TL;DR
This proposal seeks to increase Forefront DAO Treasury diversification by exchanging $FF tokens for stablecoins. This process will be conducted in two phases: first an exchange to strategic partners, then to Forefront contributors.
Motivation
Forefront treasury is currently composed of FF tokens (72% of total supply of FF) and a small allocation of ETH and ROBOT tokens accrued via NFT and Merch sales. Because 99% of the treasury is denominated by $FF, it remains highly unsustainable for the long-run development of the community.
Furthermore:
- All operations and community incentives currently are funded via $FF from the treasury or by selling $FF on the open market;
- $FF market is highly illiquid and volatile;
- The treasury does not have a sustainable or stable asset in the event of a bear market;
- The treasury lacks a productive asset to allow further diversification and growth.
As the Forefront DAO looks to expand its operations and onboard full time contributors, a diversified and sustainable treasury has become apparent. De-risking the treasury with more liquid and stable assets will allow us to fund operations and programs via USDC instead of $FF tokens or exchanging $FF in the highly volatile open market which further alleviates the selling pressure on $FF.
Specifications
We propose exchanging ~ 14% (or 1,000,000) of the $FF held in the DAO Treasury to strategic investors and community members for $1M USDC at a fully diluted network valuation (FDNV) of $10M.
Considering the volatility of the market, low liquidity, and infancy, this proposed evaluation is derived from the total network value including Forefront product.
Of the total allocated amount, 80% of the total raised amount will be allocated to strategic partners, while 20% will be reserved for whitelisted contributors / community members.
All proceeds of this strategic round will go directly to the DAO Treasury.
Strategic Partners
The strategic round is looking to bring a group of high value investors, angels and contributors to Forefront, many of which have been active in our mission, including Pet3r Pan (1kx network), Yoni (Own.fund collective), Andy Chen (DeFi Collective), Jenil (Coinvise), Brett Shear (Palm Tree Crew), Jacob Hornes (Zora), Patrick Rivera (Mirror) and Trevor McFedries (Brud). Final list will be confirmed and updated on snapshot at the time of the voting.
800,000 FF tokens or 80% of the proposed raised amount will be allocated to these strategic partners, in exchange of 800,000 USDC.
$FF tokens acquired via this round will be subject to a 12 month cliff, plus an additional 12 month linear monthly unlock after the cliff.
Forefront contributors will finalize the final allocation amount and exchange details, as well as deploy an escrow contract to ensure and enforce the vesting agreement.
Community Round
A max allocation of 200k $FF of the 1M $FF (20%) will be reserved for the community, prioritizing FF contributors as defined by Season One guidelines.
Forefront contributors will produce a list of all qualified members, according to the following criteria and process:
- Favorable deal will be given to all existing contributors;
- Following an initial commitment confirmation from contributors, a temporary public interest registration will be made available to all members; Preference will be given to members based on:
1) Past contributions to Forefront;
2) Sourcecred contribution graph;
3) Backers of FF NFT or Merch drop;
- Community allocation is capped at $10K (min $5K) per participant;
- If by the end of the community commitment round the allocated amount of 200,000FF is not fully filled, the remaining allocation will be rolled over to strategic investors.
Acknowledgement
By contributing to the Forefront DAO contributors acknowledge and agree to the following:
- They are contributing funds into the Forefront DAO to support the project as a contributor.. The contribution will be recognized with Forefront governance token, which does not confer any rights of ownership, or rights to revenue, profits, capital appreciation or any other return of value.
- Contributions to the Forefront DAO are not a sale of securities and accordingly have not been registered under the Securities Act of 1933, as amended, or under the securities laws of any other jurisdiction. You expressly consent to Forefront and/or its representatives filing the necessary regulatory exemptions including Form D under the Securities Act.
- Notwithstanding the above, contributors declare and attest that you are either (a) an accredited investor or (b) not a US Person, and agree to provide further details of the basis on which you make this declaration.
- Contributors declare and attest that you are contributing in your own capacity or as a representative of the entity noted in the offer to collaborate that was made to you, and not on behalf of any other person or entity.
Conclusion
We are planning a Community Hangout with select strategic investors in the near future, prior to the proposal vote. After hearing feedback from the community and iterating as necessary, the proposal will go to a Snapshot vote for a formal decision.
Update: On Friday 13th, we hosted a live conversation with Pet3r Pan from 1KX (potential lead investor) and other contributors to discuss the proposal scope, implications and answer community questions (including those on this forum), a recording of the call will be available on our discord #historian channel.
Next Steps
A Formal proposal will be posted on snapshot for community voting.
