Hibernation - locking your bear

Status: Draft Proposal

Co-Author(s): DefiJesus, Mesk85 & CryptoChicca

Created: 3 December 2021

Implementation: As soon as practicable following successful vote

Buzzed Summary

This proposal is to implement bear locking (‘hibernation’) and describe the benefits of this.

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.

Since launch, there has been a general consensus by bears, that they want to see the honeypot grow before any distribution, so there is a decent amount in the honeypot before any distribution erodes this, so that the honeypot can continue to grow and that distributions can be self sustaining into the future. Having said this, there has been a continued request to ‘hibernate bears’, so there are less available on the marketplace for sale.

DefiJesus recently held a Q&A with bears, asking what bears would like to do moving forward, as there was some concern with distributing profits and 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, so that it stays within given laws, given the majority of bear holders are in the US. 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.

This proposal therefore is to :

  1. Lock your bear and explain the specifications and benefits of this
  2. Seek legal advice 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 to come from the spending reserve.

Motivation

  1. Making Buzzed Bears more scarce through bear locking
  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. Aligning voting rights to those interested in the DAOs success
  4. Providing benefits for locking bears

Specification ‌ Overview

What does this proposal mean for Buzzed Bear Holders?

  1. Implement bear locking with benefits for locked bear holders and modified benefits for unlocked bears
  2. Have no plans to distribute revenue until BBH DAO has obtained legal counselling

What are the specifics of locking your bear?

  1. Timeline for locking

You can lock your bear for an indefinite period, however, you may remove your bear at any given time, and only need to wait 7 days for your bear to be returned to you. While your bear is in locking, you will receive a modified NFT, that will age, in line with the period of your locking. The reason for the 7 day cool down on locking is to ensure that voting is in line with intentions, and so that those bears that vote on a proposal are committed to its outcome. It protects bears from bad bears putting up a proposal and trying to exit and having no intention on being committed to the proposal outcome.

  1. Booster of 2x for locking

From commencement, your bear that is locked will commence a count up timer, for the period that it is locked. It is proposed to have a boost of 2x your bear, so that when you hit the 1 year mark of having your bear locked, you will have essentially accrued the time value of having 2 bears locked. At the moment, given BBH DAO needs legal advice, there is not proposed to be any payment, so this is just a 2x benefit of a future potential outcome. There can be no promises until legal advice provides the necessary direction.

  1. Modified voting rights

You must lock your bear in order to have a right to vote in the DAO. If you do not lock your bear, you will no longer receive a right to vote in the BBH DAO.

Currently there are not many bears that participate in voting, and it is a struggle to meet the 10% voting requirement. Providing for only locked bears to receive voting rights, ensures alignment of voting to those committed bears who are invested and committed to the future success of the BBH DAO.

  1. When payment from honeypot?

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, and by the time the community seeks to distribute, the answers for this legal question should be known. So, locking your bear will set your timer going, so that at a future date, if your bear remains locked, you are already accruing benefits backdated to when you commenced locking your bear.

  1. What happens if I remove my bear from locking?

If you remove your bear from locking, you will lose your time lock benefits, and you will need to start again if you want to lock your bear at a later date. If there has been no payment of any amount from the honeypot when you unlock, then you will be starting from scratch on your timer if you relock. This is a fair way of enabling people to remove bears from locking if they need to access liquidity, but balancing with those bears that are fully committed to the DAO and wanting to have a longer term investment. Therefore, you will not get locked for 1,2,4 years, but you will have the option to remove your bear, noting that it will remove your benefits, so it is your choice to lose your accrual.

  1. Is there a cost for locking?

Yes, you will need to pay gas for each bear that you lock. There may be a slightly reduced gas fee for locking multiple bears at once. There will also be a gas fee to remove your bear from locking.

Rationale

  1. After bear locking gets implemented the voting in the DAO will be modified. This has a few benefits:

  2. Even without revenue sharing, bear locking aligns the incentives of the voters by making sure they are affected by their choices

  3. People that don’t want to have anything to do with the DAO or be liable by its actions can simply hold an ERC721 token (JPEG) and be sure it is only a piece of generative art (locked option 1)

  4. 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.

Technical Specification

  1. Create and implement a locking system for bears
  2. Wait for appointment with Fenwick legal counsel regarding DAO distribution. Payment for this legal advice and appointment to come from the spending reserves bucket of the hoineypot.

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.

6 Likes

Couple of questions here:

  • What is the maximum aging that your substitute NFT can undergo? One year? More?

  • I assume that the aging will stop if you unlock a bear, but will it then restart at that same point if you re-lock it (or if someone were to buy it and then immediately lock it again)?

  • Does the multiplier cap after a single year? Or does it continue forward (e.g., 3x after two years, etc.)?

I’ve been thinking about this a lot and I’m not sure of the benefit of locking. I get the points that are raised here, but I don’t think it really adds much value the project. It kind of feels like locking for the sake of saying that we offer locking. The structure feels a bit thin and not fully fleshed out at the moment.

I had before stated my support for something like this, but seeing it written out makes me think that we really should be issuing a token. I realize there are legal concerns, but if other projects that are gaining legal advice from the same firm that we are talking to (Fenwick) are creating tokens (BAYC) then it seems like they would offer us the same advice. I think its worth revisiting the notion of the token.

5 Likes

Just to be clear, I don’t think that the thought of staking and a token are mutually exclusive - locking a bear for different set periods of time should vest different APRs of that token if we use a combined mechanic.

1 Like

Hi Bears :blush:

If we start with what we know:

  • As we speak, distributing revenues raise legal issues in few countries
  • USA seems to love controlling the population revenues and a change seems unlikely even if still to consider :slight_smile:
  • No one can predict the future even a +1000$/hour lawyer
  • Opensea is not verifying NEW “revenu generating” collections and even locking those clearly advertising revenu generating ( DAO Turtles case )

With all this and regarding all the great work you’ve been doing, it is questionnable whether or not the revenu generating aspect of BBH as initially considered should be implemented or not and whether or not it could add value over either the short or long term regarding what we know as we speak.

  • I’d say that long term believers won’t need rapid revenu generating collection (except if some mortgage their houses to buy BBH… :grinning_face_with_smiling_eyes:)

distributing revenues will be like distributing shareholders a dividend
dividends are based on net profits.
Considering what’s best for the community as a whole, holders might consider to wait see BBH to generate stable revenu before considering taking profit & distribution?

I like the idea of a timer.

this is a great way to implement staking and rewards while not having any crypto token reward involved.

I wonder the following with what you have in mind:
Will BBH Holders be able to see their timer count?
would be nice + some rewards, perks, things of any kind could just be based on that number?

To start from scratch if unstaked adds an additional flavor to the staking game!
with that said, the economy behind the reward would be first based on long term staking (at least until further implementation of the reward system)
so have you considered any perks, rewards which are not token related which could benefits the holders?

PS: I’m here since mint but this is the first time I take the time to write something :blush: wish you all a great day/night

1 Like

really good feedback here… I am going to get a variant proposal up taking into account this and the other feedback, as I feel we need an interim solution. Will be up soon…and glad to see your first post, and so detailed, really appreciated!!! We have some work to do on this staking element.

1 Like