Arcade City Proposal For Token Sale Q4
Arcade City path towards token sale and decentralization Introduction Token selling is a method that is used by current block-chain based applications to raise funds necessary to develop useful applications utilizing blockchain. Token offering will create truly decentralized investors from all over the world and will therefore help in rapid growth of the platform at a global scale. Tokens and their functions Ideally Arcade city tokens (ARC) should represent entire growth potential of Arcade city Inc. and all of its revenues. ARC
- The proportionate tokens will determine how a revenue fraction generated by Arcade City will be paid out.
- The proportionate tokens will determine reputation/decision weight of the Arcade City DAO board that can vote to hire or fire certain individuals involved in developing the Arcade city brand.
- The proportionate token holders will create a decentralized dispute resolution body associated with Arcade city.
- The proportionate token holders will execute on miscellaneous governing functions in decentralized fashion. where Investors held the DAO tokens. Plutus is a recent NFC payment DAO which also rewards investors with dividend into its DAO wallet. A system similar to this should be created for Arcade city as well. Equity Raising with Token sale Token sale should be done with certain fundraising target in mind. Arcade city should determine how much funds need to be raised for the next 5 years in order to properly meet its development needs. Funding rounds should be done in stages and there should be roughly 100MM ARC tokens issued and roughly 55% of those tokens should be planned for ICO.
Stage 1: Stage 2: Stage 3: 25% ICO distribution at a fixed price A (Now)
20% ICO distribution at a fixed price B (4 months later)
10% ICO distribution at a fixed price C (4 months after Stage 2) Staged funding rounds can help gauge how community is reacting and perceiving Arcade city. Funding in Stages 2 and 3 can result in higher valuations if Arcade city platform grows and more money can be raised in the process. Critical Considerations prior to token sale Prior to running a token sale it is important to determine how the early investors (SAFE investors) should be connected to the new. Arcade city issued a Simple Agreement for Future Equity contract (SAFE) with varying levels of discount rate for early investors. SAFE investors, however, need to be transferred over to Arcade city DAO structure so that they can actively participate in the decentralized decision making and governing process. Those SAFE investors who do not want to migrate to the tokenized asset model immediately can do so at a later time. However, certain incentives can be offered to SAFE investors to migrate to tokenized asset model early. Minted tokens distribution Chart 1 below, shows a possible Arcade city Token distribution based on examples from ICOs done by other DAO organizations such as DECENT, PEERPLAYS and PLUTUS. Chart 1: Total pi distribution of the Arcade city tokens This kind of distribution should allow for SAFE investors to transition to the DAO model of an organization. Various SAFE investors have different discount rates promised and those discount rates could be applied here when distributing the tokens among the SAFE investors. This should constitute ~ 20% of the total token sales but it is a larger discussion and negotiation that needs to computed by the following equation
Initial ICO price per ARC ( $ ) => 10 * ∑ 𝑇𝑜𝑡𝑎𝑙 𝑚𝑜𝑛𝑒𝑦 𝑟𝑎𝑖𝑠𝑒𝑑 𝑠𝑜 𝑓𝑎𝑟 𝑏𝑦 𝐴𝐶 𝐴𝑅𝐶 20,000,000 This should give Arcade city a valuation of around ~8 to 10MM dollars over its ICO phase assuming that ~500K has been raised thus far from SAFE investors. The number 10 is used as multiplier metric that a typical VC firm uses when raising capital or when exiting an investment. This can therefore be used for creating initial token valuation to gauge market perceptions and demand. Founders Equity Distribution The chart below shows the equity distribution within the founders equity section from Chart 1 above. , SINGULARITY, PLUTUS, PEERPLAYS and distribution profile of Zcash, the proposed distribution below shows power/equity distribution of key players involved Chart 2: Total pi distributions within the Founders and voting power in the Arcade city ecosystem. This distribution should also represent initial Arcade city power board which should later be transferred into Arcade city DAO. This step is important since Arcade city needs to be completely run by decentralized local power structures. The founders equity distribution as laid out on the Pi chart 2 above also ensures that the new founders stick around longer to enable successful Arcade city platform. Their founding equity will therefore have 2 year vesting period as will be discussed below. SAFE investors and community leaders should have a category of its own as shown on the chart above. Vesting periods Founders equity distribution will need to have vesting period for certain individuals who are just joining the Arcade city platform. The Ethereum smart contract will control the vesting terms. The new App development team (Michael, Ben, Steffan) should have a hybrid vesting period of 2 years. Some part of it (20%) can be released immediately but the rest should be vested for 2 years. This will prevent market pump/dump and will ensure that the technical team will see through the App development process and will have incentives to ensure that the platform goes through completion and succeeds. This aspect of game theory needs to be implemented in order to incite innovation and creativity in the system. Other founders such as Arcade City CEO and the SAFE investors will have immediate vesting. Certain community organizers, operations leaders should have a hybrid vesting period (immediate/2 years) Dividends All arcade city token holders should be entitled to participate in a revenue sharing model and therefore receive periodic Dividends. The value of the tokens will fluctuate and therefore its intrinsic value should be governed by the Dividend/growth each token is entitled to in the physical world. This will also prevent ARC tokens from becoming too volatile. Dividends can be issued to the ARC ether wallet via the smart contract automatically. originally intended to function. No middle person shall be required. Part of the Dividend will be reinvested back into Arcade city to fund continuing growth. Plans should be put in place for keeping credit card payment records in the blockchain. This process should be made transparent on the blockchain since all dividends will be carried out according to revenue. Governance Current model of Arcade city has a board comprising of SAFE investors, original founders, community organizers and developers. These board members should get together to decide on important company events. In the future, disagreements, performance issues and ethical issues may necessitate terminations of relationships. This should be handled through the Arcade city board and hiring/termination decisions of certain types should be made through voting mechanisms of the board. In the future, the arcade city DAO can decide on such terminations through their ARC tokens and reputation tokens (Non transferrable/Non-tradeable), both of which will determine a weight of the voter and the decision that follows. Reputations are important because it is possible that the community will have great influential leaders who is not able to own ARC tokens. Reputation tokens are earned and cannot be traded, it can go up and down in value based on community perception. It can however be used to influence certain decision making process of the Arcade city DAO. Individual weight function will be a sum function Voting weight = (ARC tokens + Rep tokens) References
https://plutus.it/ http://www.peerplays.com/news/faq/ https://sale.decent.ch/