learnings and direction forward
Fractionalizing NFT projects into useful DAO structures remains a complex challenge yet to be fully solved.
This article serves as an explanation of the assumptions launched at SZNS MVP, the learning gathered from the initial Albums, and our path forward to develop the most useful fractional management platform in the world.
“If you aren’t embarrassed by the first version of your product, you launched too late.” – Reid Hoffman
At launch in October, the SZNS framework consisted of a relatively simple smart contract architecture and a security focused governance system that optimized for two standard actions (buy-out and NFT addition). Additionally, any Album could construct any arbitrary contract interaction if they had sufficient technical knowledge to construct such an interaction in their respective Snapshot instance (learn more about SZN-0 here).
The SZNS MVP wasn’t an embarrassment. We celebrated the success of both Album launches on SZNS. Meebits raised 250 ETH and Divine raised 333 ETH during their governance distribution and they have 1500+ and 200+ holders respectively. In total the combined AUM of the assets in the Albums sit around 1000 ETH. We also received high praise on our UI and design, as well as the ease-of-use in participating in the Album token offerings.
At the same time MANY optimizations stood out to the team as we witnessed our two initial launch partners perform (Divine DAO and Meebits DAO). Both of them hold distinct requirements and strategies to execute. They also generally align on a few repeatable actions to strengthen their respective ecosystems.
We wouldn’t be where we are without the support from our initial communities. Both Divine DAO and Meebits DAO proved to be amazing launch partners, and collectively raised 583 ETH in their distribution events. The lifecycle of an Album looks like the following:
Concept Come to the table with an idea of what this Album is meant to support. Is this for the development of a broader community? Is this to collect NFTs with friends? This initial strategy determines the subsequent steps.
Distribution Based on the concept for the Album, determine the method of distribution. Our initial albums opted for a raise of ETH to distribute, but future Albums may distribute ownership more manually, or via airdrop.
Maintenance How will the Album continue to serve the community? Will it incentivize the collection of more NFTs? Will it airdrop governance tokens to a wider population based on contributions? Do they want to buy and sell NFTs through their collective treasury?
Dissolution or Evolution At some point, the Album will reach a point that either a. Someone makes a successful buyout offer, or b. The Album continues to evolve as a community, perhaps even growing into a more complex structure of sub-DAOs.
As seen above, the lifecycle of the first two Albums has come into the Maintenance phase of development. Both communities raise different needs to satisfy their goals.
For instance, Divine Loot wanted to aggregate more NFTs of certain attributes in order to grow their treasury. They could do this via a governance proposal, but found the process cumbersome to implement at scale. Divine also wanted to interact with a variety of custom contracts within the Loot ecosystem but could not do so without significant technical support.
Meebits, on the other hand, wanted immediate access to the liquidity raised in order to sweep the Meebits floor. Ideally, they would have been able to do this in a decentralized way. They also decided to airdrop a portion of their economy to reward contributors to the broader ecosystem.
Feature builds that come from feedback above include things like adding an NFT swapper system, a sell proposal, an ETH distribution proposal, and many other on-chain actions regarding Album maintenance. Effectively, what do NFT DAOs want to achieve together as collective owners of NFTs, and how can SZNS be the best tool for those users?
Decentralized governance is HARD. Tools require a high degree of understanding to execute on-chain action, and giving members the context for communication and participation serves its own product opportunity. We’re seeing increasing demand for tools that allow for DAOs to actually function in a meaningfully decentralized way, whereas many existing “DAOs” today have mindboggling treasuries of a community managed by 1-3 people on a single address or simple multisig.
Our goal not only focuses on fractionalization of NFTs, but on making the collective decision-making process fun! There will continue to be processes that leverage quick and dirty, trusted parties to make valuable decisions for their networks, but as time goes on SZNS will provide a robust opportunity to manage assets in a more trustless environment.
If you want an opportunity to join our early access list, or have ideas/questions, don’t hesitate to reach out in our Discord or on Twitter!
Cool things coming 🔜 👀!
Duncan
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