Recently, a second revival of Non-Fungible Tokens (NFTs) has brought wide attention to an area of the blockchain world, fueled by billions of dollars in transactions.
Most of the high-profile attention has been sparked by the sale of digital art — some of which have been in the realm of tens of millions of dollars for a single piece.
But not all NFTs need to be based on art. After all, NFTs are simply unique assets on the blockchain with provable ownership.
NFTs can have all sorts of utilities — all you need to imagine is a case where something unique is probably owned.
A real estate deed, a share, an ID, a sword in an online fantasy game, are but some of the many examples of the types of NFT use cases.
The Freeos Economic System has some built-in mechanisms that directly interface with bespoke NFTs that we have built for purpose. Additionally we use NFTs as a fun way of engaging with our community, and to attract some attention — as well as understanding — towards Freeos.
Freeos utilises NFTs in two primary ways.
- As a type of compensation provided to investors and early founders that contributed to the project.
- As a promotional system to help attract, inform and engage the growing community, including our weekly Freeos Trivia Tuesdays.
In this article, we’ll dive into how these work, and the reasons we employ NFTs in our system.
Compensation
Since the Freeos Economic System has a lot going on under the hood — and is very different from many other blockchain projects — most of the material we publish (articles, whitepaper, videos, FAQ etc.) tends to focus on the nuances and philosophy of the system design.
But one aspect that we often skip (as it gets complicated enough ) is the funding model used to raise investment, reward investors, and reward founding members of the team.
Since FREEOS tokens are not pre-minted by the FreeDAO team, our team is not able to leverage the common practice of raising money, pre-launch, through a token sale.
This creates strong constraints on how to raise development funds, reward investors, and reward those that put time and/or money representing faith in the vision of Freeos and FreeDAO.
So we came up with an entirely different model of raising funds, rewarding the much-appreciated early, fund, faith, and hard work the team has put in.
Our unique model relies on Non-Fungible Tokens to represent a type of token that represents certain rights to receive a portion of the weekly mint generated by the activity of the participants in the Freeos Economic System.
Essentially the Freeos Economic System — through user activity — generates revenue opportunities. Seven percent of this weekly revenue (in the Governance Phase) is allocated to be distributed to FreeDAO for development. But before FreeDAO receives this allocation, a smart contract intercepts this seven percent and divides and distributes it to a number of Dividend NFT holders.
These special Dividend NFTs are owned by the investors, founders and partners who helped fund and build the Freeos Economic System. There are three different categories of these Dividend NFTs, each with unique characteristics and parameters.
WayFinder NFT
The WayFinder category of Dividend NFTs is designed mostly for external, wholesale investors. It is structured to be similar to a SAFT (Sale of Future Tokens) contract where an investor pays for the privilege of receiving tokens early at a typically discounted price.
It must be emphasised that WayFinder tokens are only for qualified, wholesale investors that provide the required documentation. This description is mainly to be as transparent as possible about how compensation works in the Freeos system.
Since the Freeos Economic System has a fixed price floor set at $0.0167 per FREEOS token — and can only be voted higher (but never lower) than this value by the participants — then any discount can be based on calculations/projects based on the fixed price floor value.
To get a better idea how the fixed price floor works, as well as how it can be voted higher (and what mechanisms can help set this price), please check out this video.
As an example, an investment of $10K might provide a threshold of 2,994,012 FREEOS tokens at a price of $0.00334 per token. If FREEOS tokens ONLY reached the fixed price floor, that would be a 5x gain.
NOTE: This is merely an example, and prices will be negotiated per investor — with favourable rates typically for criteria related to how early, amount invested, knowledge and experience offered etc.
With the WayFinder NFT, a percentage (of the seven percent) is set to be delivered, weekly, to the owner of this NFT until a threshold of FREEOS tokens is reached.
This has parallels to some SAFT contracts where there may be periods of token lockups and release for a period of time (eg. 6 months — 2 years).
Once the threshold is reached, the token is expired and rendered inert. Essentially, once it reaches the promised result, it stops distributing any further tokens.
We call this target cap “horizontal” because it is capped on a horizontal timeline, when the threshold is delivered.
WayFounder NFT
Another type of Dividend NFT is meant for contributors and team members on the project that primarily put in their time, skills and effort to build and support Freeos. The rules of this token are similar to how Royalty payments are structured for members of a band that sign a record label.
Payments continue indefinitely. The only limit is a cap based on a fixed amount of weekly FREEOS tokens. Essentially, the percentage will be paid out unless the threshold is reached. If the threshold is reached (on that particular week) then only the threshold is paid out.
This creates a weekly limit on how much can be paid. If the amount of tokens is lower than the threshold, it defaults to the percentage. If higher, it uses the fixed threshold instead.
This is called a “vertical” cap, because it puts a cap on an imaginary, vertical stack of coins. There is no cap on the horizontal timeline.
This is the only NFT listed here that can be “locked”. This can be used to award the NFT, and to unlock it when a milestone is reached.
WayFarer NFT
This Dividend NFT is more rarely distributed than the rest. Philosophically, it lies somewhere between the other two NFTs.
it is designed to reward founders, directors, investing partners etc. that put capital AND labour — or in rare cases where a partner has put in significant commercial labour that would have been earmarked for other projects instead.
The WayFarer NFT represents a more uncertain outcome as it expires upon a predetermined iteration/week. It pays a set percentage (of the seven percent) UNTIL that predetermined week has been reached.
Since the amount of FREEOS tokens minted per week increases depending on the amount of users in the system, a WayFarer owner would be rewarded with greater amounts of FREEOS tokens when there is significant growth in the community.
This makes a good incentive for the founders, directors, or close investors/partners on the project to help bring numbers and attention to grow Freeos as fast as possible. This is a particularly apt NFT for any partners, and influencers that specialise in marketing.
The WayFarer token does not have a “threshold”, but instead it knows how many rates are left, and it subtracts from this value every week that is paid to the owner.
It is called an “Iteration” cap, due to the fact that it finishes on a set iteration.
Promotional NFTs
As a way to educate and engage the community, to celebrate human rights, and to promote and support the Freeos project, FreeDAO has been engaging in some fun experiments in creating, minting, selling and sharing NFTs, including our weekly Freeos Trivia Tuesdays.
Our first series is called “Champions of Freedom” and can be found in the Proton NFT Marketplace.
We often gift these NFTs in our Telegram Community when supportive members of the community contribute their thoughts, questions, feedback, and suggestions — as well as rewarding supportive comments and helping others.
We have found it a great way to keep the community informed and engaged while we’re building out Freeos.
Additionally, it has been a minor funding vehicle used to pay artists — for additional NFTs (we’re launching new ones shortly). A great virtuous circle.
To be aptly fitting FreeDAOs mantra of creating tools of collaboration and freedom, the Champions of Freedom series is honouring men and women who have been icons on the march for human equality, rights and freedom.
And even looking into simple social games that utilise our Telegram channel’s NFT tipping bot! So keep an eye on our Telegram Community.
And definitely come join us in our weekly Freeos Trivia Tuesdays.
For more on Freeos, please check our webpage for more info, or join us in our Telegram Community where you may ask more questions about how Freeos is intended to work.
