PDP19: Create a D2D Token Sink through SAFE Distribution

This proposal distributes 100,000 SAFE from the PrimeDAO Treasury based on the number of D2D burned over 2 weeks following a successful vote to reduce the circulating supply of D2D by 30-60%.

Background
With Safe Ecosystem Proposal 22 (SEP22) passing, the SAFE token has become transferable. PrimeDAO, through its early contributions to Safe in 2021-2022, became a SAFE guardian, receiving a total of 148,426 SAFE tokens. Half of the tokens unlocked immediately, with the other half vested over 4 years from TGE.

The main Prime Treasury currently holds 101,455 liquid SAFE with an approximate valuation of $2.5-$3.5 each.

While rapidly shipping multiple D2D tools and gaining traction, PrimeDAO ran out of stablecoin runway at the end of 2022 while simultaneously entering a DAO winter. As a reaction, PrimeDAO went into turtle mode and has only spent $90K in stables since the start of 2023.

New opportunities
The DAO winter has passed, and with the rise of L2 ecosystems, new interest in DAO 2 DAO coordination is emerging. We believe it’s the right moment to accelerate PrimeDAO and focus on building the D2D coordination hub. PrimeDAO will focus 100% of its resources on the intersection of rating/deals while collaborating with partners and Prime spin-outs to facilitate other types of DAO services around PrimeDAO.

Opportunity to exit D2D for current holders
As it’s not guaranteed that PrimeDAO will succeed in creating a solution that generates sufficient value to grow PrimeDAO, we suggest giving existing D2D holders the option to de-risk by burning their D2D tokens in exchange for a relative share of 100,000 SAFE from the PrimeDAO treasury.

Current D2D distribution
On April 23rd, 2024, PrimeDAO still controls ~49,850,000 D2D tokens. This means approximately 50,150,000 D2D tokens are in circulation. To enhance alignment and coordination between D2D token holders and increase the % of D2D supply controlled by PrimeDAO (making it easier to engage in D2D deals) we believe PrimeDAO should create a D2D token sink using some of its SAFE tokens.

Proposal Breakdown
We propose to distribute 100,000 SAFE from the main PrimeDAO Treasury based on the relative share of D2D burned (sent to 0x000000000000000000000000000000000000dead) over two weeks following successful vote on this proposal.

Timeline
After the burn period of two weeks, a calculation will be made by the Prime Development Foundation - using the Advanced Filter function of Etherscan to count the number of D2D burned by each holder from the moment of this proposal passing - and the relative SAFE tokens will be streamed over 24 hrs to the addresses that burned D2D. PrimeDAO will use Sablier V2 to stream the tokens.

Antiticapted effect
Assuming SAFE trades at $2,5 at the moment of completion of this burning program, and D2D continues to trade at its current $0,0117 valuation, the burn program is anticipated to lead to approximately 21,3M D2D to be burned, equal to ~42% of the circulating supply of D2D. As the prices of SAFE and D2D can fluctuate in the coming weeks, it is estimated that anywhere between 30-60% of the circulating supply of D2D will be burned.

After completion of the program, PrimeDAO’s holdings could look like:
~55,000 SAFE vested over approx 2.5 years
~50M D2D, equal to 63.5% of the total supply of D2D
~150K in other tokens including Stables, ETH, BAL, PAL, GIV, GTC, and VITA.

Request for feedback
We look forward to stakeholder input and are excited to accelerate PrimeDAO to realize the potential of D2D coordination.

1 Like

Great draft, thank you @LuukDAO!

If the proposal passes, I’ll be curious to see how many D2D are actually burned for SAFE tokens. AFAIC, I’d rather keep my stake. The thesis is still valid, the team learned a lot over the past 2 years, and the current DAO landscape offers much more opportunities for Prime’s solutions. Your tenacity deserves our support and justifies our hopes.

The technicalities of the sink are interesting, but at the end of the day, SAFE’s value will reflect the ability of PrimeDAO to rebound on the market and execute on its thesis. I’m betting on that.

Thanks @LuukDAO appreciate all the continued work!

I think this is a solid step to preparing Prime to explore re-entering the market, if in the meantime a successful path forward is established a process to ensure only ‘live’ tokens are a part of a move forward will be needed as a second mechanic to remove inactive tokens for a clean foundation.

I believe the team have enough scar tissue and proven their grit to warrant exploring the newly buoyant market and DAO 2 DAO space particularly with additional research and exploration of potential collaborations.

1 Like

PDP19: Create a D2D Token Sink through SAFE Distribution has been submitted to PrimeDAO’s Snapshot for voting and will be up for voting in the next five days until May 1st, 10:13 UTC.

https://snapshot.org/#/primexyz.eth/proposal/0x995a68d4e99691d556a1c122c85cf02bf83d4d9e24ba23afa167cc0b088b89fa

Based on the current vote progress (100% YES), PDP19 is likely to pass.

To support the D2D Burn Campaign, the Prime Development Foundation has created a D2D Burn Campaign guide and Data Dashboard to provide D2D holders with all required information to participate in and keep up with the program.

The D2D Burn Campaign ended on May 15th with the following results.

  • 12.5M D2D have been burned (25% of circulating supply).
  • The D2D price at the end of the campaign was $0.0174, up from $0.01 at the start of the campaign (74% increase).
  • Addresses who burned D2D received 0.008 SAFE per D2D, equivalent to $0.0155 of value on the day of receiving.
  • SAFE tokens have been distributed by addresses that burned tokens via Sablier.