Well in reality Pixelcraft is covering almost all of the costs to maintain infrastructure, gameplay, etc. The DAO has had to cover very little of that / almost none of it (which is not the DAO’s mission, so that’s totally fine!), and I don’t see that changing in the very near future.
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While Pixelcraft is the driver of value and creator of demand, ultimately the community is the source of revenue into the system. As it currently stands, the ability to pay for rarity farming, alchemica farming, and eventually infrastructure is all contingent on the community continuing to put money into the game. GHST can only be safely liquidated for DAI when the price bumps up during auctions, and there’s a limited amount of value that can be pulled out this way. On top of the curve’s trading fee, that’s the only way we’re getting more DAI to cover off-chain costs.
I don’t know the revenue numbers off-hand, but at the very least we need to reach a point where we (collectively the DAO and Pixelcraft) are generating annually more DAI than we expend. It may be some time before the Gotchiverse is net profitable, and we need to be prepared for that beyond just covering costs in the immediate term. This is in addition to the cost of Aavegotchi UBI, borne collectively by buyers of alchemica.
Infrastructure costs are an immediate problem that needs to be solved, and I support a swap of some kind. But I believe the scale should be smaller, and the DAO needs to be looking at ways to generate income with its cash on hand. Alternatively, Pixelcraft could be granted the 1.75 million DAI to use entirely at its discretion (and I would hope part of that would be invested with the intent of creating a reliable income stream), but I believe this runs counter to the ideal of an independent DAO serving as both an advisory body and supportive custodian of the Gotchiverse it inhabits.
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I understand the position that the DAO is NOT an investment fund, but I still view it as essential that the DAO deploys its capital in an efficient way. We are leaving a significant portion of free yield on the table.
Even Apple, who’s primary mission is to make consumer tech, still manages its treasury by diversifying into some yield bearing assets. Its just prudent when you have a large sum of capital to make sure it is working for you. Even if only to beat inflation. (Yeah the almost 2% Aave yield isnt going to beat current inflation but you get my point 
)
Nobody is saying to dump it all into some +10,000% APY ponzi LP scheme. The actual risk to the funds by depositing into something like Aave are vanishingly small.
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Since this conversation is about financing the Gotchiverse, I have a few questions for @Jesse_gldnXross.
As this money is used up, how does Pixelcraft plan to generate the future income necessary for keeping the Gotchiverse open? Is there a dedicated financial officer on staff? Has there been any thought about investment in digital assets to generate cash flow?
I’m sensing a mixed philosophy about the DAO’s role in financing the Gotchiverse. Pixelcraft has the strongest understanding of its own expenditure. The community meanwhile is the source of funding. It seems to me that the community would be better served if were capable of managing its own collective finances. I also understand that this is a fractious and uncomfortable experience when left to a democratic vote. I don’t inherently object to the idea of allowing Pixelcraft to act as steward of these funds instead. But understand that the DAO will be abdicating custodianship of a large cash pile it has held since the project’s inception, cash that ultimately came from the community.
If Pixelcraft is going to take control of these funds, I’d like to know what their financing plans are in the longer term. I’ve seen too many good projects crash and burn because they run out of money.
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#4 Sounds like the best option. I support fren 
You guys earned that GHST, but as the devs, I can imagine that it’s not easy to turn those earnings into fiat without causing some ripples.
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VC funding would be the worst option imo. I can’t imagine that at this point in the project, people would want VCs to come in.
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That would currently cause a dip of less than 3 cents (i.e. less than 2%). I doubt many people would notice or care. But I can imagine that the real problem with this option are the optics. People would claim it smells fishy when the devs liquidate a rather large potion of their stake in the token. The people who would ultimately suffer the most from such FUD are we, the community.
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Sounds interesting.
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I think this is the easiest option that would cause the least FUD. It also provides an incentive for the DAO to think hard and make plans for how to use the treasury’s funds to make some yield. And even if the DAO decides they simply want to keep a large portion of their assets in DAI, they could just turn the GHST back into DAI after the swap, by selling to the curve (which would be better optics than PC selling such a large sum to the curve). Come to think of it…CAN the DAO sell to the curve (KYC requirement and all)?
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Whats wrong with VC’s coming in?
They are the most realistic option for the DAO to offload a significant amount of GHST in return for stablecoin assets without nuking the token price and harming GHST holders.
Future sell pressure can be mitigated with a vesting period, which is typical in these types of deals.
The biggest reason PC probably doesn’t want to use them is it creates a legal relationship between the two entities. But in the DAOs case, PC can sidestep that issue and get direct access to funds. Doing a deal with the DAO is very convenient for PC.
The DAO can then sidestep having a legal relationship with a VC because a DAO isnt a legal entity. The VC understands and assumes that risk.
I understand the term ‘VC’ might be a trigger word to some, but it ought not to be. The reality is that VC’s in crypto are flush with cash right now, even in what looks to be a bear market, and they are dying to invest in up and coming gaming projects. Aavegotchi would be a killer deal for them and GHST might be something many VCs would love to hold, if only the DAO would take an active interest in giving them a path to ownership.
There is an argument to be made that VCs typically wouldnt be players of the game and capital holders of gotchis etc, so would not necessarily vote in favour of that group however. Which is why any GHST that is released for sale would not be in an amount significant enough to give any one VC a strong position DAO voting.
I also think having a quality VC would actually be a healthy counter-balance of voting power to the player-base as a whole who it can be argued are interested in maximising individual profit to themselves rather than the overall growth of the ecosystem.
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The concerns you are raising are very important and so I will try to add some clarity.
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Pixelcraft has multiple revenue streams, mostly split with the DAO. Besides NFT sales, revenue already includes passive incomes such as Baazaar trading fees and Gotchiverse crafting revenue (alchemica denominated). We are preparing more income streams that may not be GHST or alchemica related, but will be growth related. This ambitious work will take time.
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“the DAO is the source of funding it” this is true in the sense that all Pixelcraft revenue comes from Aavegotchi fans spending alchemica and GHST. But that is different than the DAO Treasury, which is currently not funding any of the Gotchiverse overhead. This distinction is important, as Pixelcraft is not asking for a grant or free access to DAO Treasury. This proposal is a Token Swap in the truest sense. Both parties need to be happy with the swap on their own terms.
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What’s wrong is that VCs exist to dump–mercenary capital in the strictest sense. We already have the best kind of VCs in the whales who funded this whole thing, except they are more altruistic, longview, and interested in game development than your average rich person. But if someone believes in the project, we wouldn’t need to solicit their funds (that is, as a VC; it may well be we need to get better at marketing to the right crypto-rich crowd) because if they were dying to invest they would already be DCAing in the current very-attractive bear market prices. From my perspective, VC is a trigger word because it means we are seeking an influx of money now in return for a bigger drain later.
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If some VC wants to buy GHST from PC (or the DAO) at about market value, instead of from the curve, there is nothing wrong with it. In fact, I think that would be great. 
Not sure what you mean. Preventing nuking is what the curve was designed to do. And so far it seems to work great, doesn’t it? Liquidating 1.75M right now would only cause a 2% dip. That’s incredible. Or do you believe that the DAO selling to the curve would create so much FUD that it puts a significant amount of sell pressure on GHST? Possible, but since the holders, players, investors etc. are all part of the DAO, I don’t really see why that would happen.
There are many types of legal relationships and they further depend on what countries the parties reside in. Can you be more specific about what kind of relationship you’re talking about?
Then what’s stopping them from buying from the curve or doing an OTC trade with PC? Right now, I can imagine 2 things.
- Like you said, PC might be trying to avoid it for whatever legal reason, maybe because of the country they reside in. However, any OTC trade would be reflected in their books / accounting software, even one with the DAO, wouldn’t it? So I’m not really sure how that would make much of a difference. Maybe you have some more info on that.
- VCs might want too much of a discount or something else in addition to GHST to get an edge. And that is why I wrote above that I believed people might not want VCs to come in at this point in the project. The players who earned their GHST or payed market value for it, would probably not want to see some large discount or big concession that they cannot be part of / enjoy for themselves.
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Betting on growth is good. I’m not suggesting that Pixelcraft should hedge against the success of its own creation, but that it should not be overexposed to the US dollar during this period of expansion, and that any yield it can get on its treasury would help fund its objectives long term.
There seems to be a consensus here that the DAO should perform the swap, and I’m confident the proposal will pass in some form when brought to a vote. I know that you will deploy funds in a manner you believe is best suited for the health of the game. I would just suggest that Pixelcraft consider some diversification in its assets, as to me it just seems logical to look at opportunities when the market presents you with these conditions, and to at some point derisk against the dollar, instead of purely holding DAI.
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I’m in favour of the token swap with the DAO, seems the best option out of these.
I think a long-term solution would be to find some way that Pixelcraft could make an income in stablecoins/fiat from Aavegotchi/Gotchiverse to cover these ongoing infra/legal/reg costs.
I think official merch was mentioned, which is a great idea.
Some other ideas:
- in-game cosmetics priced in DAI
- Aavegotchi NFT raffles with tickets priced in DAI
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In favor of the token swap more than anything here.
I feel like the additional $GHST would be more appropriate on the DAO balance sheet and the $DAI would naturally be better for Pixelcraft to utilize for on-going expenses.
How long are the funds anticipated to last? Having some breakdown of how far out these funds will run would give me a better idea about the topic too.
-AL
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Yep. If you want to invest in the game, just buy some GHST and buy a bunch of assets. There’s a lot off assets they could invest in, that require no maintenance, and would be very profitable over time, if simply held, like… wearables, ghst, anything iherently collectible…
@jarrod On revenue streams, I agree. Merch and licensing are two obvious areas. Broadening to other non GHST revenue more recently has grown to include Alchemica from crafting. Much of this can be LP’d to farm GLTR for the team. There are definitely more avenues to pursue in addition but no matter which routes are adopted, the key remains to keep building for wider adoption.
@aimo217 we share a similar thought process! As far as how long funds will last, it really ties into the point just above. The goal is to see the DAI from this swap last until we get to a point of scale where we can be self sustaining on fiat. Understanding we still pay invoices with GHST and other crypto when possible, I don’t see us exclusively spending the DAI from this swap and that should make it last well beyond a year or more.
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I am working on updated language for a SigProp that incorporates some key suggestions I see in this thread:
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Tranches option - Three instead of two options for voting, including an option for one large tranche and an option for two smaller tranches over something like six months.
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Discount % - these two options can differ also in discount rate. Open to increasing the current 5% to an 8% discount to the 1.75M single tranche. While I don’t reckon to increase the 5% if we do have to break this into two tranches.
Do you guys like the 5 day range for GHST price discovery? I think we’re close now!
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Those options sound good to me. On reflection I’m now leaning toward the single tranche option myself, but others may still be mulling it over. The discount variation could be a deciding factor for those on the fence. Setting the range of price discovery to the SigProp’s duration could invite some GHST volatility — perhaps unlikely, but something we should be aware of. If I’m understanding correctly, the price would only be known on the last day of the Sigprop? Is there a reason not to backdate the range over the past few weeks?
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In all honesty, we should do a single tranch, and go now, because 6 months from now, GHST will be worth double.
Sure, there is going to be a moment between now and then that GHST will be on discount, but we all know that if you pick a random day, 6 months out… GHST will be up from here.
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While we all would love to believe that, that is not a guarantee and not a risk the DAO should take. I do however think the single tranche 8% option would likely be the best of both worlds.
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Alternatively, we could look at the week of price action leading up to the SigProp and publish the SigProp with a clear value per GHST already locked in. Looks like $1.50 per GHST before the 8% (or 5%) discount is applied.
Definitely some advantage to having a price included throughout the SigProp.
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Assuming there is no volatility spike between now and the SigProp, I’m happy with that methodology and price point, if there aren’t any objections.
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