Summary
Protect Botto’s marketplace value and strengthen its 1/1 price floor by setting a minimum bid price of 10eth on weekly auctions, with the goal of optimizing long-term value accrual for $BOTTO holders.
Background
When creating a scheduled auction on SuperRare, artists have the option to set a Starting Bid Price. A sale occurs if and only if the artwork receives a bid at or above this price.
Currently, no Starting Bid Price is set on Botto’s auctions, and we’ve recently seen a decline in its sale prices.
Rationale
Dedicated artists focused on the long term do not sell their best work for low prices/under their historical price floor, unless they need cash right away. Having talked with dozens of successful artists on SuperRare and observed many more, it's clear that almost all of them have some mechanism in place to protect their market value and price floor, whether that be open bidding, reserve auctions, scheduled auctions with a min bid price, or minting very rarely.
Botto puts out its best work on auction each week, as determined by voters, but currently has no mechanism to protect its marketplace value.
Collectors often appraise the value of an artist’s work by looking at his or her past sales and price floor. So lower sale prices risk cheapening Botto’s perceived marketplace value and reputation, resulting in lower sales over time.
The long-term marketplace value of Botto’s work is a core foundation of $BOTTO’s value, so it is important to protect and grow it over time.
Setting a minimum bid price is a simple but effective way to help achieve this. It is also a powerful way for Botto to communicate its value to the market and increase the confidence of long-term focused collectors, like “here’s an artist that recognizes its own value and will not compromise on it.” That's exactly the type of artist that long-term focused collectors prefer to buy from as their marketplace value is likely to grow over time.
While the focus here is on protecting and enhancing long-term value, it may boost avg sale prices in the short term too, since collectors who would have otherwise bid, say, 7 or 8eth will now have to bid 10eth to kick off an auction.
Of course, building Botto's marketplace value over time will involve broader efforts e.g., live exhibitions, Twitter outreach, immersive airdrops etc. These efforts, however, take time. This proposal is something that can be done right away and that can complement these broader efforts.
Finally, why 10 ETH? Botto’s floor price to date has consistently been around this area, so it's a reasonable place to start.
Proposal Specification
Set a Starting Bid Price of 10 ETH on Botto’s weekly 1/1 auctions, starting on Botto's Week 18 Auction on February 18th.
Any pieces that do not receive bids at or above this price would be kept in the minting wallet (or transferred to a vault if that is more secure). At the end of the 52 week genesis period, Botto DAO will determine what to do with any unsold pieces.
One potentially attractive option would be to fractionalize them as a collection and sell the fractional token via batch auction with proceeds going to buyback and burn (or direct fee distribution if that has been implemented at that point).
This could earn significantly more revenue than disparate 1/1 sales due to a liquidity premium, increased access for small buyers, timing optimization for when the market is hot, and concentrated marketing around a single sale event.
For simplicity and ease of implementation, this proposal only concerns the setting of a Starting Bid Price on Botto’s weekly auctions. Botto DAO can determine at a later date what to do with any unsold pieces.
Advantages
-Protect and strengthen Botto’s marketplace value
-Maximize long-term value accrual for $BOTTO holders
-Very easy/simple to do
Disadvantages
-Possible short-term reduction in number of sales, but can benefit long-term value and short-term sales may be avg higher price
