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Proposal in Progress

@clayboyn@clayboyn (75)145d

Hey guys I've been working closely with Dave and the team to explore opportunities to better align incentives between the company and DAO while also ensuring that the team's funding needs are met. Dave and I did an episode of People's Guild discussing this topic last night and it should be going live today. We'll also be hosting a DAOn Hall on Friday to answer questions and discuss this proposal with the community before it goes to an official vote.

Here's the current draft so that anyone who would like examine it or ask questions before it goes to a vote can do so:

SPS Governance Proposal - Contract Steem Monsters Corp for Ongoing Maintenance and Development

About

The purpose of this proposal is to explore whether the SPS DAO should enter into an agreement to hire Steem Monsters Corp for the ongoing maintenance and development of the Splinterlands game. This arrangement aims to ensure continued innovation and support for the ecosystem while providing the SPS DAO Foundation with full co-ownership of the Splinterlands intellectual property (IP). Initial discussions among stakeholders have shown interest in formalizing this partnership to drive long-term growth and sustainability.

Proposal

If this proposal passes, the SPS DAO will enter into the following agreement with Steem Monsters Corp:

  • The SPS DAO will pay $2m per year which is a flat daily rate of $5500 per day for a period of 2 years for ongoing maintenance and development services.

    • The DAO Treasurers will make monthly payments in HBD then DEC.
    • While unlikely, if necessary, the SPS DAO Project Manager will work with the SPS DAO Treasurers to determine which tokens are used for payment if the SPS DAO coffers have been depleted of DEC. This may include paying in other tokens, such as HIVE, Ethereum or could require burning SPS to create the DEC needed to pay Steem Monsters Corp.
    • In cases where non-Splinterlands assets are used, Steem Monsters Corp will value those tokens at market value at the time of receipt.
    • In cases where DEC tokens are used for payments, then the price will be determined on a daily basis.  For convenience the DAO may prepay a large amount of DEC tokens, however the daily rate the DEC tokens convert to USDs will be based on the daily rate of DEC/USD for each day.

  • In return, Steem Monsters Corp will assign full co-ownership of the Splinterlands Intellectual Property to the SPS DAO Foundation.  See full agreement here (link to separate agreement will be added after approved by legal)

  • Steem Monsters Corp will be responsible for developing:

    • A new core set.
    • A reward card set.
    • A miniset.
    • Continued development of land features.
    • Multiple new game modes and features.
    • Other items as requested by the DAO, such as promo cards, card skins, and additional features, subject to available development bandwidth.

  • Revenue sharing: The SPS DAO will receive 100% of all proceeds from sales within the game's ecosystem, excluding burns, until it has recovered its initial investment plus 20%. After that threshold is met, any additional sales proceeds will be split 50/50 between Steem Monsters Corp and the SPS DAO.

Notes

This proposal is designed to align incentives between the SPS DAO and Steem Monsters Corp, ensuring dedicated development resources while securing IP ownership for the DAO. Potential benefits include accelerated feature releases, enhanced player engagement, and long-term revenue potential. Risks may include dependency on Steem Monsters Corp's performance and market fluctuations affecting sales proceeds.

Comments · 19

  • @olaf.gui(72)· 141d

    I don't have almost any SPS left, so my vote doesn't really matter, but this is crazy. Many people have been wanting to stop or at least cut the DEC recycling that keeps happening, and this proposal will increase the DEC recycling that much more.

    On top of that, there is a huge problem, and I am certain that even in the best-case scenario, the DAO will lose money. And why is that? Let's say the 120% is fully paid. But that's if we're looking in $ terms. Right now, DEC is almost at 50% peg. So if the DAO were to pay $5500 in DEC to the team today, it would pay almost 11M DEC. This would happen daily, so obviously, the payments would be made in days when it is at peg as well. However, the only times DEC has been at peg or really close have been a few days/weeks before and during the pre-sale of a core set. If we're assuming a 2-year cycle, that's about a month of DEC at peg, maybe 2 months if we're being generous. Sure, it doesn't jump from peg to 50% right away. But how long does it stay above 90% or even 80%? I'm pretty sure it stays below 70% more than 50% of the time.

    Meanwhile, when do sales happen? Most of them happen during the pre-sale, where DEC is at peg. That's when the DAO will be receiving most of the money, but during those times, $5500 will be very close to 5.5M DEC. The end result will be the DAO having less DEC than what it paid.

    Not to mention that this removes any risk for the company. Is there any other company that operates like this in the world? I'm selling all my stuff, but I want to keep it in DEC until the next set brings it to peg. At this point, I don't even know if that will happen if this proposal passes.

  • @femisapiens(57)· 143d

    When it comes to the DAO owning or co-owning the IP, what exactly would the owner be? afaik, the dao can not legally own anything...?

  • @meredorn(63)· 144d

    My main concerns with this proposal are twofold. First, co-ownership of the IP is not the same as full control. If the DAO does not own the IP entirely, this may create future uncertainty and potential claims regarding scope, use, licensing, enforcement, and decision-making. For an arrangement of this size, the DAO should not accept a structure that leaves room for ambiguity on such a fundamental asset. In general, co-ownership of an immaterial asset is not the way to proceed. (legally technical POV)

    Second, the payment mechanism is too weak from the DAO’s perspective. Funding the arrangement through DEC creates obvious sale pressure on the token and places the market burden on the community. In practice, this means the DAO may be weakening its own ecosystem token in order to finance the agreement, which is a serious structural concern, renewed once again. (Same as financing the company with xM DEC for a set as we did until now)

  • @sprstoner(42)· 144d

    Not sure I am a huge fan, though it is probably better than what we are doing now.

    I would like to see the DOA have over 50% of both the company and the split after investment agreement met.

    I would like to see a public audit of the company's expenses.

    I would like the contract/agreement to set terms for a significant bonus to the company if the expenses stay below a certain threshold and the investment agreement is met (DAO paid back plus percentage).

  • @udow(62)· 144d

    I Think that the DAO should sent the Hive-token and BEE-Token first to splinterlands and only afterwards the DEC-token. I think the DAO should keep the DEC as long as there are token like HIVE and BEE in the wallet. With HIVE I mean the liquid HiVE not the HIVE-Poer, so if the DAO need HIVE-Power for ressource credits than the neccessary amount should be kept.

  • @femisapiens(57)· 144d

    I would like to know more detail, cos this is a tad skimpy.

    What is the current value of DAO assets?

    What is the projected return per year to the DAO?

    100% back plus 20% is good, but not stellar, so we need to see that the DAO is clearly becoming wealthier each year.

    Which currency or currencies would the repayments be in?

    Which currencies are worth holding? A basket of eight to ten seems wise.

  • @nullfame(43)· 144d

    What is "the DAO?" A legal entity in Panama? Who are the DAO's attorneys? How would the DAO assert rights over its intellectual properties? I am not sure the DAO has the legal ability to do anything.

    What if the DAO was sued? Who pays the legal bills? Would Splinterlands attorneys handle the case on our behalf? And would they do this in 100% secret or in collaboration with the community manager who can decide what should or should not be known?

  • @davideownzall(74)· 144d

    Co-ownership means source code available? Otherwise it doesn't make any sense spend 2 milions and if steemmonsters Corp dies we have lost everything

  • @rainbowdash4l(71)· 144d

    I think the general principle of the proposal is solid.

    Steem Monsters will not have to worry about being able to continue operations, the community should be getting less sale driven events and more actual development.

    What I would be interested in is:

    • is the 20% premium a fair assessment of the additional risk the DAO is taking? (As in - not doing this but using HBD interest rate as opportunity costs / discount rate - makes this feel a large risk at minimal benefit)
    • how would the 20% be calculated (as in: proposed payments to Steem Monsters is daily - does this mean: total amount payed until new set released = days payed *5500 x 1.2 or does this mean the DAO is expecting to recover 2x $2m x 1.2 = $ 4.8m ? (Might sound irrelevant, but if there is only one sale at mid year 1 - it would result in a poor result compared to just save HBD.)

    Overall interesting!

  • @johnnysniffles(25)· 145d

    Am I the only one who sees this as a major red flag? Maybe I havent looked into it enough but to me it looks like we/ the DAO is taking full risk, worst case the team will drain the DAO assets and the whole notion of "locked up in the DAO" we have heard for years comes crashing down.

    I see no world in which we dont have a major DEC crash and all none splinterlands assets will be drained by the splinterlands team.

    Respectfully please explain how you expect the flywheel to run in this model

  • @mattclarke(71)· 145d

    I like this so far. Keen to see more on this co-ownership of IP. Does this place responsibility for marketing onto the DAO? Costs +20% then 50/50 split is best of both worlds.

  • @keeegs(53)· 145d

    So this is for a 2 year period where one set cycle will happen? What happens after it? A new proposal?

    I think 2 years is WAY too long for a set cycle

    I would also like to know how the repayment is covered? Is it measured in dec or usd or something else? Eg if most of that 2 years dec is well below peg as we are giving it out and then the short time the dao receives it it is close peg how does that work?

    If it is measures in usd then I see that being very bad for the dao. As we would likely give out a lot more dec than we receive back in.

    I would like more clarity on that and the expectations around the set cycle

  • @killians-wrath(35)· 145d

    So what this does is has the DAO keeps the company afloat for the next 2 years as the $2m/year which was recently shared that is the cost of the company's expenses to break even. And in turn the DAO gets shared rights/ownership of the game development code. The team gets a steady stream of recycled DEC if/once the DAO depletes it's HBD assets. And the continuation of this hypothetical idea of a flywheel will not be participated by the team once again...GOT IT! The benefit is the game will be here for at least another 2 years without having to hear about any runway problems. And in the contracted timeframe maybe the DAO can find or attract some outside developers for new game modes/features that the team generally wont have time to do. Unless there is legal reasons the DAO can't outsource the code unless the team allows for it sinces it's a 50/50 split in ownership? I'm not educated in legalities to know how that partnership would work...between the team/dao and dao/outside developers.

  • @maldin(47)· 145d

    Is that 50/50 split after costs have been recouped for the duration of the same 2 years only?

  • @gillianpearce(67)· 145d

    Will there be timelines and deadlines for the things Steem Monsters Corp will be responsible for developing and penalties if those deadlines aren't met?

    For example, if this was already in place, what would be the consequence of land development coming to a halt, as it is now?

    Will the DAO be setting out specifically what we want developed for our 2 mil and by when? How will that work?

  • @mangowambo(42)· 145d

    I think the proposal is still a bit too vague. It mentions things like “new game modes” and “continued development of land features,” but it does not clearly define what that actually includes.

    Right now, the team is usually paid for specific and tangible deliverables, such as developing a new set. That makes it much easier to understand what is being funded and what the team is accountable for.

    With this proposal, that feels less clear to me. If the scope is not defined more precisely, then it seems like the DAO would be committing to paying $2 million per year without enough measurable accountability.

    So my concern is: are we really paying $2 million for ongoing development, or are we mostly paying for IP co-ownership rights that, in practice, already depend on the existing team anyway? In other words, are we paying for real deliverables, or mainly for formalizing a co-dependency that already exists?

    Maybe I am misunderstanding part of the proposal, but that is how it reads to me right now.

  • @oaaguy(59)· 145d

    I think this is an interesting idea for anyone that wanted the DAO to own the code base or for anyone that wanted to encourage more community collaboration.

    But I suppose I’m unclear on what “assigning full co-ownership” means? Usually “Assigning full” means 100% but then adding in that “co-“ makes it seem less clear. (I guess we’ll have to wait for the legal document)

  • @aussieninja(70)· 145d

    It's so hard to know what's real and what isn't around the April's Fools timing. Is there a dashboard or anything with an audit of the DAOs assets?

    The benefit to this arrangement is that it might be easier for other parties to also develop for the game/ecosystem if the DAO owns all the IP and game assets.

  • @splinterboost(59)· 145d

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