Regarding $Safe enabling transferability voting process

Safe Ecosystem General Discussion
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I understand where some of you are coming from and the perceived urgency to make the token transferable as soon as possible. However, I don’t fully agree with the idea of making a token transferable just for the sake of it. Our focus should be on developing the actual utility of the token and how it contributes to the participation of different stakeholders in the ecosystem, i.e., the final milestone before the DAO can enable a vote on token transferability.

Re comparable cases @T_Ley: Safe DAO is not the first DAO in this situation; I can share some insights from other DAOs who were at a similar juncture before enabling a vote to make their token transferable. They mostly also took the time to carefully plan, particularly in terms of token utility and product integration of the token.

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Utility comes from the protocols that are built on top of the safe token.

Building on top of the SAFE token is one component of a much larger existing Safe ecosystem. The Safe ecosystem is quickly growing the number of useful apps powered by Safe. These apps were not built over the past many years in order to farm SAFE tokens. They were built to provide value for different types of use cases.

The SAFE token should improve these use cases, strengthen alignment, and create new uses in the already massive ecosystem. This is one of the reasons why it takes time build token utility compared to a brand new ecosystem where a token is launched more experimentally and the community can “see what happens”.

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Hello Adam, i thought a new vote was planned for 11 january : was it cancelled ?

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I’m not sure what you’re referring to. May you please provide a link?

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Have you ever thought about cooperating with a project like EigenLayer and pledging the assets of the safe wallet, so that you can manage your finances while your assets are safe? I find it very meaningful!

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Isn’t token utility going to be something that evolves? I have come to see how a well thought out token launch is essential for the sake of value, but it also seems to me as though token utility isn’t something that will truly ever be finished.

Like a good business plan is a living document, token utility will be a living proposal. I could see scenarios where the token utility, or aspects of it, came up for votes in every sprint.

I do think a moving token rather than a frozen token is more likely to catch the eye of potential ecosystem participants. Let’s get real for a minute: when someone is looking around at ecosystems and/or DAO’s or DAPPS they want to participate in… they are looking at the token price (and maybe some other market data) as part of their consideration. The value of a governance token, or the movement of that value does create relevance. (MakerDAO, need I say more?)

If the SAFE token started out low and all of a sudden boomed, heads would certainly turn, and whispers would happen, and SAFE.global saves the day. The other scenario is that the value starts out high, and SAFE.global saves the day. It’s really a win / win scenario to get this thing moving.

I love the summary @Varunkumar26 put out regarding the SAFE token utility. It can be found here: Varun Kumar Exploring Safe's TOKEN - Google Docs

How about starting a token utility proposal that simply outlines some of the basics, like governance and early adopters and voting on that along with enabling transferability but numbering the proposal with revisions?

It’s been too long to claim that the token transferability happened too fast, there is risk in making it happen too slow. Most of the governance policy and budget is in place. It feels like the SAFE token is in that sweet spot moment to go baby go!

A final thought on issues pertaining to compliance. I think Aave just recently had a governance vote where the DAO officially retained legal representation. They aren’t party to any legal issues, it’s purely proactive. I will gather some more details and start a phase 0 discussion about it.

Adrian

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Nevermind about a lawyer, the Swiss Association covers the whole legal thing. Just keeping you all on your toes :blush:

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Many thanks for all the additional thoughts and input, this is much appreciated!

We’ll be hosting a governance call next week on the Token Utility SEP. More details can be found in the link below. Looking forward seeing you there!

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Hi all, let us share some of these comparable cases :slight_smile: (cc: @T_Ley)

We have seen other cases in the space where tokens went from non-transferable to transferable. As you can imagine, each DAO has its very individual dynamics, but we found the exercise still helpful for insights on the process and challenges connected to it. Btw, if anyone has more examples or thoughts, feel free to share - would love to keep this as a discussion for us to smarten ourselves up.

Project Name Token Name Market Cap ($) FDV ($) Timeline More info
Gearbox GEAR 23,589,107 87,032,950 Launch of product V1: December ‘21
Launch of non-transferable token: December ‘21
Token transferability: December ‘22		 Link
SudoSwap SUDO 6,753,778 15,581,840 Launch of product V1: July ‘22
Launch of non-transferable token: January ‘23
Token transferability: February ‘23		 Link
CoW Protocol COW 57,622,782 314,125,318 Launch of product V1: February ‘21
Launch of non-transferable token: March ’22
Token transferability: April '22		 Link
Element Finance ELFI n/a n/a Launch of product V1: June ‘21
Launch of non-transferable: January ’22
Token transferability: February ’23		 Link
Sturdy Finance STURDY n/a n/a Launch of product V1: March ‘22
Launch of non-transferable: January ’23
Token transferability: May ‘23 - first discussion, then stopped		 Link

Key insights for SafeDAO

This section highlights the insights from comparable cases in an objective manner. Please feel free to delve deeper and contribute your thoughts or additional case examples.

  1. Token Utility: Gearbox and CoW Protocol, demonstrate the effectiveness of prioritizing the development of token utility prior to enabling transferability. This strategy has been observed to lay a strong foundation for token value and practical application.
  2. Active Community Participation: Insights from SudoSwap and Gearbox’s token transferability highlight the significance of active community involvement in governance. In these cases, the DAO went through a longer period of active discussion, and even several rounds of voting. The sentiment following the enablement of transferability suggests that active community participation played a crucial role in shaping a successful outcome.
  3. Comprehensive Governance Process: The experiences of Gearbox and CoW Protocol indicate the benefits of a milestones-based approach in governance. Ratifying key steps individually has seemingly contributed to more precise and effective decision-making processes.

Detailed cases below

Gearbox

Governance Process: Gearbox took a year after its launch to initiate token transferability, focusing on key topics, the biggest one of them being token utility. The governance process involved multiple iterations, leading to this proposal. They’ve since moved to Discord for governance discussions, but old threads are still in the WebArchive.

The final token transferability model was unique in its structure since it includes a price discovery mechanism, where participants do not know the exact final price but are aware of the price range. This model was a result of the collective effort of 0xCider and the DAO and is well-documented for reference. Hard to see this being a way for SafeDAO considering the size/stage difference, but an interesting concept in general.

Key Takeaway: The critical lesson from Gearbox’s approach is the significance of a thorough discussion before making a token transferable. They went from general models like a simple token sale, to building a roadmap of long-term project value, and determining how this value would be transferred through GEAR to token holders and Gearbox users. For Safe, there has already been an active discussion around SAFE utility available here.

CoW Protocol

Governance Process: There were three interconnected proposals – CIP:3 (Token Utility Program), CIP:4 (Liquidity Incentive Program), and a final one - CIP:5 (Swapability of vCOW to COW) – which allowed vCOW holders to convert their tokens into transferable COW tokens, catalysing the COW token’s price discovery process. The Token Utility Program incentivized long-term holding of COW tokens with trading fee discounts on Ethereum Mainnet. These discount tiers varied from 5% to 40%, depending on the quantity of COW held by users.

Key Takeaway: A multi-step approach taken by CoW allowed the community to divide its focus among crucial parts, instead of bundling all discussions into one thread and voting on everything simultaneously. This made the process easier to follow and, once again, enabled token holders to participate effectively in making the right decisions. There are clear similarities with the current approach of SafeDAO by creating clear process milestones vs. pushing out token transferability for the sake of it.

SudoSwap

Governance Process: By the initial distribution, SUDO was non-transferable to make sure that there would be sufficient participation from SUDO holders in governance. The airdrop and token launch was done in January. Interestingly, there were multiple attempts to vote for the Token Transferability, but out of three proposals, only the last one was voted through, the rest were canceled or defeated due to quorum failure.

Key Takeaway: A****ctive participation of the community in all stages is crucial, especially at the token transferability itself. This has proven to work effectively in the past with the DAO taking a firm decision on token transferability. Besides the active engagement on the forum already, initial initiatives could be considered to facilitate discussions. ****Strategy 5 of the recently ratified proposal highlighted the importance of SafeDAO governance to be efficient and user-friendly for all participants.

Disclaimer: This exercise is strictly objective and does not reflect any subjective personal or firm view or judgments concerning SafeDAO’s decisions or strategies. Its purpose is solely to provide additional context for an informed and objective discussion. Please note that this exercise was conducted swiftly and, as such, does not guarantee the correctness of any of the information presented. Readers are encouraged to verify the details independently for accuracy.

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Hello @Steven thank you for your message ! What is the TLDR / insights from the community call ? Couldn’t join unfortunately… :confused:

Thank you @bernard for this competitive overview , as we may see we can all agree making tokens untransferable is pretty common with DAO launches , nonetheless never saw a project take 2 years just for that. It’s way too long IMO and no one can have more “say” in the project they were the most involved in, very frustrating. Also many ppl outside who were willing to participate in DAO discussion / governance may have abandoned the mission since they won’t have the main criteria to get their voice heard which is voting power.

Regards

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The projects you gave examples above are not developing very well, and some are even facing bankruptcy. Why not learn from good projects? For example, uniswap, ens, dydx, blur, etc., these are projects that have great community consensus and are developing well. Safe should learn from them!

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Agree with you! @bernard why list these shit?

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Hi everyone, appreciate the engagement here and wanted to share some insights from a recent deep dive we did just to learn more. This exploration into the few comparable transferability events and their dynamics was all about trying to understand the bigger picture and seeing where it might intersect with what we’re doing at Safe. If we look into their respective approaches, there is actually some interesting information here that hopefully Safe can learn from and maybe avoid some of these pitfalls.

However, definitely agree looking at token launches in the broader ecosystem would be a valuable exercise as well. It’s all good input :slightly_smiling_face:

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It is truly mind blowing that there has been two years of no progress on this front. The case studies bernard presents seem to have no relevance to anything going on here?

Ultimately, Safe offers a product used by a large portion of the crypto community, and safe guards an even larger portion of crypto funds. It goes against everything in the crypto ethos to keep this token nontransferable for so long. The development of this critical project is hamstrung due to the fact that no one outside of the select early users have a voice in governance. This alone should be more than enough reason for moving forward.

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I have been observing the Safe community governance since its inception. Initially, I believed that the effort to create a good governance framework was a commendable endeavor. However, two years have passed, and my certainty has waned; the current governance framework is overly complex, and I believe it is creating a lot of bureaucracy in the long run.

Nonetheless, I appreciate the individuals who are actively trying to push the project forward. But as time goes by, I see less excitement from the broader crypto community, to be honest.

On a personal note, I believe there is a gigantic elephant in the room that no one is addressing. I think the ongoing “vesting” of tokens of the Backers is, quite frankly, a fugazi. The tokens are non-transferable, so there is no real vesting happening. I wish I could have had the opportunity to invest in this project under those asymmetric conditions.

While the Safe community is discussing…investors Rest and Vest:

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This is the biggest issue to adress regarding investors vesting. This is unbelievable

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SafeDAO governance has always been shaped by the community. Just like the other DAOs, which are also not in a perfect state, the SafeDAO framework is continuously being improved through community input - see the latest amendments here. Agree, that we are probably on the more diligent end with SafeDAO, but feels like this has also done a good job of stabilizing the process.

Looking at how functional key initiatives have gone through now, e.g., the OBRA process and voting, or discussion on token utility, it’s great to see how effective the contributions of Guardians and other community members are.

I think that there really are a lot of exciting things happening in Safe that maybe aren’t getting the attention they deserve. For instance, developer activity in the ecosystem is at an all-time high, if you look at amount of projects in the Safe ecosystem. Passed $80bn in assets locked for the first time (now into $90bn), with 30m transactions.

Re SAFE token vesting, there are obv differing views out there like with any larger token launch. In Safe’s case, the DAO played a significant role in deciding to postpone transferability, as opposed to, e.g., a foundation making that decision unilaterally. Agree with you that hopefully, as it comes online, more people will be enticed to more actively participate.

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Hello guys, do you plan to launch a new vote on the subject of transferability in parallel with the vote on utility or does it come after ? thank you

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Hey @cedricoo, see below

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The transferability proposal has been discussed long time ago, at that time, it was rejected, and then five milestones were set. Now that the milestones are reached one by one, do we still have to go through the tedious process for transferability proposal for another month?

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