Possible structure for co-bounties for integrations with partner DAOs

Hey fox fam!

Currently writing this from a café in Paris before heading back for round 2 of Ethcc festivities. We had some great conversations with DAOs and other projects we will likely want to integrate in the future, and as a result we came up with a cool idea for how to possibly structure some of these partnerships. When I’m back in the states next week, I plan to post an overview of some of the projects we met with where there is clear alignment and interest in a partnership and integration. In the meantime, I wanted to share this potential structure for partnerships and integrations with projects that have tokens and treasury of their own, especially because it sounds like partnerships such as Osmosis are progressing rapidly (Proposal to integrate Osmosis and Gravity DEX) 1f60e 269b

  • The general idea is pretty simple, and works as follows:

    Imagine a hypothetical integration with Project X, who has a large treasury of XYZ Tokens. Both the ShapeShift community and Project X community are interested in an integration and partnership that stands to benefit both communities and looks something like this: Project X provides a service that ShapeShift users are willing to pay for, Project X shares a % of the revenue that results from ShapeShift users’ usage, and ShapeShift rewards users with FOX whenever they complete revenue-generating activities with Project X via ShapeShift’s interface. The revenue share can either be from revenues generated by the DAO or in native tokens from their treasury if they are not yet generating revenues (ie. Uniswap).

    Let’s imagine that in order to build this integration, the engineering workstream estimates a bounty of $200k is required.

    The simplest option is for both projects to offer $100k of their token for the bounty. This option is totally fine.

    Here’s another possible structure:

    Project X puts up $200k of their tokens.

    $100k goes to the bounty

  • $100k goes to ShapeShift’s Treasury
  • ShapeShift puts up $200k of tokens:

    $100k goes to the bounty

  • $100k goes to Project X’s Treasury
  • This creates more long term incentive alignment between both projects, and I think could make sense for certain partnerships.

    Note: The split between the bounty and the treasury swap doesn’t always have to be 1:1, nor do the amounts paid by each project. If a project really wants to partner with ShapeShift, or vice versa, they should be able to pay more, including fully offsetting the other projects’ cost or even making it profitable for one party to integrate.

    For example, let’s imagine Project Y is launching a brand new protocol and rather than building their own standalone interface, would prefer to build an open source interface in ShapeShift and get immediate exposure to a large user base. They estimate the integration will cost $100k.

    Here’s a possible structure:

    Project Y puts up $150k of their tokens

    $50k goes to the bounty

  • $100k goes to ShapeShift’s treasury
  • ShapeShift puts up $100k of tokens

    $50k goes to the bounty

  • $50k goes to Project Y’s Treasury

These are just two examples, but there is no limit to how these deals can be structured. Particularly for projects that the ShapeShift community is bullish on and for which an integration stands to benefit both communities, I really like the idea of both projects co-sponsoring the bounty as well as continuing to hold each other’s governance tokens. The added benefit of this is that over time this will help diversify our Treasury’s portfolio.

Thanks for reading and looking forward to hearing your thoughts! If our community likes this general idea, I think the next steps would be to keep this in mind with future partnerships and propose it to a partner if/when it makes sense.

I love this concept(s) and am very bullish on these type of DAO ↔ DAO partnerships moving forward. Really look forward to hearing about some of the project you chat with while in Paris when you are back.

I really like seeing this progressing organically already and hope the osmosis proposal moves forward in such a way that allows them to be an early adopter of this model as they already offered some OSMO matching for that particular project.

It will always depend on the particular partnership and deal structured but overall I am very supportive of this direction as you describe it.

I really like this as well! As you said, I think this will create more long term incentive alignment between both projects, which is a win win for both ShapeShift and the other project, whatever it may be.