 2trillion market cap in crypto, and when this takes off, it will soar. At present, you can get a 2x1 plot in The Sandbox for around 1eth and a 2x1 in Decentraland for around 15k Mana. This is pretty tiny. Looking at other projects and what they offer, really a minimum 6x6 should be considered in The Sandbox which is a minimum size for brand presence. These are being released for 100-150k sand in the new walking dead release. We can however get secondary market sales in other areas, or I could source through contacts land around 25-30eth for that size, as I’ve approached some people for other groups. For DCL, the closer to the centre the more expensive and a small 1x1 can go for up to 100k. So really I wouldn’t reduce this exposure for the honey pot for two reasons:
    A) - we need to allow enough to buy the land
    B) - we need to allow enough to buy MVI or specific project tokens to either stake on the land or hold for future growth
    To support the above, the value of DCL and Sand has gone up astronomically this year and Sand even has doubled since we have been discussing this aspect of the proposal.
    There are more and more people coming into the metaverse and trying to launch different metaverse variants but my views are we stick with the top 2 for exposure if we are looking to organically grow. The benefits being that they are well developed with DCL fully integrated with VR coming in by late 2021 and The Sandbox launching full integration this month. IF we deplete this pot then we will not be able to create a space that people want to go to and hang out and it will be hard to create a virtual world that looks impressive to others who come and visit. If you build it, they will come…

  2. NFTs via investment committee - I like this and its underway. Although none spent, I trust the skills of these people based on @DefiJesus feedback and I think 50eth is a good starting point because this will grow exponentially.

  3. NFT via community - I understand why this is here given the feedback and want for members to have a voice. I think there is potential for conflict in this space, but so long as someone is prepared to take feedback and set up votes then it shouldn’t be a problem. Sometimes things need to be acted on quick though so that is my only concern, the ‘how’ does this get implemented.

  4. DeFi content - happy with this. I don’t know alot about this space other than what I have read in the news and can see there are some potential risks in this space, but I think its definitely an area we should be invested in and defer to more learned on this space. My only comments is that I feel there is less risk in property than there is in defi, so I would stick with the proposal that has been put forth in this alternate without changes.

  5. Spending reserve, I think this is good if its in an eth interest bearing thing. And I guess taking feedback in here to point, if we did this as long as it could be drawn from for the purposes of the spending when necessasry, that essentially does put the defi content really up to 40% with spending being able to be drawn where necessary, just that we are choosing to have 20% in eth, so I think that is plenty and there doesn’t need to be a metaverse reduction. I think given the bucket here and that it will grow in time, it is possible to spend for parnership allocations from this bucket given we don’t really know what that will look like yet. It could be that as we earn additional money we choose a partnership to put some of that towards, but I think that detail can be nutted out in the committee that looks after this space.

I agree with the need to review and rebalance overtime but suggest instead of working out what that may be that we have review mechanism established in this strategy so we review.
a) at 3 months
b) at 6 months
c) annually thereafter (or keep it at 6 months if annually is too long)

I think we need to get started and find out what works and what doesn’t and come back for a quick check in and put a next target to enable people to get working and underway and also let the funds do what they need to do for us.

Appreciate the additional proposals put forward here but I can’t support them at this stage, as it feels like money sitting aside for no purpose - sorry! I think when purposes get established, then we review and reallocate where required. At the moment I think we should not micro manage whether NFT are short or long term, and just ask for the best return. Also, partner projects shouldn’t get a section of the bucket until we have a proposal and know what they are. I think they can be more than covered by spending reserve and if a proposal requires more funds there is no reason we can’t take profits and make another pot if and when it is determined and necessary.

If anything, the one thing we need to cover is the royalties aspect as alot have asked about this, but just taking an assumption that we don’t want to allocate things 100% as then there wouldn’t be enough to cover distribution to bears that hiberbate, but perhaps that can be something to come out of the spending reserve, or make a new bucket from profits. We do need to see things generating before distributing to make sure the project is long term feasible.

Hopefully i’ve covered some perspective and I am ready to vote. Should we take a vote and see where the bears land? If its a strong yes we go forward and if its a no we revisit.

Cheers

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Thank you so much for the detailed feedback!

You certainly seem well versed in the Metaverse. I appreciate all your comments on this.

I think a quarterly review on the Honeypot Strategy would work out nicely. A simple vote could capture everyone’s opinion and we could react on the results. If the strategy is not working, we will rework it. I will add a 3 month review to the strategy when I propose the BIP.

For now, I would suggest we defer the Royalties payout. Let us first grow our Honeypot. I look at this DAO as a small-cap company in its growth phase. Dividends don’t usually happen until the growth phase is over. I think after our Honeypot has grown substantially, we can revisit this.

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yeah i’m happy with that, i was a little concerned about whittling away funds before giving them a chance to grow, but i think if we have the 3 month review aspect as a sense check we can always add it back in. I only mentioned coz i know people have been asking but I also know @DefiJesus has been doing work on this in making sure we get it right so I dont think we should rush it and I think we should let that process happen and when it is ready we address it then. Just didn’t want anyone to think it had been overlooked. So i’m good here.

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Thanks everyone for your valuable feedback and for taking the time to vote on this. At this time, I am going to move on to the BIP Proposal.

@DefiJesus, as per @BuzzedMo’s recommendation, I was to request from you a BIP number from this proposal. Once I have that number I can move on to writing up the BIP Proposal for this Simplified Honeypot Strategy.

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BIP-003 Is reserved for you my friend

Much obliged. Working on BIP-003 now.

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