This chapter focuses on the second important gear of the DAO, the Founder Collection. This collection is composed by the whole Poseidon DAO collection, at the moment the DAO is launched, like a snapshot. As soon as the launch takes place, the collection ownership will no longer be in Founder’s hands, but will be subject to a new governance.
The collection counts almost up to 300 artists, and an estimated value over 10.000ETH. Not a single 1-of-1 artwork has ever been sold from this collection. The evolution, becoming the Founder Collection, means opening up an opportunity for the founder to leverage wider knowledge to grow the collection, and for people to contribute and have a comeback from it. It also means the collection is no longer only stacking artworks, but a different investing strategy is employed at stakeholders’ advantage.
As briefly described in the Architecture section, the stakeholders go by the name Guardians. The criteria and duties of this role will be described in the next section. It will be up to Guardians to decide which artworks will be acquired or sold, as well as whether proceedings will be employed for further investments, or distributed through dividends otherwise.
No further liquidity will be provided to the Founder Collection for buying artworks. We think the collection is massive enough to keep growing with the proper management strategy. Moving the collection ownership in the hands of a decentralized curator ensures unbiased focus, beyond personal relationships.
As mentioned in the Genesis Distribution chapter, the initial distribution is designed in order to make sure the founder will keep high control over the collection, guaranteeing it is properly managed.
Everyone interested into the opportunity to profit from the Founder Collection over contributing to the DAO Governance can become a Guardian. Becoming a Guardian requires burning a certain amount of token, named Burn Ratio. The burn ratio is not fixed and can be altered by guardians. Initially, the burn ratio is defined at 200.000PDN. Arguably, it will become more expensive to become a Guardian over time. The token holders burning the burn ratio amount will automatically mint and receive back the Guardian NFT. The gNFT is a standard ERC1155 token, and as such can be transferred. The gNFT is the mean that practically grants ownership over the collection. Burning tokens is a one-way operation, thus gNFT cannot be exchanged back for PDN tokens. gNFTs can be stacked, indeed multiple gNFTs can be minted and the owned amount defines the voting power, as well as the ownership percentage over the collection. Therefore, in case of dividends distribution, the received amount will be proportional to gNFT balance over the total existing supply.
The DAO, an entity identified as a multi-sig address, is eligible for becoming a Guardian burning PDN tokens. Taking into account the DAO will receive a considerable amount of PDN as part of the Community Treasury, the voting power the DAO could gain over the Founder Collection must be taken under control. This scenario is not expected because it is just not aligned to the vision of the DAO, that is defined in a complete different direction.
Despite these assumptions, it is reasonable to assume the DAO itself will become a Guardian, although with a low voting power. This mechanism will ensure some additional cash flow to the DAO, whether the collection management turns out profitable.
Furthermore, exists a single exception to the one-way burn mechanism, that is the DAO itself. The DAO is, via smart contract modifier, the only entity able to go the other way around, burning a gNFT receiving PDN tokens back. The received amount of token is the current burn ratio. This mechanism alone traces a permanent strand between the DAO and the Founder Collection, projecting interesting scenarios about the management of the PDN supply.
This mechanism ensures the DAO is entitled to no longer be a Guardian of the Founder Collection, if the relation is no longer interesting for the Governance. At the same time, it unlocks an additional pool of liquidity for the DAO, limited by the amount of gNFTs that can be collected, but not to the initial PDN supply if the burn ratio is a growing amount. The market conditions and game theory will play an important role in the definition of the relationship between the DAO and Guardians.