Decentral Games

Background

Per Proposal #QmcSKku, ETH proceeds from previous drops have been used to add to the DAO’s LP positions in USDC-ICE, ETH-DG, and Matic-DG (and ICE proceeds from drops are burned). We will continue to price drops in ETH with the exception of a monthly ICE drop.

Proposal

For the following two drops that are priced in ETH, give the DG Team discretion to use the mint proceeds across the following 3 areas:

(1) Adding to DAO’s ICE & DG LP positions (2) Buying back DG; goes into ‘DG Treasury’ in DAO (3) Establishing initial stable coin reserves

Rationale

(1) Nearly all set here, but we’re a little short of $5M ETH-DG LP target now that ETH has declined, and we’d also like to have ~$1M more LP for Matic DG for more depth on Polygon (Note: $1M in LP requires $0.5M ETH --> Matic since the other side of the pair is DG).

(2) Based on the expectation that we will generate > $5M in revenue this month (that’s > $60M annualized, even assuming no growth) and $DG has a circulating market cap of ~$110M, we believe the token is significantly undervalued. Buying back some of the token today for future use (e.g. distributions to xDG holders) is a good use of funds at this time.

(3) Most of the assets in the DAO (e.g. Matic, LAND) are highly-correlated with ETH and the broader crypto market, so it makes sense to start establishing a hedge.

Note: If the vote is ‘NO’, the DAO would hold onto the ETH until another proposal were passed outlining the use of some/all of the funds.