Summary

SuperRareDAO would like to strengthen and build on its current relationship with BottoDAO to:

Diversify its treasury holding via a token swap
Introduce new curation tools for both $RARE and $BOTTO token holders, and
Bring both communities together to share ideas and future opportunities

Working with other DAOs not only raises awareness in different communities, but it also empowers other DAOs to expand beyond their existing horizons.

SuperRare is a curated marketplace for high quality NFT artworks. The SuperRareDAO seeks to decentralize curation and empower artists by giving RARE token holders the power to govern the network and protocol. More information about the SuperRareDAO can be found here: https://docs.superrare.com/the-superrare-dao

Rationale/Summary of Benefits

To add on to BIP #6 - this proposal will continue to diversify the Botto treasury beyond $BOTTO and ETH
Strengthen the existing relationship between the two DAOs (Botto currently mints all artworks on SuperRare)
Allows both DAOs to diversify their treasury and bet on the success of each other
Future participation of SuperRareDAO community in Botto’s voting algorithm
Potential Airdrop rewards of $RARE tokens to the Botto community
Contribution to the governance of one another for a minimum of 2 years
Raise awareness and reputation of Botto among SuperRare collectors
Continue the mission of progressive decentralization, collective creation, and distributed ownership

Proposal Specification

A one-time 1-to-1 market rate token swap using the volume-weighted 30-day average price at the end (midnight Eastern Daylight Time) of the votes by both DAOs (ie. if the 30-day VWAP is $0.25 $RARE and $0.125 $BOTTO, the conversion rate would be 2 $BOTTO token for 1 $RARE token)
Swap 1,000,000 $BOTTO tokens (in the above example, BottoDAO will receive 500,000 $RARE tokens
USD notional value should not be a factor in this token swap proposal since it’s derived based on the 30-day VWAP of the token prices
Lockup/Holding period - Both DAOs will hold the tokens for a minimum of two (2) years after the swap
No sale of tokens are permitted until after the two (2) year lockup period
The two (2) year lockup period begins once both snapshots passes
After two (2) years, each DAO has the right of preemption to acquire the tokens back at the 30-day volume weighted market price at the time of sale if the other DAO decides to sell
A joint press release will be announced at the conclusion of the vote (if successful)

Wallets to be used for the swap:

BottoDAO Treasury Wallet - https://etherscan.io/address/0x35bb964878d7b6ddfa69cf0b97ee63fa3c9d9b49
SuperRareDAO Treasury Wallet - https://etherscan.io/address/0x860a80d33e85e97888f1f0c75c6e5bbd60b48da9

Budget

1,000,000 $BOTTO tokens will be used in exchange for $RARE tokens. A small amount of ETH gas fees will be incurred to complete the multi-sig swap.

Criteria of Success

Diversification of Botto’s treasury with $RARE
Increase in treasury’s overall value from the token swap
Increase in Botto voting participation from the community (more Botto holders: 2,701 holders as of June 2nd)
Utilization of $RARE tokens to further enhance Botto’s presence on SuperRare by applying to and voting on the next Space Race
SuperRareDAO to utilize the $BOTTO tokens to continue training the voting algorithm

Disadvantages/Risks

Investment risk - the $RARE token could become worthless if SuperRareDAO fails to create and retain value
Going concern risk - the SuperRare marketplace fails to continue its business operations
Liquidity risk - no sufficient market trading pairs in the open market to facilitate sales of $RARE tokens at any point in time after the lockup period
Liquidity risk - tokens are locked up for two (2) years
The maximum loss would be 1,000,000 $BOTTO tokens (USD equivalent value varies based on the future price of $BOTTO)

*Updated lock up period to two (2) years to better reflect LT commitment as per Ben’s recommendation.