Empower our token holders to shape tomorrow’s world
This article is part of a series that completes the proposal #0 made on the Cardashift DAO.
The next era for humanity will be all about ensuring whatever action we engage in is healing and contributing to the planet and our communities.
Even though the financial dimension may still be considered as the judge of peace, we must think of an open economy of positive and negative externalities that complements, balances and acts as a safeguard for the traditional economy. This economy is based on unified methods and decentralized common frameworks for demonstrating, valuing and monetizing value creation, whether monetary or not. It is rooted in global communities empowered to act regardless of geographic, cultural or fiscal barriers and is meant to be inclusive by placing people at the center and allowing them to be involved at all levels, including in the governance and control of these externalities.
Fully embracing this vision of a positive economy implies freeing oneself from the systemic constraints that are well known, and blockchain and web3 seem to offer us the tools we need to change the rules of the game. Especially when it comes to creating new forms of organization that give everyone a fair say while ensuring that the value generated is shared by design among all stakeholders.
Cardashift is no exception to this ideal and understands that it is essential to integrate its token holders as soon as possible in the governance and evolution of this emerging impact ecosystem. By becoming a DAO this year, we would encourage token holders to get involved at their own level as well as introduce new mechanisms to drive usage and ultimately the value of the token.
But what is a DAO anyway?
Blockchains, digital assets, and related systems are used by decentralized autonomous organizations (DAOs) to distribute resources, plan operations, and make decisions. By making operational and financial information accessible and providing token-holding members the ability to propose, vote on, and make changes, DAOs seek to decentralize the operation of businesses and other collective entities. An effective DAO understands the value of human involvement (off-chain) in blockchain governance and the repercussions it has on-chain. Underlying aspirations, at least for impact-driven DAOs, are mainly around:
- addressing unfulfilled needs that organizations and the government are unable to adequately meet, such as public goods, education, and the reduction of value extraction
- establishing new structures, economies, and systems to satisfy the unmet needs
- applying ecosystem thinking, usually thinking beyond humans, to become antifragile
So, what is it all about when we talk about the Cardashift DAO?
Who says DAO says governance, and who says on-chain governance says token. We are introducing a governance model based on a dual token model. One is tradable (CLAP), the other isn’t (xCLAP). The number of xCLAP in a user’s wallet represents his weight in the governance. To get xCLAP, you will need to stake your CLAP. In doing so, you will earn voting rights as well as other incentives such as, for example, treasury rights and partner token airdrops. Active members could also receive extra incentives.
Additional information will be disclosed in the coming weeks to get community feedback and decide on the path to take through a DAO vote.
A unique legal framework to power the model
The DAO would leverage the French Legal Framework of Association (1901) allowing token holders to be easily integrated in the decision making process. Its purpose is to provide a self-regulating infrastructure with standards and interactions, where members would be able to control the treasury, its investments and the technical ecosystem.
Find below an illustration of the model and what it allows to foresee …
This framework enables innovative and flexible financial models which will greatly benefit Cardashift and its token holders, especially in the context of the deployment of new products and/or the acquisition of stakes in new ventures. Check out some of the ideas we are exploring on the matter in the DAO Proposals section below.
A model that makes the token increasingly useful and valuable, ideal for a successful CEX listing
Decentralizing the way we tackle humanity’s biggest challenges involves making our token ever more accessible. Listing it on a prominent CeX is one way to do this, and giving our token more and more concrete utilities and value is the way to go.
As of now, we are in serious talks with Tier 1 exchanges to give the opportunity to non-crypto users to get involved in impact generation and Cardashift products. We estimate that, by Q1 2023, our token will be listed.
DAO Proposals Examples
To give you an insight of what is going on in our brains, we are sharing with you some ideas we are exploring. These market opportunities will be intensively discussed with you and brought to a DAO vote before moving on to the next steps. The first votes would take place as early as October but we are keeping them a secret for now, stay tuned!
Enabling innovative and flexible financial models
Disrupting the status quo and fully embracing our vision of a positive economy for demonstrating, valuing and monetizing positive externalities requires the proper support and funding.
With the model presented above, we are able to design what we call an equity swap, allowing us to attract capital. VCs are becoming increasingly fond of investing in blockchain-related companies or directly in on-chain projects. Many DAOs have started to do the same. Not only are these DAOs investing in crypto projects, but they are also taking equity stakes in companies. This second point tends to scare off traditional investors, fearing that DAOs will be blocking their decisions or that the decision-making process will take too long, given the number of important decision-makers in-house. Let’s imagine that a VC and a DAO are shareholders in a company. If the VC and/or the company want to bring in new investors and/or increase their share of the capital, without diluting the existing capital, a pre-investment agreement can be put in place. The DAO offers a rate at which its shares could be redeemed, at any time. The VC and/or company, already in the capital, can exercise this right over time.
Let’s imagine that the DAO owns 20% of the company’s capital, equivalent to an initial investment of €1M.
In the example above, we have taken 1% of capital equivalent to 100k€. This deal allows VCs and/or companies to recoup capital, grow their share or bring in new investors. This is very useful if the DAO’s decision making is complicated or if new people want to invest without diluting the current allocations.
With this agreement and example, the DAO can recoup its initial investment while retaining a 10% stake in the company. It is possible to adjust all the parameters to make a customized deal.
If the company is not doing well, the valuation imagined in the agreement is not necessarily interesting anymore, so the VC will not exercise his right. However, if the company is doing very well, the VC will hasten to exercise his right, to buy out the DAO’s shares in the capital in order to take a larger share.
In this second case, it would be interesting for the DAO to have a fairly dynamic valuation of its share.
One can imagine the following valuation:
With this more dynamic model, the share price gets higher and higher the closer you get to the DAO’s final ownership percentages. This allows the DAO to make a higher capital gain than with the fixed model and not have an opportunity loss if the company is doing well and therefore the VC would like to have more shares.
This model can be replicated with all the bricks underlying the DAO. The vision has already been presented to a large number of investors, VCs, and other stakeholders. Feedbacks are great and especially constructive, allowing us to mature our project. Discussions are well underway with several VCs for a fundraising campaign in late 2022.
This will allow us to surround ourselves with the right players to deliver a stronger impact, to establish ourselves in the investment ecosystem, and to move faster on new monetization products. Rest assured, the DAO would remain citizen-driven and the large investors will only be a source of value for everyone.
Funds of funds
Tomorrow, our ambition will be to directly finance impact funds by offering them citizen funding. Being a fund token holder offers the opportunity to be exposed and have governance rights on a pool of projects while being rewarded with the impact proofs of these projects. We have already discussed the opportunity with several recognized social impact funds.
Financial exclusion is one of the key factors limiting entrepreneurship and economic growth. Developing a lending solution in the Cardashift ecosystem will give further opportunities to the impact projects we are supporting, to scale up their activity & maximize their positive impact on society. We’ve identified potential partners which can be included in the framework we are creating. You may have already met some of them…
On-chain Carbon & Methane Markets
Carbon markets have been the first solution to tackle and monitor carbon emissions in the world. However, it faces local & regional challenges that do not fit with carbone limitations. Building a decentralized carbon market would be an alternative to these local markets and will make emissions control efficient.
[Catalyst Fund9] Education Financing Solution with Seedstars
Access to quality education in emerging markets is limited to those who have financial means to attend private institutions. We propose to unlock access to education financing through Income Share Agreements (ISA). With an ISA, a talent agrees to pay for their college education, or a portion of their education, by making pre-determined payments after graduation based on a percentage of their income. See Seedstars Academy for more information.
We value your feedback! Please join the debate on Discord and push your thoughts & ideas …
And of course, don’t forget to register for the vote!