Perform the first fractionalization of a VitaDAO IP-NFT.
This is a proposal for VitaDAO to fractionalize its IP-NFTs to give VitaDAO community members the opportunity to gain IP rights represented as FAM (Fractional Asset Manager) tokens as described herein. This proposal includes open questions for you to comment on and promote community buy-in and excitement. The main open question to be answered by VitaDAO, in addition to whether to enable fractionalization for an IP-NFT owned by VitaDAO, is whether the community agrees that the ApoptoSENS - Senolytic CAR-NK Cells project is the ideal candidate for being the first fractionalized project.
Fractionalizing VitaDAO’s IP-NFTs will increase engagement and participation within the VitaDAO community. By allowing community members to gain direct exposure to VitaDAO’s IP, it may encourage more people to become involved in the research process and contribute their skills and expertise. This can lead to more collaborative and open scientific development, which can ultimately lead to more successful research projects and advancements in longevity.
Fractionalization may also enable VitaDAO to generate additional revenue to fund its research projects. For example, by implementing transaction fees, yield farming, and scientific prediction markets, VitaDAO can earn additional funds that can be used to support the research directly, as well as potentially increase the value of the fractionalized tokens.
One potential risk is that fractionalization may lead to a lack of coordination or direction within the research projects. By allowing individual community members to speculate on the success of specific research projects, there may be a lack of overall direction or focus between the research efforts going on within VitaDAO. This could potentially lead to conflicting interests, fragmentation, and a lack of collaboration, which could ultimately hinder the progress of the research.
Overall, fractionalization of VitaDAO’s IP-NFTs presents both opportunities and risks, and it is important for VitaDAO to carefully consider these factors before making a decision. Some opportunities / risks are listed; please comment and highlight more.
- New utility for VITA token holders. We will have the power to get new tokens representing direct IP rights to VitaDAO’s IP-NFT portfolio by staking and locking VITA.
- New sources of funding for researchers. Direct funding of IP-NFTs through fractionalization enables researchers to fundraise for additional scientific milestones, unlocking evergreen funds for their labs.
- Volatility protection for VitaDAO treasury. If a value inflection point has been reached, such as issuance of a patent related to an IP-NFT, the valuation of the IP in an IP-NFT may skyrocket. Fractionalization can help insulate VitaDAO from the volatility of those rapid value shifts.
- Strategic supporters for specific research projects. Fractional tokens can be used to provide incentives for specific tasks such as data generation, analysis and algorithm creation, and development of the IP-NFT to reward individuals or teams who have made significant contributions to the project’s success.
- Liability limitation for VitaDAO. Fractionalization can drive demand for VITA by enabling token holders to obtain direct tokenized rights to the IP-NFTs in VitaDAO’s portfolio. This reinforces the separation of VITA token ownership from IP-NFT token ownership, which can help isolate VITA holders from liabilities that could arise related to the IP e.g. a lawsuit for infringement or adverse reaction to a longevity treatment.
- Granular exposure to the VitaDAO portfolio. Investors are enabled to purchase a portion of the rights associated with an individual IP-NFT, providing granular exposure to the VitaDAO portfolio and allowing investors to fund specific projects or ideas rather than committing capital to the entire portfolio.
- Liquidity for IP-NFT funders. Fractionalization provides liquidity to funders by allowing them to sell fractions of their IP-NFTs on Molecule’s marketplace. Liquidity gives funders the ability to quickly convert fractions into other assets to realize returns on their investments when they choose.
- Coupons for community members. If the project has a sufficiently high probability of commercialization and the community wants to receive coupons on future products, fractionalization enables those coupons.
- Ethical guidelines by community members. If the project has a sufficiently high probability of commercialization and the community wants to govern its ethical encumbrances, fractionalization enables that governance.
- Value fragmentation. We want IP-NFT fractions to drive value to VitaDAO, not away from VitaDAO. There is a risk that fractionalization drives IP value to fraction holders, not to VitaDAO. To mitigate this risk, we can require staking and locking VITA in order to gain access to fraction tokens.
- Attention and incentive fragmentation. If community members become hyper-focused on singular research projects, they may lose sight of the overall DAO’s mission and be biased to shuttle more of the DAO resources toward projects they personally have more upside in.
- Negative reflection on the DAO. Any token launch from VitaDAO’s IP-NFT portfolio is a reflection on the DAO, so it is important to ensure there is sufficient interest and projected liquidity to make the token a success.
- IP leakage. With data transparency between the fraction holders and researchers comes the risk of IP leakage, where fraction holders may disclose confidential information, so we must balance good data management by fraction holders with open science by ensuring that data released to the community does not jeopardize the IP and trade secrets.
- Rollercoaster of emotions. VitaDAO funds high-risk, high-reward projects, which comes with high volatility potential. Direct exposure to early stage scientific research via fractional tokens is guaranteed to be a rollercoaster for those who participate in fractionalization.
- Regulatory uncertainty. Because it is not clear how the FAM non-fungible tokens created through IP-NFT fractionalization will be classified and treated around the world, there is a risk of VitaDAO unintentionally running afoul of regulations. For example, if a fractionalized token sale is marketed as an investment opportunity, then securities laws will apply to the sale. In order to mitigate these risks, VitaDAO should have fractionalization reviewed by a third-party law firm prior to launch.
FAM are true fractions of the original IP-NFT with managerial and economic rights.
The proposed rights of FAM are as follows:
- Claim proceeds from commercialization of the IP
- Receive proceeds from sale of the IP-NFT
- Govern over whether the IP-NFT is transferred
- View confidential research data
- Admit new FAM
- Mint FRENS (more info will be provided in a later proposal)
FAM tokens from VitaDAO’s IP-NFTs will be distributed via token sales to VITA holders who lock and stake VITA and provide additional capital to fund the IP-NFT.
VITA holders who lock VITA will be able to purchase the same value in FAM tokens with USDC. This will simultaneously raise funding for the IP-NFT development, as well as drive utility to VITA by gating access to FAM with VITA holdings, and drive value to VitaDAO by locking tokens.
The proposed distribution methods for FAM is as follows:
- Fixed-price sale to recoup the original investment
- Buyers must lock VITA to gain access to the sale
a. The market value of VITA locked entitles the right to buy the same value of FAM
- Buyers can burn the FAM (erasing those NFTs permanently) and reclaim their VITA at any time
First project to fractionalize
Launch FAM for ApoptoSENS - Senolytic CAR-NK Cells in January 2023. Progress should be made with data generated by SENS prior to fractionalization, which will help the community make a decision whether SENS is the appropriate project to fractionalize. More importantly, SENS has deep ties to the crypto community, and fractionalizing a SENS research project can bring significant attention to VitaDAO and SENS by enabling a community longevity enthusiasts for the first time to individually receive direct exposure to longevity research, with both direct IP and data access rights (with appropriate non-disclosures in place).
Token Launch / Tokenomics
FAM launch raising up to $290,950
- 55% to be maintained with VitaDAO
- 30% to be launched to the community
- 10% to collaborators (Amit Sharma)
a. Vest over four years, one year cliff
- 5% to SENS, in accordance with the original agreement
- Will continue to serve as the PI on the research project and primary point of contact
- Will be responsible for summarizing data to present to the FAM holders
Laurence Ion (Laurence Ion#4088)
- Responsible for executing IP-NFT fractionalization and launch of FAM tokens on behalf of VitaDAO
Temporary Project Lead: Benji Leibowitz (Benji Leibo#2036)
- A FAM holder will be elected by all of the FAM holders (post launch) to be their delegate for communications with Amit & SENS
- Will be responsible for creating governance proposals to the ApoptoSENS DAO for which scientific / business development directions should be taken
- Will organize community calls to report on progress and answer questions of ApoptoSENS DAO members
- Initial data release for SENS Aim 1 (mid January 2023)
- VitaDAO internal marketing to / diligence by members (mid-end January 2023)
- Fractionalization (Q1 2023)
- Completion of Aims 1&2 (Q2 2023)
- Completion of Aim 3 (Q2 2024)
SENS Research Agreement
- Agree - Approve fractionalization & ApoptoSENS IP-NFT
- Agree - Approve fractionalization, but with a different IP-NFT