Abstract

The proposal aims to create a plan for what to do with the RARI Chain sequencer revenue that is now being generated. The proposed revenue share is a 50/50 split between the Rari DAO and the Rari Foundation. The DAO’s share would go towards the DAO treasury (35%) and a new sub-treasury called the “Creator Fund” (15%). The foundation’s Share would go towards operational and maintenance costs (30%) and towards repaying the Arbitrum Grant (20%).

Motivation

With the new Rari Chain now generating sequencer fees the Rari Community needs to decide where these funds should go. Implementing this revenue-sharing model ensures a fair distribution of resources between the RARI DAO and the Foundation, fostering sustainability and growth for both entities. By allocating funds to a creator fund, we support creator innovation within the community, while bolstering the main treasury ensures financial stability for future DAO endeavors. Allocating a portion of the Foundation’s share to pay off the Arbitrum grant will help fulfill the Foundation’s agreement agreement with Arbitrum and allocating funds towards maintenance and operations ensures the continued smooth functioning of the chain.

Rationale

This proposal aligns with the RARI DAO community’s mission to foster a decentralized and sustainable ecosystem for digital art and collectibles. By sharing revenue between the DAO and the Foundation, we ensure that both entities have the necessary resources to support the growth and development of the RARI ecosystem. The allocation of funds to a creative fund reflects our commitment to nurturing creativity and innovation within the community while directing resources to the main treasury strengthens the financial foundation of the DAO.

Key Terms (optional)

• RARI Foundation: A Cayman Islands legal entity that represents the DAO IRL. It allows the RARI DAO to have a formal representation, enter into contractual relationships, and utilize the other benefits and protections of a legal entity.
• Creator Fund: A new treasury that would be created and used to fund creators and their initiatives within the RARI community.
• Main Treasury: The primary repository of funds controlled by the RARI DAO for supporting various initiatives and projects.
• Sequencer Fee Revenue: Rewards collected in ETH generated from transactions on the RARI Chain

Specifications

The RARI DAO and RARI Foundation would split the Sequencer Revenue 50/50 with the funds more specifically being broken down into the following categories.

DAO’s Share - 50%

15% to a Creator Fund

RRC-19 proposes creating a new sub-treasury called the Creator Fund. This treasury would be funded using 15% of all sequencer revenue generated. This treasury will be reserved to fund creative projects and initiatives.

Having a new treasury explicitly for creative initiatives will encourage creatives in the NFT space to join the DAO and create proposals to fund interesting creative projects. This will help attract new members to the DAO and help foster innovative ideas in the Rari Ecosystem.

35% to the Treasury:

35% of the Sequencer Fees would go towards the RARI DAO Treasury. This will help sustain the DAO by funding DAO initiatives as well as ensuring the DAO has the funding to continue with operation costs for the foreseeable future.

Foundation’s Share - 50%

30% for maintenance and operations costs:

This portion of sequencer revenue would be used by the RARI foundation to operate, maintain, and improve the RARI Chain. This helps to ensure the Chain remains operational and can continue to return sequencer fees for the RARI Ecosystem.

20% for paying off the Arbitrum Grant:

RARI received a grant from the Arbitrum Foundation to build the RARI Chain using Artribrum Orbit. This grant needs to be paid back by the RARI Foundation. Using 20% of sequencer fees to repay this grant will allow us to fulfill the agreement with Arbitrum without requiring the use of treasury funds.

Steps to Implement

• Create a new Creator Fund Treasury Address and give the DAO the power to control these funds.
• The foundation will inform the third party that operates the sequencer to send the rewards to the appropriate addresses.

Timeline

Once the proposal is passed, the revenue split can be enacted for the next monthly sequencer payment.

Overall Cost

There is no cost associated with this proposal