[DAO:0d4cfd4] Purchase of LAND in Genesis City

Governance
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by 0x8218a2445679e38f358e42f88fe2125c98440d59 (1010)

Linked Pre-Proposal

Should the DAO Buy Back LAND?

Summary

This draft proposal is to advance the purchase of LAND in Genesis City.

Abstract

4 polls were conducted to determine 3 key objectives:

  1. Whether the community agrees to buy LAND in Genesis City.
    The community voted ‘YES’ (95%)

Refer to Annex (1)

  1. Whether to buy the cheapest on Marketplace, or to create a price formula.
    The community voted ‘Buy cheapest at marketplace’ (61%)

Refer to Annex (1)

  1. The parameters for purchasing LAND.
    The community voted to purchase LANDs that are 4k MANA and below(70%), at a monthly spending cap of 40k MANA or less(67%), and to give contiguous LANDS/ESTATE priority(76%)

Refer to Annex (2-4)

Motivation

The DAO has been having ongoing discussions as to whether LAND should be purchased and repurposed for the past year, in order to provide valuable content as opposed to LANDs being left barren and used purely as a speculative instrument.
It is after numerous discussions that the community has decided it is best to purchase LANDs for purposes that will be agreed upon at a later date.

This bear market has also brought about a unique opportunity in which LAND value has reached fair to under valuation, and it is prudent for the DAO to make purchases of LANDs/ESTATEs now rather than during a bull market where valuations can go beyond what is deemed reasonable for purchase.

Specification

The monthly purchase process of LAND/ESTATE has to fulfil 5 criterias.

  1. Adhere to a price ceiling of 4k MANA per parcel

Annex (2)

  1. Adhere to a maximum monthly budget of 40k MANA.

Annex(3)

  1. LANDs which are contiguous and priced at or near floor(a leeway of +10% above floor price during the time of purchase) will be given priority. Only LANDs/ESTATEs which are evenly shaped(1x2, 1x3…, 2x2, 2x3…, 3x3, 3x4… and so forth) will be considered. If no such LANDs/ESTATE exists during the time of purchase, LANDs at floor price shall be purchased.

Annex (1) and (4)

  1. Purchase is to be made at the end of each month, at any point in the day(GMT), at the discretion of the DAO Committee.

  2. All purchases are to only be made with MANA. Purchases can be made on both Opensea as well as the Decentraland Marketplace.

Conclusion

In light of Genesis City LANDs/ESTATEs being underutilised and the floor price reaching an “undervalued/fairly valued” valuation, The DAO has come to a decision based on discussions and finally a poll, to purchase LANDs/ESTATEs for repurposing.

The purchase agreement will follow parameters that have been agreed upon by the community to ensure prudence in expenditure.

The purchase and ownership of LAND/ESTATEs will expand the DAO capabilities in 5 ways, primarily:

  1. To organise events/activities such as town halls etc.
  2. Generate passive income to the DAO by rentals.
  3. Provide LAND to grantees who require space to deploy.
  4. Allow the DAO to create scenes all over Genesis City that may lead to a better experience for users, such as kiosks that may provide ‘ATM’ services etc.
  5. Possibly used as rewards/prizes for any events organised by the DAO.

Annex (1) - Should the DAO Buy Back LAND?

Annex (2) - the ceiling price PER PARCEL allowed by the DAO to purchase from the marketplace.

Annex (3) - The total amount of MANA that the DAO is allowed to spend MONTHLY on purchasing LAND.

Annex (4) - Whether contiguous LANDs should be given priority.

Vote on this proposal on the Decentraland DAO

View this proposal on Snapshot

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Side notes as a reference.

Specification
Under point (2), the budget of 40k MANA represents 3.5% of the DAO’s quarterly budget
Formula is as follows:
40k x 3 months = 120k MANA
120k x $0.66(as of 18/4/23) = $79.2k
79.2k / $2.23m(total quarterly budget as indicated on the Grants tab) = 0.0355 which is 3.5%

Under point (3), the rationale of choosing evenly sized plots vs odd shaped ones is to ensure that potential users/ tenants of the plots do not experience the difficulty of adjusting their builds to fit.

Under point (4), the day of purchase has been published to remove any doubts of ‘timing the market’, whilst giving the DAO committee sufficient time within said day to execute the purchase.

Under point (5), only MANA is to be used as this removes any risk of price fluctuation in FIAT terms, and also removes the need to convert MANA to ETH to make purchases.

1 Like
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Hey @3Point1Four thanks for putting this together. Just a couple of questions.
Will this fall under the grants category or is there another budget category outside of grants that would fund this proposal? I may have missed this part, please forgive me… who will be in charge of deciding which lands to buy and executing the transactions?
Thank you.

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Hey CheddarQueso, it should fall outside of the grants category for 3 reasons,

  1. Grants typically have a deadline with which the grantees have to apply for renewal.
  2. The ownership of the LANDs/ESTATEs will be with the DAO instead of a “grantee”.
  3. The purchase will be in perpetuity until a governance proposal is launched to cease it.

The DAO committee will be in charge of deciding which LANDs to buy, as well as the execution. Parameters mentioned under the section “Specification” are in place to enforce the purchase process so that any ambiguity is minimised.

As to which wallet should the LAND be sent to, i’d suggest it be consolidated along with the roads we own, but the decision should also lie with the DAO committee.

1 Like
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or the floor for a single parcel is above 4,000 mana.

Speaking of which, would it make more sense to have a USD-based cap, given the fact that 4k mana today is not the same as 4,000 mana when mana is $3 or higher.

6

Hey jar0d, thanks for your suggestion. I did consider that as a possibility, but using fiat can have both upside and down. If, for example MANA goes back down to 30 cents or under and stays there, the DAO will have to fork out more MANA if the purchase agreement is in FIAT terms, which is less than ideal.

Using MANA will essentially guarantee the ability to forecast the expenditure from this purchase agreement without the ‘exchange rate’ risk.

As an organisation, I believe that price stability/predictability is more important than speculation. It’ll also reflect better on the DAO to price it’s native LAND in our own currency than in FIAT.

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My one concern is including Opensea as a marketplace to purchase. I strongly feel that only the DCL marketplace should be the point of purchase. I have seen many people come through the Decentraland Discord and in the CBD discord talking of being scammed purchasing empty parcels on Opensea. Also considering we are Decentraland, why would our own marketplace be the place to purchase our own land?

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Hi Existential, I have the utmost faith in our DAO Committee that they are astute enough to discern the right collection from which to purchase from in Opensea, as opposed to new investors coming in and having difficulties differentiating.

The main goal of this purchase agreement is to get the best possible deal for the DAO, therefore including OS will give the committee more leeway to choose from both platforms, as opposed to limiting it to 1 and opening the possibility for entities to corner the market.

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Purchase of LAND in Genesis City

This proposal is now in status: PASSED.

Voting Results:

  • Yes 80% 6,184,287 VP (139 votes)
  • No 19% 1,511,563 VP (6 votes)
  • Abstain 1% 4,440 VP (11 votes)