Magnet DAO AMA #1
We had an awesome first AMA with Avax Club Degen. Below is a cleaned up transcript that summarizes some of the Q&A that took place:
Q. Can you give us just a brief description of what Magnet DAO is all about?
Justin Mahone: We all know OHM and the amazing work they are doing, along with how big their treasury has grown. We questioned if there was a better use of all those funds. Why not use 10% and invest it into new projects with huge upside instead of keeping it in stablecoins? We can maximize the expected value and return for investors by using our platform and funds to invest, incubate and grow new projects. Investors in MagnetDAO will vote on which investments the innovation fund should pursue. It benefits both the projects and investors. Investors have access to a wide variety of vetted small scale projects on a variety of chains (we are aiming to go cross chain soon), and they can decide on investment themselves. They can gain exposure through incentivized bonds and just by holding MAG since the investments are part of the treasury.
Projects can get access to VC-like funding without the drawback of a large percentage of funds being owned by a centralized firm. We also use our community and network to help these projects grow and flourish through their development process..
Q. Those projects are highly over-collateralized and you are saying that there may be a better way than letting all that over-collateralized assets sit there and not work for us right?
Justin Mahone: Correct. Obviously, the treasury must be backed by stablecoins for safety concerns (90% of ours is as well), however 10% is allocated for higher EV plays.
Q. What do you think the vetting process of these start up projects will look like?
Dexx: The core team & DAO leadership will actively perform due diligence on the projects. We have a robust team, including those with early-stage investing experience, marketing, product management, design and engineering. This will all go into vetting the projects that we consider investing in. Additionally, any use of funds we make from the treasury will be voted on by the DAO (token holders). DAO leadership will present their findings to the rest of the DAO and then hold a vote.
Q. Can you tell us a bit about your core team and how you met and why you decided to deploy on Avalanche rather than another network?
Justin Mahone: I personally love AVAX because it has:
1. Superior tech — fast, decentralized, L0 subnets;
2. Great marketing — Great UI, Avalanche Rush;
3. It’s EVM compatible so we can go cross chain;
4. Great community: Trader Joe, AVAX club degen; and
5. Incentives programs.
Q. So tell us about your launch. It looks like you are putting great effort into it being a fair launch and everyone can get a piece of the pie.
Justin Mahone: We believe in a fair launch for everyone. No presale, whitelist or secret VC funding. It will be a public sale on our platform; the sale will go as follows:
1. Phase 1 (48 hours): Everyone can deposit usdc for the public sale;
2. Phase 2 (24 hours): This is the grace period. Anyone can withdraw usdc if they feel the price is too high (since the price is determined by capital raised / tokens for sale);
3. Phase 3: Everyone can claim their tokens.
Q. Do you have any dates in mind or are we still too early for that?
Justin Mahone: Middle November is our target for launching.
Q. Have you begun to formulate the DAO and what it will look like at all?
Dexx: Yes — we have been actively discussing this. Additionally, we are planning on building our own in-house DAO toolkit, to have a native UI/UX interface for our DAO members. We plan to license this out once it is complete as well. In the meantime, we’ll use another platform. The DAO will be run by a leadership team (to start, core members + 1–2 outside advisors — TBD). Anyone can submit proposals and, if they make sense, DAO leadership will decide to hold a vote. The DAO will then vote on the proposal and, if it passes, we will go forward with the proposal. The innovation fund will be held in a multisig wallet where DAO leadership must sign-off on to approve transactions.
Q. Do you reckon that your project will be an on-the-come-up one right away? I honestly think that you guys will hit it big with the idea since I’ve seen absolutely no one (even outside of the DAO world) do something like this.
Justin Mahone: We hope so! We are working hard to establish ourselves among the AVAX ecosystem, and are in talks with multiple AVAX projects. Regardless, we plan to raise a percentage of the funds in stable coins which will pay the team so we can continue building and developing no matter the market conditions.
Q. What can you do to assure the community that this is not a “rugpull?”
Dexx: The code will be published,it is open source, and we encourage our peers to audit it. We will also get a third-party audit for our token contract and all of our smart contracts. Regarding doxxing, some of us are doxxed amongst each other. I personally don’t have plans to doxx publicly at this time, but am open to it in the coming months as the project proves its success and gains traction. I think crypto has proven that “anon” teams can be highly successful. We are hyper-focused on establishing a secure system for everyone and will not let you down. Audits, Multi-sig, liquidity lock, DAO structure, etc., are all precautions we are actively mindful of pursuing.
Q. What do you feel makes the little curveball of using 10% of the treasury to fund startup projects the thing that is going to bring people into another ohm fork?
Dexx: Firstly, — we believe the 10% innovation fund is more than enough to convince people to invest in new forks. It’s a novel concept in a crowded space where everyone is lazy and trying to copy paste. Amazingly, they are getting massive investments and are successful! Even if we do not gain as much steam as some others, if we have a decent launch and are able to gather some funds for the treasury/innovation fund, we will have an initial fund to start with. It really does not take much to do something great and prove to everyone how successful a mechanism like this really can be. That said, our team is going to really step it up to build something that will inspire the community as a whole. Additionally — there are more things we are considering than just the 10%. For example, we are looking to partner with a liquid-staking stablecoin, so that our stablecoin treasury can accrue value over time. This hasn’t been done by any other OHM fork. Liquid-staked stablecoins are still a pretty novel concept to begin with. I’m not sure if you are all familiar with Lido, but the point would be to have a coin that accrues in number of tokens over time, or that those tokens accrue in value over time, making it so that our treasury balance and stables used to LP are in essence continuously staked.
Lido does this with stETH. We would do it with something like alUSD, Alchemix’ stablecoin on ETH network. The partnership is something to consider, but innovative concepts like this are where we will stand out.
Q. All the OHM forks are building inter-connected ecosystems. Like Spell and Time or Arbis and Zero2Ohm, etc. Have you considered building something like that?
Dexx: Certainly! That’s one of the most powerful things about the DAO and community we hope to build. As we build, incubate, advise and invest in projects, we fully imagine there to be some incredible synergies across protocols
Q. What measures are you considering to use for mitigating risk when choosing projects to use the Innovative fund?
Dexx: The projects we invest in will likely be later stage, closer to their launch, so those inherently are less risky and we will be able to see community, traction, and product.
For earlier projects that are less proven, we plan on having a very active relationship with those teams, helping them incubate and grow. I even envision us having individual developers reach out to us telling us they want to build, and us providing them with an idea and infrastructure to start. At the end of the day, a lot of entrepreneurship is a trust system. Not every project will be a hit, but the goal is that enough will be to make it worthwhile
Q.Will you be looking at using the Innovation fund for promising NFT gaming projects or have you thought about this at all? Avalanche seems to be a premium network for Gaming.
Dexx: Yes. All options are on the table. We want to be flexible and able to react to the market conditions and innovative projects swiftly.
Q. What are the networks you first had in mind when branching out?
Dexx: At first, the focus will likely be around AVAX projects. We are extremely bullish on AVAX and its ecosystem. We have gotten some incredible support and partnerships, so naturally we will be very active there. Mid/long-term, we definitely plan on getting involved with other chains.