PROPOSAL OUTLINE
Mozaic DAO to enter into an OTC agreement to enable strategic growth initiatives
SPECIFICATIONS
The Mozaic DAO has been approached by various counterparties to enter into an OTC deal which will enable the next phase of expansion of the Mozaic ecosystem. Under the terms of the deal, up to USD $500k worth of $MOZ tokens will be purchased from the DAO Treasury at a 30% discount. The tokens will be subject to a 6-month cliff and a 6-month linear vesting period after that. The purchase price, and discount, will be calculated based on the live price of $MOZ token at the time of signature.
JUSTIFICATION
The funds raised from the OTC deal will be utilized to support critical and strategic advancements within the Mozaic ecosystem, ensuring the long-term viability of the protocol. The goal is to move Mozaic towards self-sufficiency by focusing on revenue-generating products, providing a polished web interface with additional features to attract sophisticated users, and ensuring the team has adequate resources to develop these products in a timely manner. The DAO will pursue the following initiatives:
Berachain Vault(s)
Mozaic DAO has established a strategic goal of expanding its product offering into the Berachain ecosystem - a high-performance EVM-identical Layer 1 blockchain that utilises proof of liquidity as a consensus mechanism.
Berachain is expected to generate significant interest and TVL and the DAO anticipates that the blockchain’s goal and expected user base are closely aligned with the strategic goals of Mozaic.
Mozaic is collaborating closely with Berachain's Head of DeFi and other ecosystem partners to develop an innovative strategy to maximise $BGT (Berachain Governance Token) earnings with strong support from the Berachain team. It is anticipated that this strategy will draw substantial interest from protocols, validators, and users, which could deposit their excess reserves into Mozaic to benefit from the protocol’s high-$BGT-yield strategies.
In tandem, Mozaic will undertake a comprehensive product redesign, introducing new levels of customizability into the UI to accommodate varying user risk tolerances. The redesigned product will also feature a highly scalable architecture, enabling faster deployment of future vaults across different chains and protocols.
By establishing Berachain vaults, the DAO expects to:
- Diversify Mozaic's product offerings and provide users with new opportunities in an exciting new ecosystem that has a focus on growing Mozaic’s core business metrics of TVL and liquidity;
- Avail the protocol’s users of increased yield and return potential as the Berachain network scales, hence driving further engagement and participation;
- Raise awareness of Mozaic and the $MOZ token through active engagement in Berachain community-wide marketing activities; and
- Increase Protocol Owned Liquidity and Treasury Reserves through maximising $BGT (Berachain Governance Token) rewards for the protocol.
The dedicated Berachain vault is anticipated to go live in early Q4 2024.
dApp Rework
The Mozaic Finance dApp has been in operation since August 2023. Throughout this time, DAO participants have suggested multiple enhancements that will improve the performance, user experience, and gamification of the protocol over time.
The DAO proposes to invest in a comprehensive dApp rework through Refine Studio, which will facilitate the following outcomes:
- Introduce advanced analytics, offering users, developers, and the DAO detailed insights into the product, marketing performance, and product performance;
- Develop a personal portfolio page, allowing users to track their holdings, across multiple vaults, and performance effortlessly;
- Create a leaderboard to facilitate mechanisms to reward users in the Mozaic ecosystem;
- Implement account abstraction to simplify user interactions and improve the overall user experience; and
- Ensure branding and user experience align across all dApp web pages.
The estimated cost will be $15,000 per month, with the project taking approximately 3-4 months to fully complete. This will include multiple version releases, resulting in a final cost of approximately $45,000-$60,000.
Additional Hirings
The DAO is seeking to hire additional core team members to enable the continued development of the protocol’s core features and ensure that the core team has the requisite skills and expertise to facilitate the continued growth of the protocol.
The DAO requires candidates with the following expertise: AI engineering, and finance, and proposes to allocate a portion of the funds received towards salaries and employee-related costs for these individuals.
The impact to existing salaries and wages expenses, funded out of the protocol’s Treasury will be in an increase of $290,000 per annum (payable in stables).
Runway Extension
Mozaic will utilise a portion of the funding received to extend its current development runway with a focus on facilitating medium-term protocol self-sustainability.
Allocating funds to this initiative will:
- Ensure that Mozaic has the necessary resources to continue its operations and development activities without interruption;
- Provide financial stability and security, allowing the team to focus on strategic initiatives and long-term goals;
- Allow the team and DAO to prioritise and focus on initiatives that enable revenues and profitability that will facilitate the self-sustainability of the DAO.
The team is currently supplementing a portion of wages with MOZ tokens from the dev fund and will continue to do so until the company generates enough revenue to support 100% wages in stablecoins. Some core team members are being paid far below market rates. The current burn rate is $69,000 per month.
OVERALL COST AND IMPACT
This deal does not have a direct financial cost to the DAO and the DAO Treasury will manage the allocations of tokens to the counterparties under the stipulated terms.
The holdings of existing $MOZ token holders may experience dilution due to the inherent discount rate of this deal upon unlocks and vesting. However, the DAO expects that the initiatives enabled by this proposal will become financially accretive to existing token holders within a period of 3 months.
TIMEFRAME
Discussion/Temperature check - 72 hours (complete)
Call Out - 24 hours (complete)
Snapshot Voting - 72 hours (ongoing)
STEPS TO IMPLEMENT
Upon approval, the DAO will:
- Identify and finalize strategic partners for the OTC deal. Mozaic will not solicit the deal to the public; instead, all interested private parties must approach Mozaic directly.
- Set up the necessary legal and financial frameworks to facilitate the deal, utilizing a Token Purchase Agreement and operating under the legal jurisdiction of the British Virgin Islands.
- Manage the allocation and vesting of tokens through Hedgey according to the agreed terms.
- Provide weekly updates to the community on the progress and impact of the OTC deal during Community Calls and through Discord announcements.
CONSIDERATIONS
Quorum threshold (4,000,000 xMOZ)
Snapshot voting requires at least 65% of the vote weighting for a proposal to be considered 'APPROVED'
The team and any individuals directly connected to them will be barred from taking part in the OTC deal.
Anyone who has sold $MOZ tokens since August 1st will be considered ineligible. Additionally, all participants must refrain from selling any $MOZ tokens prior to the signing of the contract to prevent market manipulation and secure more favorable terms.
Wallets that currently hold over 10,000 $xMOZ and those impacted by the Theseus and Hercules compromise that held over $100 in the vaults will be given preference to participate in purchasing $MOZ at a 30% discount to the existing market price, calculated using the rolling average price of $MOZ for the two weeks prior to the time of contract agreement.
Those that were impacted the most will be given higher preference.
If your wallet is eligible, you may submit a form at https://docs.google.com/forms/d/e/1FAIpQLSdb6AgDKSyWaM9gFl0zXWlBfWC4ws0inZoWWYnPlR1WxslSlg/viewform.
The protocol will accept USDC on Arbitrum.
