SAFE Token Utility Proposal

Wondering if there is an update on the protocol designer position here, I saw it was removed from safe career.

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Hi!

I think that now is a great time to resume this discussion and understand what the next steps necessary to solve

For a complete picture, need to take this discussion

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Definitely , this was submitted by @lakejynch almost 1 year ago and we should’ve been already set. Worth considering interesting points / suggestions have been made. Let’s get involved more and draft a valuable utility for $SAFE.

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Value Capture Not Tax :+1:

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Is it possible to resume discussion on this topic please ? I have the impression that the discussion was put on hold due to market conditions, but it seems appropriate to resume now. :slight_smile:

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@RSivakov, @Billion, @cedricoo. Agree that now is a good time to continue the token utility discussion. Fwiw, going through the proposals in the submission thread, I took a stab at mapping and categorizing the stakeholders that have been mentioned in the proposals submitted so far.

Taking a step back helped me to get a clearer conceptual view of which groups we need to consider to bring more innovative token utility ideas to the table.

Consolidated Categories of Stakeholders:

  1. Development and Infrastructure:
    • Module Developers, Dapp Builders, Registry Maintainers and Managers, Auditors:
      Focused on developing, securing, and enhancing the Safe infrastructure. According to submitted proposals they might be engaged in activities like registry management, fee taking, revenue swaps, escrow fee taking and registry staking.
  2. Ecosystem Management and Governance:
    • Councilors, Treasury/Governance, Working Groups:
      Responsible for the overall governance, policy-making, grant distribution, and ecosystem oversight.
  3. Users and Community Engagement:
    • Retail End-Users, New and Existing Community Members, Token Holders: Might be engaged with the ecosystem through using modules, purchasing them, token swaps, fee taking, participating in staking, and benefiting from mutual insurance and audit systems.
  4. Research, Education, and Talent Development:
    • Researchers, Educators, Top Web3 Talent, Grant DAOs:
      Involved in research and development, educational initiatives, and talent development through grants, bounties, and fellowship programs.
  5. Commercial, Financial, and Investment Interests:
    • Investors, Token Holders, Enterprises, Accelerators:
      Focused on financial aspects like staking, token swaps, collateralized debt positions, and accelerating commercial projects within the ecosystem.
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I agree that token utility should be the primary focus until:

  • Founders, early adopters and investors have the ability to exit and reap the rewards of the risk they took on

  • A basic revenue and subscription model is created and scheduled to be implemented when our customers have Safe sufficiently engrained into their business model so that leaving Safe is not a fiscally responsible decision

  • Safe has clearly established how DAO members aka all current and future Safe token holders will, by default, make a significant contribution to the network and business model simply by holding the token.

  • Safe has clearly addressed identity and KYC within the scope of regulatory compliance. Safe ABSOLUTELY NEEDS to be proactive in this regard even if it means approaching the SEC/CFTC/FINRA before they come knocking on the door

It’s very important to remember that every founder, early adopter, and investor of every company - public or private, blockchain or non-blockchain- has the basic right to profit from risking their own capital and or resources to potentially benefit the company The only thing the company must do is follow the rules and precedent that have been in place for the last 90 years. If the company does this correctly, then there’s nothing to worry about along these lines. Does a DAO legally have to be a public company? Not at this time. Food for thought.

I am all for full autonomy and a brilliantly designed network. But sometimes things need to be taken in multiple steps. If we can find simple method while working toward the greater idea, we will have more $ and resources available during that 2nd ‘greater stage’. If any of the below is impossible on Safe because of technical limitations, please let me know. I am an early adopter through a company I founded, have multiple Safes but am by no means an expert on Safe development. This is something I must brush up on in the near term.

Questions:

  1. Thoughts on allocating grant funds to creating a rock solid plan for the next 5 years along with a “Utility team” who understands engineering, business, the regulatory environment, and anything else deemed important within the scope of token utility? I am not saying anyone currently working on this shouldn’t be - I am saying monetary incentives can go along way in pushing things ahead more efficiently. Just like staking rewards do for blockchain networks.

  2. Why can’t we keep it simple for the time being and institute a simple NFT based subscription model similar to what pinata has going on?

  3. Again keeping it simple for now - can we plan to require all subscription payments be made in SAFE tokens via Gnosis Pay? Create USDC to SAFE swap pair specifically for this purpose allowing demand to dictate the cost of SAFE. Thereby solving a portion of the utility question with intent and a documented plan of action. This is how the ‘Open Blockchain Token’ regulations work in the state of Wyoming, USA.

  4. What about a simple system where SAFE token holders and wallet users contribute a portion of network bandwidth and or SAFE liquidity for sub payments?

  5. Anyone have an opinion on SAFE’s total value or market cap?

  6. Who’s in communication with Safes VC investors?

  7. Has SAFE contacted the SEC and or received SEC approval for EDGAR access and filing capabilities? I did this myself for the company I founded - a US based DAO LLC that also has a US Gov’t issued SAM number which is required to be eligible to win US Government contracts. My point is, I have experience with this and can help in this regard if needed.

  8. Has anyone discussed a tender offer? Where Safe offers to buy back some of the tokens from early adopters and investors. This would quell the concerns of those who believe they should have the ability to reap some of the rewards by now and those who don’t want to enable transferability yet.

With the recent market move up, SAFE has between $60-$70 billion of assets in custody and 75% of the defi market as its customers. We have the potential to pull off something similar to the Oracle Database (founded in 1977) model and it is time we take advantage of the opportunity before us!! Does everyone realize that there’s talk that the SEC is going to approve Bitcoin spot ETFs across the board in early January? Does everyone realize BlackRock will be investing trillions in the blockchain space? This is the moment we’ve been waiting for. No regrets!

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Can we press ahead this proposal to Season 1 - Sprint 2 ?

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You’ve highlighted lots of important long-term initiatives.

Thoughts on allocating grant funds to create a “Utility team”?

  • I would pick a specific opportunity, initiative, or issue to focus grants funding on first before creating any new entities
  • This would be a proof-of-concept (PoC) to begin to prove out the need for a “Utility council”
  • It’s likely easier to receive funding for a specific project than forming and funding a new team/council
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Also can’t wait for this to be put to next stage. However, imo, I think we’d be wise to not prematurely rush it into this sprint just for the sake of timing for two reasons:

1. Regulatory Clarity
Imo, some of the points @rmourey26 made regarding regulatory certainty are valid. We would be wise to achieve a deeper level of regulatory and legal understanding before presenting the condensed token utility proposal. This would also save us unnecessary time and mindspace, i.e., can avoid discussions on utilities that may not be legally feasible in the first place.

2. Implications of OBRA
We should conclude the underlying elements of OBRA (e.g., details on strategies) to the extent that we understand its implications on Token Utility (e.g., determining if parts of this will be funded through OBRA). I recall this being a topic in the last community call and there is still a very active discussion around it. @adamhurwitz.eth being mindful that you contributed a lot to the OBRA discussion already, would be amazing to get your view there.

Would love to hear others’ opinions on this.

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Yes, that would make sense in my opinion.
@Andre maybe you could take a look at this discussion?

Regarding point 2: OBRA strategies are being uploaded in a minute. Just working on adding the last feedback from the recent governance call.

[UPDATE] OBRA strategies and budget: [Discussion] OBRA strategies and budget

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Repeating my thought above I’d focus on making projects as specific as possible to fit into a 16 week SafeDAO season consisting of 4 sprints, 4 weeks each sprint. This will make it possible to build incrementally and grow successful projects.

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I am glad you see the merit in my comments concerning regulation. In my opinion, there is no greater priority and it should be our primary area of focus until resolution. As Binance’s CZ just learned the hard way, regs can and will impact everything if we allow it. Do you or anyone else want to work on a reg specific proposal or plan of action with me? I can begin work on a draft this week.

Why would you think that regulation is the primary thing, SAFE is a multi-signature technology based on Ethereum, which can be interpreted as software on Ethereum, all of which originated from Ethereum.

Maybe you should tell the Ethereum Foundation that it needs to do regulatory stuff?

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When is the vote to enable SAFE token transferability?

Am I allowed to ask this question here or is there a better place to ask?

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Although your statements are correct, Safe’s regulatory responsibilities remain the same. In fact, many would argue we should be leading the way in this regard especially considering the prevalence of Safe and the $ amount of assets we have in custody. The lack of compliance industry wide is one of the reasons why blockchain technology has yet to realize mass adoption.

I’ve reached out to the EF multiple times in the last 4 years, about identity and regulatory concerns as well as the rapid acceleration of quantum computing advancement, and they essentially ignored both realities up until October 18, 2023 when Vitalik Buterin warned of the need for a hard fork in the event that the quantum era suddenly arrived. Which is unconscionable considering the amount of $ at stake, the amount of business’s that could be impacted in such an event. The ID/regulatory issues could be resolved Ethereum wide by instituting an identity and proof of funds requirement for all participants along with the elimination of anonymous accounts. And whether it’s implemented as pure on chain logic using ZK proofs or an off chain work around doesn’t matter at this point when 60% of Etheruem runs on cloud servers owned by AWS and a myriad of other cloud providers - the purity of the blockchain is long gone at this point - not that it can’t be recovered. But I know avoiding the issue and or kicking the can down the road will only lead to problems like CZ of Binance and others have already learned the hard way.

The DAO I founded is Ethereum based but that didn’t stop us from being compliant. Everyone has a basic right to profit from the risk associated with building a startup or new technology regardless of whether the company is public or private. It’s simply a matter of following the regs in place. And if you do, there’s nothing to worry about.

Considering Safes has 75% of the defi market as its customers and is the creator of the protocol that many believe will be the default account structure in the future, we have a responsibility and opportunity to lead the way rather than wait for for someone else to do it.
The first public blockchain or the first significant project - the likes of Safe for example -that addresses compliance and regulation in accordance with prevailing international standards and norms will more than likely be the leader going forward. Investment and talent will pour in and challenges will be solved relatively quickly.

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Token utility comes from the things that are built on top of the token. There’s no reason to keep delaying the vote to unlock transferability. In order to attract builders transferability needs to be unlocked.

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Hi All,

Went through the thread to scope the developments since Safe called on the community for inputs regarding token utility (My inputs are here

Comments I had the chance to look into
1)Great on @bernard for consolidating a great list on categories of stakeholders.
2)@adamhurwitz.eth has mentioned some great ideas (Utility team, 16week season of 4 sprints, other ideas on token utility, short + long business model alignment)
3) Andre and the Obra strategy and budget
4)@v3naru Safe API assessment

Anything else I missed? Would love to learn what the next steps regarding the token utility discusion

Best,
Varun

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@lukasSmart Account Fee Engine (S.A.F.E.) is important for thinking and designing sustainable business models. Uniswap has implemented fees this past year and CoW Swap is working towards that as well.

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