17 posts tagged with "guide"

In case you don’t know, Juicebox is the best way to fund and operate any Web3 business, especially NFT projects. If you’d like to know why we’d recommend reading ‘WHY Juicebox for NFT projects’ if you haven’t already done so first.

For now, we’ll be going deeper into Juicebox lore and fleshing out all the weird and wonderful options, looking at how to leverage them ideally for an NFT project. By the end of it, you’ll have set up a system where:

1. Buyers of your NFT will automatically receive a quantifiable stake in your project’s treasury in the form of ERC20 tokens.
2. People can invest in your project without having to own an NFT.
3. Automate payments to your key team members and display them transparently to your community.

In this article you’ll learn:

• How to create and configure a Juicebox project suited for an NFT collection
• How to link royalty fees from your NFT sales to your shared Juicebox treasury

1. Create your project​

https://juicebox.money/create or https://sepolia.juicebox.money/create (testnet)

I’ll go from the Funding cycle section of our create flow and recommend some possible starting points for your NFT project.

1. Funding​

Funding cycles​

We highly recommend using a funding cycle. This is the time period over which distributions will be made and other Juicebox settings such as the discount rate will be applied. Common funding cycle lengths are 1 week, 2 weeks or 1 month.

Distributions​

You can specify the amount you’d like to distribute to each member of your team per funding cycle from the treasury. If you don’t raise the total amount of funds you’ve planned for your whole team, then each team member will be paid the percentage you’ve specified for them from any funds you have raised. For instance, if you planned for Mike and Bob to get 1 ETH each per week, but you only raised 1 ETH total in a certain week, then they will just get 0.5 ETH each.

If you’re opting not to go for the shared treasury approach, you can route all funds from the treasury straight to the owner, or a percentage cut to any other wallet address.

Token​

Reserved rate​

As mentioned earlier, whenever new tokens are minted as a result of someone buying an NFT or contributing for tokens straight up, this percentage of those new tokens will be reserved and the rest will go to the buyer. By default, these tokens are reserved for the project owner, but you can also allocate portions to other wallet addresses. A reserved rate of 50% will ensure the project owners maintain a majority share of the treasury and may be a good option for your project.

Discount rate​

The discount rate incentivises people to get in early on your project. It controls how the issue rate of your community ERC20 token changes over time. A higher discount rate means people who buy your NFT in the early days will receive more tokens / ETH than those who come in later. An exact figure is hard to give, but with a funding cycle length of 2 weeks, a discount rate of 10% may be a good place to start.

Redemption rate​

This redemption rate encourages token holders to hodl and stick with your project token for the long term. On a lower redemption rate, redeeming a token increases the value of each remaining token, creating an incentive to hold tokens longer than other holders. Similar to the discount rate, you’ll have to gauge how aggressively you want to pull this level, but a redemption rate between 50 and 75% is probably a good place to start.

3. Rules​

Pause payments​

You probably don’t want to check this. Check it only if you want to hold off payments for a certain period after you create your project.

Allow token minting​

You probably don’t want to check this either, it allows project owners to mint any amount of tokens to anyone on demand. Whenever you have this enabled, your project will have a warning flag on its Juicebox page warning contributors of the possibility of their tokens being diluted.

Reconfiguration​

This is important. It restricts how long before the next funding cycle reconfigurations must be submitted before they are able to take effect. For example, with a 3-day delay (a good starting point), a reconfiguration to an upcoming funding cycle must be submitted at least 3 days before it starts. It’s a great way to ensure your community against any malicious owner behavior.

2. Create a payable address​

This will create an Ethereum address that can be used to pay your project, rather than having to go through the Juicebox interface. It will be necessary in the model of the Juicebox NFT project we’re going for, since you will use this address as the destination for your royalty fees. You will be prompted to do this when you create your project, but can do it later at any time in the ‘Tools’ section of your project page pictured below.

3. Do your thang on Opensea, or wherever. Send royalty fees to the payable address. Let the magic happen​

And that’s it! Congratulations. You’ve set up a system where buyers of your NFT will have a quantifiable stake in your project with community tokens (ERC20), and have allowed people to invest in your project without having to own an NFT.

Conclusion​

We hope you’ve enjoyed digging into the details of Juicebox and how you can leverage the protocol for your NFT project. If you’re interested in having a crack at the setup described here, have a play on Sepolia. If you’ve still got some questions, come shoot us a message in our Discord or arrange an onboarding call. As always, happy Juicing!

Disclaimer: This is not financial or legal advice. As always, speak with an expert and do your own research.

Juicebox is an extremely flexible and powerful Web3 protocol made to fund and manage shared treasuries. It has been responsible for some of the biggest names in crypto community fundraising, including ConstitutionDAO, AssangeDAO and MoonDAO. Funding and operating an NFT project with Juicebox is an especially effective way to leverage the protocol, providing massive benefits to both owners and their communities. In this article we’ll cover why, and in a follow-up article, we’ll cover how.

In this article:

1. Basics of the Juicebox protocol.
2. Why Juicebox NFT projects are better.
3. What does it cost?

1. Basics of Juicebox​

Juicebox allows people and communities to crowdfund their project and give their contributors a stake as community tokens (ERC20) in return. Once funds have been raised, the protocol can be leveraged to automate payments from the treasury in a controlled, transparent and decentralized fashion.

2. Why Juicebox NFT projects are better​

Juicebox NFT projects are a win-win for both communities and owners. There are countless ways you can configure your Juicebox project for your specific goals, but here’s a general strategy we recommend for NFT projects:

Instead of sending your NFT royalty fees directly to the owner’s wallet, you can send them to a shared treasury owned by your community. Upon buying an NFT (and paying the royalty fee), the new owners of your NFT’s would automatically receive an amount of your community tokens proportional to their purchase amount. The more someone pays for an NFT, the more tokens they receive. This gives your community members a formal and quantifiable stake in the shared treasury - your project as a whole. Your community could also contribute and gain stake in your project by just buying tokens, not necessarily having to own an NFT.

For communities​

Token value​

You can use these tokens for anything you want, perhaps governance, raffles or exclusive access to future drops. But a unique feature of Juicebox is that it allows the option for these tokens to be redeemed by community members for a portion of your project’s treasury. As the pie grows over time, a contributor’s tokens will be worth more. Your community can gain on top of just the increase in value of their NFT’s.

Having a shared treasury is optional, however, and you could instead just have all royalty fees sent to the Juicebox project route straight to the creators. In this case, the token your community receives could not be redeemed for any ETH.

Your community can gain on top of just the increase in value of their NFT’s.

Trust and transparency​

Firstly, a properly configured Juicebox project makes rug-pulls impossible. You can give your community time to react before any changes to your funding and spending parameters take effect.

Additionally, your Juicebox page shows exactly how all your funds are flowing - how much and where it’s coming from, and where those funds are subsequently being spent. The only way funds can leave the treasury is by configuring and scheduling a payment, for which your community will always have time to react to.

Spending (left) and income (right) shown on a project’s Juicebox page

You may be asking, “Ok I see the benefit for my community, but what’s in it for the owner?"

For owners​

Maintain a high stake in your project using the Reserved Rate.​

If you choose the option of your token holders being able to redeem from a shared treasury, we should mention that as an owner you can control exactly how much stake you maintain of this treasury over time. The reserved rate allows you to keep a portion of all newly minted tokens. A 50% reserved rate means you will maintain a 50% ownership of treasury no matter how big your project gets.

This is mostly irrelevant if you don’t want a shared treasury and to simply route all funds into the project straight to creators.

Allow for people to contribute to your project without buying an NFT and, therefore, raise more funds.​

This model opens up a massive and mostly untapped market of people interested in investing in an NFT project without necessarily buying an NFT. Whether it be too high of a floor price, not wanting to go through the whole selection/auction/listing process, or anything else, Juicebox opens the door of your project to these people through community tokens.

Consider if the projects like the Bored Apes had followed this model - how much more funds could the creators have raised as a result of people buying some stake worth less than the purchase price of a Bored Ape?

How much more funds could the [Bored Apes] creators have raised as a result of people buying some stake worth less than the purchase price of a Bored Ape?

Automate payments to key members of your team.​

If you’re going for the shared treasury approach, Juicebox allows you to pre-program specific distribution amounts from your treasury to any ETH address, e.g. pay vitalik.eth US$1000 every week. This saves the hassle of manually transferring funds to your team from your personal or shared multisig wallet.

Otherwise, as mentioned prior, you can simply route all funds from the project to creators and their teams.

3. What does it cost?​

Up front, all Juicebox costs is gas. As of the 23th of May, it’s about US$150-200 worth of gas to launch your project, deploy your own ERC20 token and a payable ETH address for you to link your royalty fees to. Then, for any funds you end up withdrawing from your project’s treasury, you’ll pay a 2.5% fee to Juicebox. But, for this 2.5% cut of your payout distributions, you’ll receive Juicebox’s native token (JBX) in return at its current issue rate. Moreover, your fee will give you a growing stake of Juicebox’s expanding ecosystem and treasury.

Conclusion​

If this has already been enough information for one reading, feel free to tap out now. But if we’ve piqued your interest at all, you may want to read on about exactly how you’d setup your Juicebox NFT project here (https://docs.google.com/document/d/1Xqj5AyG8pZcpdtbxYfOzqwIaMNyrhQZPfVhfsUpYw1M/edit). Alternatively, come hangout in our Discord and arrange an onboarding call if you’re interested in learning more. Happy Juicing!!

Disclaimer: This is not financial or legal advice. As always, speak with an expert and do your own research.

Communities using Juicebox can leverage their reserved rate decisively when they want to make it more difficult for new members to join. Funds can still be received, but more of the newly minted tokens will be owned by the project itself. The current project members can use this to decide how they will manage their subsequent growth on a per-funding cycle basis.

When the project wishes to make membership more accessible again, members can do so by lowering the reserved rate.

There's currently a discussion happening in JuiceboxDAO deliberating if it might be wise to move its reserved rate from 35% to 50%.

The reserved rate can also be useful for other purposes, this is just one possible metaphor that can be used to guide decision making.

Becoming a contributor at JB wasn't exactly intentional.  It wasn't until a conversation with a community member that I was able to articulate and realize that getting paid was more than just a possibility. I had first learned about DAOs a few years ago but never really understood what they did or how they got things done.  How do DAOs coordinate? How do they align their philosophy?  How did they keep each other accountable?  All of these questions were very difficult for me to wrap my head around. I then stumbled upon JB after finding out about the NOUNS project and then finding SharkDao which was using Juicebox for its treasury.

What I talked about with this JB community member was the fact that I didn't say a word in Juicebox for 2 - 3 weeks.  I attended a couple of town hall meetings and listened in on some voice chats that were happening, not knowing what the agenda was or what they were going to be talking about.  I remember reading a bunch of  threads in Discord, trying to follow one or two specific issues, to see how the community tried to solve them.  What became clear was that it was important for me to not try to understand what a few people were doing, but to try and understand what the community was doing.  That was an epiphany for me.  It made me ask, "where do this community's values and my personal beliefs and ethics intersect?"

This was the moment I started to look for tasks that helped me align myself with the community philosophy.  I started to shift my mindset from a quiet observer to thinking about how I could provide value that  could help advance the protocol and in turn, the Juicebox Community.  As I was exploring, I realized that I was also learning how to navigate the community.  How to navigate the notion, the web site, the Discord and everything else that might go along with JB.

To those wanting to become Juicebox contributors: follow a couple of tasks or issues and see how those issues are being solved by the community.  Then see if those solutions line up with how you might handle those issues. That doesn't mean you have to agree.  It just means that how we talk to each other and how we interact with each other lines up with how you want to talk to people and how you want to be talked to.

If you start this way, not only will you find a way to contribute but you will see that the Juicebox community will help you contribute.  You'll see that Juicebox will view you not just as someone that has a valuable skill but someone that has a philosophy that aligns with the goals of the Juicebox community.

Entering the world of decentralized autonomous organizations (DAOs) is kind of like opening the gates to Narnia: it's thrilling, it's confusing, and because real money is involved, it's somewhat scary.

Late 2021 appears to be the frontier of DAOs, and best practices and playbooks for starting and governing DAOs are being written as I write this.

In particular, the DAO stack - the set of software tools required to run a DAO - is beginning to mature. One such example is Juicebox - a DAO treasury protocol - which was recently picked by the ConstitutionDAO to raise almost ~47million USD in an attempt to buy a copy of the United States Constitution.

In this article, we'll define the fundamental functions of a DAO and describe the tools required to fulfill these functions. The content is a derivative of Juicebox contributor @nnnnicholas 's episode on The Fintech Blueprint Podcast; if audio is your thing, check it out!

What's a DAO do?​

At present, a DAO is more of a concept rather than a strict organizational definition. We'll talk about DAOs as they are being used today in the crypto/NFT world. In this world, a DAO has 2 main functions:

1. Building a treasury of assets (NFTs, Ethereum (ETH), or some other token)
2. Governing the treasury

Let's say your favorite podcaster decides to set up a DAO for their podcast. They need assets (read: money) to keep the podcast going and do bigger and better things like merch and in-person events. So, they need a way to build a treasury of assets. They'll issue an ERC20 token (let's call this token $PODC), and anyone who contributes funds to the treasury will receive $PODC token in exchange. You, the listener, believe in this podcaster and want to be a part of their success. So you buy some $PODC token and contribute to the treasury.

As a $PODC token holder, you have perks. You can propose changes to the podcast format and make guest proposals, and you can also vote on other proposals. You and the other token holders now have skin in the game - or skin in the podcast - and have a meaningful impact on the podcast and its success. The DAO can be creative here, too. Holding a token might grant you access to a private discord, private meetings, or airdrops. In a successful DAO, the DAO may vote to distribute excess funds to token holders.

Don't like what the DAO is doing? No worries! Your tokens are 100% backed by the treasury, meaning you can sell your token back to the DAO and receive your original investment (less gas and other fees).

An attractive characteristic of a DAO when compared to a traditional private company is transparency. Every aspect of the DAO is available on and verified by, the blockchain. Any eager individual can observe the flow of assets and call out dodgy activity. Importantly, no accountants or lawyers are required!

The DAO stack​

To achieve the 2 functions of a DAO, we're going to need some tools. Luckily, smart folks are putting in the leg work and the DAO stack is maturing rapidly. Below, we'll discuss Juicebox, Gnosis, Snapshot, and Aragon - 4 key tools in the DAO stack - and how they fit together to form a DAO.

Juicebox​

The Juicebox protocol is a programmable treasury. In practice, you can think of Juicebox as a decentralized alternative to Kickstarter; a way to raise funds on the blockchain. It fulfills the first function of the DAO: building the treasury. Technically speaking, Juicebox is a set of smart contracts deployed on the Ethereum blockchain that handles the issuance of tokens and the building of the treasury.

In our podcast DAO example, the podcaster would create a Juicebox project. They can define various parameters that dictate how the project will operate, like funding targets, the exchange rate, payouts, and the number of tokens reserved for founders. The Juicebox project has an associated token: $PODC. To contribute to the podcast DAO's treasury, I would head to the project's page on https://juicebox.money, connect my Metamask wallet and contribute ETH. In exchange, I would get some $PODC token based on the Juicebox project's predefined exchange rate.

Gnosis​

Who "owns" the treasury? A single person could own the treasury, but nothing is stopping them from running off with the bag besides reputational risk.

Enter: the multi-signature wallet, commonly known as a "multisig". A multisig is fundamentally a contract that can hold assets and execute transactions, with one exception: it requires the signature of more than one address to execute transactions. Just like a business where you need multiple signatures to do anything, a multisig requires some number of signatures (typically m of n, say, 2 signatures out of 3 signatories) to execute a given transaction.

So, when setting up the podcast DAO, we would create a multisig between the podcast founders (say, the 2 podcasts hosts and any other significant contributors). The multisig would be the owner of the Juicebox project. This allows us to have multiple individuals controlling the parameters for fundraising so that no individual can go rogue.

Gnosis is the go-to tool for creating and managing multisigs. It provides a clean and simple UI to enable the management of a multisig. Signatories connect their Metamask wallet and can approve and reject transactions from Gnosis.

Snapshot​

How do you vote with your DAO tokens? Snapshot.org! Snapshot is an off-chain voting tool used to propose and vote on changes to the DAO. It leverages IPFS to store votes.

A proposal is just a document that lays out some change to the DAO and gives a single choice amongst multiple options in a voting mechanism. Anybody holding the DAO's token can vote on a proposal for which result they prefer. For example, someone might create a proposal on Snapshot that a certain person is interviewed as a guest on the podcast. As a $PODC holder, I can navigate to the proposal on Snapshot.org and vote yes or no. The weighting of my vote is proportional to the amount of $PODC I hold.

A proposal is accepted by the DAO when a certain number of votes is reached (say, two-thirds, or 67%). When a proposal is accepted, it is the responsibility of the multisig signatories to carry out the proposal.

Importantly, there is an element of trust required for this to work effectively. At the end of the day, the multisig signatories have complete control over the treasury, and they have to be willing to carry out the wishes of the DAO. This risk is mitigated by the nature of the multisig: because it requires multiple signatures, the likelihood of coordination amongst bad-acting signatories is somewhat mitigated. Reputation is on the line, too, so signatories are somewhat incentivized to act in the best interest of the DAO.

Aragon​

As noted above, Snapshot voting happens off-chain, but on-chain voting is possible. In comparison, Aragon provides on-chain voting. With Aragon, no aspect of the DAO is happening in your web browser. Instead, absolutely everything would be executed as a transaction on the blockchain. In some sense, this makes the DAO more decentralized, but also a little bit less agile and quite a bit more expensive to interact with.

Takeaways​

DAOs are becoming more and more popular, and there is no single playbook for creating a DAO. We are in an ecosystem of DAO tooling. Juicebox, Gnosis, Snapshot, Aragon are composable tools that can be mixed and matched with each other to create the infrastructure that is a single DAO. Each DAO will make different choices about which pieces of tooling and what level of decentralization is appropriate for their project and goals.

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Follow [@aeolianeth] on Twitter.

In its first funding cycle, each project issues 1,000,000 tokens for each 1 ETH received.

Level 0​

In its simplest form, a Juicebox project can be configured to fundraise and provide refunds.

Example: I pay 5 ETH into a treasury and receive 5,000,000 tokens, and you pay 5 ETH and receive 5,000,000 tokens. There are now 10 ETH in the treasury and 10,000,000 tokens total. Since I own half of the tokens, I can redeem them to get half of the treasury's total – in other words I can get a refund. You can do the same.

Level 1​

A reserved rate can be added which will allocate a percentage of the minted token supply to a preprogrammed list of addresses.

Example: The project sets a 10% reserved rate that goes to the DAO's multisig address. I pay 5 ETH into a treasury and receive 4,500,000 tokens, and you pay 5 ETH and receive 4,500,000 tokens. The DAO's multisig now has access to 1,000,000 tokens. Because of the reserved rate, I can no longer redeem my tokens to get a refund – I will only get 90% of what I paid.

At a reserved rate of 100%, no tokens go to new contributors.

Level 2​

A funding cycle target can be set which blocks off some funds from the treasury that can be distributed by anyone to a set of preprogrammed addresses.

Example: The project sets a target of 1 ETH. I pay 5 ETH into a treasury and receive 5,000,000 tokens, and you pay 5 ETH and receive 5,000,000 tokens. The treasury now has 10 ETH –  1 ETH is within the target, and the other 9 are considered overflow. I can redeem/burn by tokens to receive my proportion of the overflow, which is 4.5 ETH. The 1 ETH target is still distributable to the project and not accessible to token holders.

Level 3​

A redemption bonding curve can be added which reduces the amount of the treasury that can be reclaimed by redeeming tokens.

Example: The project sets a 50% bonding curve. I pay 5 ETH to the treasury and receive 5,000,000 tokens, and you pay 5 ETH and receive 5,000,000 tokens. Because of the redemption bonding curve, I will only receive ~2.5 ETH if I redeem my tokens. The rest is left to share by those who are holding, so you could now redeem your tokens and get the remaining ~7.5 ETH.

Level 4​

A discount rate can be added to decrease the rate of tokens that are minted and distributed when contributions are received over time.

Example: The project sets a 10% discount rate and a 14 day funding cycle duration.  I pay 5 ETH to the treasury and receive 5,000,000 tokens on day one during the first funding cycle. Fourteen days later during the second funding cycle, you pay 5 ETH and receive 4,500,000 tokens.

Level 5​

It is important to note that a project can change its reserved rate, target, redemption bonding curve, and discount rate on a per-funding cycle basis. Some projects might choose to have no funding cycle duration for the most flexibility, meaning they can reconfigure the project on demand. It is really important to trust the owner of the project because they have a lot of control to shape the tokenomics.

A project can also set a ballot contract in its funding cycle to create conditions according to which all proposed reconfigurations must abide.

Example: The project sets a 3-day delay ballot contract. If the project owner wants to reconfigure any funding cycle property, the transaction to do so must be sent at least 3 days before the end of the current funding cycle. If the reconfiguration was made within the 3 days, the next funding cycle will instead be a copy of the current one, and the reconfiguration would be eligible to take effect after that one.

People can build arbitrary ballot contracts as long as it conforms to IFundingCycleBallot.

A project's overflowed funds in the Juicebox protocol can serve various purposes depending on the configuration choices the project makes.

A reminder, overflow is the amount of funds currently in a project's Juicebox treasury minus its current funding cycle's target, which specifies the amount allowed to be distributed from the treasury to preprogrammed addresses during the cycle. A project's token holders can burn their tokens at any point to receive a proportional amount of the project's overflow. This proportion can be affected by a bondingCurve also configured per funding cycle. A curve of 100% is a linear proportion.

Here are outlines of how a project's funding cycles might be configured to use its overflow for achieving various treasury designs:

Refund​

Overflow can be used to give all contributors access to their money back in the case of an unsuccessful campaign.

In the case of ConstitutionDAO, the project's first funding cycle is configured with a target of uint256.max, which allows free movement of any funds accumulated in Juicebox into preprogrammed addresses (the Gnosis multisig wallet). It is also set up with a duration of 0, which gives the project's owner (also the Gnosis multisig wallet) authority to trigger a new reconfigured funding cycle at any point. All ETH contributed mints a proportional amount of the project's tokens for the contributor.

The multisig could thus reconfigure the project to have a target of 0 and then inject all of its raised funds back into its Juicebox treasury, which would make all funds in the project considered overflow and therefor claimable by token holders. With the bondingCurve at 100%, each token holder could then burn their supply to receive the same amount of ETH they originally put in.

Ragequit​

A project can use its overflow to allow disenchanted token holders to exit and take with them a portion of the treasury's funds.

Only a project's overflowed funds in Juicebox are available to be claimed by burning tokens. If a project's funds are mostly kept in a multisig (or other contracts/assets), they cannot not be taken into account in the redemption value of a token (changing in V2). A project can thus tune the expected return of ragequitting by injecting liquid funds back into Juicebox, adjusting its target value, and loosing/tightening its bonding curve.

If a project is spending its raised funds at a faster rate than it is pulling in funds, or if the project's rate of token distribution has changed over time, it's likely ragequitting via the built in juicebox mechanism won't yield the same amount as initially contributed.

Shouts to MolochDAO for coining the term "ragequit".

Cash-back​

A project that sells products can use its overflow to give customers the opportunity for cash-back.

TileDAO, for example, currently sells artwork for 0.16 ETH. When works are minted, the sale price is piped into the TileDAO treasury, minting the project's tokens for the buyer in return. TileDAO might want to give its token holders incentive to hold these tokens by giving them utility, perhaps decision making weight in governance, otherwise holders might want to redeem them for some of the project's treasury. This redemption would essentially give the buyer of the art some cash back, the value of which determined by several aspects of the project's funding cycle choices over time.

Realizable profits​

A project can inject funds into its treasury from arbitrary sources, giving all token holders access to them by burning tokens.

The simplest example here would be a project that gathers funds via a Juicebox project to purchase a thing, then turns around and sells the thing for more than what it paid. The funds from the sale can then be injected back into the Juicebox project for token holders to claim if they choose to do so.

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Consistent through all of these examples are consequential choices that a project can make to offer its community particular treasury designs over time. The address that controls the NFT representing a Juicebox project has the power to make these choices. Whichever EOA or contract stewarding this responsibility on a community's behalf should be scrutinized and held accountable to the extent each community sees fit.

Hopefully what these examples make clear is that the tokens issued by projects using the Juicebox protocol have no intrinsic value. They can, however, be used by projects as a utility for making decisions, the outcomes of which can give them value. It all depends on the choices we make together over time, and the social and algorithmic contracts we use to make these choices binding.