Proposal: Provide a Grant for a Startup to create a Harberger Tax Inspired NFT Protocol & Marketplace
Amount: $250,000 USDC, spread out over 4 progress milestones (see below)
To Who: @MemeBrains & @TheBossDragon
Intended outcome:
Prologue:
Hello CityDAO!
This is my first proposal ever since proposing the CityDAO Podcast almost a year ago. Working with, supporting and advocating for CityDAO has been one of the most fulfilling experiences I’ve received in the Crypto world. This proposal takes things to a whole new level.
In 2018 I sold my last company in part because I felt the unshakable calling to plunge down the Bitcoin rabbit hole. Opportunities like this come once in a lifetime so I decided to go all-in and it’s been one of the most fulfilling decisions of my entire life. This journey led me to discover CityDAO and the principles of the Network State where I felt an equally strong calling to become involved. I believe that what Bitcoin is doing for global economics, the Network State is doing for global politics.
But everywhere I look, DAOs, NFT communities and nearly every single Gated Access Community I’ve come across run into the same 3 problems: Squatters, Flippers & Depleting Treasury.
Squatters hold those community keys (NFTs, Tokens etc) but do not participate. This artificially inflates the price of those community keys/NFTs in the open market -such as on Opensea- while simultaneously lowering productivity for everyone involved. Squatters are usually well intended however the inactivity hurts the community.
Flippers hold those community keys for future resale purposes and also do not participate, further inflating the community key prices and lowering community productivity. Flippers are also usually well intended however the hoarding and inflated floor pricing it creats hurts the community too.
Depleting Treasury is like a ticking time bomb. Every startups nightmare…limited Runway threatens the end of any capital intensive initiative.
Through CityDAO I’ve discovered the principles of Harberger Taxes. At least 2 CityDAO projects that I know of have mentioned a desire to implement Harberger Taxes in their projects, yet no fully functional solution currently exists in the market to click the proverbial ‘on switch’ to try it out. Tweets and articles by notable people and thought leaders also demonstrate interest in bringing this idea to market.
Within the principles of Harberger Taxes, I along with many others I’ve spoken with see the seeds to solving all 3 of these major industry pain points with one single solution.
This proposal is to find out in an indisputable way if a Harberger Tax Marketplace for Gated Access Community Keys and Digital Land Ownership will indeed help change the world of online communities for the better, as we think it will.
Project Team:
Eric Gilbert-Williams - CEO
Eric is a lifelong entrepreneur across multiple industries. He bootstrapped his last company to a team size of 50+ people and several million in ARR then sold it in 2018. He has also been involved in event production, angel investing and startup consulting. He is the host of the CityDAO podcast, an active DAO enthusiast + contributor and is also the host of a Philanthropically motivated Mental Health Podcast. Eric brings experience in organizational leadership, stakeholder relationship building, B2B + B2C sales, team trainings and public speaking.
Bhargav Patel - CTO
Bhargav is a serial entrepreneur in the technology space. In 2011, he founded Performance IQ, a data analytics and gamification software company for boutique fitness clubs. He grew the company to 3000+ locations & 20M+ users, prior to getting acquired by Battery Ventures in 2018. Since then, he has been involved with multiple ventures in retail, manufacturing, software & web3 space. He is an avid crypto investor, an early CityDAO citizen, and brings a ton of web3 development experience in smart contracts, NFTs & Defi protocols.
Budget: $250,000 USDC over 4 milestones (see below)
Summary: Launch a Harberger Tax Inspired NFT Protocol & Marketplace for CityDAO and other gated access communities to benefit from. This will allow communities to add customized functions and utility to their NFTs based on the specific needs and goals of their community. This project will develop the protocol MVP along with accompanying marketplace. Communities will be able to mint, distribute, manage and buy/sell their customized NFTs. Communities who select taxation features in their NFT will have those taxes sent directly to replenish their treasuries.
Pitch Deck PDF with Project Overview here: https://drive.google.com/file/d/1_bmjqVkI4CnChvkv6_vkdAyu8Xe8uQjd/view?usp=sharing
Pitch Deck Video Walkthrough here: https://www.youtube.com/watch?v=obYXxQv2r0Q
Use of Funds:
Benefits to CityDAO:
$1 million in Royalties for CityDAO Treasury Replenishment: a) As a separate agreement from the Grant, the venture proposed above would engage with CityDAO in an Incubation and Marketing agreement. The agreement would state that should the venture succeed in generating revenues then the CityDAO Treasury would be provided with a 20% royalty from those top line revenues until $250,000 has been sent to the CityDAO Treasury, and then a further 5% royalty for an additional $750,000 USD, equalling a combined total of $1 million USD or equivalent back to the CityDAO treasury. b) In exchange for giving this royalty to CityDAO, the venture will be formally supported by CityDAO for testing, marketing, feedback, discussions early distribution and be the ventures first live customer, establishing a true win-win environment for both parties.
Saved Costs: Other CityDAO projects which require a functioning Harberger Tax inspired NFT protocol and marketplace would be able to leverage from this technology and no longer be required to develop it from scratch. This would save development costs on other CityDAO projects and initiatives.
Momentum for Treasury Replenishment initiatives: This would be the first active project within the CityDAO ecosystem to have an agreement in place geared towards treasury replenishment. This will hopefully inspire others to create projects and agreements which would also replenish the CityDAO treasury.
Branding & Market Presence This project would provide credit back to CityDAO on-going in various forms including the CityDAO logo, ‘CityDAO Incubated Project’ references, public facing credit towards the CityDAO community in media events, and more. People will know this project was inspired and supported first and foremost by CityDAO to continue building the CityDAO brand.
Timeline and Deliverables:
To demonstrate our commitment and determination for this project, we have broken the project down into 4 milestones. Upon approval of this proposal, $250,000 USDC will be transferred to a gnosis based escrow wallet. Funding will be opened on a per milestone basis starting with the first milestone funding being released and used to complete the first milestones deliverables. Upon completion of the first milestone deliverables, funds will be unlocked then used from the second milestone to complete the second milestone deliverables, and so on.
Milestone 1
Budget: $1
Deliverables:
Milestone 2
Budget: $19,999
Deliverables:
Milestone 3
Budget: $50,000
Deliverables:
Milestone 4
Budget: $180,000
Deliverables:
Challenges & Questions:
Will it work? It’s clear that between the Radical Markets book, the RadicalxChange foundation, tweets by Vitalik, Balaji and within other discussion forms, there is a sincere curiosity and belief by influential parties that a Harberger Tax model could revolutionize property ownership, memberships, NFTs and gated access communities everywhere. We can debate the theory until the cows come home…but there’s only one way to actually find out. This project aims to find out.
That’s not enough money to scale Correct, it’s not. But with this pre-seed funding and a live MVP, we will be able to confidently approach a Seed round in 2023 aiming for the $2mil - $5mil range with the appropriate Angel Investors & VCs. The Seed round will provide the hires needed to bring this product to market and gain the initial traction required to then approach a Series A round in the $20mil - $30mil range for market scalability.
That’s too much money! Please read #2 above.
I think Harberger Taxes will fail. Please read #1 above.
Why not do this inside CityDAO as a CityDAO fully owned project? a) CityDAO does not have enough money to do this as a broad market solution in a long-term scalable way. It would simply be too risky for the treasury and bootstrapping this would require too much commitment from DAO members, distract from core CityDAO initiatives and severely limit this initiative's chances of success. b) This is a startup venture concept which is intended to live and grow on its own. Although connected to the same root system as CityDAO overall and connected with multipl CityDAO projects, this is an offspring of CityDAO, not part of the main/original tree. c) Lastly, legal liability is mitigated when this project is separated from the CityDAO LLC and visa versa.
How does this replenish the CityDAO Treasury? Please read ‘Benefits to CityDAO’ above.
Let’s debate, discuss and theorize about this for a year++ before deciding Not an option for us. We have a window of opportunity here that will not remain open long. Either we do this or we don’t.
The Mob. Look, our intentions here are to do something good, not only CityDAO, but for the market as a whole, and simultaneously help our entrepreneurial career. We really don’t want this to turn into something unpleasant for anyone involved. We are hoping CityDAO can rally around this project as a very positive thing.
I have more questions plz We will be hosting a daily AMA on this Proposal at 2pm PST on Thursday and Friday November 9th and 10th and daily from Monday November 14th until Friday November 18th. Come join and ask all your questions!
Is this Legal? Everything within this proposal will be first passed through CityDAO legal council and any required changes will be made accordingly before finalized.
Legal Notice & Disclaimer: The entirety of the above proposal and any and all of its details, including but not limited to pitch deck and related details must be reviewed by and modified by CityDAO legal council and/or other legal council related to the venture or any of its stakeholders.