So you launched a successful project through Bankless DAO.
What now? How do you scale? How do you align values with the DAO?
This is a follow-up post with my personal thoughts to compliment IcedCool’s Project Revenue & Ownership Discussions
Let’s explore.
Project Type: Revenue Generating
Examples: The Rug, MetaFactory, Bankless Indices, Media Nodes, NFT Showcases, etc.
Revenue-generating projects are relatively straightforward to align values with the broader DAO. There are three ways that I can think of.
Option 1: Revenue Sharing with Treasury
The first is the one that we already do among most revenue-generating projects: profit sharing with the Bankless DAO treasury. After paying contributors for their work, the project can distribute the remaining profits back to the treasury.
This helps diversify the treasury and provides non-BANK funding for future seasons and contributors.
Option 2: Buy Backs
The second option is something we haven’t done yet. Rather than distributing profits to the DAO treasury, the project could allocate it towards BANK buybacks. This especially works for projects that generate their revenue in crypto monies like ETH, DAI, USDC, etc.
This is actually a very optimal way to go about value alignment as both BANK holders and treasury benefit from the demand-side pressure, while the project benefits as they build up a reserve of BANK for themselves.
They could then turn it into a revenue-generating asset by LP’ing and/or leveraging Olympus Bonds, or use it for future incentives for their contributors.
Option 3: Tokenization
If the project is generating revenue, another path forward may be to tokenize the project and governance over the product. There’s a lot to unpack here for this post so I’ll leave out the nitty-gritty for tokenization out for now. Not every project will be worth tokenizing, and if it is, there needs to be a lot of thought and planning around it.
But if tokenization is the viable path forward, the value alignment mechanism here is to distribute a portion of the supply to BANK holders and the DAO treasury.
The exact numbers will depend on a lot of factors!
Project Type: Non-Revenue Generating w/ potential to generate in future
Examples: Bounty Board, DEGEN, Bankless Academy
The most capital-intensive projects right now are our software products that aren’t currently revenue-generating but could be in the future.
These projects have been around for a while and have received millions of BANK in seasonal grants. We are at the point where these projects are maturing, finding product-market fit, and are ready to scale. The problem is that these projects are becoming too capital-intensive for Bankless DAO to afford every season, but are also not ready to generate revenue to become self-sustainable.
There’s really one path (that I can think of) they can go down:
Option 1: Raise Outside Funding
Once the initial product is built and there’s PMF, this is when it’s a good time to start exploring outside funding, potentially from Investment DAOs and other crypto funds. This will allow the project to hire full-time contributors and scale the product to its full potential without continuing to ask for an incredible amt of BANK every season. The project becomes a fully-fledged subsidiary of the DAO.
Additionally, other than direct investments, bDAO projects could also lobby for grants from other project grants programs like Uniswap Grants, Polygon Grants, and Gitcoin Grants.
When to cut off Bankless DAO Funding
Generally speaking, there needs to be some internal timeline on when a project needs to make the jump from relying on BANK to outside funding to scale and finish the product. Bankless DAO should be used to bootstrap the initial team and MVP. There needs to be some discussions/social consensus on this timeline (somewhere around 3 seasons/9 months feels like plenty of time).
After multiple seasons, there should be enough built to garner interest from investors (MVPs, user growth, etc) to scale the product.
If not, the harsh reality is that the project may have failed. This is okay! Not every project will be a success and we have to recognize that.
The good news is that successful projects will be able to raise outside funding, scale the product, and should have an avenue towards revenue generation. This would lead them back to the “revenue-generating projects” path.
Project Benefits
The last area for value alignment is project benefits for Bankless DAO members!
The first instance of this was with DAOPunks which offered Bankless DAO members pre-sale access to the NFT drop. (They also did a revenue share with the DAO treasury!)
To summarize a handful of member benefits:
- Airdrop tokens (tokenization)
- Pre-sale access and discounts (for culture drops)
- Membership access (hold BANK and get bonus benefits)
We’re still early in this area, but DAOPunks, Flipper NFT, and others are all leading examples of where Project Benefits can go.
These are just my thoughts on how to align values. To summarize:
Alignment for Bankless DAO Projects
- Revenue sharing with Treasury
- BANK Buybacks
- Tokenization that favors BANK holders and the treasury
I summarized them in this hopefully not too confusing flow chart
**If you are building a project for Bankless DAO and are wondering about value alignment or tokenization, please hit me up. I will happily share my thoughts on potential avenues with you and the team for your specific project!
Value alignment is nuanced and every project will be different!
This post should hopefully give you the templates and ideas to get the ball rolling.