More than a JPEG — Squid NFTs
Not financial advice. As always, do your own research.
Edits: December 21, 2021 — to reflect new bonding policy and veSQUID implementation
On October 26, 2021, the very first SquidDAO NFT was sold for 20 ETH. SquidDAO released in stealth mode, so buyers were taking a chance on a fledgling DAO offering (the most expensive sold for 497 ETH!). Forty-three days later, Squid 80 sold for 13.3 ETH, all of which went straight to the SquidDAO treasury, which now has over 15,600 ETH. What’s the secret to the success of these NFTs? Why are they still being sold for large amounts of ETH? And why might a discerning anon consider purchasing one?
Why did SquidDAO release Squid NFTs?
Simply put, SquidDAO’s mission is to stack ETH — using that ETH for the betterment of the ETH ecosystem by investing in protocols at various stages and to provide returns to our hibernators (SQUID stakers). Squid NFTs provide a massive revenue stream to achieve this goal. By all measures, the NFTs have been a runaway success! At first, each NFT came with a full $SQUID token, then 0.1 SQUID, and finally 0 SQUID, as the DAO treasury grew. Now, each NFT provides governance rights and, soon, income generation. In total, these NFT sales have raised 7,874 ETH for the SquidDAO treasury.
But ser, no $SQUID given— why buy?
In simple terms, it’s transferable cash and governance rights.
Bonding Fees
With the planned implementation of veSQUID (a future mechanism to lock $SQUID for periods of time in exchange for voting rights and bonding fees — similar to Curve’s veCRV mechanics) each Squid NFT will receive bonding fees equivalent to 1 veSQUID multiplied by the current index. Bonding fees are paid when anyone purchases a bond at SquidDAO. Right now, for every SQUID purchased through bonds, this will generate 0.05 SQUID to be paid out pro-rata to veSQUID holders and 0.025 SQUID to be paid pro-rata to NFT holders.
[Editor’s Note: Edited to clarify that bonding fees paid to veSQUID holders and NFT holders will be split 50–50 and each pool will then be disbursed pro-rata to their respective holders]
Example:
Assume SQUID costs 200 ETH, and you purchase 200 WETH of SQUID Bonds. This means you’re entitled to 1 SQUID that will be available to be claimed proportionally over the next five days. Since you purchased 1 SQUID through bonds, the protocol will create an extra 0.1 SQUID, that 0.1 SQUID is split 50–50 as bonding fees (paid to all NFT holders — including you — and to veSQUID holders — split again, 50–50) and protocol fees (for the dev team).
The best part about this — it’s retroactive — i.e. every bond to date has accumulated bonding fees, and these will all be paid out when veSQUID is implemented to NFT holders and other veSQUID holders.
[Editor’s Note: According to this passed snapshot, the amount of bonding fees has been increased 4x to 0.25 SQUID per 1 SQUID purchased through bonds, but the timeline for the release of the new bonding contract is after the retroactive bonding fee calculations were made. Going forward, veSQUID holders will receive pro rata 0.10 SQUID per 1 SQUID purchased through bonds and NFT holders will receive pro rata 0.10 SQUID per 1 SQUID purchased through bonds.]
On-Chain Voting Rights
SquidDAO will implement on-chain voting for all SQUID holders to have a say in the governance of SquidDAO. You will gain voting rights if you lock your SQUID for varying periods as veSQUID (similar to the Curve model). To reward early adopters and to recognize the importance of NFTs to our ecosystem, each Squid NFT will provide voting power equivalent to 1 veSQUID * current Index. By owning a Squid NFT, you can turbocharge your say in the governance process given that Squid NFTs are currently being auctioned off for less than the cost of 1 SQUID. Even at this early stage, NFT holders have already made several votes to determine the future of SquidDAO.
Fully Transferable
The rights to bonding fees and voting are attached to the NFT, not a particular wallet. So if you purchase these NFTs on the secondary market, you will receive these rights once they’re fully implemented.
Squid NFTs are true alpha generators; they will pay out a dividend based on protocol bonding and provide you with amplified governance (relative to purchasing SQUID outright).
But none of these are available right this instant, so what do I get right now?
Patience, young larvae. While you’ll have to wait before you can start collecting SQUID through bonding, you do get access to these benefits for each NFT you own:
Access to #👑Kraken / Wider Kraken network
The #👑kraken channel within the SquidDAO Discord is where the magic happens. Owning a Squid NFT gives you exclusive access to this channel. Here you can network and be part of a community that cares deeply about SquidDAO, ETH and DeFi. It doesn’t hurt that a number of Kraken are also whales with varied interests across crypto. If you’re interested, as many Kraken are, you can also go on to join #daobuilders and really contribute to SquidDAO.
Your access isn’t limited to #👑kraken. Communities are what makes or breaks the success of a protocol and our Kraken are the foundation on which SquidDAO’s success is based. As further services that plug us into other protocols are rolled out, you will have exclusive access to private Discord channels within those communities as well. There are immense opportunities for being part of this select group of investors if SquidDAO executes on its growth plan.
Voting on DAO initiatives
Each NFT currently gives you one vote for DAO initiatives through Snapshot (to be replaced with on-chain voting in the future). These range from new investments and partnerships to recognizing our contributors through Coordinape. At this stage, with 15,000 ETH in the treasury and available for deployment, each NFT possesses a great deal of power to direct where this capital should be allocated.
Amazing Artwork with Future Collector Value
Anyone that’s seen the Squid NFTs can see how talented our community of artists are, reflecting each of their distinctive styles and themes. They also make for awesome profile pics! We will help provide a springboard for other talented artists going forward and to use NFTs to generate partnership opportunities with other protocols.
A Potential Discount
The current Squid NFT auctions are being auctioned for far less value than that of an actual SQUID token. This represents the market discount given future initiatives are not completed in full. So you’re effectively purchasing 1 veSQUID worth of rights from bonding fees and voting at a fraction of the cost. An investor needs to determine what the impact will be on the value of these NFTs once these initiatives are fully implemented.
I’m in! How can I get my hands on one of these?
Welcome to the Squidadel! We’re excited you want to be a part of this! The best way is to participate in the Auctions that take place every day on the SquidDAO page.
Good luck paralarva, and look forward to seeing you in #👑kraken!
– ChickenBoo 🐔
A current Kraken and cartoon chicken with a taste for ETH, DeFI and SQUID
