Building DAO owned $RARI Liquidity on Velodrome

Thesis:

RARI foundation grants would benefit from an incentivized Liquidity Pool on Velodrome.

  • 20k OP GovNFT Incentives are on the table from Velodrome, as well as Locking Incentives and Bribe Matching.
  • OP Superchain has a lot of NFT Activity with Zora and Manifold, and I think RARI would be welcomed.
  • Velodrome also is releasing an auto-compounding strategy called Relay, which would help automate LP Management.

Strategy A:

I can help RARI organize a NFT sale, where the proceeds go into an LP DAO, which is governed by the owners of those NFTs.

  • RARI Foundation can choose which artist they think would be best suited for the project.
  • The Artist gets paid half up-front, half on completion, as well as a percentage of the final mint.
  • The remaining ETH is used to purchase and max lock veVELO and to be paired with RARI from the Foundation for LP.
  • The veVELO locked votes to direct VELO emissions toward RARI/wETH LP, and then LP is migrated from Mainnet to OP due to VELO rewards.

The collection can be sold on Mainnet, and then funds can be migrated, as well as opt-in NFTs to manage the DAO on Optimism. This reduces NFT supply on Mainnet, and creates utility on Optimism. The new LP DAO could also use VELO Yield to incubate art projects.

Alchemix will be doing something similar for their veALCX release toward the end of the year – I helped design a proposal to serve their needs, and it passed.

Tech:

The Tech used would be Moloch v3, and ERC 6551, and the development would be executed by the DAOhaus team, working with Silo.

Website: Silo.gg

DAOhaus Developers could also integrate this into the RARI Protocol, as a component of this Funding Request.

Strategy B:

Rarible has several NFT contracts which represent OG NFT Community mints. The contracts can be found on Etherscan.

It’s possible that we can reach out to these people by offering an Airdrop of Governance Shares, using ERC 6551.

If you hold a NFT from these contracts, you can bridge them to OP, and claim a share to a Moloch Treasury, and then contribute ETH to be used as described above.

.:.

A combination of these methods could be used as well.

Mostly, we would be trying to accomplish the following:

  • Engage the RARI Community
  • Crowdfund ETH and match RARI via Grant Support
  • Build veVELO, to create an Incentivized LP Pool on Optimism.
  • Migrate LP away from Mainnet, and deepen LP on Optimism.
  • Deepen LP so that RARI Foundation Grants have more Liquidity to attract projects.

I am a RARI Delegate, and I am also on the Silo Team.

Would love to discuss this and see if there is interest amongst the RARI Foundation and other Delegates.

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I think that a final design here ought to include previous RARI Contracts, and an OP Bridge Migration from Mainnet to OP for those older NFTs.

This ought to potentially involve 85k OG Collectors, or holder wallets, who may want to participate in this LP DAO.

These collectors would join forces in membership with the collectors of the newly released Mainnet collection, which would also be bridged to OP after the sale, and then both the classic contract holders, and the new collection holders would share governance over the LP DAO.

Those votes could all be delegated, and there would be some ETH from the OG Collectors, and some ETH from the new collection sale.

RARI matches these with a grant, and RARI/wETH LP gets a gauge on Velodrome.

.:.

The development for all of this is mostly done, but there needs to be a working OP <> Mainnet Bridge.

We will also need to make some small customization to include both the OG Collectors contract, and the new collection.

RARI developers could work on a Mainnet <> OP Bridge, or a Mainnet <> ARB Bridge, or our developers can do that for OP, and RARI can give them a small grant for development work.

RARI would also need to pick 10 Artists that they would like to offer the work to for making this collection, and then payment for the artist that accepts the job would be half up front, half on delivery, with a % of the final take.

.:.

I think this would make the proposal able to be executed.

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Summary Update:

OP has an upcoming “We :heart: The Art” Contest":

I’d like to submit an entry to this contest, on behalf of a RARI LP DAO to act as a case study.

Sales from this collection, as well as the OP Prize Pool would go toward building a veVELO position, and RARI/wETH LP within a LP DAO Treasury.

Video Overview:

The Prize Pool:

To qualify for 50k OP, we ought to communicate the following to Optimism:

  • “We :heart: The Art” Contest wants to bring Arts, Education and Public Goods to Optimism. Rarible becoming involved in Optimism helps OP meet this goal.
  • Moloch LP DAOs, using 6551 are an innovative governance for NFTs, which take advantage of Optimism Transaction costs.
  • RARI Migration to OP and veVELO Accumulation involves a 4+ Year Commitment to Velodrome and Optimism.
  • This project is a Case Study, and if successful, RARI Foundation will engage other artists to launch similar projects on Optimism, supported by RARI Grants.
  • We are offering a new way for collectors to find value on Optimism, by seeing NFTs as membership tokens to shared treasuries.

The decision to Farm OP - VELO LP serves two purposes:

  • 30 - 50% APR in VELO emissions can be compounded weekly to build our veVELO position.
  • We are taking a Long position on VELO.

When VELO hits .25 again, the LP DAO can vote to break the OP - VELO LP, and sell the VELO for USDC. Then use OP-USDC to farm.

Treasury Balance will fluctuate, because VELO is a volatile asset.

However, this volatility is not really important, because the function of the OP-VELO LP is to compound veVELO, and capture a longer term upside to VELO.

THE NFTS:

The contest requires the collection to be minted on OP Mainnet by Dec 13th, using Manifold.

We would use a collection I’m building called “Optimistic Landscapes”.

Supply is 69. The paintings are sized to be Twitter Banners (1500 x 500).

The paintings were made with Midjourney, and then each one was painted over in Photoshop, placing these somewhere inbetween 1 of 1, and AI Categories.

Project Flow:

Details:

  • Bridging RARI to Optimism Step by Step Tutorial:

  • OP Multi-Sig:

    • Moloch RDF can transform an existing Gnosis Safe, into a Gnosis Safe whose signers are each of the 69 NFTs in this collection.
    • We ought to have an Optimism Multi-Sig which can be turned into this LP DAO Treasury. The signers could be the veRARI Delegates, and the RARI Foundation.

The RARI awarded to match to ETH Sales for RARI/wETH LP would need to be in the future LP DAO Treasury, along with the Minted NFTs before Dec 13th.

  • Marketing Materials:

    • We will share how each of these NFTs will own Governance Shares of this treasury, as well as the commitment from the RARI foundation.
    • We will show off the structure of the LP DAO, and how it works to deepen RARI Liquidity.
    • We will tell people that if the project is awarded OP Grant from the contest, the OP will be used to Farm VELO, and build veVELO position over time.
    • We can dream up a couple of examples of project grants that could be enabled that relate to supporting Public Goods | Education | Liquidity on Optimism.
  • Marketing Targets:

    • OP Contest Judges are NFT Influencers
    • Previous Rarible Collectors might pick one up.
    • Velodrome Community might see this as a novel experiment.
    • Optimism Governance Enthusiasts.
    • Moloch Community
    • Manifold Community

We only need to sell 69.

After the project is submitted – and before the Judging Period ends on 12/20, we setup the Rarible Storefront using Manifold, and then have the Sale.

Since the Treasury owns the NFTs, the ETH sold goes into the Treasury.

The ETH from the mint is split in half, to be spent on veVELO, and to be paired with the RARI from the grant to make RARI/wETH LP.

Here is a condensed Flow Chart of this process:

ASK:

  • 20,000 RARI to be paired with ETH, and deposited as DAO owned LP – To be delivered to the OP Multi-Sig before Dec 13th.
  • 2.5 ETH for Art and Project Design [rootdraws]
  • 2.5 ETH for Marketing to RARI Foundation and RARI Devs for Bridging RARI to Optimism.
  • 2.5 ETH for Moloch RDF Devs for Deploying RDF to Optimism for this collection.

RECEIVE:

  • 2500 SILO Tokens will be given to the LP DAO.
  • 69 Piece, “Optimistic Landscapes” NFT Collection and Marketing Materials delivered in time for Contest Submission to an OP Multi-sig.
  • NFT Collection receives Moloch RDF, which is an airdrop of Governance Shares to ERC 6551 Accounts, which are owned by the NFTs in the collection.
    • Moloch RDF is a claim app, that will be released on Optimism, which will allow each NFT owner to claim their Governance Share.
  • 100% of the OP Contest Reward goes to the LP DAO.
  • 100% of the NFT Sales go to the LP DAO.
  • 100% of the Royalties from Secondary NFT Sales go to the LP DAO.

Afterward a Case Study will be written and released covering the project, so that the RARI Foundation can use this pattern to coordinate similar projects.

I would like to have this grant submitted for a vote, so we have time to execute before the Deadline on Dec 13th.

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Thanks for explaining it again so clearly. Your artwork is truly beautiful!
I like the experiment part. I agree with you it has a lot of value. The flow charts make things so much easier to understand. But I have 2 concerns that make me not support this idea for now.

  1. The different cogs and pieces needed to work together in a very short time.
  • The RARI <> OP bridge
  • Coordinating with collectors
  • The small customization to the OG Collectors contract
  • Coordinating with ~10 artists for the collection.
  1. The OP “We Love the Art” campaign and contest is up, but Rarible is not on the minting platforms list (not deployed in OP yet). So, IMO the experiment won’t have the impact we want for Rarible. Collectors and artists won’t be motivated to come to Rarible to mint.
    Also, I’m not entirely sure whats like the user experience in a Rarible Storefront with Manifold. However, my main concern is that Rarible’s biggest opportunity lies in officially being part of the campaign.

Please let me know if I’m missing something @rootdraws.

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Hey Jaf -

So, I’ve reduced the scope of the proposal, to make it as small as possible, while still qualifying for the OP Contest, cause I think that’s a powerful grant match // LP DAO Subsidy.

To respond in sequence:

  1. Time

It is a short time period, and we would need immediate action to execute. That being said, I’ve been around and expressed this idea for a few weeks already, and had around 3-4 calls discussing these ideas.

I know that LP is a solution we need to solve for if we want a robust grant program, and I know that the Moloch LP DAO needs to take place on an L2, because of transaction costs.

So, for me, it comes down to incentives | grant matching opportunities.

I don’t see a better near future L2 Grant opportunity than this OP Art contest, for generating a bunch of capital for the LP DAO. And, if it works – which is not certain – we could see between 90k and 40k worth of Farmable OP entering into this LP DAO Treasury. Those assets would build veVELO position over time, and we could use that time to come up with more sophisticated projects to try out.

  1. The RARI <> OP Bridge has a tutorial:
    https://github.com/ethereum-optimism/optimism-tutorial/tree/main/standard-bridge-standard-token

There are funds allocated in the Grant to RARI Engineers, and I’m told that if there is a clear action for them to take care of, they can manage it. I’ve updated my proposal to no longer need a NFT Bridge – this is strictly a ERC20 Whitelist, using standard OP Bridge.

  1. Collectors:

The collection only has 69 pieces. So, there will not need to be many collectors. I have also included in the grant some Marketing Funds, so that RARI can do a small outreach about the project between Dec 13th and Dec 20th.

I will also do a small outreach to the groups mentioned above.

The OP Contest itself will also carry some weight here, because there are ~32 Judges for the OP Contest, and each of them is a famous CT Influencer or personality. The AI Art collection Judges includes pplpleasr and loomdart, and others.

So, if the collection is solid, and Rarible is onboard, and the Moloch RDF is ready to go – then, I think people will see the value of the collection, and I think that the Judges will see the novelty of the project.

  1. Small Customization to OG Collectors Contract.

I have removed the OG Collectors Contract idea from the project.

The original idea here was to bridge those NFTs and then include them in the governance DAO - but that idea has been removed. It is something that we can re-examine later, if this current project moves forward. I just felt it was unnecessary.

Also, there is no customization of that contract – it was a bridging, and including that contract in Moloch RDF, so that the Moloch RDF could allow multiple OG Collectors contracts to participate in a governance claim process.

AKA – If you have one of the OG Collectors contract NFTs, you could bridge it to Optimism, and then use the Moloch RDF Claim app to claim a 6551 smart wallet with a Moloch Governance share in it.

The idea used the OG Collectors contracts, but did not modify them.

But, now I have cut that entire idea from the proposal for simplification reasons, and speed.

  1. Coordinating with 10 Artists for the collection:

Not happening either – this is just my art, which I am already working on. The collection will just by my art, and will be 69 pieces, and will be released on Manifold, cause that is one of the pre-conditions for qualifying for the Contest.

  1. Rarible not being Included in the “We Love the Art” Contest

We can’t always be the stars of the show. However, I believe Rarible funded Manifold, and I know there is a Rarible Storefront integration into Manifold. So, that will have to do, if the delegates and yourself decide to move forward with this proposal.

I am looking at this from a pragmatic angle, and also a self-interested angle.

I have an opportunity to submit an art collection that I’ve already been working on, to a contest, to get a bunch of capital, and use it to support an LP DAO.

We have been in conversations about how an LP DAO may benefit RARI, and that there could be a grant matching opportunity here.

My proposal update, is basically an offer to bridge those two ideas, so that my submission to this contest is done on behalf of the RARI LP DAO idea – as a test, or proof of concept.

If we are able to succeed, then, I think that what we end up getting is a demonstration of how these LP DAOs are structured, as well as measurably deepened liquidity for the RARI/wETH LP.

I think that this depth of liquidity improves the ability for the grant program to function - and then, we can worry about integrating more of RARI protocol into Optimism, or maybe using some of the new RARI grant funds to continue to help support the use of Manifold | Rarible Storefronts to do more collections like this.

.:.

Those are my thoughts. I am going to focus pretty much exclusively on making that art collection solid in time for the Submission deadline, and I already have approval from Moloch RDF for that collection.

So, what is needed is:

  • We need an OP Gnosis Multisig for Delegates, which can be converted into a Moloch DAO.
  • We need a standard ERC20 whitelisting for RARI on the OP Bridge.
  • We need grant funding to direct RARI into that treasury, and to pay for the artwork and marketing and moloch RDF deployment.
  • We need the artwork to be completed.
  • We need some marketing materials to explain the vision to the Judges, and the groups mentioned above.

At that point, we need to have a sale from this multi-sig between Dec 13 and Dec 20.

And IF this works out, then, we hope to sell the 69 paintings during that time period, and then receive the OP Contest rewards directly into the treasury – which at that time, will be a Moloch LP DAO, governed by the NFTs in that collection.

The Iffy part, imo, is not really the execution before the deadline, but the lack of certainty that if we go to this trouble, that there will be an OP Contest Reward at the end of it.

I personally don’t have anything to lose, and a lot to gain by trying – so this grant is like me saying “Here’s a cool idea, if you help support it, we can make it your idea, and let’s see if it works.”

Thank you for reading, and I understand if you’re not interested.

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