Has SafeDAO Set the New Standard for Launching Governance Tokens?

Eligible participants can claim tokens via airdrop until Dec. 27, 2022

article-image

Source: DALL·E

share

key takeaways

  • The token will provide retroactive rewards that will be partially vested over a four-year period
  • Core contributors are given “backloaded vesting” for their token allocations

Leading Ethereum-based digital asset management platform Safe — formerly Gnosis Safe — has launched its governance token, SAFE, following its latest rebrand.

The SAFE token will be used to ensure the decentralized governance of SafeDAO.

The token can now be claimed via an airdrop facilitated by Safe’s core team, appointed Safe guardians, investors who participated in the protocol’s $100 million fundraise and 55,000 Safe users. Eligible users will have until Dec. 27, 2022, at 12:00 pm CET to claim their tokens.

The launch of SafeDAO’s SAFE token was unlike traditional airdrops.

The token provides retroactive rewards that would partially vest over a four-year period, and core contributors will be given “backloaded vesting” for their token allocations.

Nick Ducoff, a venture partner at G20 Ventures, complemented the approach SafeDAO took, and tweeted that this should become the new standard for DAO token launches.

Ducoff told Blockworks that the four-year vest with a one-year cliff and ensuing monthly vesting is already a market standard in traditional tech companies that should be used by DAOs.

“Part-time contributors and bounties probably should have little to no vesting, because it is often the only payment those contributors are receiving for their services, and many need to be able to sell them — even if they believe in the organization — to pay bills and eat,” Ducoff said.

Added Ducoff: “We want a more diverse contributor base, so we shouldn’t limit contributors to those that can long hold a token and don’t need the money, but we also want contributors who are building for the long-term value of the DAO.”

Drawing on the likes of ENS and LooksRare, Ducoff said without vesting options of airdropped tokens, it is possible that token recipients would sell immediately, causing prices to drop. 

“You could argue that’s ok, because they went from short-term holders to long-term holders, but while ENS found a group of long-term holders and delegates, LooksRare eventually petered out,” he said.

The SAFE airdrop is also only eligible to contributors or delegates within the ecosystem, and DAO participants will be asked to review and sign legal documents.

Ducoff believes DAO governance should involve a legal process because “while employee/core contributor contributions are likely inherently owned by the DAO, contributions by contractors are not without clear assignment of IP [intellectual property],” he said. 

And the initial airdrop of SAFE tokens will be non-transferable, and it will be up to the community to determine whether that changes.

A move that Ducoff believes can help the token pass the Howey Test — an SEC method to determine whether a financial instrument, including a digital asset, is a regulated security.

“I’d be cautious about discussing when the future vote about transferability might occur — and keep it rather opaque such that people are taking these tokens with no expectation of profit,” he said.

Although Ducoff thinks that SafeDAO’s approach to launching its governance token is a good starting point, he acknowledges that the market is still in its early stages. 

“These are all experiments,” he said. “They will learn from it and adjust – and because of the composability and transparency of the blockchain, others can learn too, accelerating the innovation in the space.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit