Investment Cohorts

Motivation

Over the past year, we were exploring different types of new projects, types of contributors/supporters, and various incentive mechanisms. In this proposal, we use key learnings with improved tokenomics to build a self-sustainable DAO of contributors looking to fund, support, and become early adopters of promising DeFi and Web3 technology.

Goals of V2:

  1. Increase engagement and input from supporters when selecting the next project by introducing investment cohorts
  2. Increase incentives alignment of ShineDAO stakeholders through fees, buybacks, and sustainable profit distribution

How Does Investment Cohort Work?

  • The goal of the investment cohort is to find and invest in the next project as individuals through ShineDAO.
  • Supporters with >15k SHN can apply for the investment cohort before the deadline (this is the only requirement for now).
  • Supporters applying after the deadline, will have to wait for the next investment cohort.
  • Deal access will be limited to supporters in the investment cohort.
  • We might increase cap/person, but keep the same mechanic (more SHN gives you a higher cap/person, more influence on decisions, and more rewards from fees and treasury yield).
  • Supporters in the investment cohort will be responsible for supporting evaluation and selecting the project they wanna invest in as individuals.
  • ShineDAO will provide support with operational activities such as sourcing projects, scheduling interviews with founders, evaluation, key terms, legal structure, technical infrastructure, and general facilitation.
  • Supporters will pay a 10% fee from their investment in a project for operational activities to ShineDAO.
  • ShineDAO will use the 10% fee and monthly treasury earnings to buy SHN on the market. 50% will be distributed to SHN holders in the investment cohort (proportionally to the SHN they are already holding) and 50% will be distributed to the most valuable contributors supporting and owning operational activities.
  • Supporters in the investment cohort are welcome to contribute to or own operational activities and get SHN rewards from fees and treasury.

In the next iteration, we are aiming to allocate more voting power and more benefits to long-term holders of SHN through veSHN, and automate the reward distribution process.


Feedback :pray:

Do you have any suggestions or concerns?
Would you be interested in being a part of the investment cohort? Why?

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2 Likes

What would be the exact utility that this would be providing?
And how many people would we be expecting to join up?
Thanks!!

Difference from now (from my POV) is that holders would need to decide on beforehand to join and be part of investment process and decide which project to go for.

Today we have a gap in the process. We have created a good method of finding and evaluating projects but get little feedback from SHN holders that are potential investors.

This slows down the process and reduces quality in the decisions. For example with Kassandra it was impossible to know how much allocation we should ask for since we didn’t know how much people want to invest.

Also with Bluebit Finance it became clear that we have a gap. If investors were active in the investment decision at an earlier stage there would be No need to ”create a sentiment”.

On a meta-level for those who have experience working on complex problems: A cross-functional investment club working and taking decisions together will be much more effective than a divided organization with separate groups and functions for investors, hunters, evaluators, deal-makers, content creators, builders etc. https://www.forbes.com/advisor/business/cross-functional-teams/

This new proposed way of doing it should solve that problem + give many other benefits= more value for all holders :pray:

1 Like

In my opinion, the best way to tackle the pump-and-dump scenario for SHN tokens during the seed sales while not compromising on scalability at the same time would be the following:

  1. We initiate investment cohorts alongside the present model, i.e., buy SHN before sale → buy project tokens on sale → dump SHN. We keep both avenues open for the community members to choose for themselves.

  2. We negotiate two types of deals with the projects with which we raise seed rounds. One type would essentially “favor” the investors more the other type (I’ll try explaining this in the next section).

  3. We allow the investment cohort folx to participate in the deal that “favors” investors more.

  4. Non-investment cohort folx only get access to the second deal (“less favorable”)

Why?
We can scale by not denying anyone access to the deals if they refuse to be part of investment cohorts. I feel in the long run the folx choosing the “less favorable” setup would realize it’s better to go with the “more favorable” deal and sign up for the cohorts.

Let’s take an example:

  • We strike a deal with project ‘X’ for a 100k seed round
  • “Favorable” deal: 50k worth of tokens for 2 month vesting at the price of $0.5/token
  • “Less favorable” deal: 50k worth of tokens for 1.5 month vesting at $0.75/token
  • Investment cohorts folx get access to “favorable” deal
  • Other community members get access to “less favorable” deal

Curious to know everyone’s thoughts regarding this idea…

3 Likes

We can even have some veSHN bonuses for people who successfully complete the cohort.

2 Likes