Hibernation, Honeypot Distribution and Voting Amendments

Hibernation, Distribution and Voting Amendments

Status: Draft Proposal

Co-Author(s): @Mesk85 @DefiJesus @n00bleLAND and @CryptoChicca

Created: 6 December 2021

Implementation: Immediate

Buzzed Summary

This proposal is to postpone the implementation of bear locking (‘hibernation’) and distribution of honeypot funds for reasons described in here.

Abstract ‌

Buzzed Bear Hideout is a unique brand that establishes itself with a DAO. Its original intention was that every bear gets a vote (“1 bear = 1 vote”) and that there would be bear locking and distribution from the honeypot to all bear holders.

Of the original intention for Buzzed Bears, neither locking nor distribution has been finalized, albeit there have been questions raised in discord and the governance hideout, to move these aspects forward.

In respect of the distribution to bears, the general consensus from the community has been that they want to see the honeypot grow before any distribution, so that when distributions commence, they are self sustaining and will not erode the honeypot, thus enabling it to keep growing…

DefiJesus recently held a Q&A with available bears around these two topics, asking what bears would like to do moving forward. There was a question raised as to whether a distribution of profits would trigger SEC legislation from some bears. The general view of those on the call was that Buzzed Bears should get legal advice before distributing to bears, given the large majority of US bear holders, so that it stays within laws to which it is accountable. It is proposed therefore that there be no distribution to bears until legal advice from a proper counsel like Fenwick (who are providing advice to other NFT groups like BAYC) is obtained.

Finally, following the QnA, two proposals have been put up in the hideout around the matter of bear locking. Firstly, a summary of the QnA (Hibernation - Next steps) and secondly, a proposal to move forward with the bear locking (Hibernation - locking your bear). There has been considerable feedback provided both formally and informally across discord and the hideout, and it has become clear that whilst the intention of bears is to hibernate, the technology to do so must be sustaining, and the most appropriate course of action is to move Buzzed Bears to locking and layer 2 in one transaction, meaning all future transactions will be with little to no gas fees. However, given there is no market identified leader in layer 2 protocol at this point of time, the most sensible approach is to postpone the locking until such time as this occurs.

This proposal therefore is :

  1. There will be no bear locking at this current time
  2. In future, bear locking will be proposed when a layer 2 protocol is determined suitable to ensure success of the Buzzed Bears brand and provide a path forward where gas is not a prohibitive requirement for bear holders.
  3. Legal advice will be sought regarding distribution to bear holders prior to the establishment of any distribution proposal. A distribution proposal should come back through governance and BIP at a later date. Payment of this advice shall come from the spending reserve and is undetermined at this point in time.
  4. Reduce the quorum of voting in BIP to 8% of the total number of bears, until such time as bear locking is implemented.

Motivation

  1. Addressing requests around two key elements of the advertised Buzzed Bears project
  2. Obtaining legal advice to ensure BBH DAO stays within laws to the fullest extent possible to protect those signing transactions on behalf of BBH DAO and also the community in receiving any funding from the honeypot
  3. Listening to concerns raised by community members and provide a pathway forward to address those concerns
  4. Providing a voting structure that supports those bears that are invested in the DAOs success

Specification ‌ Overview ‌

Bear Locking & Gas

  1. No locking to occur at the present time
  2. Proposal for bear locking to be revisited when a suitable layer 2 solution is cemented

There has been considerable feedback received that the cost of gas is prohibitive for both small and whale holders of Buzzed Bears. Given Buzzed Bears are on the Ethereum network, there is no way around this, while on layer 1. Therefore, there will be no locking implemented at this point in time, as the intention is to benefit bears, not hinder growth. Given the feedback around the price of gas, it has been suggested by many to move to a layer 2 solution. At the moment, there are a number of layer 2 vying for the prime position, and it is unclear the best avenue forward. Therefore, the proposal is to postpone the bear locking until the layer 2 solution is more clear. Then, a proposal will be revisited for locking of bears, and moving to a layer 2 network, in the same transaction. It will be proposed that the honeypot cover the cost of this transaction for bears holders.

Do you support postponing locking as described herein?
  • Yes, postpone locking until layer 2 solution is identified as a market leader and bridge collection then
  • No, I want to bridge the collection to an existing layer 2 now and commence locking and I will comment which one below.
  • No, I just want to lock my bear now and I don’t care about gas costs

0 voters

Honeypot distribution

  1. No distribution until legal advice is obtained and a pathway forward determined

At this point in time, the majority of bear holders have expressed a desire to continue to grow the honeypot. BBH DAO will seek legal advice on the distribution of honeypot to bear holders, to ensure it is operating within applicable laws. BAYC have recently sought advice from Fenwick lawyers for the implementation of a token system and Buzzed Bears are awaiting a meeting to progress an answer to this distribution question. Buzzed Bears will seek advice on the best method to move forward, and will report back to the community on this once it has been obtained, with a pathway to implementation. By the time the community seeks to distribute, the answers for this legal question should be well known.

Do you agree with this proposal to postpone honeypot distribution?
  • Yes
  • No

0 voters

Modified voting rights

  1. Ensuring sufficient quorum for voting by reducing the 10% requirement to 8%

Currently there are not many bears that participate in voting, and it is a struggle to meet the 10% voting requirement (1000 votes). However, of the proposals presented, they are more often that not voted in one direction close to if not 100% of votes. Therefore, to reduce stress on those active bear members who are voting, it is proposed to reduce the 10% voting requirement to 8%. This will mean that the voting requirement is 800 votes. This will ensure those bears invested and committed are able to progress proposals for the benefit of the DAO with less stress. A review of the voting quorum should occur when bear locking is implemented.

Do you agree to a reduced quorum for voting?
  • Yes
  • No
  • I don’t vote in snapshot so I don’t feel I can comment either way

0 voters

Rationale ‌

  1. Implementing bear locking will provide enhanced benefits to bears, but only when it can be done through a mechanism which doesn’t impact bear holders. The layer 2 solution makes sense, but it is sensible to determine the market leader and move in that direction.
  2. We have people working daily on the DAO that live in wildly different countries with different legislations but a majority is concentrated in the US. As community members take up more responsibility they also take on any extra possible liability. So in order to make sure we keep our bears protected and the future of our community protected we must show our willingness to abide by the applicable laws and consult with industry leading law firms like Fenwick.
  3. There is generally a scramble to get voting for proposals even when they pass with 100%. This creates stress on members, and doesn’t help facilitate good DAO outcomes. Reducing the voting quorum will enable proper consideration, and rigour but with less stress. More voting by bear members is welcomed and recommended also.

Technical Specification ‌

  1. Wait for appointment with Fenwick legal counsel (or suitable alternative) regarding DAO distribution. Payment for this legal advice and appointment to come from the spending reserves bucket of the honeypot.
  2. Continue to review layer 2 solution for the moving of Buzzed Bears for locking.

Test Cases ‌

There are many groups that have both locking and tokens/distribution. Many are doing so without consulting legal advice. BAYC are in the process of obtaining legal advice with the view to implement a token. This will be a test case as they are consulting Fenwick. BBH DAO will seek to get legal advice from this firm to determine the steps forward.

Copyright ‌

Copyright and related rights waived via CC0.

3 Likes

Thanks for putting this together and I think that in general its the smart move. I do think that we should not lower the voting quorum however. We have passed plenty of proposals, so I don’t think that lowering it will actually be wise. It feels like a way to pass lots of things with just the largest holders. I vote to keep it at 10%.

1 Like

Yeah they generally pass, but I have had to list 3 proposals twice coz we had 100% votes but just didn’t hit quroum. That was the rationale for the suggestion. But, I do completely understand about the whale voting aspect, and it is a very valid point. Let’s see what everyone thinks.

What will define a solution as the L2 market leader?

This just feels kind of nebulous to me, as I think polygon is already the de facto L2 market leader. I understand the hesitancy around poly, especially since there are so many scams involved with airdrops on poly, and I know that there are some valid concerns (and technical challenges) with what happens to the L1 bears in this scenario that we need to hash out.

With that being said, staking bears will show long-term commitment and could have additional benefits like enhanced APR and/or voting rights (which might render the reduction to 8% quorum unnecessary).

4 Likes

This is a very well thought out proposal. Although I am not to active in the Discord, I do make an effort to read the proposals and vote on snapshot. I believe that lowering the % required is in the best interests of BB.

I am located in the UK so have slightly different legislation to deal with than the USA Bears. As far as I am concerned, Buzzed Bears is a long term play for me, I have no worries at all regarding distribution to holders. I completely agree that seen as the majority of holders are based in the US, it is in the best interests of the DAO to spend the time and seek the appropriate legal advice regarding any distributions.

1 Like

@DefiJesus csn you please add your thoughts on this. I love polygon personally but my understanding from talking with DeFi is that it is it’s own chain so our bears would be registered on polygon not ethereum. From a safety for the future ethereum has a stronger stay given its history and matic is a newer chain. That being said, DeFi has suggested some L2 on Ethereun whereby if they go kaput our bears are still registered on ethereum. I believe he feels zksync is going to be the best but it’s not clear atm. Could we move to that and then change later? I’m not sure. I’ll let @DefiJesus correct it confirm what I’ve said and add his feedback. Thanks great question.

1 Like

That is correct chicca. I might be wrong but polygon doesn’t share security properties with ethereum. zksync on the other hand is settled on the ethereum blockchain so even in the event of zksync disappearing, there is still a record of ownership on the ethereum blockchain.

1 Like

i think we should just convert what we want to pay out to hodlers in matic and send it off to hodlers just tell them to add the matic network to their meta mask and make it a claim system where they come and claim it. i mean while hibernation is happening on the matic network it would be perfect as they would need a tiny bit of matic either way to pay the fee to make hibernation happen this way they know it not a scam token for sure as it will just increase the balance of the matic they already had
sorry i hope i dont sounds dumb just my 2 cents.

1 Like

Definitely not a dumb idea, but by doing this then you still run into the same problem of issuing dividends, thus making the bear a security.

have moved this proposal to snapshot for voting bears

btw we could do something like if we claim all of our reward (or above a threshold of token we want to claim regarding the earnings or total reward we have) we need to burn a bear?

it makes the bears collection deflationary but does not remove any of the security aspect :slight_smile:

(inspired from project Cryptozoo.co)