The Hedgey protocol is enabling powerful partnerships between DAOs through locked token swaps.
DAO-to-DAO token swaps are a new way for DAOs to collaborate with each other. In doing locked token swaps, DAOs are able to use their native tokens to invest in other DAOs, which are in turn equally invested in them. This creates aligned interests and a strong foundation for future collaboration and partnerships.
In combining Hedgey’s token locking protocol and our D2D swap protocol, we’re creating a simple way for DAOs to invest, collaborate, and participate in the upside of DAO partnerships.
Hedgey has been collaborating with incredible DAOs like GnosisDAO, Shapeshift, DAOHaus, Metacartel, 1hive, and more for the last 6 months.
Today, we’re sharing a fun, innovative way DAO communities have been using one of core pillars of the Hedgey protocol to create community-themed, token-wrapped NFTs with a simple guide to doing it yourself.
This Metacartel-themed NFT was created on Hedgey for free by locking up 9 Rchili (the minimum is $1 in Rchili, or any token, to receive a Hedgey with these awesome traits). Check out all 40+ MCON-ready Hedgehogs on their OpenSea collection.
A sustainable compensation model can be a make-or-break for DAOs trying to retain and onboard contributors, especially in the current market conditions.
This article will cover:
Let’s dive into the current state of DAO compensation, what’s working, what isn’t, and what different DAOs are doing.
Hundreds of NFTs, each representing ownership of locked tokens, are being created by DAO communities on Gnosis Chain.
Web3 and DAO treasuries have taken a substantial hit in recent weeks. Asset prices globally are down and inflation is up. Some DAOs, such as 1Hive, were able to utilize diversification strategies during the peak of last cycle to convert their native tokens to stable coins, to build up that emergency runway, but most did not. It has never been more apparent of how important diversification is. It may seem like there is nothing left to do, because selling tokens at these prices may only further exacerbate the problems and put additional sell pressure on token prices, especially when buyers are becoming more scarce until things settle down. However, I believe there is still one great option to deploy native DAO tokens to earn yield and responsibly convert them to stable coins: long dated covered calls.
Background: Hedgey Finance launched the ability for any DAO to deploy a covered calls market (pair of token <> usdc), across any EVM. Covered Calls are derivatives, commonly referred to as Options, where the Seller of the call is Selling (and receiving payment for) the Right (for the Buyer) to purchase X amount of Tokens at a specific Price per token before a specific Date. Simply what this means is that as the seller, I am getting paid up front in USDC, and locking my native tokens in the DeFi protocol where the buyer can purchase those tokens from me at our agreed upon price anytime before the expiration date. When the buyer buys my tokens, referred to as ‘exercising the call’, they pay me the agreed upon USDC to purchase the tokens. If the call expires (doesn’t get exercised before the expiration date), then I just get my tokens back and can deploy and sell another covered call.
While traders may think of covered calls as a strictly day trading strategy, for the DAO<>community relationship, they can be a very powerful tool that does not require constant trading. Rather than a short term speculative toy, selling 3 - 6 month (or longer) dated covered calls has the power to align benefits and incentives of a DAO and its community.
For the first time, NFT, POAP, & token communities can give supporters exclusive access to discounted token offerings, and create a new way to whitelist.
NFT token gating, a strategy that gives token holders access to exclusive products, token offerings, experiences, content, and more. For example, NFT holders may receive perks like special discounts on new products, early access to store openings, or invitations to members-only events.
From discounted token offerings for communities to creating a new path to DAO fundraising — this approach is an innovative way to reward and provide unique opportunities to early & core contributors.
Introducing another pillar of the Hedgey protocol, DAO-to-DAO (D2D) token swaps — a huge step toward DAO-DAO interoperability.
One of the major challenges that many DAOs face is the fact that their treasuries mostly consist of their own native token. If not done correctly, asset diversification can lead to dumping of the native token on the open market, resulting in a negative price impact.
D2D token swap is a common endeavor of DAOs trying to diversify some of their treasury by holding other DAO tokens.
For DAOs/Treasuries, token teams, and web 3 startups
DAOs/Treasuries have gained massive wealth over the last two years, much of which has been in the projects native token. This creates a native token dilemma, where the project has a large treasury that resides in a highly volatile, illiquid asset that needs to be converted to more stable coins, but is forced to do so through means that create negative price impacts and poor market sentiment from community members. This leads to projects holding more tokens than they should, and not building up the stable coin reserves/diversified treasuries required to build and grow in changing market conditions.
Introducing a new approach to token rewards that allows DAOs and token teams to give tokens to core members while having better control on when tokens enter liquid markets. Learn more on our DISCORD.
First, an incredibly important shout out to DAO HAUS. The Hedgey NFT protocol was designed to be used primarily for DAO treasury diversification in combination with our public OTC deal offering protocol to create public, time-locked token sales. It is only because of the innovation, exploration, and collaborative nature of DAO HAUS that this concept came to fruition. So — big shout out to DAO HAUS, Ceresbzns, and Spencer. If you’re not in that ecosystem you’re NGMI.
A new, unique feature in the Hedgey protocol allows users to lock any token, for any amount of time, in a Hedgey NFT. This feature allows people to use an NFT as a cool visual wallet for their tokens.
This article will walk you through how to do this.
First, head over to the Portfolio page on the Hedgey app where all your Hedgey NFTs (across all chains) will be displayed. If you haven’t already, connect your wallet, either through Metamask or WalletConnect.