Summary

An anonymous collector has expressed their interest in acquiring three to four Botto artworks by the end of week. Currently, there is no standardized way of handling collector approaches.

(TL;DR) BIP-18 has four points, where:

  1. The DAO accepts the incoming offers of a minimum 10ETH from the anonymous collector for up to four Genesis artworks.
  2. Active rewards generated from the proceeds of these 4 artworks will be spread across the revenue redistribution of Round 10,11, and 12.
  3. Going forward the DAO may accept offers of 10ETH or more on unsold Genesis Artworks but is under no obligation to do so. Subsequent offers will trigger a BIP on how and whether to accept the incoming offers. (Edited for clarification)
  4. The DAO must retain 10% of Genesis Artwork supply, and so will void the reserve clause when it only has 56 remaining in the treasury. This clause may be revised in a separate BIP.

This BIP has been expedited by the core team to a 24 hour consideration and 24 hour voting interval, assuming best interest in the DAO and to maintain potential collector interest in the artworks.

Rationale

Botto has received sizable attention in its second period, Fragmentation. With that, renewed interest in Genesis artworks has appeared. The DAO currently holds 14 Botto artworks from the Genesis period in its treasury. So far, the DAO have floated a few ideas around for what to do with Genesis artworks, some suggesting to fractionalize or relist, others to burn, and others have suggested simply holding.

With an anonymous collector having expressed their desire of acquiring 3 or 4 Botto artworks by the end of week, the DAO urgently requires a way of handling incoming offers that net a positive DAO and collector experience.

The rationale behind adhering to a 10ETH reserve for remaining Genesis artworks is twofold. First, the reserve had been set in the Genesis Period which all prospective collectors were required to follow during auction. Second, this 10ETH reserve does not misalign with existing Genesis collectors.

Ultimately, this leads us to proposing that we accept incoming offers from the collector that are equal to or above 10ETH in value per artwork. This does not mean that we list Genesis artworks on SuperRare or any marketplace at 10ETH. It only means we have a valuation in which to accept consider incoming offers. (Edited for clarification)

Holding a minimum of 10% of Genesis Artwork supply / 6 artworks in the treasury allows for us to flexibly explore other avenues with Genesis artworks in the immediate or near future. This point of the proposal aligns with the sentiment that holding artworks from Botto is good for the DAO, signaling long-term conviction in what Botto has done.
Finally, it is proposed that active reward revenue for a prospective sale of four Botto artworks is distributed for Round 11 voters, providing voters fair notice of the transactions.

Advantages include:

  • Having a streamlined manner of handling incoming offers on behalf of the DAO
  • A positive collector experience upon approaching the DAO
  • Signaled increase in conviction by the collector(s)
  • BottoDAO still holds a minimum amount of Botto’s Genesis Period collection
  • Active reward revenue for DAO voters (40ETH less fees, *0.25)
  • Retroactive reward revenue for DAO voters (40ETH less fees, *0.25)

Disadvantages include:

  • Potential price appreciation in Genesis artworks may become a foregone opportunity
  • Expedition of timeframe is nonstandard behavior for the DAO.
    - Active reward revenue date specified may result in less curation in the remainder of Round 10. Round 10,11, and 12 will have an even spread of revenue generated from Genesis artworks.

Proposal Specification

Edits for clarification below (strikethrough removed)

  • The DAO sets a reserve of 10ETH for remaining Genesis Artworks held in treasury. The DAO accepts the incoming offers of a minimum 10ETH from the anonymous collector for up to four Genesis artworks.
  • The DAO accepts offers from collectors of 10ETH for remaining Genesis Artworks. Going forward the DAO may accept offers of 10ETH or more on unsold Genesis Artworks but is under no obligation to do so. Subsequent offers will trigger a BIP on how and whether to accept the incoming offers. The marketplace for transacting is contingent on collector preference.
  • The DAO is required to hold a minimum of 10% supply of Botto’s Genesis Period artworks (6 artworks) in its treasury. This may be reviewed by a follow up proposal.
  • Active rewards generated from the proceeds of these 4 artworks will be spread across the revenue redistribution of Round 10,11, and 12.

Budget

n/a

fully support on this BIP - we finally have some momentum and we should ride it.

some reserves on active rewards being distributed in 1 single round - too gameable, I'd split the active rewards over X rounds equal to the number X of Genesis Artwork sold (so if 4 are sold -> split rewards over 4 rounds)

    On board with getting Botto Artworks into the hands of new collectors at prices that demonstrate some level of their inherent value, without fully liquidating our collection. 10 ETH seems like a solid starting point.

    "positive collector experience upon approaching the DAO" is a very significant part of this proposal - building trust and a larger network of Bottonians is essential to propagating the art and ideas of the DAO. I think this outweighs disadvantages of "moving too quickly / expediting the timeframe."

    Point of Information: I, personally would not qualify for any of the rewards generated from sales.

    mazzi There are 3 rounds of active rewards to distribute still excluding the last round (Round 9). I think you are 100% correct, it's too gameable.

    I will update the BIP to distribute the genesis artwork proceeds evenly among the final distribution weeks.

      Support as is + spreading rewards over last 3 rounds.

      Well done an thought out.

      I think this looks good generally but do feel Botto may be cutting itself a bit short in terms of specifics.

      Last genesis period 1/1 sold for 45 eth on the secondary. granted it was an exceptional early one, but still. I think more open price discovery would be good, while still rewarding this collector for their conviction.

      So would propose a slight modification: The collector may obtain any single Genesis Period 1/1 of their choice at 10eth. After that, the remaining 1/1s (barring the six kept in treasury) are placed on reserve at 10eth to facilitate open price discovery. It would also be beneficial to Botto’s momentum and visibility in the marketplace if it has live auctions in that range.

      At that point, the interested collector could bid on any number of the remaining available 1/1s.

      Given that Botto has purely done open auctions throughout its history, I don't feel it fair or optimal to do four OTC at once to a single collector. There may be others with a lot of conviction right now as well, and I feel they should get a fair shot at the same works. I do feel that one OTC is a reasonable gesture of appreciation for the exceptional conviction this collector has shown.

      Another clause I'd consider is something like max four genesis period 1/1s placed on reserve per quarter. Just given the long-term upside of these early works and that they are quite a valuable asset for the treasury. But don't think it's essential and understand if we want to keep things simple here.

        I think letting market decide how much these genesis pieces go for (if we are to let them go) is much more efficient than selling to an “anonymous collector”. To me this proposal makes 0 sense, as @Ben has stated, some have sold for multiples of 10e. What is the point in urgency at current state? This is a very short term positive. We’re just getting started, right?

          I feel like offering one piece of their choice direct is a fair and reasonable gesture given their show of conviction. But yeah outside of that, I feel it is best for Botto and other potentially keen collectors to place the remaining on reserve and give other collectors a fair shot + open price discovery.

            I agree with Ben in that 4 in one swoop is a lot without other buyers having a chance, other buyers maybe waiting for the Dao to decide what will happen with the unsold pieces. If the buyer wasn't anonymous and was someone we knew would bring more awareness and interest to Botto, maybe that would be another story.

            I do think that 10 eth is a good price. Do you think the collector would still be interested if offered 1 and then having the chance to bid for 3 more on auction?

            Ben

            Thank you for this reply! As a precursor, I do believe we should test different ways of putting treasury genesis artworks into circulation, and I do implore us to suggest improvements. I would however, strongly recommend that improvements and modifications are done in a subsequent BIP. Here are my responses:

            Ben Last genesis period 1/1 sold for 45 eth on the secondary. granted it was an exceptional early one, but still. I think more open price discovery would be good, while still rewarding this collector for their conviction.

            I think one major difference is the sold versus unsold argument here, which in my opinion makes the two not suited for comparison.

            Ben So would propose a slight modification: The collector may obtain any single Genesis Period 1/1 of their choice at 10eth. After that, the remaining 1/1s (barring the six kept in treasury) are placed on reserve at 10eth to facilitate open price discovery. It would also be beneficial to Botto’s momentum and visibility in the marketplace if it has live auctions in that range.

            At that point, the interested collector could bid on any number of the remaining available 1/1s.

            This also assumes that, an artwork that initially received no bids at its perceived 'fair' valuation of 10ETH and currently has no expressed interest, will, in a subsequent auction, receive bids over 10ETH. I see this as us repeating past action and expecting different results, with this course of action much to the chagrin of the collector who approached the DAO and expressed their interest in acquiring the multiple artworks held in treasury. So far, no other (prospective) collector has done this. The collector has also clearly expressed not wanting to participate in an auction setting let alone kickstart an auction. I do not believe this to be a slight modification.

            For what it's worth, I have nothing against placing a few artworks on reserve at 10ETH, but there is also overlooked 'downside' of relisting Genesis artworks at 10ETH and these continuing to go unsold for long periods of time after listing (bad optics).

            Ben Given that Botto has purely done open auctions throughout its history, I don't feel it fair or optimal to do four OTC at once to a single collector. There may be others with a lot of conviction right now as well, and I feel they should get a fair shot at the same works. I do feel that one OTC is a reasonable gesture of appreciation for the exceptional conviction this collector has shown.

            Should other collectors have a fair chance of acquiring these three or four artworks selected by the prospective collector? Perhaps! I would argue though, that equal opportunity presented itself both at time of auction and any approach could have been made to the DAO and/or via our existing collectors. Assuming we do part ways with four artworks - existing and new collectors would still have the opportunity to pick up a previously unsold artwork at Botto's original reserve price in the Genesis period.

            Nevertheless, I am unsure as to whether this is the most fair way forward. Personally, I would suggest that the interested collector respecting the historical 10ETH reserve set up by the DAO is fair, with that individual showing clear desire to acquire some artworks held in treasury, while the others that may share the same level of conviction have not stuck their neck out and reached out. The former is a real, succinctly presented deadline offer, with the latter dealing in a hypothetical which we can test in other ways.

            Ben I do feel that one OTC is a reasonable gesture of appreciation for the exceptional conviction this collector has shown.

            While I understand that going back and attempting to OTC only one artwork may seem a gesture of appreciation, it can also be misconstrued as predatory behavior. Quite frankly, I don't know how well received this counteroffer would be, even though I agree with you, it's a reasonable counteroffer.

            Ben Another clause I'd consider is something like max four genesis period 1/1s placed on reserve per quarter. Just given the long-term upside of these early works and that they are quite a valuable asset for the treasury. But don't think it's essential and understand if we want to keep things simple here.

            I am ok with this, but would again ask it to be parceled into an optimized BIP after this one, irrespective of result.

            In sum, the DAO currently holds 27%(!) of all Genesis artworks. We can easily hedge by parting ways with four artworks curated by the prospective collector, then improve this BIP with a subsequent one that experiments with other ways of getting other genesis artworks into circulation via price discovery.

                        After reading Choobie's reply I think I'm personally convinced that it's a good proposal after all. Why not accept the fair offer, instead of putting them to a possibly unsuccessful auction again. And there will still be 10 unsold pieces left in the treasury.

                        I don’t think it’s fair to give exclusive sale to said buyer simply because he/she asked first. We should list, for transparency sake as well.

                        We can list them with reserve of 10e. If he is the only one interested then he’ll be able to purchase at desired price. If not, we’re able to optimize through the market. This is the only way the proposal makes sense to me

                          Nonsense I think letting market decide how much these genesis pieces go for (if we are to let them go) is much more efficient than selling to an “anonymous collector”. To me this proposal makes 0 sense, as @Ben has stated, some have sold for multiples of 10e.

                          We have already, in the past, let the market decide how much these Genesis pieces go for with a previously held auction. We can do so again, but I am strongly against turning away a collector who has clearly signaled a lot of conviction for a price we previously deemed as fair.

                          Nonsense some have sold for multiples of 10e. What is the point in urgency at current state? This is a very short term positive. We’re just getting started, right?

                          Yes, and some have yielded 0 bids in a previous auction. And yes, these artworks in treasury may be more valuable in the future, and yes, there may be opportunity cost to selling these at a reserve price. But there is also opportunity cost to not distributing these artworks. We want other collectors to treat these as grails, and/or somewhere down the line part ways with their Botto 1/1s to collectors who will flaunt these as their grails. That type of exposure is incredibly beneficial to Botto, and we can do so in multiple ways. While I appreciate that we rightfully treat these as prized assets of the DAO, we can and IMO should make moves that seek to spread our bets.

                          Nonsense We can list them with reserve of 10e. If he is the only one interested then he’ll be able to purchase at desired price. If not, we’re able to optimize through the market. This is the only way the proposal makes sense to me

                          In response to this and the urgency commented you made, this collector has expressly mentioned that they do not want to be placed in a bidding war and would like to wrap this up by end of week. I see limited downside and hypothetical opportunity cost. Regarding your "just getting started" comment - yes, I absolutely agree, and we would still have 10 more treasury-held artworks to do so. But there is nothing wrong with letting a collector with conviction take the first bite because they showed initiative.

                          An example on how we could take this further: we can post a subsequent BIP that puts the remaining 10 treasury artworks on a reserve auction, where the first four of the artworks that meet the DAO's reserve valuation of 10ETH are distributed, with the remaining 6 held by the DAO further down the line. There is nothing stopping us from doing so.

                                  The collector has also clearly expressed not wanting to participate in an auction setting let alone kickstart an auction.

                                  I was missing this data point, thanks. do we know why this is the case? That they don’t want to participate in an auction?

                                  While I understand that going back and attempting to OTC only one artwork may seem a gesture of appreciation, it can also be misconstrued as predatory behavior. Quite frankly, I don't know how well received this counteroffer would be, even though I agree with you, it's a reasonable counteroffer.

                                  I don’t think an artist deciding what they’re willing to sell their work at is ever in any way predatory. Unless they’ve already made a commitment that they are breaking. Botto never made a commitment to sell its work OTC at 10eth. It offered these pieces on reserve via open auction. And arguably Botto has a lot more momentum now than back then. Also, other potentially interested collectors may not have realized the idea of pursuing OTC even if they had the conviction.

                                  This also assumes that, an artwork that initially received no bids at its perceived 'fair' valuation of 10ETH and currently has no expressed interest, will, in a subsequent auction, receive bids over 10ETH. I see this as us repeating past action and expecting different results

                                  Again, I think Botto has more momentum now than back then. Also, if we felt it was better for optics we could just keep it on open bidding. Interested collector offers 10eth and if no higher bids come by say a day later then it is sold. A lot of artists do this on SuperRare. They tweet out somethnig like "I'll accept the highest offer on X piece by Y time."

                                    choobie What is the point of catering to this one person so much? Your reasoning for one person to have 4 Genesis pieces is so they, a random, anonymous buyer, can flaunt it as their grail? After paying below average price? We have an offer for 10e on 4 pieces, that should give you more confidence in putting out on open market.. Regardless of what this person wants. You should be speaking for benefit of the protocol. Not listing because some haven’t sold in the past? Makes 0 sense. If buyer really wants to buy, they’ll participate in the auction.

                                        10 ETH is a decent price tag, and we can sell 4 Genesis pieces and strengthen our Treasury at the same time.
                                        Also, network effect is important. We DO want other collectors to acquire Botto art.
                                        Some of these auctions concluded with no bids just a few weeks ago. the fact we have a collector willing to acquire multiple of these at 10 ETH each is a success for Botto imo - it helps validating the quality of the entire Genesis collection by reducing the unsold pieces.

                                        Ben I was missing this data point, thanks. do we know why this is the case? That they don’t want to participate in an auction?

                                        No, but I believe they do not want to be used to kickstart a bidding war and/or be put through an auction process.

                                        Ben I don’t think an artist deciding what they’re willing to sell their work at is ever in any way predatory. Unless they’ve already made a commitment that they are breaking. Botto never made a commitment to sell its work OTC at 10eth. It offered these pieces on reserve via open auction. And arguably Botto has a lot more momentum now than back then. Also, other potentially interested collectors may not have realized the idea of pursuing OTC even if they had the conviction.

                                        I agree that it is not predatory, I only meant that it may be interpreted as such. Again, I have no clue how the prospective collector would react. My point is that this BIP is a reflection of the terms set out by the prospective collector while serving as a baseline for us to work with for subsequent treasury-held artworks, and that asking to adjust the terms may not be well-received.

                                        Ben Again, I think Botto has more momentum now than back then. Also, if we felt it was better for optics we could just keep it on open bidding. Interested collector offers 10eth and if no higher bids come by say a day later then it is sold. A lot of artists do this on SuperRare. They tweet out somethnig like "I'll accept the highest offer on X piece by Y time."

                                        I agree, Botto definitely has more momentum and I see the nuance in the open bidding option. I am okay with this, but again, err on the side of caution based on discussions with the prospective collector.

                                        Nonsense What is the point of catering to this one person so much? Your reasoning for one person to have 4 Genesis pieces is so they, a random, anonymous buyer, can flaunt it as their grail? After paying below average price? We have an offer for 10e on 4 pieces, that should give you more confidence in putting out on open market.. Regardless of what this person wants. You should be speaking for benefit of the protocol. Not listing because some haven’t sold in the past? Makes 0 sense. If buyer really wants to buy, they’ll participate in the auction.

                                        Please don't misinterpret my actions as not speaking for the benefit of the protocol. We have been presented an opportunity that I have in turn packaged into a BIP, as we have no standardized approach despite a fair amount of discussion on Discord. It is my strong opinion that distributing treasury-held artworks to other collectors is a good move, especially at a pricepoint we deemed fair throughout much of the Genesis period. I also did not express a lack of confidence in putting treasury-held artworks to the open market. I firmly believe that with 14 Genesis artworks, we are able to experiment with the open market once more, even if we part ways with four of these pieces.

                                                  Multiple people would absolutely bid more than 10eth on each given the sparked interest in AI and AI art in general. Please put it back on auction and if there is no one else bidding then this "anonymous collector" would get them for the desired price and the protocol would have the exact same benefits.

                                                  There is no downside to putting them on auction in order to maximize benefits for stakeholders.