Finding more ways to raise funds for DEX launch and MIN token launch, as launching on Cardano takes more time and cost than initially planned.
Background/Context
In order to have a treasury, we need to launch our tokens along with yield farming, but we need to launch a high-performance DEX first. The token launch is expected to be at Q1 2022.
Auditing cost of DEX contracts, batching contracts and yield farming contracts are around $150k-200k.
Relying 100% on Catalyst means that we only get $5k/proposal/month. Even if we somehow manage to win all proposals and get all Catalyst funding at once and use all of it to pay for auditing without taking any for salary, it’s probably not enough.
With current block and mempool size, even if we have a good idea, we still need more engineering hours to further optimize Plutus contracts, and some reliance on compiler optimization from Plutus team.
With more VCs coming to Cardano, we need a way to stay competitive with VC-funded projects.
In general, the time and cost expectation to launch has gotten bigger from when we announced FISO. Now that we know the final protocol parameters, the auditing cost and the Catalyst releasing schedule, we definitely need more funding from outside of Catalyst to supplement engineering capacity and pay for expenses until token launch.
Solution
There are a few ways to raise more funding without allocating tokens to VCs or private investors:
Do an NFT sale. We collaborate with NFT artists and leverage Minswap’s popularity and branding to sell NFTs. We can expect to raise $100-200k after splitting profits with our partners.
Selling 0.5-1% of our dev fund allocation. The dev fund is intended to be exchanged for cash for growing Minswap, so this would be a correct use of dev fund. Because we have reached a certain level of popularity, if we limit the maximum amount of buy by IP, wallet address or captcha (e.g. 1000 ADA), we can mostly avoid big allocations to whales and early insiders. The token distribution demographics would be about the same as if we distribute it by yield farming, or even more equitable since yield farming doesn’t have a whale limit. The public sale tokens can have no vesting, and thus incentivize buyers to become LPs on launch as there wouldn’t be any market to dump. This would also seed the initial market for MIN tokens from the community, and the team doesn’t have to dilute circulating supply to seed liquidity.
If we can raise adequate funding for auditing, we can withdraw our auditing proposal from Catalyst Fund6 to leave the slots for other projects that are more in need of seed funding.
What should Minswap do to ensure a quality product launch?
The reason we put out this proposal is because we don’t want to make big decisions behind closed doors. Even though we don’t have a formal DAO structure and on-chain voting yet, I think it’s still a good idea to let community have a say in big decisions.
A bit on our team structure, up until now only me (Long) is the full-time dev. Other 4 devs are working 2 jobs and having no weekend for ~6 months has taken a toll on our productivity and personal lives. Having alternative source of funding will help us pay for all auditing cost at once and bring some devs full-time to deliver a scalable DEX, as well as stay competitive in the space.
I think it’s better to provide one percent of Dev funds - it gives you liquidity and people get a chance to be a part of the growth from scratch and keeps the whales out - the other two ideas are okay but very ordinary as many other platforms have used NFTs and eventually people find it difficult to sell them - so my vote goes to Dev funds
I 100% support this proposal. It’s understandable that building DEX is a full-time job and if you want to succeed you need to be fully committed.
Just for consideration, maybe create Minswap “tip jar” Cardano wallet, so ppl from community can send you some ADA. I know I’d happily send you some epoch rewards I receive. And of course disclosure should be made to make sure ppl understand that it’s donation and they should not expect anything in return.
Well except for the best DEX on Cardano
I support whichever road you choose. From personal experience I can tell it is using and tiring to be pulled between different engagements and not having sufficient resources to fast track the business. Ensure you have enough capital and some more to achieve your current goals.
You have done amazing for the community but Minswap product quality should come first.
MinSwap = Strong product + Strong Community + Decentralised Launch
We are here to support you.
I think that a small portion of tokens must be sold, not only from the Dev bag. You can also sale some of the community bug in order to make this project go faster and you can keep the project honest by giving a some months-years-whatever release plan for the tokens sold.
We have no idea how many months we have ahead of us until the bears come. Winter will kill any project that has a weak team or a weak fans base.
We decided to go up first and try the project in the testnet and as it backfired it gave some bad and unfair publicity. In order to make sure that this project will survive the bear winter we need to :
a) Make sure the projects rolls out as good as possible with no further problems.
b) Get it out as fast as possible to make sure we have a big users base that used the dex for months before the bear market.
If a presale is needed, with a good and honest release plan of the tokens, for us to have the money to do this good and fast so be it.
Sooner or later the reality knocks on the door of everyone who started a bussness with ethics. Being real bust staying focused is something that can be done. Being romantic and see this project dead in a couple of years is sad.
NFT sale would be the best idea IMO, but only if it were done right - otherwise the Dev fund is probably best.
I think one way to make the NFT sale work, is to give serious desirability to them - perhaps allow users to customize a pixel grid “wall” that is used as a background somewhere on the site, using their own uploaded pfp (similar to pixelmap). Doing so would create real demand for the NFTs by allowing users to flex their support of the project and their involvement in it, and display their own pfp on the site.
Additionally, if a small commission were charged on secondary sales of these NFTs (that went to minswaps dev team), it could help generate revenue for development in future endeavors.
As someone who is generally super against presales, I totally understand where you guys are coming from. I had no idea that Catalyst funding was so limited – only $5k per month is practically nothing! You definitely need another source of funding here. I think selling dev tokens is a great idea and voted accordingly.
Just wanted to show my support here and applaud the team for being so transparent every step of the way. Been following the project since early days and am so bullish on this project. <3
I’m a fan of the dev funds sale. Will provide quick liquidity and could be structured so as not to be bought out by whales. NFT’s whilst a good idea run the risk of taking up quite some time (even just getting the right partners to run the process) and could be counter productive - few instances of CNFTs having poor reputational impacts.
Either way, will back you all the way. I’d support/buy either
Cost of entry for projects is high with audits and everything else required to get a functional and safe product. I support whatever decision Minswap makes to help fund the DEX. Lots of projects seem to be in the same position based on what I heard at the Cardano summit.
I say that I trust your decision 100% I have never seen this much transparency in the crypto space so make the decision that you feel that is best for the project. We stand with you.
But if you decide to have A public sale. For (min token holders only) Before the public sale.
Have a Fundraiser, that for so much donation you receive a surprise gift box. with NFT and x amount of min tokens. But it is a surprise gift box
Wink wink.
My vote goes to the NFT sale. Then check how much those funds will bring you.
If you still need to raise capital launch a token sale. You already put some thought into the structure of the token sale, but I have some suggestions. The cap of how many tokens to sell 0.5 - 1% is already set, allow people to deposit x amount of ADA per wallet/IP/captcha. Based on the deposits you distribute the tokens fairly between all participates at GO LIVE of the platform. The amount of ADA that wasn’t used to buy tokens gets refunded to the participates.
I tried to participate in the Sale and I was rushing because I know that it would sell out fast and I send the amount that I wanted but forgot the plu 2 ada I then sent the 2 ada in a separate transaction to the same address but got my Ada refunded and no min tokens. By the time I received my Ada back the sale was over. So I lost out due to my mistake. I was frustrated at myself. But Quick Suggestion:
Make things simple. I have people that I know will not get into crypto because it’s too complicated for them. I know better just rushed and lost out but if things were more simple more people would participate.
If you can make anything that needs two clicks into one button DO IT! Dumb it down as much as possible so a 80 year old grandma can use things. Then masss adoption will come.
Not Minswap but the whole industry.
Thanks for listening to me ramble.
the one thing that is not considered here is that NFT and Dev Fund sales do not have to be mutually exclusive. Take an example from VYFI sales, they created NFTs along with the sales and it became so popular. The NFTs carries value and can also be used to stake to earned interest on. (not just a pretty gif!).
