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.