Strategic vision of the DAO, what do they think it should best be used for? What types of projects are most beneficial and how do we draw lines between Sandbox company and DAO.
Are there scenarios where they are making their recommendations in large part based on information that isn’t public, and if so are they fine with us going against their recommendations or should we figure out how to better propagate information.
This is an important topic, indeed
We are separate entities.
The DAO operates through an endowment from TSB to the Foundation (as we are a “wrapped DAO”).
Lanzer covered this on his podcast & (once legal approves my run of show) I will also be doing a show about the structure of the DAO in relation to TSB.
But, I do get what you’re getting at, Robbie… To what degree are the delegates expected to vote in line with the wishes of TSB, right?
I don’t want to speak out of line here, but as I understand it, our 12 Admin-vetted delegates who received VP from TSB are expected to vote the way they see is best. While typically, if one were to delegate their VP, the delegate should take their delegator’s wishes into account, this is a unique scenario in which it was not just the VP being spread around by TSB but also an invite for trusted SandFam to vote using their will.
I will add this to the list of questions for them
Are there a examples or references of Web3 DAO’s liquidating traditional Eth PFP holdings for “art collections” finding substantial financial positive growth, new users and new members of the community?
I think Seb has a certain sensitivity to art and that he wants to bring all of its elements together within TSB.
I understand that and I agree, but I’m waiting for a response regarding the promised feedback before I say anything further.
Can you clarify whatcha mean here, @sebga?
All in this message @theKuntaMC
We never received any feedback until today. I was watching this discussion to understand, but it remained forgotten.
I refer to this :
Hi Seb,
Well this story is an entire roller coaster of its own ! I was tasked to negotiate on behalf of a London based Family office for a swiss italian client of them nearly 50 primary market acquisition through private sale of top NFT artists in a very short time frame for a budget of 1,2 M euro.
Unfortunately there was several due dilligence process that the family office and client was taking a lot of time to complete and finally refusing to comply with althogether, faced with the potentiality that I was dealing with fraudulent funds (doubt that was later confirm in a surrealist IRL meeting in Milano where I was offered a LARGE amount of cash in a sport bag as payment for the mission done so far) I obviously couln’t take this money and had to stop collaborating with them. After that I had to contact each and every artist involved to clear this off. This situation is currently being investigated by Tracfin and the HCMR, its all that I can publically share…
Overall a learning experience comforting me in my capacity of delivering on such mission in a timely manner, and a reminder that due diligence process are crucial to such contract.
Hi Money,
Thanks for engaging in the convo. there is no such example and the reason is that all collector DAO constitute themself around a pre-established collection rational so pivoting a DAO art collection isnt really an option as it’s litteraly contrary to the core fundamental constitution of those DAO.
However if i had to dig for an exemple I’d say Felllowhip is a project which pivot from Photography, to post photography and now more largely AI in order to adapt to market demande really brought substantial financial positive growth, new users and new members to their community.
Thats not ETH PFP to art rather than one medium of art to other art medium but thats as close it can get to illustrate pivoting from a underperfoming category to one more in demand.
This topic already was an heated one in SIP-9
I’ve came to realize that there is a substancial part of the community that is adament about rejecting any proposition that isnt specifically targeted toward making the game better.
I genuinely have no idea of how to make the sand box product better, neither do I have the skill set, experience or legitimacy to tap in this discusion. To be clear this SIP wont make TSB games better, at least not directly, I can understand that can be a sufficient reason for many voter to vote “NO” and I respect it.
All I can say is that my SIP aim to benefit the DAO in the only way my experience and skillset can, just like I would for any other client.
If I can help raising those concern in my thursday meeting i’d be happy to do so.
@Lanzer can attest from our discusion on his podcast that before SIP-9 the transfer of TSB collection to TSB DAO was never made public, resulting in quite a lot of interrogation.
PS: Apologies for the serie of late reply I was at the opening of the Paris Blockchain Week
Yes I can. It was a great interrogation… Ahem, I mean conversation.
Thanks for your follow up during such a busy week. Much appreciated! Enjoy the event.
Wow, what a crazy story.
Thanks for your feedback.
Back to SIP 26.:
Hey,
Sorry it took a bit of time to draft this response, there’s quite a lot to unpack here.
At this stage (subject to change as we aim to remain agile and responsive to market conditions), we’re targeting a total liquidation amount between €600K and €800K. The required volume percentage to reach this goal heavily depends on the specific assets involved and does not account for potential short term market-making opportunities.
For instance, if we prioritize assets valued under 1 ETH, we would need to liquidate over 80% of the total volume, which would only yield around €100K–€150K at the current ETH/EUR rate.
Given that the current estimated value of the collection ranges between €1.2M and €2M (based on latest ETH/EUR price), our FIAT liquidation target represent a bigger proportional share of the total liquidation target than originally anticipated. However thats not really a relevant figure in a multy-currency high-FIAT/crypto-volatility context.
The €400K to be returned to the DAO would thus represent approximately 50% to 66% of the total liquidation target.
To avoid any confusion — our remuneration is not taken from the collection’s liquidated funds. It is instead drawn from The Sandbox DAO’s annual budget.
As a result, between 33% and 50% of the funds generated from liquidation will be used for acquisition and market-making, amounting to roughly €200K–€400K annually, based on current targets.
In your proposal, you suggested that our remuneration should be deducted from the liquidation proceeds. From both a contractual and financial perspective, I don’t believe this is technically feasible.
Regarding your KPI examples as basis of succes metric, I don’t think there are adapted….Reducing the size of the collection and removing depreciated, illiquid assets should be a clear priority whereas your suggested KPI would encourage the opposite behavior and not account for the quarterly cash out target:
1M EUR KPI: We could achieve this by liquidating less than 20% of the collection volume, targeting the top 260 NFTs, which represent 95–98% of the collection’s total value.
60% KPI: Conversely, liquidating 60% of the volume (primarily less-liquid assets) aside from requiring far more effort and would generate less than €100K in value.
As previously mentioned, over 80% of the collection’s volume represents under 5% of the total valuation, about €100K–€150K.
A few comment have expresses worried toward liquidating too much of the collection so I want to ask : Are these assets worth keeping? I Personally, I don’t think so.
Lastly, we will absolutely include performance tracking: the value appreciation of acquired assets will be benchmarked by comparing purchase price vs. asset value at the end of the SIP’s term, and this will be reported quarterly.
Here are some additional figures to illustrate the state of the DAO’s NFT collection, and in particular the value of the Top 200 compared with the rest of the NFTs.
Please disregard the slide “The quarter plan during 12 months” and “”The quarter plan during 4” as these were the wrong presentations to download, and in fact were not meant to be shared.
Please refer to Brian’s latest explanations and our latest infographic
Hello @Arthemort’s team
I think the entire catalog should be separated into several collections. And only one or a few of these collections should be submitted to a SIP like this one.
I don’t see what would prevent remuneration from being indexed to results.
Hi Seb,
In response to the idea of separating the catalog into multiple collections and only submitting a few to a SIP like this one:
That was actually an approach I seriously considered when drafting this SIP. You can even see it referenced in Slide 2 of the presentation, where I initially separated the collection from the liquidity aspect.
However, after evaluating the pros and cons, I concluded that this would add unnecessary complexity and could potentially create negative outcomes. It might lead to a situation where it’s only worth going through the entire vesting process for a few high-performing collections, leaving the DAO stuck with low-value, illiquid assets that no one wants to handle.
Consider the process we’re already going through: several weeks of preliminary discussions with the DAO team, two weeks in the SIP idea phase, another two weeks of active discussion, then two more weeks of voting. Even after that, it’s unclear how long it would take to actually kick off operations. Plus, there’s a mandatory three-month freeze before submitting another SIP.
On top of that, we still need to build the internal framework from the ground up to manage operations on the custodial wallet. That’s covered in Section 1 of the requested budget. Splitting collections across multiple SIPs would reduce the flexibility we need to respond to market dynamics effectively, and that kind of agility is essential in this space.
That said, I’ve seen proposals aiming to streamline the SIP process in the future, and I think those initiatives are promising. Combined with our end goal of leaving the DAO with a curated portfolio of a few hundred performing assets and a solid operational framework, this would allow the DAO to manage its holdings fully independently.
Of course, I expected this to be a topic of debate. DAO members have different perspectives, and in some cases, personal ties to certain projects. Others might simply lack experience or insight into the NFT collectible or digital art markets. That’s entirely fair, and it’s why I believe open discussion and long-term thinking are so important here.
In response to the idea that our remuneration could simply be indexed to results:
What I was pointing out in that paragraph is that the acquisition budget is calculated as:
Acquisition budget = Liquidation revenue – Quarterly cash out
and not
Acquisition budget = (Liquidation revenue – Quarterly cash out) – Remuneration
As you know, SIP budgets are vested by the DAO treasury itself. This structure means that our remuneration is part of a broader operational budget and not directly derived from the liquidation proceeds.
Making the entire remuneration variable wouldn’t be fair, particularly in regard to the work outlined in Sections 1 and 4 of the proposal. Those deliverables are independent of liquidation outcomes and are scheduled to be completed either before or after any transactional activity occurs.
To provide some perspective, in traditional art market practice, when I manage the liquidation of a collection, I typically receive 8% before tax on sales from the vendor if the collection is auctioned. That fee covers cataloging, valuation, strategic advice, and operational oversight. The auction house itself takes an additional 5% to 12% from the seller, and around 30% from the buyer. These fees drive the hammer price down compared to private sales, and since all those costs are passed on to the buyer, it impacts my commission as well — similar to how a tariff works.
In private sales, the commission is usually degressive, based on the value of the individual work:
But I don’t think this kind of structure translates well to the DAO context, considering the nature of the project and how funds are managed.
I’ve spent a lot of time trying to come up with a variable income model that would make sense for this mission. I couldn’t find one that wouldn’t create adverse incentives or misalign with the KPIs. As I’ve explained before, using simple volume or value-based targets doesn’t encourage the right kind of behavior or strategy for the long-term benefit of the DAO.
Also, we’re a team of independent professionals, each operating as a separate entity. The tasks we’re responsible for differ significantly in scope, responsibility, and influence on the final outcome. Splitting a variable income evenly would be inherently unfair, and designing a more nuanced system would introduce even more complexity.
On top of all that, fixing a percentage commission on ETH-denominated sales — with a target cash-out in dollars, converted to stablecoins, then to SAND, routed through an offshore Cayman account, and finally reconverted to euros and distributed to our respective companies — adds another layer of financial and operational friction. It becomes an accounting and compliance headache that could compromise both efficiency and transparency
This was exatly the tenur of Sebastien Borget concern on our meeting of thursday (he wasn’t there physically but those were the thing passsed on to me through note by Cyril) I understand where its coming from and I would love to meet you half way but I just can’t figure out how, I have made one proposition howerver : Setting up a Reserve price on some of the assets.
