Problem Statement: MoonDAO has many innovative ideas for projects that would empower its long term mission of creating a settlement on the moon, and also generate sustainable revenue for the DAO. With our first financing round of 2,600+ ETH we were able to make a statement that the collective is powerful enough to finance multi-million dollar missions and engage people from around the globe, however this is not enough to finance the entire roadmap and constellation of ideas that will get us to the moon.
Context: Our first mission of sending two members into space has had massive returns in growth and publicity to the DAO: it has given us the momentum to reach nearly 12,000 token holders and create a strong governance and incentives foundation to operate as a DAO. The DAO has survived the bear market thanks to treasury diversification into stable coins and a strong community that weathered the storm -- the people that stuck through those turbulent times have become very close, and our community is stronger and more mission-focused than ever. We are now in a period of building to prepare ourselves for the next incoming wave of energy in the markets. Now is the opportunity to focus on creating sustainable revenue streams that play to the strengths of a DAO, and create a strategy for navigating our path to the moon.
We have a bunch of ideas that could be turned into subDAOs and could generate revenue for the DAO:
A MoonDAO Satellite
Sending members into low earth orbit
Sending members around the moon (and eventually on the moon)
Asteroid mining
Satellite debris clean-up bounty programs
Marketing / Social / Podcasting for Aerospace companies
(insert your own idea here)
We will go through three options considered:
Do not raise money to finance new projects (e.g. use existing funds to finance new projects, and potentially keep the door open to financing in the future)
Sell $MOONEY directly to finance new projects
Create a subDAO for each new project
There are other options like debt financing, but I think without stable revenue coming into the DAO we aren’t in a position to risk debt financing at the moment. There may also be options “outside the box” that aren’t being considered, and I’m open to hearing other ideas.
What follows is an analysis of the pros and cons of each option considered, and finally a summary with my recommendation for what we should do.
This is the null-hypothesis or “no-op” -- it is worth considering whether we need to raise any new capital at the moment. We could always wait until a future moment. This is the “why now?” question.
At the moment MoonDAO has ~$2.25 million in stables and ETH, this is enough to run several internal proof of concepts and maybe make one large bet. There is always the option of “doing nothing” and keeping operational costs low, often this can be the best course of action as we wait for market conditions to improve and wait out the bear market.
Ultimately, however, we would need to either generate enough revenue to finance our ambitious plans to the moon or raise more capital from the community. We might not need to do this now -- but eventually we will likely need to (unless we find partners that are willing to pay us big contracts for products and services we provide, and we never need to finance again).
It’s always best to finance when you are not in need of financing -- and if we wait too long, financing might be our only option and we may have to take terms that are not great for the DAO. The water hasn’t reached our necks yet, and the structure of the DAO is antifragile enough to scale operational expenses up or down. I’m very confident that we’ll survive the bear market.
While we wait, we would have a slow stream of payments out to contributors over time (at current expense rate we have ~2 years of runway, but again, costs can be reduced), but the scope of our ambition will ultimately be limited in that time, we would not have enough to send more members into space sustainably, build satellites and payloads that will go to the moon, or finance sending a member to the moon with a partner. In other words, at some point we need more money to finance our future missions and while we wait we are in a state of limited ambition.
If we go with this option, I think the best course of action would be to use this time to focus on providing bounty services for partner companies and create stable revenue streams for the DAO, leveraging our global workforce to help those companies (and retain some % of bounty for the DAO) -- this is definitely the path to sustainability long term and I think this should be worked on regardless of what path we take for financing new projects. Although this model would sustain us, it will take time to build up the reputation and operational efficiency to scale this up to a multi-million dollar opportunity.
The best way to get to a point of self-sustaining revenue through a global workforce is to create awareness of our DAO as the premier way of getting everyday people to work productively towards a multiplanetary future. Without exciting projects for the DAO to focus its energy on, it would be difficult to recruit new members, and we might see the community start to dissipate, and people starting to look elsewhere for opportunities. I strongly think that we need flagship projects that generate interest in the DAO and get new contributors excited, while also offering opportunities for them to work for the DAO and create sustainable income.
Basically, I think we need to continue the momentum of the DAO and highlight inspirational projects for the DAO -- either with exciting partners that are willing to pay us to work on interesting projects, or community financing and running our own exciting plans. If we don’t have these projects, I believe that we might suffer a slow death as interest wanes and our treasury dissolves over time.
TLDR:
Pros: Market may improve in the future, we may come across a partner that gives us a contract to make sustainable income for the DAO (so we don’t need to finance), we keep options open.
Cons: Limited scope of ambition, less excitement for contributors, if opportunity never comes we may slowly burn treasury and suffer a slow death.
Our treasury has $5.6MM in $MOONEY tokens and we could sell some of these directly to finance new projects. About ~48% of the total $MOONEY tokens still sit in our treasury. This is the traditional financing route of a “company” -- we could earmark something like 10% of the $MOONEY tokens and sell them directly to people. This would empower our treasury, converting $MOONEY tokens to stables.
I think this is the most simple way of financing -- we would simply open up an address and let people donate to MoonDAO to finance our future projects, and in exchange distribute MOONEY to those addresses that put in money proportional to the amount they donated.
The major cons of this approach are that the markets are pretty weak at the moment -- I personally think MOONEY is trading for under its value and by selling the tokens we’d be selling ourselves short. It also increases the circulating supply of MOONEY and would not be great for MOONEY holders, although this may be offset with the new staking to vote which will diminish the circulating supply of MOONEY.
If we want to go this route, I think we should wait until market conditions improve and in the meantime keep operational expenses low and hopefully wait for the market to warm up within the next year or so. There is a risk that the bear market continues for a few more years and we are put into a position where we need to dilute the holders and sell $MOONEY. We would likely use some lock up period for these new people though, and that could offset the dilution.
We are also in a tricky position where the value of $MOONEY is directly proportional to the value of what it is governing -- aka the treasury + network of talent. So it’s a lose-lose situation to wait as the treasury dries up, because governance value would also be impacted. So sitting on our hands too long could be bad for the DAO -- we shouldn’t wait too long, but we also shouldn’t sell at a low point.
If we do sell $MOONEY directly, I think we should do so by focusing on selling it to partners that strengthen our position and add a lot of value to us, while also creating opportunities for the community to receive the same terms.
There are also legal uncertainties with selling $MOONEY directly, and we may need to engage a lawyer to help us navigate the uncertainty and protect the DAO.
It’s also important to note that we can never mint any more $MOONEY because we have revoked ownership over the juicebox project. So, we are going to be limited in the amount of $MOONEY we can sell. This is a protection to $MOONEY holders, but it also means we can’t just constantly raise by creating more $MOONEY. This is a good thing though, since it gives scarcity (and therefore value) to the token.
In my opinion the best use of $MOONEY at the moment is to use it to incentivize new contributors to work for the DAO, giving talented members $MOONEY to help build the DAO and using the new staking mechanism to lock up tokens so they are incentivized to build with us long term.
TLDR:
Pros: Simple, keep the focus on $MOONEY, gives us more runway to finance ambitious projects now and keep the momentum going.
Cons: Dilutes MOONEY holders, market conditions are weak and we’d be selling $MOONEY low (implicit bet against ourselves), and there is legal uncertainty we need to navigate.
This is the most “DAO”-centric solution to raising capital for projects -- but since it’s something that is new, there is no playbook for this. Therefore this idea depends a lot on how subDAOs are implemented.
If done right, subDAOs could become a recurring stream of ETH/Stables to the main DAO, and a passive form of token streaming to the $MOONEY holders, all while further decentralizing the DAO and creating more autonomous sub-units that can scale to tackle any new goal.
This option is more operationally complex, as the DAO becomes a curator/incubator/venture model for new projects, and thus will require more DAO operators. However, it also creates a big opportunity for talent to be able to run their own organization within MoonDAO. This increases our talent pool by putting more responsibility into the hands of project leaders.
Having multiple sub-projects creates a federation of projects that are all united by MoonDAO and networked together by MOONEY. This is a model that can only be achieved with the new tools we have at our fingertips in “web3,” so we would be breaking new ground and pioneering a new space.
Right off the bat I’ll address the major concern I’ve heard: new tokens. At the moment $MOONEY is the only token that governs the DAO through staking with vMOONEY. This will always remain the case. This will never change, $MOONEY will always be the central token.
The worry seems to be that by creating new tokens, this will dilute the governance and move operational energy away from $MOONEY. These are valid concerns that need to be addressed, and there needs to be clear incentives for $MOONEY holders to move forward with this new system.
My suggestion is that new subDAO tokens are distributed as follows:
10% of minted tokens are airdropped to existing MoonDAO members (vMOONEY holders)
40% are reserved into the subDAO’s treasury and controlled by the subDAO token holders (incentivize contributors, liquidity, etc.)
50% are distributed to people who are funding the project
By airdropping the minted tokens directly to MoonDAO members, we create a passive stream of new subDAO tokens that are going to their wallets. By default they become members of the new subDAO and can vote on those projects.
A fixed supply of tokens would be generated for each project -- ideally following an infinite series allowing anyone at any time to mint tokens for some period of time. As tokens are minted it asymptotically reaches a final token issuance (price goes to infinity). I haven’t seen a tool that does this yet, so if not, then we can follow a similar style to the MoonDAO minting of a 1 month period open mint. We can also follow a staking model for the subDAOs similar to what we did with vMOONEY.
New tokens would be scoped to govern the multisig associated with the project, and otherwise will not affect MoonDAO’s regular governance. MoonDAO as a network will only be governed by vMOONEY holders.
Furthermore, MoonDAO would take a 5% cut of all ETH/stables/etc. raised into its main treasury -- this means that MoonDAO would have a passive stream of new ETH coming into the main treasury for each project that is being funded.
Therefore new projects would support the main treasury and the vMOONEY holders. All the while decentralizing the DAO and creating focused projects where people can choose for themselves what projects they want to fund directly, and not diluting $MOONEY supply.
TLDR:
Pros: vMOONEY holders automatically receive subDAO tokens, the main multi-sig gets passive income from funds raised in other subDAOs, the DAO is more decentralized as a federation of projects allowing for talented people in our DAO have more space to run their own show, MoonDAO members can directly support projects they believe in, and $MOONEY isn’t diluted.
Cons: $MOONEY isn’t in control of subDAOs, higher operational complexity
Eventually we will need to create valuable products and services that generate $XX million in yearly revenue for the DAO so we can make it to the moon.
To get to that point, we will need to invest some amount of money into projects that get us to that scale (satellites, direct experiences of space, affiliate marketing, etc.). The more bets we can make and curate inside of the MoonDAO community, the higher our probability that a moonshot will take off.
We should keep our ambitions high and keep funds flowing into MoonDAO to sustainably finance projects that attract the right talent that will ultimately create self-sustaining revenue for the DAO by producing products and services that get us to the moon.
Global markets are soft, and selling $MOONEY directly will dilute holders and is an implicit bet against ourselves by selling at a low.
Creating subDAOs allows us to finance new projects while not diluting $MOONEY holders. It also lets talented people create their own DAOs within the MoonDAO ecosystem -- thus expanding our network of people.
With each subDAO vMOONEY holders would receive a passive stream of governance tokens, and the MoonDAO main treasury would receive money coming in from new subDAO raises -- creating some recurring revenue for the DAO to operate and keep making moonshot bets, and further incentivizing people to hold $MOONEY.
We don’t want to sit on our hands too long, there’s no time to waste -- it’ll either be a DAO on the moon or it’ll be a nation or company. What are the implications if the moon is in the hands of a few nations? Or a few companies?
The chance to create a positive future is in our hands -- one moonshot at at time.