Updates in the DAO Community (February Edition)

In Web 3, many communities function as Decentralized Autonomous Organizations (DAO) to help govern and shape the direction of the community. That means a proposal can only be passed with the community’s consent. Researching and analyzing proposals can be used as a trading tool to help give potential token holders an edge on what to expect in the future. However, in Web 3, it’s hard to track what happens in every community. That’s why this week's report will explore four tokens and the proposals being discussed amongst their communities. Additionally, we look at the potential impact it might have on the token’s price. 

By the end of this report, you will be caught up to date with these communities, which can help you have an edge in your trading strategies. 

1. ApeCoin DAO - $APE

MarketCap: $1,780,173,792

Treasury Value: $46.8M 

ApeCoin: ApeCoin, also known as $APE, is the governance and utility token that serves the popular APE ecosystem. The APE ecosystem comprises the ApeCoin community and all products and services that use $APE.

A part of the culture of NFTs is the content created with them, such as memes, GIFs, and other entertaining content. NFT content has been an excellent way for community members to engage and collaborate. The ApeCoin DAO has agreed to pass a proposal to create an ApeCoin-powered IOS/Android/Web app to empower collectors to create content with their NFTs. The idea is that Web 3 creative studio will use collection-tailored algorithms to automatically cut off the faces of NFT characters, modify them with editors' tools, and apply them to various content templates. The inspiration for the idea is that NFT collectors would never have to use photoshop or hire a professional to create the content necessary for their NFTs. 

Additionally, the proposal made it clear that ApeCoin DAO would ensure that ApeCoin would be the primary payment currency for all paid features of the app. NFT collectors of Yuga Labs and ApeCoin token holders will be the first to get all the benefits of content creation within the app and will always be prioritized for new features and templates. 

What does this mean for $ApeCoin? Using ApeCoin as the primary payment currency within the app could spark demand for the $ApeCoin if the NFT content app is popular. Users might want to utilize ApeCoin to take advantage of a discounted rate for premium features. 

The utilization of ApeCoin as a payment currency has been introduced previously, and it is one of the four key utilities of the token. So far, ApeCoin has been utilized in Benji Bananas - a free-to-play mobile game from Animoca Brands - where users can earn ApeCoin for playing, and it has been accepted payment currency for Gucci & Tag Heuer. 

That said, the current proposal could provide insight into how the ApeCoin DAO plans to reward its token holders and how it will continue to expand ApeCoin as a payment currency. 

2. Decentraland - $MANA

MarketCap: $1,141,356,760

Treasury Value: $151.5M

$MANA: $MANA is a cryptocurrency that serves the virtual reality platform Decentraland. 

This month, Decentraland has numerous proposals up for a vote. These proposals include a new category addition; hands, DAO Committee elections, and partnerships. However, one of these proposals could significantly impact the ecosystem's growth, which pertains to creating a LAND INTEGRITY ADVISORY BOARD and a LIAB Lead. The newly created position of a LIAB lead would be required to work with the community - all stakeholders - to resolve the current Land Owner + DCL Worlds co-existence tension. This proposal is currently being put up for a vote.

For reference, in December of 2022, Decentraland (DCL)  launched a program - DCL Worlds - which was a response to the high entry point of owning land in Decentraland. To own a parcel of land in Decentaland, users should expect to pay around 2,6999 MANA. In essence, DCL Worlds enables users of a registered DCL Name (100 MANA) to build on a 2x2 parcel (outside of Genesis City) with a limitation of 100 MB and 100 concurrent users at a much cheaper entry point. However, the most recent announcement by the Foundation is that the 2x2 parcel scene limitation has now been lifted entirely. What this means is that DCL Worlds can be unlimited in acreage, posing a serious concern for existing DCL landholders, such as, what is the value of land, and what is its long-term appreciation potential given the introduction of DCL Worlds with [potential] unlimited capacity and minimal investment requirement? 

(Snapshot of a user) 

The DCL ecosystem considers DCL World an important part of its future. At the same time, they want to protect their current landowners and prevent a mass exodus from their platform. 

Listed below are potential Land Owner Supported Initiatives to alleviate the issue: 

  • An expansion of the Genesis Map in a non-dilutive 1 : 9 expansion plan which would greatly reduce the land barrier-to-entry, bringing 16x16m parcel prices down by nearly 90%.
  • A land ownership requirement, at a later point in time, to expand the capacity / reduce the limitations of DCL Worlds.
  • A modest Mana staking requirement, at a later point in time, to further expand the capacity of a DCL Worlds and increase demand for Mana benefiting the long-term operational capacity of the Foundation.
  • A rewards system to incentivize early builders.  This includes contests voted on by the community with rewards to include winning land parcels (which can equate to long term DCL Worlds ownership).

The long-term support of current Landowners for DCL World would mean there is a world where both can co-exist, which would be a win-win for the ecosystem. DCL Worlds would provide an affordable entry point for individuals and businesses to enter the metaverse while, at the time, DCL Landowners can protect their digital land investments. All this can be seen as a positive catalyst for future growth in the ecosystem.

However, only one initiative would directly affect the $MANA token, and that initiative is a potential $MANA staking requirement. According to the proposal, the idea of a minimum requirement would serve two primary purposes for the Decentraland ecosystem. The first is that a staking requirement would create upward demand for the $MANA token. The second purpose would be that upward price pressure would increase Market Cap and enhance the operational capacity of the Decentraland ecosystem. Furthermore, DCL's attempt to utilize $MANA as a tool for growth can be seen as a sign that the company is looking for ways to improve the token’s utilization and enhance demand. 

Lastly, all these recent proposals, both active and passed, indicate two major points:

  • The Metaverse is still a thing -The fact that current landowners are concerned about their land value with the addition of DCL World indicates that investors see long-term value in virtual land. At the same time, DCL World opened up a new way for individuals and businesses to enter the metaverse at an affordable price to help grow the ecosystem. Both these issues indicate a demand for the metaverse. 
  • Decentraland is dreaming big - Despite a bear market, DCL is continuing to find ways to improve its product and be one of the major metaverses down the road. 

3. Merit Circle - $MC

MarketCap: $109,416,335

Treasury Value: $58.5M

$MC: $MC is the governance token for the Merit Circle DAO - a DAO that creates opportunities for crypto and gaming enthusiasts and helps build the metaverse. 

The Merit Circle DAO recently passed a proposal that changed the multi-signature (multisigs) and structure of the Merit Circle DAO. The new proposal changed the 4 out of 7 multisig into a 5 out of 9 multi-sig, and the required signatures for a transaction to be approved and executed from 4 to 5 (a simple majority required). The idea behind the proposal was to increase the security regarding Merit Circle DAO’s treasury and other operational and administrative functions in which the multisig team is involved.

Listed below are the following multisig team. It should be noted that the team of multisign have crypto experience and are across different time zones.  

While this proposal shouldn’t directly impact the token’s price, it should be seen as an encouraging sign to current token holders that the Merit Circle DAO contains a reputable and well-experienced multisig team.

Additionally, as of February 6, there’s an active discussion on a possible Merit Circle Constitution that would strengthen the decentralized governance of Merit Circle. While it’s still only a discussion, a written constitution can show token holders that the DAO is evolving and growing and taking the next step forward. For example, MoonDAO, which has grown to over 40,000 Discord members, and 11,000 + wallet holders, also recently passed a written constitution for its community. 

That said, the newly updated proposal should not have a direct factor in the token’s price. Instead, these proposals can indicate the DAO’s growth and its plans to evolve and adapt.

4. Friends With Benefits DAO- $FWB

MarketCap: $5,820,779

Treasury Value: $18.26M

$FWB: $FWB is the native token for the Friends With Benefits DAO (FWB) - a group of more than 4000 engaged members focused on building a decentralized future.

2022 launched the first year of FWB fest - an immersive conference and festival experience at the intersection of culture and Web3. The event brought artists, writers, musicians, software engineers, start-up founders, and creatives to Idyllwild, California, for a couple of days. The FWB DAO is considering a proposal to host FWB Fest in 2023 and set a foundation for FWB Fest to be an annual recurring gathering point for the FWB community. FWB DAO is already known for its digital and real-life events playing a massive role in its community growth, but FWB Fest has the potential to be their flagship event as a community. However, for that to happen, several changes would need to occur from a financial and strategic perspective, which is what the proposal outlines. 

The business models for FWB Fest 2023 detail some new initiatives that seek to make the festival more sustainable in the long run. 

  • Increase community programming & Decrease booked talent
  • Shift food and beverage to à la carte
  • Shifts tickets to fiat & stable coin
  • Add an FWB day only for members, denominated in $FWB
  • Create a clear way to transact in $FWB token

In the long run, an annual FWB Fest could prove to be a huge revenue generator for the FWB DAO, while at the same time, it could expand the DAO into new cultural markets - both positive signs for token holders. For those thinking on a longer timeline, FWB Fest could be the catalyst needed to attract more users outside of the crypto community.

That said, two of the initiatives listed above could directly impact the FWB token in the short term which we should take note on: 

1) Add an FWB day only for members, denominated in $FWB

The proposal seeks to include adding a bonus day of programming on Thursday that only community members can attend through a separate ticket, about the future of FWB. Tickets for this early access day will be only available for FWB members, at an additional $FWB price.

2) Add an FWB day only for members, denominated in $FWB

The proposal mentions creating a FWB flea market where community members can sell wares to each other, denominated in both $FWB and FIAT. FWB will charge vendor fees in $FWB.

Both these proposals indicate that the FWB DAO is finding ways to implement more token utility onsite for the FWB Fest, along with new membership perks. Additionally, with the projected increase in capacity and partnership interests, demand for the token could be significantly higher during the festival dates.

Market caps and Treasury Value sourced from coingecko & DeepDao.io current as of February 13, 2023

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