VDP-100 (Fractionalization of Newcastle-Korolchuk IP-NFT)

[benji]

VDP-100 (Fractionalization of Newcastle-Korolchuk IP-NFT)

Fractionalizing VitaDAO’s first IP-NFT to enable community governance over the IP and involvement directly into the R&D decision-making and capital allocation processes.

Background

This proposal aims to assess community interest in fractionalizing the “Discovering Novel Autophagy Activators’’ IP-NFT, funding the Viktor Korolchuk Lab at Newcastle University. Although the original fractionalization proposal (VDP-73) was to fractionalize the ApoptoSENS IP-NFT, given recent data readouts from several of the ongoing projects, we have conviction that the Korolchuk IP-NFT has the greatest probability of resulting in a longevity therapeutic of any of the projects in VitaDAO’s portfolio. As such, the Korolchuk Lab’s work is most deserving of further funding and governance directly by the community via fractionalization. Doing so will create direct greater capital and incentive for the VitaDAO community to contribute to the project and move it into overdrive.

Problem

We believe that validating fractionalization as a funding and incentive mechanism could shape the future of VitaDAO, and may provide necessary capital and attention of the community to optimally guide projects toward success. Fractionalization would allow individual members to personally hold ownership in the governance of the Newcastle-Korolchuk project, rather than indirectly through the VITA token. This proposal is specific to the Newcastle-Korolchuk IP-NFT, but hopes to lay the groundwork for how to effectuate fractionalization of all IP-NFTs in a way that is most accretive to individual members and the DAO, how to maximize research funded, how to preserve the DAO treasury, how to ensure compliance with relevant regulations, and how to provide VitaDAO members agency and incentive to contribute directly to the research. There has been justified skepticism within the VitaDAO on the utility of IP-NFTs over equity as the optimal funding vehicle for a DAO, and we hope that this proposal specifically and fractionalization generally will convince the community.

Proposed Solution

To address these challenges, we propose the fractionalization of the Newcastle IP-NFT with the following high-level protocol and rationale below:

Selecting Newcastle as the beachhead project

We feel that it is imperative to advocate for the most promising project in VitaDAO’s IP-NFT portfolio given the high risk associated with early stage biotech research, if we’re going to propose the community take on the risk of the project directly. As such, we commissioned several advisors to Molecule to perform analysis of the data generated to date by all of the VitaDAO projects under NDA. These advisors have asked to remain anonymous, though we can say that they combined have 50 years of academic biomedical research, pharma, biotech, and venture capital experience. They scored each of the VitaDAO projects along several axes, including favorability of licensing terms, quality of experimental planning, commercial viability, clinical strategy, expertise of the research team, and probability of success given the data generated to date. Their feedback was independent and unanimous: Korolchuk’s project is the most promising of all VitaDAO IP-NFTs to generate valuable IP.

Tokenomics

1,000,000 VITA-0001 tokens (IP-NFT fraction tokens) will be minted. 10% of the VITA-0001 tokens will be sold to members of VitaDAO in a fixed-price sale. Participants who receive an allocation of VITA-0001 tokens will be subject to a two month lockup period. The purpose of this lockup period is to avoid “pump-and-dump” behavior once VITA-0001 tokens have liquidity. However, this lockup period is relatively short to ensure that new data can be published without significant delay, while ensuring data release can be embargoed during the lockup period. If the lockup period were longer, this would delay the ability of the token holders to see data being generated.

VitaDAO will retain 69% of the VITA-0001 tokens.

Researchers will receive 5%, vested over 4 years, with a 1 year cliff. This vesting period is to incentivize long-term success of the project and discourage falsification of data. This must first be approved by Newcastle.

Newcastle University will receive 1%, vested over 4 years, 1 year cliff. Though this is not required in the contract, it may be a strong signal to other University TTOs, incentivizing them to speed up the licensing process if completed by a deadline. This must first be approved by Newcastle.

VitaDAO Dealflow WG will receive 5%, vested over 4 years, 1 year cliff. Vesting period to incentivize long-term success of the project. This must first be approved by Newcastle.

The liquidity pool will receive 10%. A liquidity pool on UniswapV3 will be created upon claiming the sale proceeds, matching 10% of the fractions with 100% of the funds raised from the sale.

All of these numbers can be subject to change once token holders begin governance, as more VITA-0001 tokens can be minted and distributed pursuant to token holder vote.

Genesis Sale

The genesis sale will be a fixed-price sale with overflow rebates and vesting.

10% of the tokens will be sold to VITA holders at a fixed price. Importantly, this price should not factor in any appreciation or depreciation in the value of the project based on the emergent data as VITA holders should have the power to make that determination once liquidity has been established at the conclusion of the sale.

The pricing is determined by a cost-based valuation, factoring in committed research costs of 220,358 CHF (245,557 USD), legal and operational costs of 38,563 CHF (43,295 USD), inflation of 23,865 USD (VitaDAO holds USDC so it makes sense to calculate inflation with regard to USDC - calculated with the US Bureau of Statistics Inflation Calculator), for a total total cost-based valuation of 312,717 USD.

Note: All mentions of USD are to denote value, not stable coins

Given the final valuation, 10% of the VITA-0001 tokens would be valued at 31,271 USD and a price of 0.31271 USD per token. We propose that these funds are raised in WETH, resulting in a price of 0.00018 WETH per token, for a total fundraising amount of 17.63 WETH (at current prices).

The sale of tokens will occur over a 2-day period during which members of VitaDAO may bid as much money as they are willing to contribute and lock in VITA tokens. The value of each buyer’s bid can be up to the maximum of their VITA holdings locked in the sale contract. The more VITA a buyer locks for a 2-month vesting period, the more that buyer may bid during the sales period. This VITA locking mechanism is to prioritize allocation of VITA-0001 to the members of VitaDAO who have supported the original fundraising for the project.

If the sales goal of 31,271 USD is not met, then all funds will be returned to funders. If the sales goal is met or exceeded, then the final allocation of fraction tokens will be proportional to each bidder’s fraction of the total bids.

For example, if Alice bids 40,000 USD and Bob bids 20,000 USD, and Alice and Bob are the only funders, then Alice will receive twice the allocation as Bob (this also means that Alice locked twice as much VITA as Bob).

Any overflow is returned to bidders. For example, Alice and Bob together bid 60,000 USD, but the sale sought to raise 31,271 USD, so there is 28,279 USD in surplus. That surplus overflows and gets returned pro rata, so Alice gets back 19,153 USD and Bob gets back 9,576 USD. At the conclusion of the sale, participants will immediately be able to claim the surplus that overflows.

Sale participants receive vested VITA (vVITA) and vested VITA-0001 tokens (vVITA-0001), to ensure they can participate in governance while locked. After the two-month vesting period is over, sales participants will begin to be able to swap their vVITA for VITA and vVITA-0001 for VITA-0001 tokens, with the total amount locked for the full 2-month period.

When VitaDAO claims the proceeds from the sale, a Uniswap liquidity pool will be created using the full sales proceeds and 10% of the VITA-0001 tokens at the same price as the sale.

Liquidity Pool

After the sale is completed, a liquidity pool will be created with another 10% of the total fraction tokens combined with 100% of the funds raised. The starting token price will be equal to the final price of the auction.

Therefore, if the 31,271 USD goal is met then the VITA-0001/WETH pool will be seeded with 31,271 USD matched with 10% of the VITA-0001 tokens (100,000) at a starting price of 0.31271 per Molecule.

Use of Funds

Though immediately all funds raised will be leveraged for establishing liquidity, the ultimate intent is for these funds to go toward research and IP development. However, we want the community to have governance here once democratized directly to the community. There is some optionality as to how funds can be leveraged to develop the Newcastle work.

First, the funds can be used for decentralizing structure-activity-relationship (SAR) analysis. The Korolchuk lab has a computational biologist in-house, but we believe we can bring the strongest SAR talent from around the world to help determine promising compound scaffolds and design optimal candidates to take into medicinal chemistry optimization. For example, LabDAO has offered to give access to its large network of computational chemists and develop hackathons around analysis of the data being generated from the Korolchuk lab. Given the importance of the decisions made from a hit-to-lead perspective being made in the next few months, having independent consensus by many highly-trained computational chemists would be high-leverage capital that could be deployed with the funds raised.

In addition, given the breadth of compounds emerging as hits from the screen, not only will SAR analyses be absolutely crucial to down-selecting lead compounds, but so will medicinal chemistry. Experienced and talented medicinal chemists typically cost ~1k USD/day, and capital could be leveraged for medchem as well.

Another potential use of funds is for filing intellectual property. With the quantity of potential novel compounds coming out of this research, foundational substance of matter patent protection around the best compounds will clearly be essential to increasing the IP value. Contracting patent attorneys to file strong substance of matter and method of use patent applications around each of the (hopefully) many compounds coming from the screen will be high-leverage deployment of the funds.

In summary, in the short term, the funds from the fundraise will be leveraged for liquidity; however, once governance has been established, there are many routes for reallocating this capital from liquidity to IP generation. This should be a community decision that future IP-NFT fraction holders can get more data and context to help drive efficient decision-making.

Token Rights and Legal Considerations

The VITA-0001 tokens represent membership in an IP pool containing the Korolchuk IP-NFT and its attached IP and R&D data. IP pool membership enables fraction token holders to govern the joint development and experimental use of the IP and R&D data in the pool.

Holders of VITA-0001 tokens have information rights including the right to receive regular, non-confidential updates from the researchers and ask questions to the researcher, as agreed upon with the researcher, as well as obtain confidential information about the research after following appropriate protocols such as KYC/NDA. Fraction holders will have access to data rooms containing the IP and R&D data. Holders of VITA-0001 tokens will have information rights to non-confidential data rooms with the results provided by the researcher to the community to help with the decision making process, with proprietary information will be redacted to protect the integrity of the IP. This data room will remain open continuously and be the mechanism of providing non-confidential updates to fraction holders. Holders of VITA-0001 tokens may also have the opportunity to gain access to confidential data. This data will be highly confidential, thus requiring users to sign confidentiality agreements to safeguard the IP, but allow people to access and contribute to the research or make funding decisions based on this information if they choose.

Holders of VITA-0001 tokens have rights to govern issuance of licenses to use the underlying IP and R&D data attached to the IP-NFT. Control over the licensing function of the IP and R&D data is decentralized through token holder governance.

Holders of VITA-0001 tokens can only distribute proceeds from licensing or sale of the IP and R&D if they exercise their rights to do so through governance. Token holders must make the judgment in the future whether and how to distribute licensing or sale proceeds, such as by forming a legal entity prior to making such distribution.

The rights of token holders are governed by the VITA-0001 IP-NFT Fractional Association of Molecules (FAM) Membership Agreement, an adhesion contract holders agree to at points of sale, claim, and voting.

Given the current regulatory uncertainty in the US with respect to crypto and the aggressive recent actions taken by the SEC, we sought advice from two US law firms and a Swiss law firm, who all recommended to geoblock any buyers from the USA.

Conclusion

This is a brief overview of a potential fractionalization protocol, likely with many open questions from the community. Ultimately, the goal is to get fractional IP-NFT tokens into the hands of the community to drive projects forward and only release a fraction of the governance ownership into the market that allows for price discovery and future, larger, fundraising should it be needed and justified. Our timeline is ASAP, and our entire team at Molecule is hustling to enable this by beginning-mid June if approved by the VitaDAO community.

• Agree
• Revisions Requested (Detail in Comments)
• Disagree

[alexdobrin]

@benji

VitaDAO Dealflow WG will receive 5%, vested over 4 years, 1 year cliff. Vesting period to incentivize long-term success of the project. This must first be approved by Newcastle.

How will the 5% be allocated within the working group members?
Will new members of the longevity & dealflow wg be eligible for this allocation?

[alexdobrin]

Would be awesome to have a token distribution chart

[benji]

Great questions.

1. In the future, I think this decision is best made a priori to deals being funded, and agreed upon by the community as part of the funding terms. Whoever sourced the deal and anyone directly involved in diligence should split the ownership. However, I think the deal sourcer should get the most, because sourcing the best deals is the highest value work. So, maybe 2.5% to the deal sourcer, 1% to the shepherd, and the rest split between the additional deal flow WG members who contributed to diligence.
2. I don’t necessarily think anyone on the deal flow WG who hasn’t worked on a specific project should be owed any fractional ownership, but that is ultimately up to VitaCore. Just thought it would be a good idea to give some allocation at a high-level and let you all agree upon shared allocation from there, based on who has done the work to get the project to this point and who will continue to work on the project and create further value.
3. Here’s a very basic proposed token distribution chart, and will add it to the VDP text body as I’m sure others will ask for the same thing.
   
   

[EliMo]

This topic is definitely not getting the attention it deserves. It may be because of people’s attention being on Zuzalu, but I urge us all understand this well before launching the rocket Newcastle could be for the DAO and IP-NFT future.
@benji could you expand on what the underlying IP and R&D data actually is? What will exactly be fractionalized?

[benji]

Thank you @EliMo for bringing more attention to this. Happy to clarify and apologies for the confusion.

The IP rights to the VITA-0001 tokenholders are subject to this agreement here. I highly recommend you read this if you’re interested. It is a contract so it may take some effort to parse through the legal lingo, but @Jesse can answer any specific questions you have.

In short, VITA-0001 as we have proposed it, is a governance token, where the economic rights are not hard-coded (we were advised against doing this for now). Economic rights enforcement could be governed in the future by VITA-0001 token holders. Should an interested buyer come along interested in licensing the IP in full, this may make sense to vote on, with greater compliance requirements and complexity likely to ensue.

The R&D data generated by the project will be made available respectful of IP sensitivity, should this proposal pass, to the entire community. A data room is currently being prepared that shows which experiments have been run and the data that has been generated, while blinding all sensitive IP details (compound structures) for protection. We’ll also include which experiments are ongoing and planned, and allow VITA-0001 token holders to weigh in on future killer experiments that further develop the IP and push it forward.

Thank you for your questions and happy to answer any more.

[Jesse]

In fact, “fractionalization” is actually a bit of a misnomer, as the IP-NFT is not being locked like an NFT fractionalized using fractional.art – rather, the IP-NFT is just being used to mint VITA-0001 tokens.

VITA-0001 tokens represent membership in the IP pool for the Newcastle-Korolchuk IP-NFT.

VITA-0001 holders have the following rights:

• Governance: VITA-0001 holders have the right to participate in the governance of the IP-NFT and its development. This includes voting on proposed licenses and use of proceeds.

• Access to Intellectual Property: VITA-0001 holders have access to relevant data and other Intellectual Property (IP) or Future Intellectual Property arising from the development of the IP-NFT. This is necessary for due diligence and to govern the development of the IP-NFT intelligently. However, this does not grant any license to the IP.

• Duty of Care: VITA-0001 holders have a Duty of Care to honor, support, and adhere to the terms and conditions of the FAM Agreement, including any governance agreement made pursuant to it.

• Confidentiality: VITA-0001 holders must not, without consent, use or disclose any confidential information or IP for any purpose or attempt to sell or register any Confidential Information, IP, or R&D data rights developed through their participation in the token holder group.

These are described in an adhesion contract called the Discovering Novel Autophagy Activators IP-NFT Fractional Association of Molecules (FAM) Membership Agreement developed by VitaDAO’s legal working group.

Adhesion contracts are token wrapper membership agreements and licenses and are widely used in crypto to attach rights to tokens. Two prominent examples of adhesion contracts attaching IP rights to tokens in the NFT space are the CryptoPunks Terms and the Viral Public License for Miladys.

VITA-0001 holders will encounter and agree to the terms of FAM Membership Agreement in several places for it to “adhere” to them: at the point of purchasing Molecules in the original sale, in order to vote with Molecules in governance decisions, in order to access the data room for the IP pool, and in order to claim any proceeds from licensing or sale of the IP-NFT, IP, and R&D data.

[Andy]

Can’t vote because on Trust Level 1, but very bullish on this. Selling 10-20% to continue the project’s growth is a no-brainer.

Hope we can use it for HairDao

[bowtiedshrike]

Calling it Vita-0001 will cause confusion with Vita tokens. Please name them something else.

I’m not clear on how the funds will move to research, or how that will help move research forward. As I understand it, you’re trying to raise $32k, which goes first to liquidity. Assuming there is any left after the dumpoors are done, does the pool get drained and then the cash sent to New Castle? And a $32k raise is not much runway at all.

While a reserve price is good to have, I do not understand the rationale for limiting the buy price, especially capping at $31k. Is the hope this will drive demand for the token, so it pumps after the initial event? If it’s possible to raise more and/or increase the valuation, why not do that?

Also, I would prefer to see the researchers get a larger cut than the WG.

[benji]

Was hoping you’d comment. Always asking the hard q’s @bowtiedshrike

@bowtiedshrike

Calling it Vita-0001 will cause confusion with Vita tokens. Please name them something else.

Glaxosmithkline stock ticker is GSK and its unnamed drugs are GSK-####. Amgen’s ticker is AMGN and its unnamed drugs are AMG-####. Was thinking we’d follow the standard here (stocks vs token discrepancies aside). What do you suggest we name it?

@bowtiedshrike

I’m not clear on how the funds will move to research, or how that will help move research forward. As I understand it, you’re trying to raise $32k, which goes first to liquidity. Assuming there is any left after the dumpoors are done, does the pool get drained and then the cash sent to New Castle? And a $32k raise is not much runway at all.

1. The funds will be moved in at the discretion of the VITA-0001 tokenholders. Luckily the project is sufficiently capitalized to hit its next milestones, so the next question is why fundraise at all?
2. They do not have a budget for any external in silico analyses or external medchem support. This is what we suggest the fundraise is spent on, but ultimately tokenholders will decide.
3. We have attempted to design a system to tame the dumpoors. You can be the judge of whether it’s sufficiently protected. The proposed mechanisms of prioritizing VITA tokenholders, who are likely to be more long-term supporters than pumpoors and dumpoors, is one line of defense. Another line of defense is the proposed 2-month vesting period after the sale is over. If you think either of these are either unnecessary or insufficient, please say so.

@bowtiedshrike

While a reserve price is good to have, I do not understand the rationale for limiting the buy price, especially capping at $31k. Is the hope this will drive demand for the token, so it pumps after the initial event? If it’s possible to raise more and/or increase the valuation, why not do that?

1. The price is something we want back and forth with a ton. It would likely be too much to recap all of our thinking here. Below is a table outlining pros and cons of both a fixed price sale and an auction.
   
   
2. I think the important piece here is that the existing VITA token holders have supported the project up until this point, so why would we want to charge them a premium valuation? In fact, we want to reward them for having supported the project by getting them in at a lower valuation. This was what the decision boiled down to.
3. By raising such a small amount, the project can take on less dilution at the proposed cost-based price. Subsequent funding rounds can be at a different valuation on community-based price discovery, whatever that may beeeeeeee.

@bowtiedshrike

Also, I would prefer to see the researchers get a larger cut than the WG.

What do you propose the split is here?

[bowtiedshrike]

@benji

stock ticker is GSK and its unnamed drugs are GSK-####.

No one trades the individual drugs, though. The original FAM is ok with me, or you could try some sort of other aging/life pun. AGE, LiveItIP, LiveTech, IPNFT, FracPat, LongevIP come to mind. The more useful suggestions from ChatGPT are LifeX, LifeIP, VitaConnect, LifePropel

@benji

The funds will be moved in at the discretion of the VITA-0001 tokenholders.

I mean mechanistically. Assuming VitaDAO (other tokenholders have no effective governance in this system since VitaDAO holds >2/3 majority stake) says ‘give it all to the company/lab’, where does the money come from and how does it get to the lab? And $32k isn’t enough money to be worth discussing where it goes. From a lab point of view, it would be nice to have, but it’s not enough to hire more people or buy fancy new toys. It will get spent quickly.

@benji

I think the important piece here is that the existing VITA token holders have supported the project up until this point, so why would we want to charge them a premium valuation? In fact, we want to reward them for having supported the project by getting them in at a lower valuation. This was what the decision boiled down to.

Having more money for the project to work with is always a net positive. If the project is solid, you don’t need to artificially stimulate demand or siphon money from the project to the secondary by keeping the valuation low. I would think that the dilution risk and the next rounds of funding would be more important for setting any fundraising goals.

Also seems like you’re optimizing for two different routes at the same time. If you try to pump the secondary at the expense of the primary, go all in, and try to get this thing to pump next alt season. Stimulate massive FOMO, meme it to oblivion, etc. But even random altcoins pull a few million doing this, not $30k. If the goal is to get the primary to 10x without pump/dump, need to make sure the project has the capital to succeed. Primary valuation may not matter as much because it will go up. And a $300k raise is substantially more money than a $30k raise. You can do things with $300k that you can’t with $30k.

The secret limit people seem to cap after a few million. So if there was a valuation you wanted to avoid for later fundraising, that would make sense. The other game that gets played is WL followed by public sale, where the public sale is exit liquidity for the WL. You could do 3% for WL (aka Vita holders) at a reserve rate, and then 7% public sale (anyone) at market rate.

@benji

What do you propose the split is here?

How about a 7-3-1 between researchers, WG, and university?

[benji]

awesome comments all around @bowtiedshrike

@bowtiedshrike

No one trades the individual drugs, though. The original FAM is ok with me, or you could try some sort of other aging/life pun. AGE, LiveItIP, LiveTech, IPNFT, FracPat, LongevIP come to mind. The more useful suggestions from ChatGPT are LifeX, LifeIP, VitaConnect, LifePropel

how about AutophaGPT?? Not a big fan of any of these suggestions tbh but will let others comment if they have strong feelings

@bowtiedshrike

I mean mechanistically. Assuming VitaDAO (other tokenholders have no effective governance in this system since VitaDAO holds >2/3 majority stake) says ‘give it all to the company/lab’, where does the money come from and how does it get to the lab? And $32k isn’t enough money to be worth discussing where it goes. From a lab point of view, it would be nice to have, but it’s not enough to hire more people or buy fancy new toys. It will get spent quickly.

If the community (tokenholders + VitaDAO as you mention) votes to distribute the funds to the lab, it would have to come from the liquidity pool (given that’s where the funds are going). Off-ramping can be done via Molecule or a VitaDAO entity, and wired to the lab, or an alternative path we can pursue is whether Newcastle University can set up a Coinbase Institutional account, which we did with a researcher funded by HairDAO. Hopefully there are other market makers when that time comes to supplement the liquidity originally provided by the project’s multisig, but this is something that can and should be discussed down the road. Luckily we have time to make such a decision and pursue different options.

@bowtiedshrike

Also seems like you’re optimizing for two different routes at the same time. If you try to pump the secondary at the expense of the primary, go all in, and try to get this thing to pump next alt season. Stimulate massive FOMO, meme it to oblivion, etc. But even random altcoins pull a few million doing this, not $30k. If the goal is to get the primary to 10x without pump/dump, need to make sure the project has the capital to succeed. Primary valuation may not matter as much because it will go up. And a $300k raise is substantially more money than a $30k raise. You can do things with $300k that you can’t with $30k.

If the project is going to raise 300k, that would require setting a price. This would be arbitrary and not determined by community-based price discovery. If the project needs that quantity of capital, better to wait until a price is discovered that doesn’t force too much dilution nor arbitrarily setting a price. This is what we hope to enable, rather than raise millions (which is not yet needed).

@bowtiedshrike

How about a 7-3-1 between researchers, WG, and university?

This makes sense to me, but I’m curious what VitaCore’s opinions on it is.

[bowtiedshrike]

@benji

how about AutophaGPT

Not a fan. Saw ‘Molecule’ up above, which I like except for potential confusion with the company of the same name.

@benji

Hopefully there are other market makers when that time comes to supplement the liquidity originally provided by the project’s multisig,

Why will there be other market makers? This sounds like it is going to raise liquidity for a pool, and the first few people to move out in size will get all of the liquidity. A $30k pool is reasonably easy to manipulate. Is a VitaDAO-funded liquidity pool necessary? Would a different exchange model (eg order book, or NFT-style auction) work better without costing liquidity?

@benji

If the project is going to raise 300k, that would require setting a price.

If $300k was the target, yes. But if the raise is open-ended, the market sets the token values. If you are handing out 10% of the tokens no matter how much people invest, and people collectively invest $30k, then each token is 30k/100k = $0.30 each. If people collectively dump in $300k, then each token is worth $3. And there are reverse Dutch auctions and other variants that can be done to incentivize people buying in. IIRC, FloorDAO had some twist on their auction, Redacted Cartel did something else with the launch of BTRFLY (I think that one may have been the Dutch auction, where the price drops over time until all the tokens are sold), and JonesDAO did the reserve price thing for their pre-sale.

I think a $30k limit sells the project short from a crypto-perspective, where you can get whales to dump that much in on a degen bet. Unless there are fund-raising issues later with having a higher valuation implied by the token raise, I don’t see how limiting the money raised helps the project or VitaDAO.

Overall, I would like to see fractionalization work, and be successful. I agree that we’ll learn best by doing, even if there are mistakes along the way. But at $30k, this seems like an intellectual exercise more than anything… it may cost that much just to audit the smart contract.

[benji]

@bowtiedshrike

Not a fan. Saw ‘Molecule’ up above, which I like except for potential confusion with the company of the same name.

More intentional than accidental here. We’ll likely go with Molecules and have gotten positive feedback on that from user testing.

@bowtiedshrike

Why will there be other market makers?

I think the same reason anyone market makes VITA - for potential fees. I just checked the Uniswap VITA / WETH LP and counted 30 liquidity providers. I understand this is not apples to apples, but if it is even remotely predictive of liquidity for the Molecules, this shouldn’t be a huge concern.

@bowtiedshrike

Is a VitaDAO-funded liquidity pool necessary?

Probably not necessary, but would be accretive to VitaDAO if the price of Molecules went up. If the price of Molecules went down, it would be a net cost to VitaDAO. This is the risk, and in fairness, if VitaDAO is going to fractionalize an IP-NFT, it should be willing to take on the risk of market making (in my opinion).

@bowtiedshrike

Would a different exchange model (eg order book, or NFT-style auction) work better without costing liquidity?

On layer-1, order books don’t make a ton of sense. They are highly gas inefficient and capital inefficient. Same thing with a blackboard order book. There is a reason AMMs are so popular on ETH - they maximize capital efficiency and minimize gas. Maybe on a layer 2 a central limit order book would make more sense.

@bowtiedshrike

If $300k was the target, yes…audit the smart contract.

Love how you’re thinking, and we certainly thought long and hard about the dutch auction, fair batch auction, and even came up with some new potential auction mechanics that could be experimented with. However, for a first launch, we thought a fixed price would be most simple to implement, understand for community members, and most fair to participants. Another thing to think about is exhausting the demand for the token by inflating the sale price in an auction. What would that do to the price stability? Will refer you again to this table:

@bowtiedshrike

I think a $30k limit sells the project short from a crypto-perspective, where you can get whales to dump that much in on a degen bet. Unless there are fund-raising issues later with having a higher valuation implied by the token raise, I don’t see how limiting the money raised helps the project or VitaDAO.

Although I tend to agree, it’s important to note that in biotech fundraising, as opposed to crypto or DAO fundraising, is not meant to maximize funds raised. It is to raise a specific amount to reach a certain milestone without taking on too much dilution. Limiting the money is exactly what you want to do in biotech, because you know within a pretty narrow margin (5% or so), exactly what you want to raise because you know what is required to get to a value inflection point, when you can again raise money at hopefully a higher valuation based on the data generated. Our goal is to enable capital efficient biotech, not degen aping and overvaluing programs. This will hurt us in the long run as no reputable biotech company will want to license a hilariously overvalued asset.

@bowtiedshrike

Overall, I would like to see fractionalization work, and be successful. I agree that we’ll learn best by doing, even if there are mistakes along the way. But at $30k, this seems like an intellectual exercise more than anything… it may cost that much just to audit the smart contract.

Thank you for saying this, and it’s important to reiterate. We have to get something out there with an MVP. Trust me, everything you are saying are concerns we have discussed for months. We can either debate endlessly, or ship. We want to ship, learn, iterate, and add all the bells and whistles as time goes on. Hope this makes sense. Your thoughts are incredibly well taken, hugely appreciated, and hope we can continue to get your valuable feedback.

[SimiKol]

Great points!

@benji Could you explain the reasoning for this particular token allocation?

I personally believe that the researchers ought to have a larger share. Additionally, the name ‘VITA-0001’ for the token appears somewhat unsavory. Is there a particular marketing strategy that informed this choice of name?

[SimiKol]

Sale participants receive vested VITA (vVITA) and vested VITA-0001 tokens (vVITA-0001), to ensure they can participate in governance while locked. After the two-month vesting period is over, sales participants will begin to be able to swap their vVITA for VITA and vVITA-0001 for VITA-0001 tokens, with the total amount locked for the full 2-month period.

A vesting period of two months appears rather brief. This implies that the recipients can convert their vVITA into VITA, potentially offloading a large quantity of VITA and inevitably impacting its market price.

As a token holder, I’m concerned that this brief vesting duration could cause fluctuations in the short-term price of the token and might attract participants who may not have long-term commitment or alignment.

What measures are being taken to prevent such scenarios?

[benji]

We simply proposed what we thought was fair. @bowtiedshrike seems to agree with you that the split should go more toward the researchers. What do you think about their suggestion below?

@bowtiedshrike

How about a 7-3-1 between researchers, WG, and university?

@SimiKol

Additionally, the name ‘VITA-0001’ for the token appears somewhat unsavory. Is there a particular marketing strategy that informed this choice of name?

The thinking here was to align ourselves with a biotech company, which typically has it’s stock ticker (GSK) and then a unique number representing a compound in their pipeline. If you peruse most pharma and biotech pipelines, they all typically follow this standard. The goal was to not deviate too much from this nomenclature. Open to suggestions.

@SimiKol

A vesting period of two months appears rather brief. This implies that the recipients can convert their vVITA into VITA, potentially offloading a large quantity of VITA and inevitably impacting its market price…What measures are being taken to prevent such scenarios?

I understand the volatility concern generally, but not as you have described it. All participants in the sale would have liquid VITA today. Creating a vesting period will simply lock supply for the two months, then the level of liquidity would return back to the exact same state as when the vesting period began, a reversion to the same float. What is the logic that it would be any greater in two months time than there is today?

[Jesse]

@bowtiedshrike

@benji

how about AutophaGPT

Not a fan. Saw ‘Molecule’ up above, which I like except for potential confusion with the company of the same name.

Molecules is a great name for the token class. VITA-0001 is a great name for the first of many Molecules.

In the future, VitaDAO can mint Molecules from other projects funded with IP-NFTs, minting VITA-002, VITA-0042, VITA-0069 etc. (named that way in the tradition of biotech e.g. Compass Pathways’ pipeline product COMP360) using its IP-NFT portfolio, building a tokenized pipeline.

In this way, Molecules are a gain-of-function for IP-NFTs, an extension of the legal and smart contracts which make up IP-NFTs and unlock granular governance.

We don’t need to worry about the potential confusion with the company because these these are Molecules minted from the smart contract developed by Molecule. Like Marc by Marc Jacobs.

VITA-0001 may be just the first of many Molecules minted using the Molecule protocol and VitaDAO is not the only user.

@Andy

Hope we can use it for HairDao

Will we see HAIR-0001 in the future?

IP-NFTs enabled VitaDAO, and other BioDAOs at large like HairDAO, to tokenize their IP and R&D data rights and responsibilities, holding them onchain. Molecules enable BioDAOs to go further, tokenizing IP-NFTs, unlocking granular governance over their project pipelines.

@bowtiedshrike

No one trades the individual drugs, though.

Rather than trading, the purpose of minting Molecules is unlocking granular governance.

Molecules are IP governance tokens, tokenizing membership in IP pools. The collaboration, coordination, and incentivization unlocked by IP pools in the VitaDAO pipeline (and, from a policy perspective, drugs on the market in general) should reduce costs of drug development for the benefit of patients.

In VitaDAO, the patients are the platform: our whole community suffers from aging. If VITA-0001 is successful then most of us will probably be taking it. Then we will probably also want to govern it. Our legal working group member Chris Byrnes has some great writing on why: in short, when patients govern the drugs they are taking, commercialization trends towards more ethical.

@bowtiedshrike

I think a $30k limit sells the project short from a crypto-perspective, where you can get whales to dump that much in on a degen bet. Unless there are fund-raising issues later with having a higher valuation implied by the token raise, I don’t see how limiting the money raised helps the project or VitaDAO.

Overall, I would like to see fractionalization work, and be successful. I agree that we’ll learn best by doing, even if there are mistakes along the way. But at $30k, this seems like an intellectual exercise more than anything… it may cost that much just to audit the smart contract.

+1. $30K is an almost awfully small amount to raise. But does this Korolchuk project need more than $30K right now? Instead of 10% of VITA-0001 for $30K, the DAO could sell 25% of VITA-0001 for $75K using the same cost-based valuation model. If it doesn’t need it, then why sell so much for so little? This may be some of the most expensive money the project will ever get. If it can reach the next research milestone with what it has, then it can probably get $75K for less than 25%.

I do not believe uncapped auctions make sense in this context of funding research using Molecules, where the purpose is for the research to hit specific milestones. As Benji described:

@benji

it’s important to note that in biotech fundraising, as opposed to crypto or DAO fundraising, is not meant to maximize funds raised. It is to raise a specific amount to reach a certain milestone without taking on too much dilution. Limiting the money is exactly what you want to do in biotech, because you know within a pretty narrow margin (5% or so), exactly what you want to raise because you know what is required to get to a value inflection point, when you can again raise money at hopefully a higher valuation based on the data generated. Our goal is to enable capital efficient biotech, not degen aping and overvaluing programs.

This is correct. I think the proposed model, a fixed price token sale at a cost-based valuation with overflow rebates and vesting, is the right model for this context. It enables VitaDAO to raise a specific amount needed and assess the market for the project without demand exhaustion.

[SimiKol]

@Jesse

Molecules is a great name for the token class. VITA-0001 is a great name for the first of many Molecules.

In the future, VitaDAO can mint Molecules from other projects funded with IP-NFTs, minting VITA-002, VITA-0042, VITA-0069 etc. (named that way in the tradition of biotech e.g. Compass Pathways’ pipeline product COMP360) using its IP-NFT portfolio, building a tokenized pipeline.

In this way, Molecules are a gain-of-function for IP-NFTs, an extension of the legal and smart contracts which make up IP-NFTs and unlock granular governance.

We don’t need to worry about the potential confusion with the company because these these are Molecules minted from the smart contract developed by Molecule. Like Marc by Marc Jacobs.

VITA-0001 may be just the first of many Molecules minted using the Molecule protocol and VitaDAO is not the only user.

The VitaDAO Community might find it a bit confusing to have a token class named ‘Molecules’ and the IP-NFT platform service provider named ‘Molecule’.

I believe it would be beneficial if we conduct a community vote to determine the fundraising target for the auction. The same goes for voting on how much the researchers should get.

[SimiKol]

@benji

I understand the volatility concern generally, but not as you have described it. All participants in the sale would have liquid VITA today. Creating a vesting period will simply lock supply for the two months, then the level of liquidity would return back to the exact same state as when the vesting period began, a reversion to the same float. What is the logic that it would be any greater in two months time than there is today?

How will the two-month vesting period be implemented?