Background

In July of 2023, SIP-15 was authored by the then-COO of SuperRare Labs to establish an earmark within the DAO treasury for the purpose of distributing tokens to the community to incentivize network growth.

This SIP granted the DAO council the authority to spend 45 million $RARE to this end. SuperRare Labs then brought forward a proposal to distribute tokens in a retroactive airdrop, which was eventually abandoned due to timing, execution, and strategic concerns. Since then, no new token distribution proposals have been brought forward.

One of the concerns with such a distribution was the public nature of DAO Council proposals. Passing such a proposal would inevitably release information about the airdrop before it occurred, which could lead to front running. In addition, the Foundation Director now believes that doing such a broadly targeted token distribution from the council multi-sig may represent a liability risk for the individual council members serving at the time.

To address both of these concerns, the Foundation Director and Foundation Operator recommend that the DAO Council vote to delegate the authority to implement SIP-15 to a new multi-sig wholly controlled by authorized representatives of the RareDAO Foundation (the foundation director, foundation operator, and foundation accountant). We believe that this new multi-sig should be known as the Network Incentive Fund. Signers on this multi-sig may receive, and should encourage, guidance from the DAO Council and SuperRare Labs as to how the 45 million $RARE should be spent, and where possible, inform the DAO Council of their plans before any token transfers are initiated with the purpose of establishing a new incentive program.

Resolution

1. The Foundation Operator shall create a new 2 of 3 gnosis safe with themselves, the Foundation Director, and the Foundation accountant as signers. This new multi-sig shall be known as the Network Engagement Fund.
2. The Network Engagement Fund’s signers shall have authority to modify the gnosis safe through the addition of signers, modules, transaction guards, or similar changes through the normal authorization process afforded by the smart contracts involved.
3. The DAO Council, through a minor DAO action to determine SIP implementation details, shall delegate the authority granted by “SIP-15 Fund Ongoing Network Engagement Rewards” to “implement one or many programs to reward active users of the SuperRare marketplace &/or staking contracts” to the signers of the Network Engagement Fund multi-sig.
4. The DAO Council authorizes SuperRare Labs to participate in the design, development, and execution of token distribution programs under the direction of the Network Engagement Fund’s signers, who shall maintain final decision making authority over such programs.
5. The DAO council shall transfer 45 million $RARE to the Network Engagement Fund multi-sig, less any amount of $RARE that has already been spent on network incentives at the time of transaction initiation.

Relevant Authorities

• SIP | Fund Ongoing Network Engagement Rewards

  • *“Following the adoption of this proposal, the RareDAO Governance Council will: i.) dedicate 40m RARE from the community treasury to an allocated pool whose purpose will be to fund user rewards, ii.) be officially authorized to implement one or many programs to reward active users of the SuperRare marketplace &/or Staking contracts as a minor DAO action, and iii.) re-allocate the ~4.8M in unclaimed RARE from the Aug '21 airdrop for the same purpose.

  SuperRare Labs and the RareDAO Foundation will provide guidance to the Governance Council as needed to facilitate the design, implementation or distribution contemplated by any such program that may be developed - whether based on historical or prospective user engagement data.”*

• Community Approved By-laws v3 Section 8 (Emergency and Routine DAO Actions): Upon a quorum of approving Council members, either in writing or in person, the Council may perform and/or delegate any of the following actions or related ancillary actions without limitation in its sole and absolute discretion without complying any other requirements (each an “Emergency or Routine Council Action”):

  • Performing or authorizing ongoing network maintenance, administrative or procedural aspects of the DAO, or other ancillary tasks related to the ongoing operations of the DAO;
  • Responding to and performing certain Protocol operations and network security responses in the event of an Emergency;
  • Approving of and funding transactions, ongoing overhead expenses, and miscellaneous operational expenses by the Foundation or DAO less than $100,000 USD (“De Minimis Transactions”) per annum in value provided that, there cannot be more than three (3) of such De Minimis Transactions in a month
  • Determining and executing implementation details for Community-approved Proposals to the extent not materially and substantially inconsistent with the particulars of the Proposal as approved by the Community;
  • Distributing funds (less than $1,000 USD per Council member per month) to the Community for the limited purpose of incentivizing or rewarding participation in DAO governance;

• Community Approved By-laws v3 Section 9 (The SIP Process): Community members, including Council members, may create and publish SIPs or related requests for consideration by the Community and the Council. All SIPs, comments, requests, or other forms of participation in governance are purely advisory and non-binding upon the Council, Foundation, DAO or Community, unless and only to the extent: (i) the SIP has satisfied all required SIP governance procedures, formalities, and voting requirements for a final Community-approved Proposal; and (ii) the executable details of the SIP are published in a SIP implementation plan by at least a majority of the Council. The Council, by supermajority decision, has the discretion to establish policies and procedures to complement or modify the Community-approved SIP procedures, including by appointing community stewards to effectuate administrative aspects of DAO governance and limiting the subject matter of SIPs that may be considered by the DAO.