AIP: bidding-strategy - Community Vote for Bidding Strategy [VETOED]

AIP: bidding-strategy
Title: Community Vote for Bidding Strategy
Author: Stellar Magnet, Rachel-Rose O'Leary <rose@dark.fi>
Type: Process
Created: 2022-02-08

Summary

Due to diverse opinions from the AssangeDAO community, members of AssangeDAO propose collecting community input on the Clock NFT bidding strategy. The proposal authors believe that decisions regarding the bidding strategy should be opened up to the community.

Details

Assuming this proposal is approved by the Consensus Unit, a Snapshot governance proposal can then be created. We propose that there should only be a maximum of 4 voting options included in the Snapshot vote and have created this forum thread - to both gather sentiment on the idea from both the community and the Consenus Unit, and to gather the possible voting options.

The Consensus Unit - Jen Robinson (Julian Assange’s lawyer), Gabriel Shipton (Julian Assange’s brother) and Stella Moris (Julian Assange’s fiancee) will review this proposal and can decide:

  1. Whether this proposal is valid and will benefit Julian Assange’s defence - to allow $JUSTICE holders to decide on the bidding strategy or whether AssangeDAO should execute a “max bid” strategy without a token vote.
  2. If they decide that this proposal is valid for a Snapshot vote, they can decide on the top 4 options to include in the vote.

We propose that the Snapshot vote will start on Feb 9th at 07:00 UTC and be open for 6 hours, until 13:00 UTC, giving the Gnosis Safe one hour to enact the decision of $JUSTICE holders.

Note: To proceed with a community vote, AssangeDAO must mint $JUSTICE as soon as possible and give community members time to claim their $JUSTICE. This will enable DAO governance to be enabled before the auction for the Clock NFT closes.

Motivation

There has been some confusion on how the Gnosis Safe should bid on the NFT.

Some community members support a “maxbid” strategy of betting the entire treasury on the NFT. However, if this happens outside the context of an organic auction, the DAO will be defunded and be hampered in achieving its objectives. Also it may put core team members at more legal risk if this strategy was acted upon alone, without a community decision.

Unfortunately, there have been some tweets or claims made about how AssangeDAO is going to participate in the auction without consultation of all members of the Gnosis Safe, and without consideration for the legal risks of the Gnosis Safe.

As such, this proposal would open the decision making process to the community. We are working on improving our workflow for public communications to reduce this confusion in the future.

4 Likes

I would like to see community votes on bidding strategies, at the very least to clear the air about the DAO’s overall views on how funds would best be utilised.

The community’s consensus seems to be maxbid, but might be useful to see the overall split of opinions using token-weighted voting

2 Likes

Quotes from the DAO Itself
Given somehow this has become “subjective”, step one is to see what was stated upon the DAO inception. A few quotes:
-Under “ASSANAGEDAO MISSION” - “To Achieve this goal, AssangeDAO will gather funds to bid in the upcoming NFT auction of an artwork made in collaboration between Julian Assanage and Pak”… No where in this Mission statement does it say the DAO will take control of a treasury, monetize JUSTICE coin, use the funds for other purposes or otherwise. It is black and white.

-Under “JUICEBOX RAISE & JUSTICE TOKEN”- “$JUSTICE will be the token that governs the AssangeDAO. If the auction is won by the DAO the NFT will be held in a multi-sig. The community will decide via governance what to do with the NFT and the future roadmap of the DAO. If the DAO loses the auction for the NFT, the Gnosis Guild Zodiac Exit Module will be added to the Gnosis Safe by the Safe signers. The ETH in the Gnosis Safe will then be redeemable for $JUSTICE tokens.”… In this Roadmap section it is clear what the DAO intends to Govern and what happens if the DAO is not successful in bidding. It is very black and white of two possible outcomes. There is no section or otherwise here that has a roadmap where the DAO is not “defunded” (more on that in a moment)

-Pinned on twitter, " All ETH contributed will be used to acquire the 1/1…" This adds context to the substack which clearly states “ALL ETH”.

There is nothing subjective in nature about the above messaging. Numerous Mods have also indicated over and over that ALL ETH will be donated. It has been portrayed as such…

Due to this portrayal WIkileaks has also been promoting this DAO to 5.5 million people stating, “The AssanageDAO Has now raised over US$45.2 million for bidding in the Clock auction”… Also clearly interpreted as ALL ETH due to the portrayal of the DAO.

Substance and Implications of Strategy
The DAO has one mission statement that is clearly defined above. Even in a scenario where this becomes, “subjective” if the goal is to help Assanage what does it imply to “keep ETH in a treasury”.
1: It implies the DAO is more capable than the foundation itself
2: It implies “we can give more by keeping some for ourselves” :upside_down_face:
3: If we do give all as described originally, the DAO still has the NFT which it can auction AGAIN and raise even more money. The DAO can give 100% of the funds, get 5% kickback from Juicebox worth MILLIONS AND manage a MULTIMILLION DOLLAR NFT it can auction again if it so desires functionally raising multi-millions in value on-top of this donation.
4: This was a DAO set to give to Assange, not monetize a JUSTICE coin.

The “Motivation” section outlines the DAO will be “defunded” and there are “legal risks” of the strategy to use 100% of the funds, as originally outlined, to bid on the 1/1 and subsequently 100% donation… This is false. 5% of Juicebox fees STILL goes to the DAO which is millions of dollars. Further the DAO will have a multi-million dollar asset under governance that it could sell again if it so desired in a separate auction to raise even more funds for the cause…

In terms of legal risk, it seems there are greater hazards of litigation in terms of fraud for promoting a raise of funds predicated on a false narrative. The above quotes are not subjective in nature. Fraud is generally defined as deception intended to result in financial or personal gain. If the raise is indeed framed as donating 100% and then a coin is monetized within that raise and the founders are within jurisdictions with fraud laws (U.S., EU, Australia, etc) there is potential for class action lawsuits.

In the end it is simple as there are two solutions. Donate the money as intended and the DAO manages millions of dollars in assets afterwards or pivot and donate much less than was raised while stating the DAO is now somehow fulfilling its mission statement in doing so. Those are the choices and there only seems to be one that is on the right side of truth

6 Likes

I concur with the above. (Namely, Jimbs’ post)

I think it’s also worth noting that the artist of the 1/1 - Pak, has suggested there’s a chance the auction will be cancelled entirely if the DAO doesn’t go forward with its originally stated promises. Here’s a quote including the question that raised it:

Question: ‘So if all funds from the DAO aren’t used to bid, auction will be canceled?’

Pak: “Falsifying the public promise will result in cancellation. This choice is solely based on community feedback. We helped them rise for this cause, thus I agree with the action.”

3 Likes

As it was promised to put all the money on Pak 1/1, you should stand by that. This would be win-win situation, if we got out bided, more money will go to support Assange’s defence, if not its the biggest statement made to show the world how important this case is.

4 Likes

What options would the community have for voting?

I agree that a “maxbid” doesn’t really make sense in this context unless another party bids slightly less than the DAO’s treasury amount. If the DAO can win the auction for the Pak 1/1 NFT, the remaining amount can be put in the DAO’s treasury, which backs the $JUSTICE tokens. This would allow DAO participants to either swap their $JUSTICE tokens for ETH and send it directly to the Wau Holland Foundation as a crypto donation or keep them to use for voting on future initiatives.

I suspect many would choose to do a combination of both. Keeping excess ETH raised in the DAU treasury would allow the community to decide how best to allocate it, which is more in line with the spirit of a DAO.

Further from Pak which makes perfect sense, “That again, if the DAO doesn’t need the work to support Julian, it’s a pointless exercise to simply hand it over to them after eliminating all other possible bidders by advertising their wallets…”

What Pak is stating there is in game theory it makes no sense for whales to come and try and bid on this piece. They lose tax deferred capital gains positions, lose yield bearing assets, etc etc. You do not take that exposure to bid $20million knowing there is a DAO “threatening to bid, but not doing so”… The DAO suppresses bids by its nature, but then now pivots to withhold money raised to bid.

1 Like

Why would you take ETH to donate to a DAO just to claim ETH back unless you have a profit motive. I suspect the sole reason of doing this is to make profit. No where in the substack, tweets or Juicebox is there ANY inclination the DAO was going to take the $50 million and begin monetizing a coin. The idea that it will “allow participants to swap Justice for ETH and send to Wau”… Talk about red tape bureaucracy. Option A: Donate to DAO, bid on 1/1 as stated, money goes to Wau Holland foundation… Option B: Make a coin JUSTICE —> let people donate ETH to the DAO → send them JUSTICE → let them swap the coins from JUSTICE back to ETH → then they can send to Wau Holland… :woozy_face:

2 Likes

Again, nothing but 100% agreement with what you say here Jimbs.

Bid the maximum.

Trying to win the auction for the lowest price possible doesn’t make sense in this case.

Bidding the maximum is the simplest, most direct way of achieving the stated aims: supporting Julian and his legal fees.

“The primary mission of AssangeDAO is to raise capital for the legal fees of Julian Assange. We are cypherpunks seeking to free Assange from the legacy justice system. To achieve this goal, AssangeDAO will gather funds to bid in the upcoming NFT auction of an artwork made in collaboration between Julian Assange and Pak.”

The nft auction is a mechanism for directly supporting Julian and his legal fees. It should be used to maximum effect.

2 Likes

I discussed the proposal on the bidding strategy with Stella Moris and the Assange family. We believe the AssangeDAO must maxbid on the Clock NFT by Pak. For us this means that the AssangeDAO should bid all the ETH on the Clock NFT by Assange/Pak that is available for withdrawal from Juicebox to the AssangeDAO multisig at 10:32 pm UTC 8 February 2022, which is the end of the second Juicebox cycle. Accordingly, we ask the AssangeDAO multisig signers to execute this transaction anytime before the auction closes. We believe that this is the best outcome for AssangeDAO to assist Julian Assange’s liberation.

Gabriel Shipton - Julians Assanges Brother

3 Likes

What Pak is stating there is in game theory it makes no sense for whales to come and try and bid on this piece. They lose tax deferred capital gains positions, lose yield bearing assets, etc etc. You do not take that exposure to bid $20million knowing there is a DAO “threatening to bid, but not doing so”… The DAO suppresses bids by its nature, but then now pivots to withhold money raised to bid.

This is important to point out. It is very awkward how the bidding has happened so far, and it’s possible that a larger player may have made a bid if AssangeDAO had different messaging or a different strategy in the auction.

Yes, this is also kind of awkward. Hopefully we can develop better tools for facilitating DAOs with fundraises like this in the future to reduce the red tape. I am personally interested in working in this space.

I think the main split in ideology (and the reason there is so much back-and-forth) is that many people wanted to mint tokens in a DAO dedicated to helping Julian Assange with the main first milestone being the purchase of an NFT for charity. If the main goal were just to donate to the Wau Foundation, there is a much simpler way to do that directly.

I’ve been to a few art auctions, and generally people bid like 10% over the next highest bid. I’ve never seen a case where someone bids 1,000% over themselves, but this all still a pretty new area.

Anyway, regardless of how the DAO proceeds, I appreciate you all taking the time to write well thought-out points.

I too believe that we should maxbid on the NFT, as that was the representations made by the organizers, then if the organizers wish to fund their own independent criminal justice reform organization, they can make the proposal to sell the 1/1 NFT, or to open another round of funding for that purpose.

Blockquote ve been to a few art auctions, and generally people bid like 10% over the next highest bid. I’ve never seen a case where someone bids 1,000% over themselves, but this all still a pretty new area.

This is frequent in charity auctions. It is not frequent in for-profit auctions; i.e. collectors collecting or speculating on the value of art.

I think we shouldn’t bid all the fund raised. Some ETH should be left for the DAO community for the future operations.
It will benefit Assange in the long run. With the fund, the DAO can organize more events, make the voice heard in public media and attract more people to help Assange.
I don’t think we will lose if we don’t bid full amount. Even that happens, that is even better because Assange family get the extra money considering all funds left in DAO will be used to help Assange anyway and it will grow more.

1 Like

We need Big liquidity for JUSTICE token ! If you don’t do this, this DAO will have no purpose and will disappear from the beginning, if you add liquidity and gain people’s trust, ASSANGE’s name will always live on in the crypto industry and the DAO will always be sustainable.It’s up to you to support ASSANGE and make THIS DAO sustainable, please don’t turn this into a huge scam!!!

1 Like

The community’s consensus seems to be maxbid, but might be useful to see the overall split of opinions using token-weighted voting

I don’t think there is a need for a maximum bid, which is against the law of auctions. The auction can be successful, but it does not have to be the highest bid. I think some of the funds should be set aside for the operation of the community. Or put the rest of the money to support more people fighting for freedom. Or use part of the funds to increase the liquidity of justice, let it play a wider role, and let more people know about our dao and our purpose. have a far-reaching impact on the world.

I too agree with Jimb’s post and support Pak’s decision to cancel the auction if the Dao fails to stand behind it’s original promise. Do the right thing guys.

We should vote for the bidding rather than listen to care team only. I suggest that we should wind the auction but the leftover should be DAO. And we don’t need to spend all the money. That’s ridiculous and unfair to the most members of the DAO

1 Like