This will be the 1st in a series of topics that hopefully, after discussion, give future authors a sense of what components they can add within their proposals to boost their chances of getting it passed.
Iâd like to discuss with everyone revenue/profit sharing with the DAO. If the authorâs SIP has a key product that he/she intends to generate revenue from, should the DAO get a share of that revenue since we are an early financier of the product?
For example, an author comes up with an SIP to create a software that improves the user experience of the marketplace. Said software in turn gets a platform fee of 2.5% everytime an item is sold. Potential revenue per month is 1k sand/month
My proposal is for the author to include a 3-5% rev share from the platform fee to the DAO.
In an event the product gets acquired, 10-20% of the sale goes to the DAO.
Although the rev share amount seems small, it ensures that the DAO gets a Return On Investment for financing the proposal, as opposed to nothing. This also ensures that the DAO stays sustainable by having income generated, rather than just outgoing expenses funding SIPs.
Iâve been thinking about this for a while and wasnât sure how to approach it. Something about every SIP needing to give a percentage seemed too much, but Iâm not sure why I felt that way.
I think there is a world where every SIP giving a percentage is reasonable, but a max 1% of net revenue would be my vote until we get a good idea of how this plays out. 5% is more than even creator fees are on most platforms.
Iâd say that this doesnât apply to all SIPs, only the ones that intend to bring in revenue on a consistent basis with a product/software/course, with that revenue derived mainly from paying customers/clients.
SIPs for events, Sandbox for good, operations, can be left out of this equation as they are typically one offs and largely arenât done to bring in revenue.
In terms of % of revenue, the figure I gave would be considered ballpark and it should vary between different SIPs.
I hadnât even thought of naming budgets that are and are not includedâŠthatâs an awesome idea
I would advocate for the voting DAO to discuss and determine percentages into effect via a SIP. Reason being: The DAO Admin Team would be forced to spend its time and resources deciding what SIPs should give a percentage and then negotiate that with each SIP author during SIP curation.
What do you think of this?
SIP budgets that must offer some % of revenue share: Platforms, NFTs, SAND Initiatives, Game Content, and Liveops
SIP budgets that are case-by-case and negotiated with DAO Admin TEam during curation: Other
SIP budgets that are exempt from revenue sharing: Operations, Sandbox for Good, Staking
After giving it some more thought, perhaps its better to allow the SIP authors to decide if they would like to add rev share into their proposals. The idea of it is to give authors an edge, something to consider adding to sweeten the deal on their SIP, instead of making it compulsory. Ultimately whether they choose to go for it is up to them, and then we as voters decide if itâs good enough.
I had exactly the same line of thoughts that if the DAO is financing some SIPs that are generating revenues, a part it should be shared with the DAO. I actually asked the question to Deepsea_Yobike for the idea of new horror game A New Horror Game Series for The Sandbox? but no answer was provided. I have the same opinion that @DAO that it would be more beneficial to let the author of a SIPs to chose to offer or not revenue sharing to the DAO. It will revert to SIPs author, the duty to explain why they do not offer %age back to the DAO or have lower chance to pass. Will allow to differenciate as well between small creator and a big studio.
What we could potentially do, is aksing the DAO admin team to provide guidance about what is a reasonable set-up of revenue sharing based on their experience (I am assuming TSB has all numbers) and according to the category/type of SIPs.
It could be added as recommendation into SIPs guideline.
Hello KCL,
Thank you for that thought. I think itâs normal for DAO-supported creations to be able to recover funds from the sales generated by a game. This echoes the principles of video game âpublishersâ, where the studio sees its production costs covered by the publisher, but the revenues generated are shared.
In the case of DeepSea, our studio paid in full for Chapter 0 and Episode 1, in order to promote this IP. Our aim with the DAO and this SIP is to be able to launch a Saga that can generate sales of NFT and therefore revenues, but also attract a public of gamer fans of horror games to The Sandbox, which indirectly serves the valuation of The Sandbox (Land, token, cryptoâŠ). In the same way as with a publisher, heâd take charge of the episodeâs production costs, get paid on sales, and if the game does really well, heâd take charge of other episode productions.
In this case, we propose that Episode 2 should be used to finance the other episodes of the Saga. But we can fully understand if we do otherwise and share the NFT revenues with the DAO (e.g. 30/70), but thereâs a real possibility that the other episodes will also call on the DAO to be created, but if sales are good, everyone will be happy.
the dao should only fund community projects, not private projects.
no one wants to join a DAO/platform that only benefits a limited number of people.
engaging and inclusive initiatives will help to nurture a community spirit and will allow a greater influence of the dao tsb, this will have an impact on the value of the Sand, Lands and assets.
This requires more thought and discussion.
But as it stands, although I am not inclined to vote for funding a private project, I thank you for allowing the subject to be addressed because it is essential.
Hey Johan,
Sorry for calling your topic out this was just to illustrate the discussion and I do not think this is the best place to discuss your episode 2. We can maybe continue this conversion when your SIPs come out for voting. But thank you by the way for your answer it allows us to fuel some good discussion.
For example I am in a disagrement with @sebga (and it is fine) because for example I consider that healthy studios are to the benefit of TSB and the DOA as they will be more active, publish more and bring more players.
Of course the difficulty lies into the valuation of indirect benefits like to number of players, more experiences published⊠vs a direct benefit via a share of revenues. I do not have the experience in that field to judge but I would expect that studios are able and used to present solid cases. @sebga what is your definition of a community project vs a private project. We are all private individuals that togtehr forms a community.
Last but not least @Johan : if your SIPs is coming for voting you will need to give us a bit some explanation about this (found it just now while searching for your studio)
Hi Sebga and KCL,
The Sandboxâs objective is to attract more and more players by constantly improving its Gamemaker. But to attract players and keep them coming back, we need to offer increasingly impressive experiences. For this to happen, video game studios need to be incentivized.
For example, our studio makes games for Meta, Pico, Steam⊠and most of the time, we have these games co-financed with partner platforms or publishers. Todayâs declining markets make it impossible to finance quality games simply by selling NFTs. So we need to find a mutually beneficial approach that supports the studios and brings value to the platform. In my opinion, this is one of the roles of the DAO, and the community is there to choose from among the projects those that seem most interesting in terms of image, virality and profitability.
In any case, The Sandbox has the potential to become the biggest metavers of the coming years, but itâs essential to significantly increase the size of the community and get gamers to join us.
agree, I need to explain this aspect.
Iâm writing about this, it deserves a thread. As soon as I have finished the draft, I will post it on the forum so that we can all discuss the subject and build what is best for us all.
To answer your question, of course a community is the addition of individuals entity, but I am talking about private financial interest. @Johan , Iâm agree about âwe need to find a mutually beneficial approachâŠâ and with your global vision but not with the case you defend right now.
I think youâre french so letâs talk together.
The best way, more transparent should be on a X space, a public talk.
But if you donât want we can have a private discussion.
In any case itâs absolutly not a trap, I think we all love TSB and want the best for us all.
Have you a discord or X account where I can join you ? you can find me on X (@Xsebga).
I donât disagree with a revenue sharing plan for all SIPs generating revenue, I only advocate that the amount be very small, not to exceed 1%. If we take a long term approach to this, then 1% from dozens of SIP projects should eventually be enough to sustain the DAO while not threatening a SIPs success.
Hello Lanzer,
I understand this long-term approach but, in my opinion, we are very far from that at the moment.
On the one hand, there is neither sufficient attractiveness nor sufficient traffic on the TSB platform to generate significant income linked to the sale of NFTs or derivative products.
On the other hand, the Beta status of the tools used does not guarantee the longevity of the experiences offered, and in fact a reliable and lasting source of income for the DAO.
I will propose some avenues for reflection very soon, I hope that they will resonate with everyone and that by combining good will with the talent of each person we will be able to create a complete, viable and attractive system.
I understand what youâre saying, no worries, I donât think we have the luxury of procrastinating. Absolutly not, but we need to be efficient and relevant, moving forward in a way where the dao is sustainable for itself and attractive for everyone.
Iâll share it here tomorrow.
I share the same sentiment with @Lanzer. What we should aim to do as a DAO is to ensure that we get an ROI on the funds we invest in, and yet ensure that we do not put a strain on the finances of the projects we support.
While the amounts may start small in terms of absolute revenue from such contributions, that amount will grow as projects stack up(even if we account for projects that may possibly fail).
What Iâd like to avoid is a scenario where we introduce this initiative a tad bit too late, and down the line, projects will question why earlier SIPs were never required to contribute to revenue sharing and yet they are. In all fairness, they have that right to question.
Hello Lanzer,