75072ba728c541ade305418815fdedde07c661d6
Proposal:
The purpose of this proposal is to establish a functional budget to pursue both a market maker for the SPS token and to pursue a top tier exchange listing. There is no way to be certain of success in the pursuit of a centralized exchange listing, but by apportioning the funds and establishing some general guidelines for how the DAO would like to pursue a listing if one becomes available, we would allow for the necessary conversations to advance those opportunities to be able to take place.
@clayboyn has already made a very detailed post explaining a lot of the basics about market makers and exchange listings, so if you would like a better understanding of what our options are and how they function, that's a good place to start. Please keep in mind that exchanges generally require NDAs to even have a conversation with them related to listing a token. There is absolutely zero chance we get and maintain a top tier listing without a market maker.
If this proposal passes, the Unallocated portion of SPS that was formerly allocated for Team (270 million SPS) will be authorized to be used by the SPS DAO to negotiate and potentially pay for exchange listing fees, liquidity deposits and marketing fees as well as market maker fees and deposits that may be required to list with a top tier exchange. These funds will not be available to be used for any other purpose for the duration that this proposal is active without a vote to explicitly remove the authorization.
The SPS DAO will allocate a budget of up to $500,000 of SPS and/or stable coins to hire a market maker and provide the necessary liquidity to operate on high volume exchanges. At this point with the SPS token having so much upside potential, it would likely be in our best interest to hire a subscription based market maker instead of selling token options to a lending based market maker. Not all of this would be a spend and it's unlikely that all of it would need to be used, the intent is to simply authorize a budget for the SPS DAO Project Manager to negotiate with.
The SPS DAO will also allocate a budget of up to $2,500,000 of SPS and/or stable coins to pursue a listing with Binance. The funds are not authorized to be used for any other centralized exchange listing. There is no way to be assured of success in the pursuit of an exchange listing and it should be known that the terms of any deals will be under NDA contracts. The intent is to simply authorize a budget for the SPS DAO Project Manager to negotiate with and not a guarantee of results.
If this proposal passes, the budget authorization outlined above will expire 365 days after the date this proposal passes.
Mar. 16 Amendments
After listening to Yabapmatt's thoughts in the latest Town Hall concerning our chances of successfully pursuing a tier 1 exchange listing, and reading feedback in Discord, I have decided to add some qualifications to this proposal.
The budget outlined above will not become available for the SPS DAO Project Manager to utilize until these game development milestones have been reached:
The NPE (New Player Experience) project is complete. As exact criteria for completeness is a bit nebulous at this time, I leave it up to the SPS DAO Project Manager to decide, in consultation with the Splinterlands team, when this requirement has been satisfied.
SPS Validator software has been released and is available to run on independently operated servers by the community.
If both of the above do not happen within 365 days after the date this proposal passes, then the budget authorization will expire without being used, and require another DAO proposal vote to be extended further.
The intent here is to ensure that the SPS DAO Project Manager chooses a wise time to pursue an exchange listing, with the greatest chance of success. Having a solid NPE in place will increase our player retention & smoothness of onboarding, and SPS Validators will show to the exchanges that our token's operation is sufficiently decentralized.
Raising the budget ceiling
It is entirely possible that prevailing market conditions will be very different at the future time when the SPS DAO Project Manager decides to utilize the budget set forth herein. If, upon making a careful determination of listing requirements at the time, the SPS DAO Project Manager decides that the authorized budget is not sufficient and a higher budget is needed, then a new DAO proposal vote will be required to raise the budget ceiling.
Responsible use of funds
The SPS DAO Project Manager should strive to negotiate as good a listing deal for us as he can, and if it can be helped not spend the entirety of the funds authorized for use by this proposal. It's important to realize that the budget set forth herein establishes a maximum limit of what CAN be spent, not an exact amount that MUST be spent.
Mar. 17 Amendments
After careful consideration, I have removed Coinbase from the scope of this proposal and limited it to pursuing a Binance listing. I do not believe there is any realistic chance of getting listed on Coinbase (at least for the time being), due in part to the fact that BNB Smart Chain (formerly called Binance Smart Chain) is the primary blockchain for SPS and that chain is not supported by Coinbase. It is possible to imagine SPS being bridged to other chains which Coinbase does support, but that would require additional R&D and so will be left as something to consider in future SPS DAO proposals.
In addition, the following constraint is added on how funds may be made available for this proposal's budget:
Minimum threshold for selling SPS
In order to meet the budget authorized by this proposal, it may be necessary for the SPS DAO to sell some of its SPS holdings for stable coins and/or other tokens outside the Splinterlands ecosystem. The SPS DAO is not authorized to sell any SPS for such purposes unless SPS is currently trading at 10 cents or higher on whatever platform will be used for the transaction, at the time of each individual transaction.
Presumably, any such selling activity will be done in small increments stretched out over time, so as to minimize market impact (which also means the SPS price will need to be at or above 10 cents for a sustained period). The exact details of how this activity will be conducted (how much should be sold at once and how often, etc) can be decided on later if this exchange listing proposal passes.
The intent of this constraint is to ensure the SPS market is healthy enough to support the requisitioning of necessary funds. If we reach the 10 cent threshold, that also demonstrates the strength of the token and that we have some momentum built up, which will work in our favor during exchange listing negotiations.
Mar. 18 Amendment - Temporary suspension of SPS to DEC conversions
Some community members have expressed concern about the SPS to DEC conversion mechanism and how DEC supply may be affected if there is a rapid rise in the price of SPS. The worry is what would happen if too many people attempt to lock in SPS gains from any temporary rapid price increase by converting to DEC at roughly the same time, resulting in overinflation of DEC.
As a safeguard for the Splinterlands ecosystem, if SPS becomes listed on Binance, then the SPS DAO Project Manager will ask the Splinterlands team to temporarily suspend the SPS to DEC conversion mechanism. This suspension shall begin on the day that the listing becomes public knowledge, and will last until at least 2 weeks after the day that SPS becomes listed. After that time, the suspension can be lifted at any time when the Splinterlands team judges that it is safe to do so.
This suspension gives the SPS market a chance to adjust to any incremental demand that may be created by the listing. It would channel any short-term selling pressure to the SPS market and remove the possibility of a massive spike in the amount of DEC issued from conversions. By the end of the suspension period, the market will likely have settled into a new equilibrium.
Furthermore, the Splinterlands team should feel empowered to suspend the conversion mechanism whenever they judge it prudent to do so, beyond the specific time period mentioned above. They should not hesitate to protect the game and players if the economic situation calls for such an action.
Note that this measure is intended purely as protection against hypothetical situations that may or may not arise.
Here are some personal thoughts from myself to add context to the above proposal:
Wow, that's a lot of money!
Yes. Yes it is. Go big or go home. There is nothing to gain in life without risk, and I believe this is a risk worth taking given the potentially large benefits and visibility of being on a tier 1 exchange. It is a large amount, but it is a manageable expense and will not bankrupt the SPS DAO. We will still have a large treasury left over.
Why now?
Splinterlands has existed for several years already, and we are struggling to expand & attract interest from the broader crypto community. We need to kick things into high gear. I believe being on a tier 1 exchange will greatly increase our prospects for doing so, following the success of other web3 games such as Axie Infinity. It's a step we must take at some point to increase our visibility, and if not now, then when? How long should we keep kicking the can down the road? I say, let's strike while the iron is hot and be a part of the new bull run!
Why not run this proposal a little later once the NPE and SPS Validators are complete?
It will take a decent amount of time to negotiate & setup exchange listings, on top of development time to finish the NPE and SPS Validator milestones, and I don't want us to miss this bull run. Once the game is in a good position to make a top tier exchange listing have a reasonable chance of success, we need to be able to pounce on the opportunity without further delays.
Having the budget authorization already established by this proposal will mean less red tape and less delays when the time is right for the SPS DAO Manager to enter into negotiations with the exchanges.
Why worry about this at all? Won't things just sort themselves out if the devs build us an awesome game to play?
Building a game that is fun and exciting to play is crucially important. But to be a web3 game that thrives well into the future, we need to think like crypto investors, not only like gamers. We need investment in our token in order to support the game, get people excited, attract interest, and help ensure that the Splinterlands team never ends up in another cash crunch with their back against the wall.
Getting on a tier 1 exchange raises our visibility in the broader crypto community. It's a step on the path to success that multiple major, well known projects have undertaken. It will go a long way toward earning us a spot at the table in the big leagues.
We are lucky in that the SPS DAO is well funded and in a good position to help catapult us to the next level! So let's use those resources, instead of just letting them sit there until it's too late!
Who am I?
I'm an active member of the Splinterlands community, well known in Discord but wanting to remain anonymous for the purposes of kick starting this initiative. That will have to satisfy you.
Thank you for your consideration, and thank you to @cryptomancer for supporting me by graciously donating the 100k DEC fee for this proposal. Have fun voting everyone, and pass or fail, I look forward to seeing how many of you agree with my sentiments!