Alternative Honeypot Strategy - Let's Define the Foundation

Hello BBH Community,

This post will present an alternative Honeypot strategy to what @OverAnalyser proposed back on August 9th. Before I begin, I just want to thank @OverAnalyser for taking the time to write up such a detailed proposal. Without his proposal kicking things off, I surely wouldn’t know where to begin.

Treasury allocation (or strategy) is, very much in my opinion, a fundamental component to the success or failure of our community. So, let us take a step back and lay the foundation first to ensure we have a solid strategy moving forward.

This Honeypot strategy is comprised of and influenced by:

  1. Feedback from @OverAnalyser’s proposed strategy.
  2. What Bears are proposing in the #gov-proposals channel on Discord.
  3. My own opinion on what I think the Honeypot allocation should look like.

Feedback:

After reading over the feedback, I have noted the following suggestions:

  1. Allocate more than 5% to the Spending Reserve.
  2. Heavily focus on long-term/flipping of NFTs.
  3. Allocate more in Metaverse land, not so much in the fungible tokens.
  4. Buy floor Bears with a small % of the Honeypot.
  5. Allocate small % to BTC to hedge against ETH headwinds.
  6. Launch an NFTX index with floor Bears.

To capture sentiment on each of these suggestions, I read over the replies to each (if there were any) and recorded the number of likes. I understand this is probably a rudimentary way of going about it, however, I used the tools I had at hand. For simplicity, let’s first define Sentiment Points. A reply that is in agreeance or receives a like (heart icon) is 1 Sentiment Point. For example, if someone replied to Suggestion #1 with an overall tone in agreeance, this is 1 Sentiment Point. Likewise, if someone liked the post, this is also 1 Sentiment Point.

Suggestions based off Sentiment Points (ordered from greatest to least):

  1. Suggestion #2 with 6 Sentiment Points
  2. Suggestion #3 with 6 Sentiment Points
  3. Suggestion #4 with 5 Sentiment Points
  4. Suggestion #1 with 4 Sentiment Points
  5. Suggestion #6 with 3 Sentiment Points
  6. Suggestion #5 with 1 Sentiment Points

Sentiment in favor of being heavily invested in NFTs and Metaverse land is strong. In addition, feedback showcased a desire for allocating a small percentage of the pot to buying floor Bears and a need to increase our Spending Reserve. We finish up with lower Sentiment Points on an NFTX Index and even lower Sentiment Points for allocating funds to BTC.

A caveat: Sentiment Points only tell a partial picture. I understand that many might not have voiced an opinion or liked a post on subjects they don’t understand or are simply indifferent to. These Sentiment Points are far from perfect, although I think they capture the overall tone, at least in this context.

Bear Proposals

I have been keeping a close eye on the #gov-proposals channel and making notes on what our community have been actively proposing. The majority of what is being proposed is NFTs, Metaverse land and related content. This correlates with the suggestions’ outcome above. Going off Sentiment Points, Suggestion #2 and Suggestion #3 has implied the Bears want the focus of our Honeypot on NFTs and Metaverse land. I also have seen a few comments on collaboration projects and staking pools.

My Opinion

The way I view ownership of Bears is probably different than most. In my opinion, Bears provide a great way to gain secondary (or indirect) exposure to whatever the Honeypot has invested in. With that in mind, I feel that investments which are outside the scope of obtainability for the average Bear holder should be specific areas of interest. These hard-to-obtain investments can be found in many different places within the crypto space; however, I would argue that most can be traced to NFTs and the Metaverse. For this reason, you will find my Honeypot Strategy heavily focused in NFTs and the Metaverse. The extent of which is similar in degree to that of @OverAnalyser’s.

While I believe the Honeypot allocation should go to these hard-to-obtain investments, I am also a stout believer in hedging against risks and engaging in diversification. I think everyone, including our Honeypot, should hedge their investments against unforeseen headwinds. For me, this hedge can be found in DeFi Tokens and Bitcoin. You will find both having small Honeypot allocations in my strategy.

aBinaryMind’s Honeypot Strategy

As I previously have stated, this Treasury strategy materialized from a combination of feedback from @OverAnalyser’s Treasury strategy, reoccurring proposals in the #gov-proposals channel, and my own opinion of what I think Honeypot allocation should look like. I tried to not let my opinion influence the outcome of this strategy any further than the feedback or the suggested proposals in the #gov-proposals channel did. I am hopeful that this strategy will please everyone to some degree, although I understand that might be asking a bit much.

What I am Proposing:

image

Allocation Reasoning:

  • Metaverse Content at 20%. This is a 5% increase from @OverAnalyser’s Treasury Strategy. Reasoning: my own opinion on the potential for the Metaverse, Sentiment Points on Suggestions #2 and #3, and reoccurring proposals in the #gov-proposals channel.

  • NFTs (via Investment Committee) at 20%. I decided to keep the 30% allocation into NFTs that @OverAnalyser suggested in his Honeypot Strategy. I just broke this 30% into two different categories. Here, we see 20% allocation to the Investment Committee. Reasoning: Investment Committee has been formed at time of this Honeypot Strategy proposal.

  • NFTs (via Community Proposals) at 10%. In wanting to keep with the 30% allocation into NFTs, I would like to propose that we allocate the remaining 10% into community NFT proposals. Reasoning: I have seen countless NFT investment suggestions in the #gov-proposals channel. Let’s give the adamant community members the chance to convince us of NFT projects to invest in via proposals.

  • Income Generating ETH at 20%. This is a 10% decrease from @OverAnalyser’s Treasury Strategy. Reasoning: Sentiment Points of Suggestion #3 suggests a desire to have more of the Honeypot in non-fungible versus fungible assets. 5% of the 10% decrease went into Metaverse Content.

  • Floor Bear Sweeping at 5%. This is a new area for allocation when comparing my Honeypot Strategy to @OverAnalyser’s. The other 5% of the 10% decrease in Income Generating ETH was allocated here. Reasoning: Sentiment Points of Suggestion #3 suggests a desire to have more of the Honeypot in non-fungible versus fungible assets. Suggestion #4 had high Sentiment Points and there has been plenty of Bears who have voiced their opinion in #gov-proposals on this subject. I believe allocating a small amount of the Honeypot for floor Bear purchases has merit. Some uses that come to mind: NFTX Index, reward these Bears to deserving community members, use them as a giveaway/raffle to aid marketing, or just hold them and flip them back to secondary when they appreciate.

  • DeFi Tokens (Small/Med/Large Cap) at 5%. This is a 5% decrease from what @OverAnalyser had proposed. Instead of 10% of the Honeypot allocated to DeFi, I propose we break this 10% up into 5% in DeFi and 5% in BTC. Reasoning: Suggestion #5, while the lowest on the suggestion list above, has been debated on in the #gov-proposal channel. I am also of the opinion that a little Bitcoin exposure can be beneficial to the Honeypot.

  • Bitcoin at 5%. This is another new area for allocation when comparing my Honeypot Strategy to @OverAnalyser’s. Reasoning: Please see DeFi Tokens above.

  • Spending Reserve (as ETH) at 10%. This is a 5% increase from what @OverAnalyser has proposed in his Honeypot Strategy. Reasoning: Suggestion #1 had 4 Sentiment Points, showcasing Bears’ desire to have more in the Spending Reserve. I also agree with those who have voiced 5% in the Spending Reserve is not sustainable.

  • Partner Projects/Collaborations at 5%. This is a 5% decrease from what @OverAnalyser has proposed. Reasoning: I reallocated 5% from this to Spending Reserve. Like @OverAnalyser, I really don’t know what this looks like yet or what kind of price it will demand. I can’t imagine collaborations costing all that much, albeit I do admit I am not well versed in NFT collaborations, so 5% for now seems reasonable.

The Pie Chart:

Closing Remarks

Coming up with a Honeypot Strategy is not easy. Coming up with a Honeypot Strategy that will please everyone is just about impossible. I tried to take the feedback from @OverAnalyser’s Honeypot Strategy Proposal, the suggestions that Bears made in the #gov-proposals channel, and my own opinion to form a Honeypot Strategy we can all get behind. I understand there are going to be allocations some don’t agree on, but I am optimistic that we all will find more that we like than dislike.

I think it is very important that we get a Honeypot Strategy formulated, proposed and voted on, sooner than later. It sets a foundation that we can build on. Once the Honeypot Strategy is agreed upon, we can begin to fill in the slices of the pie. Proposals can come in on Metaverse Content, NFTs (via Community Proposals), Income Generating ETH, ideas on what to do with Floor Sweeping Bears, DeFi Tokens, Spending Reserve, and Collaborations.

Also, keep in mind that whatever Honeypot Strategy we eventually agree upon, doesn’t become set in stone. I would recommend revisiting the Honeypot Strategy every so often and tweaking it, if need be. A simple proposal and vote could make additions, subtractions, or alterations.

I would like to finish this off with a poll. I would like to know how many Bears can get behind this to some degree (either fully or partially) or if they simply can’t get behind it at all because it deviates too far from their vision. I also welcome all feedback in the comments below.

Thank you for taking the time to read over my Honeypot Strategy. I look forward to reading over all provided feedback.

Cheers,
aBinaryMind

  • Yeah, I can get behind this Honeypot Strategy!
  • Sorry, but I can’t get behind this Honeypot Strategy.

0 voters

4 Likes

First of all, thank you @aBinaryMind for putting this together, dedication flags all over! it’s nice to see some data on top of @OverAnalyser’s data, who’ve made such an astonishing work, thanking him for that too.
I’m new to de-fi, nft, metaverse, all other sh!t like liquidity pools and tokens… Wish to know more about it all but not the best time, as we’re still working on our beloved bears.
That said, I do have feelings (let’s use that exact word) about where my money is being invested at.
All I have is ideas.
Ideas like assembling committees for each investment department and distribute 50% of the honeypot by them. Other 50% would be staking and all that as Eth is going up.
I see no advantage on spending DAO’s money to buy floor bears, only way I can see it is if Tropo and Gfunk agree that buying floor bears will be a good long term investment (being obvious here x)).
Also, not sure if is a good idea to allocate a % for the community to invest in nfts… I mean, we have 2 beasts taking care of it, community would just make a lot of bad choices imo, that’s why we reached out to Tropo and Gfunk first place, right?
I would like also to trust someone on the metaverse deal, unfortunately I didn’t put my time to learn more about it, that’s why I would like to see ppl leading different committees and putting up ideas where/how they’d invest their share, before actually determine allocation %
Hope this makes sense, if not… Blame it on how buzzed I am rn :smiley:
I still haven’t voted, but I will

2 Likes

Thank you for the feedback :smiley:

I understand the concern with picking up floor bears but I see it as a great way to pick up something cheap and flip later for profit. If we believe in this project, believe in the community, and the leadership, we should expect organic growth via rising floor price. Most projects have seen good organic growth for these reasons. In my opinion, a project that buys back its own artwork also looks good. It can be looked at as if the project it taking a bet on itself. No project is going to do that unless they feel confident on its outlook.

I respectfully disagree with your comment on the community being unable to make smart choices when it comes to investing in NFTs. For one, anyone who proposes that we buy into a project would need to garner enough votes to do so. They would need to convince the community why we should buy into it. The very nature of this governance system acts almost like a hedge against poor decisions. If someone proposes an NFT project to get into and enough vote on it and it passes, it will be a good project. From the little bit of time I have spent talking with people in the channels on Discord, I have quickly realized that it is filled with smart people. I am sure there are plenty of us well versed in NFTs to make great suggestions. Trust the community.

3 Likes

I agree that we have to formulate a strategy for the treasury and vote on it as soon as possible. I like the focus on NFTs and the Metaverse, because these high quality projects are difficult to obtain as a single investor and ideal to acquire as a DAO. I think buying floor bears can be done for a good reason, especially as the DAO then acquires IP rights and can create a comic, a book or even YT clips creating adsense income for the DAO. More rare bears can license their bears to appear in the project. (who would we pay for these kind of upfront expenses?)

I support the vision that bears start to reflect the value of the treasury. Therefore, we must think about ways of securing our stake in the treasury in a formal way. Will this be build by contractors or internally or will we use projects like fractional.art? A study of how other DAO’s set up the financial structure would be instructive (Beanie capital, BAYC, …

1 Like

Thanks for the feedback.

You bring up some good points. You are suggesting great ideas on how to fill in some of the slices of the pie. I hadn’t really thought of fractional art but that is an option for sure. I imagine we would appoint individuals at some point to do just as you suggested: look into other DAOs and/or community driven projects and see how they have structed things financially.

Looking forward to getting some of those pie slices filled once we get a good foundation.

1 Like

Great work @aBinaryMind, I am so grateful this community has people like you and @OverAnalyser willing to put in the time and effort to make this DAO successful.

Please understand if we end up agreeing to this distribution or something simular I would definately be bullish on the DAO long term.

That said, personally I believe with the proposed strategy are funds would be spread too thin, negatively impacting the potential upside in areas the DAO could be incredibly successful.

I did not buy bears to get BTC and ETH exposure. The DAO offers no advantage over buying BTC, ETH and staking it myself.

I would prefer a distribution nearer to,

  • Metaverse content/plots 30%

  • NFTs (via I.C.) 30%

  • NFTs (com’ proposal) 10%

  • Defi tokens 15%

  • Collaborations 5%

  • Reserve 10%

Honestly the actual % of each of the above pot is less important than ensuring we narrow down the number of pots we are tying to fill. I suggest keeping our funds, our skills and our time, focused on these areas we can potentially have larger successes from. This is more likely to provide all bears a profitable return.

5 Likes

Great work @aBinaryMind, i only went with the votes at the time and my personal bias. I’ve certainly not been into the weeds of the discord much recently, so I’ve not seen what people are doing there.

I would agree with @theJE11YF15H when they say that reducing the number of pots may be a good idea, 5% / 12.5 ET really isn’t that big a pot to work with and we can soon spend lots of time discussing it. I would disagree with respect to ETH / BTC, I think keeping a liquid reserve is a good idea incase we get a NFT bear market (of the bad king).

I would also lean towards @ansteadm 's suggestion to floor sweep and fractionalise with a AMM pool for some bears (can we do it on a L2?). Giving people the option to trade in and out may be usefull.

2 Likes

We would be able to fractionalize a bundle of NFTs on Fractional, and that ERC20 contract would be then able to live on L2.

It’s super easy to get it supported on zkSync. zkSync doesn’t support gen purpose smart contracts, but allows people to provide liquidity to ParaswapPools to have atomic swaps. Their VM will be live in a couple months most likely.

To add to Optimism there is this guide to add a custom ERC20 token: optimism-tutorial/standard-bridge-custom-token at main · ethereum-optimism/optimism-tutorial · G

For Arbitrum: Token Bridging · Offchain Labs Dev Center

After creating a bundle of NFTs, we can just have the DAO sweep the floor, add those purchased NFTs to the vault, increasing its’ value, and bringing more liquidity/trades to that AMM pair. This would also help to bring more liquidity for our bears.

If we want to get it supported on some sidechains, I can intro the team to Polygon to get it added to their PoS Chain. It needs to be mapped to do so. From there, you could have liquidity added to Sushiswap or Quickswap. I know the Quickswap team, but I think a collab with sushi would be cooler

2 Likes

Thanks for providing some very detailed feedback.

You bring up some good points. I agree with you that the DAO should be investing in areas that are unobtainable for the average Bear. My sentiment on this should of been apparent enough in the post. With that being said, allocating some funds into Bitcoin and ETH allows to grow the Honeypot steadily while giving us that liquid reserve, as @OverAnalyser put it below.

Like I said in the post, it will be hard to structure a Honeypot Strategy that we all can agree on. It is good to know that if this Honeypot Strategy goes through, you would be bullish. Thanks again for the comment.

1 Like

Hey @OverAnalyser! I am glad you stopped by to drop a comment.

Thanks again for kicking this important topic off. I am optimistic we can zero in on a strategy we all can accept and build off of.

The number of pots is a bit high, I do agree. This was because I listened to the feedback and the Bears on Discord. I was trying to accommodate everyone’s suggestion where each suggestion had enough merit behind it. This was extremely difficult to do.

Glad to see we agree on ETH and BTC. Do you feel the allocation amount is appropriate?

Thanks again for chiming in :smiley:

1 Like

Personally, I don’t think we should have any BTC exposure. Just focus on ETH and NFT assets. If you need liquid assets, just use ETH, or interest bearing versions of ETH.

Neither should we have Defi asset support- though if people want that to have different exposure (e.g. through DPI), I can understand. I just think we should focus solely on NFTs/Metaverse or this will get too complicated.

Keep things simple, start small and build from there.

2 Likes

Hey @ansteadm. This sounds very interesting but I will be honest, I don’t know much about it. The 5% allocation to Bear sweeping could easily aid in this. As I suggested in my reasoning, sweeping the Bears could be used for all sorts of things. Their is a lot of good reasons to pick up our Bears at floor price.

Thanks for the comment.

1 Like

This is awesome - @aBinaryMind thanks so much for this version. And thanks to everyone for thier input. This is exactly the kind of brainstorming we need and shows that through decentralized planning we can (hopefully) make something really special.

I like the new propositions, but I also agree with some of the points raised.

  1. Too many buckets. I didn’t realize it before, but its so true. We have too many things going on. We should start as simple as possible and then allow it to get more complicated as the DAO finds its footing. My vote would be to keep maybe 5 or 6 buckets total. Maybe 5 to keep it clean.

    • Metaverse
    • NFTs (Investment Committee)
    • Income generating ETH
    • DeFi Tokens
    • Spending reserve

Once we start some things in motion we could divide those buckets a bit (ie have Community Proposals added to the NFTs). Just a thought. (Side note: I am OK with whatever percentage allocation that is decided. Its going to be pretty hard to make a perfect strategy in that sense and we should be ready to adkust accordingly.)

  1. Committees. 100% agree. For example, I think @ansteadm should head the DeFi token committee (because I have no idea what 75% of what he wrote is about).

I guess I only have 2 points making the numbered list seem a bit unneccsary. Oh well. Cheers.

4 Likes

Thanks for the response. I am happy to help. I feel a strategy of sorts is important moving forward as it sets limits in all the intended investing. With no strategy in place, we could find ourselves in a scenario where we spent too much in one area and wished we hadn’t.

The comment on too many buckets does make sense. Like I said in an earlier reply, I was simply trying to accommodate too many suggestions. Perhaps keeping it generic like you have suggested makes sense. Maybe we are over complicating this. I could consolidate what I have suggested. Perhaps I will do that and take another poll in a few days.

I 100% agree on committees. I think once we have a Treasury Strategy in place, we could create committees focused on each slice of the pie.

1 Like

Wow! Such incredible talent and detail, thank you both OA and ABM for getting this all together. Really appreciate it. Agree lets get a strategy in place so we can move forward. Plus this market moves and since we were talking about DCL and the sandbox, their tokens have both risen with sandbox token almost doubling.

Some thoughts after reading through:

  1. I like N00blelands suggestion of the pots - keep it simple, less is more.
  2. A plan for now is good. Things change and we know this crypto game changes, so let’s not plan for forever, just for the next 6-12 months and then have set dates for review and change if appropriate. Of course we can review anytime, but this is just a helpful reminder to ensure we are still relevant with community feedback and market climate.
  3. I like the idea of forming committees and people assisting in different areas where people have skills. I found Marks comments most intriguing and I know nothing about that space, but it sounds very promising. I agree with N00bleland that some of the main pots can be split within those committees and this would help the ebb and flow of demand and trend.
  4. I agree with the comments about BTC and ETH as I hold those too. I do like the idea in investing in what I don’t know about or can’t attain. Power in numbers. We did well with the fractional punk. I think we do need balance and diversity I agree there, but I do like the exposure to Defi and CRV stuff as I have no idea about that stuff, so that does excite me.
  5. 100% agree on increases for NFT and Metaverse and placing more % funds here. I think that’s a massive future and we are like at $10 bitcoin stage at the moment imho, when I see openseas almost cracking 3bil in sales in Aug and the % growth since Jan, it excites me for our future. When you look at 90k DCL land and 166k sandbox land thats an incredibly low marketcap and sandbox launches in September, so the future is only just starting for those places, and it allows us to connect with other NFT communities and raise our profile.
  6. I think 5% is too much for sweeping the floor. I am not opposed to floor sweeping if its for promotional purposes and raffles / giveaways on occasion but think organic is better. In other projects I am in when floor sweeping has occured, more NFTs have simply been listed at the floor price so it hasn’t achieved the goal of raising the floor. To raise the floor, it would be better to offer incentives to people to delist their bears for sale or competition for those that list above a certain price. For example, spend the 12.5 eth and buy a few good NFT for 1eth each on new projects and have a once a month offer for those that delist their bears and they can win a NFT. We are getting heaps of new people joining, but the problem is the undercutting, so we incentivise the higher listings to increase the floor. I think floor sweeping is just a bandaid and I would rather find a more sustainable solution.

Thanks for listening and again, incredible work. I am not opposed to either strategy. I have opinions either way, but no massive deal breakers. I think just simplify and lets get the vote happening so we can move forward. Sorry for the long reply. Hope it helps.

3 Likes

I appreciate the very long and detailed response. I like most of these points you have brought up.

I think the ‘keep it simple’ rule applies here. I can get behind this. You bring up a good point that the crypto space is constantly changing and evolving. Without a doubt, we will need to adapt to that change and adjust our strategy accordingly.

The idea behind floor sweeping the Bears is not necessarily to rise the floor. In the context of what @ansteadm has suggested, these floor Bears would be used for something else entirely. I also like the idea of holding them and flipping them back to secondary when the project appreciates or rewarding them to community members or aiding in marketing (raffles).

I appreciate the feedback.

2 Likes

second this as well

extra second this, which is why I’m moving forward with the MVI proposal

I personally don’t care for pet rocks. I don’t buy gold in meatspace, so why buy gold in the metaverse?

3 Likes

Hey BuzzedMo! Thanks for the feedback.

To your remarks:

  1. I agree with this suggestion. Most of the feedback has suggested this. I plan to provide an alternative and more simplified strategy this weekend.

  2. I also agree with this. In my proposal, I suggested our strategy would need to change, every so often, as a result of the ever changing crypto space. I will take a look at your MVI proposal.

  3. Bitcoin is just a way to diversify and hedge against risk. I am a believer in not throwing all your eggs in one basket. In our case, that would be to have everything in Ethereum or Ethereum related assets. With that being said, I understand why some would be opposed to holding Bitcoin. We all have our opinions.

Thanks again for the feedback.

1 Like

despite my opinion on this I certainly voted yes on your poll. In the end this isn’t up to only me so that’s a good thing :slight_smile:

1 Like

That is the beautiful thing about this governance system :smiley:!

1 Like