ZooDAO LBP: After-Action Review

A message from the team:

We would like to thank the community for its continued support and engagement as the team works towards building a solution to NFT utility, delivering on our core mission of creating greater purpose for NFTs.

This week, we launched our Liquidity Bootstrapping Pool (LBP), lasting a total of 72 hours from February 22nd to 25th. The LBP raised approximately 191,000 $DAI, distributing a total of 859,000 $ZOO tokens to 77 buyers.

We recognize that the LBP was scheduled at a time of near unprecedented instability. Geopolitical conflict in Eastern Europe has justifiably created a great deal of anxiety and fear. Meanwhile a looming bear market and economic uncertainty continues to adversely affect both Decentralized Finance and traditional financial systems to a high degree.

In line with our core principles of organic growth, we chose not to market the LBP using influencers and marketing companies. Our strategy has been and always will be focused on organic growth, fuelled by close engagement with integrated NFT projects and through word-of-mouth engagement between users and their communities. While spreading the news on ZooDAO’s LBP with influencers could have resulted in increased purchases of $ZOO in the LBP, such a strategy would be at odds with our core principles and come at the expense of our supportive community. In line with this, the ZooDAO team did not artificially manipulate the price, and the sizeable capital raised came organically from our incredible community.

Despite the challenging environment, our LBP proved to be a success: the combined IDO and LBP raised the funds needed to sustain the continued development of ZooDAO, and deliver on our ambitious roadmap. We’re enormously grateful for the support of the community, the trust placed in us and are encouraged by the number of community members who participated in both the IDO and LBP.

We look forward to sharing the next steps in ZooDAO’s development and empowering our close-knit community to make the decisions which shape the future of ZooDAO.

Finally, we join all our friends in the cryptosphere and beyond in hoping and advocating for de-escalation of the ongoing conflict and for peace to prevail.

Peace cannot be kept by force. It can only be achieved by understanding.

With love, the ZooDAO team.

ZooDAO’s LBP and IDO: Key Information

The ZooDAO Liquidity Bootstrapping Pool (LBP) wrapped up on February 25th, generating 191,300 $DAI towards the continued development of ZooDAO’s solution to NFT utility.

Combined with the 400,000 $DAI generated through the ZooDAO IDO, the total amount raised is 591,000 $DAI.

Management of Funds

The majority of the $DAI generated through the LBP and IDO have been transferred via ZooDAO’s smartcontract to be held in a Gnosis Safe. These funds are under custody of a Gnosis Safe smartcontract which requires three ZooDAO team members to approve any transaction affecting those funds. This measure is in place to provide greater security to the custody of the funds, and minimize any opportunity for misappropriate of funds by a third party.

Of the 3M $ZOO tokens available during the LBP, a total of 858,696 were purchased, leaving 2.1M $ZOO remaining. Remaining $ZOO which were unsold during the Balancer LBP have been returned to the ZooDAO Treasury. This can be verified in ZooDAO’s Aragon Portal, labelled “LBP Unsold Tokens”.

Use of Funds

The combined funds raised during the IDO and LBP are projected to be used to scale-up human resources in the ZooDAO team, hiring at least two additional developers to continue scaling the functionality of the dApp as we progress to V2 upgrades. With increased engagement from NFT projects and more complex demands on the functionality (i.e adoption of the VeZOO model), it will be critical to have a full development team engaged to deliver within the expected timeframe.

Funds will additionally be used to undertake multiple rounds of audits; the cost of these audits and results will be available to the community in due course.

$ZOO Token Launch

$ZOO tokens purchased through the IDO are claimable on Thursday, March 3rd at 21:30 GMT. $ZOO will not launch on any exchange until users who purchased during the IDO have had the opportunity to claim their purchased tokens.

$ZOO is expected to be launched on Uniswap V3 after a period of IDO Claiming. The team has reached out to the largest token tracking providers (CoinGecko, ConMarketCap) to request inclusion of $ZOO, enabling tracking of the token’s value via various apps.

Rewards for participation

To thank users for their early engagement and taking on an active role in the development of ZooDAO, IDO users were automatically enrolled in a lottery-based airdrop; the 25 winners will be announced shortly after launch of $ZOO on decentralized exchanges. After full launch of ZooDAO, users locking $ZOO tokens in the dApp will also be eligible for other surprise airdrops.

LBP Insights

The LBP generated some helpful insights into the market’s valuation of $ZOO tokens. As described in our first article on the LBP, one of the benefits of using an LBP to distribute tokens is the ability to allow the users to decide on a fair and acceptable price for the token. This is achieved by launching the LBP at a higher price (3.27 $DAI per $ZOO), with the price continuously dropping until users made a purchase. In response to the incoming demand, the price of $ZOO would then increase, proportionate to the size of the purchase of tokens.

Hosting our LBP on Copper enabled users to see the purchase price of $ZOO in real-time, as well as the swap transactions and their effect on the price. Examining the full dataset following the LBP, we have arrived at a number of key insights.

In our previous article on the LBP, we highlighted a hypothetical scenario in which no $ZOO tokens were sold during the LBP. This scenario also serves to identify the lowest possible price $ZOO would arrive at, considering the set parameters of the LBP.

Considering the chart below, the price of $ZOO could have — in theory — dropped to 0.07 $DAI per $ZOO, in absence of any purchase. As expected, this hypothetical scenario did not occur.

A gradual start

While the majority of trades of $ZOO tokens took place in the second half the LBP, the price remained relatively stable, hovering between 0.18–0.20 $DAI. The first purchase of $ZOO during the LBP was at a price of 1.29 $DAI per $ZOO, with a few additional trades resulting in some price fluctuation in response to larger purchases.

As demonstrated in the chart below, the price of $ZOO was largely maintained in the second half of the LBP due to more continuous demand counteracting the downward price pressure applied by the LBP model.

Arriving at a supported price

Considering the weighted distribution of purchases of $ZOO during the LBP, the volume of purchases reveal that users find a fair price of $ZOO at launch to range from 0.18 $DAI to 0.25 $DAI. Note that this weighting is based on the volume of the combined purchase of $ZOO, not solely the average cost of the token at time of purchase.

Conclusions

The key objective of the LBP was to determine $ZOO tokens to the widest possible audience, while determining a fair price prior to launch on the market. The purchase dynamics by users determined that the $ZOO was indeed fairly priced during the IDO at 0.2 $DAI per $ZOO, with the price of the token holding above this price during the LBP under dynamic market conditions.

The price of $ZOO held strong support in the range of 0.19–0.22 $DAI; the conclusion we can draw from this is that the wider community decided that an entry price close to the IDO price represented an opportunity to accumulate tokens.

What’s next?

The team is excited for the next steps in ZooDAO’s future, and the incredible features we are preparing for the community.

Users can look forward to the upcoming public testnet, in which we’ll provide the community the opportunity to experience the completed dApp to help identify any UI / UX improvements. In this critical stage pre-launch, we rely on our incredible community to continue spreading the word on ZooDAO’s solution, and advocating for new NFT projects to join us in creating greater purpose for NFTs.

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ZooDAO

ZooDAO is the first community-governed platform enabling users to generate yield from their NFTs.