SIP | Perform a Token Swap between SuperRareDAO and BottoDAO

Author: choobie, Project Lead at Botto

Status: Sponsored | Consensus Passed

Type: Governance

Implementer: SuperRare DAO

Sponsor(s): John Crain

Link to Temperature Check Poll: Discord

Created Date: 02/06/2022

Summary: SuperRareDAO should perform a token swap between SuperRareDAO and BottoDAO to support a mutual partnership around developing artists on SuperRare and diversify one another’s treasuries.

Abstract: Botto is a decentralized autonomous artist (DAA), connecting Art (NFT) with Capital (DeFi) and Community (DAO). Botto works in collaboration with a community of stewards who vote on its generated imagery to decide what is art. This community of stewards is collectively known as BottoDAO.

Since Day 0, SuperRare has been home to Botto’s art and success as a DAA, and its community of collectors have driven it to become an All Time Top-10 artist on SR. Currently, Botto’s artwork proceeds pay for Botto’s costs, including the creative labor of its voters. Botto uses the votes to evolve its aesthetics and develop as an artist over time, with the aim of becoming the first world-renowned DAA. Botto’s decentralized economy of incentives that sustains its autonomy is enabled through the $BOTTO token. The token gives holders the ability to vote and govern Botto.

This proposes that BottoDAO and SuperRareDAO perform a token swap of their native protocol tokens. Such a token swap would enable both DAOs to continually interact, engage, and align incentives with one another in both an immediate time horizon and beyond.

Motivation: SuperRare and Botto are both pursuing missions of progressive decentralization, collective creation, and distributed ownership. Both SR and Botto are motivated to further cultivate decentralized approaches to art.

Community is central to this - with both DAOs carrying conviction that artists, collectors, curators and participants are central to our paths forward. A token exchange facilitates this conviction, allowing progressive interplay between both DAOs to pursue their aligned missions through mutual governance rights.

For $RARE holders, this also means directly contributing to, and being rewarded by, training Botto’s development as an artist.

Specification:
Technical specifications include facilitating a one-time transaction on each side of the respective DAO multisigs, where:

  • 1,000,000 $BOTTO are sent to the SuperRareDAO Treasury Wallet
  • The 30-day volume weighted average price is used to determine the equivalent amount of $RARE to be sent to BottoDAO’s Treasury wallet
  • This 30-day volume weighted average price is calculated at midnight Eastern Time after the end of each DAO’s respective snapshots
  • USD notional value is not considered
  • Both DAOs hold the the tokens for a minimum of two (2) years after the swap
    • No sale of tokens are permitted until after the two (2) years lockup period
    • The two (2) year lockup period begins should both snapshots pass
    • Each DAO has the right to acquire the tokens back at the prevailing market price if the other DAO decides to sell after this period, with market price taken at the time of declaring intent from either party.

The wallets to be used for the swap are each DAO’s multisig:

Should both SuperRareDAO and BottoDAO’s proposals pass, a joint press release will be announced at the conclusion of the vote.

A small quantity of ETH is required to facilitate the token swap transaction for both parties.

Benefits:

  • SuperRareDAO helps ensure the Decentralized Autonomous Artist can further cultivate its home on SuperRare, while further exposing itself to Botto’s upside
  • Enables SuperRareDAO to participate in Botto’s voting ecosystem
  • SuperRareDAO gains exposure and goodwill of the Botto community of artists, collectors, and enthusiasts
  • BottoDAO may utilize acquired $RARE tokens to apply and vote on the next Space Race to build out curation of related AI art projects
  • Both parties diversify their treasury and bank on the success of their respective DAOs
  • Both parties mutually strengthen existing ties with one another, compounding each others’ media exposure and networks
  • Both parties are able to contribute to the governance of one another

Drawbacks:

  • A 2 year token lockup for both parties; illiquid treasury funds
  • Potential investment risk where $BOTTO may become valueless should Botto fail to maintain and/or innovate its operations.

Outcomes:

  • Straightforward treasury diversification in the form of 1,000,000 $BOTTO
  • A new Space Race participant in the form of Botto
  • Participation in and governance of Botto’s artistic journey as a decentralized autonomous artist

Edit: Updated lock up period to two years to better reflect LT commitment as per BEN’s recommendation.

4 Likes

Support 100%

As a holder of both $BOTTO and $RARE and participant in both projects, I see great alignment here. SuperRare and Botto are both at the cutting-edge of decentralized curation, and I think they deliver a lot of value to one another.

Only change I’d suggest is extending token lockup to 2y. I consider Botto and SuperRare to be very long-term projects still in their early days. I think this would help signal mutual LT conviction and commitment and promote LT thinking.

2 Likes

FYI - a parallel proposal is also up on BottoDAO’s governance forum for discussion.

https://forum.botto.com/d/17-bip-08-domo-rarerigato-mr-robotto-superraredao-bottodao-token-swap

Treasury diversification + aligning community interests + increased visibility across crypto projects - it’s a no brainer!

True, 100% support for the token swap suggestion.

1 Like

I support a 2 year lock up - show LT commitment from both DAOs. What are other people’s thoughts?

1 Like

Yeah I like that idea as well

1 Like

I support this too and its the right mindset to have. I’ve updated the proposal to reflect this lockup period!

What I worry about is that while this is great for botto, it would also be seen as the SR DAO showing favoritism to a specific artist based DAO.

Would open the flood gates for other artists and organizations to try and swap their tokens for SR.

Also not sure SR DAO mission is to invest in other DAOs. Believe it is more to invest in other artists fairly and without preference.

1 Like

It’s not favoritism if it’s voted on by the community. If other artists and organizations want to swap tokens with SR - they have the right to put up a proposal and see if the proposals will pass the temp check by the community. Not sure I understand the concern here.

Botto is also an artist - albeit AI - how is this not supporting other artists?

1 Like

Rule of thumb is that proposals should only be put forward that benefit every RARE holder equally, not proposals that benefit small groups or cliques.

So simple question I ask is does this benefit all RARE holders equally, or is it particularly targeted to benefit BOTTO RARE holders?

1 Like

100% YES it benefits all RARE holders equally.

I don’t understand why you think this only benefits Botto holders only. Swapping tokens allows ALL $RARE holders to get exposure to Botto token, not a small group/clique.

If we take your rule of thumb - how did your proposal for allowing Eric, Max, and Robness benefit every RARE holder equally? It’s clearly targeted to benefit a small circle.

1 Like

You are right that the Eric, Max, and Robness SIP violated this rule of thumb.

1 Like

SuperRare and Botto are both experiments in decentralized curation, so I see more alignment here beyond just Botto happening to be an artist on SR.

1 Like

Agreed, BOTTO is a decentralization curation experiment/DAO. Since the SuperRare DAO is also a curation DAO, it makes sense for it to exert influence in other curation DAOs. If the SuperRare DAO can figure out a clean way of crowd sourcing the inputs to be applied to the BOTTO curation algorithm with the $BOTTO token, then this proposal effectively sets up the SuperRare community’s ability to literally curate the BOTTO DAO. I’d say the token swap is the obvious first step, but I think more discussion needs to be had about how the SuperRare DAO intends on using the tokens for a curatorial purpose. Relatedly, what other curation projects can the SuperRare DAO start to influence?

1 Like

Agreed I think this is a mutually beneficial and sets up the two communities for more collaboration moving forward. I would like to sponsor as a council member.

1 Like

@choobie I updated to the proposal to identify John Crain as a proposal sponsor

3 Likes

Thank you John and thank you elo for updating the proposal.

As a minor update, an equivalent Botto governance proposal passed a Snapshot vote the other week.

@choobie the Snapshot vote is live, here

2 Likes

Could you elaborate more on how this swap will be executed? Will you be using a specific venue to automate the process?

UPDATE: SuperRare Community Access Pass to Botto

Access Passes to Botto for holders of 100 $RARE or more.

SuperRareDAO Access Passes are a way to distribute access from the 1M $BOTTO tokens SRDAO hold in their treasury. Total was calculated as if 1,000,000 $BOTTO were staked to generate VP. At 10,000 minted passes = 175VP daily.

Details:

  • Max SRDAO 10k passes
  • Generates 175 Voting Points/day
  • Provides eligibility to training and curation layers of Botto
  • Provide eligibility to drops and rewards

Pass holders also have access to our incentivized onboarding, basically 1000 $BOTTO worth of bounties for being active voters.

Access Passes start as a ‘blank canvas’, allowing the community of access pass holders to curate the cover of their Access Pass over a four week period. The most voted on fragment will appear on the Access Pass.

(to be publicly announced next week but can mint now quietly): Botto - SuperRare Access Pass

1 Like