# Proposal X – Token Migration

Drafted with support from: Cobra

## Overview

* Meta-DAO creates new token with dynamic mint, that is controlled by Autocrat (`metaX99LHn3A7Gr7VAcCfXhpfocvpMpqQ3eyp3PGUUq`) through the futarchy markets
* Provides a claim to all holders of META (`METADDFL6wWMWEoKTFJwcThTbUmtarRJZjRpzUvkxhr`) the new META token at 1:1 ratio
* Claim and burn
* Burns the tokens held in The Meta-DAO treasury (`ADCCEAbH8eixGj5t73vb4sKecSKo7ndgDSuWGvER4Loy`) and remainder of existing META tokens to complete full migration to new token
* Maintains a 1:1 of market capitalization (MCAP) and fully diluted valuation (FDV)

## Rationale

A dynamic token supply mechanism[$^{[1]}$](#get_1) aligns perfectly with futarchy governance, offering an ideal framework for decision-making and token distribution.

With a dynamic token supply mechanism, The Meta-DAO would only mint new tokens in the case of value creation. Therefore to introduce additional supply the proposal and outcome must at least generate as much or more value than is issued.

With the current static token model, The Meta-DAO's treasury has custodied approximately 98.5% of available token supply, any movement of the held META is only actioned through a passing proposal. Autocrat has the authority to trigger an expansion of the circulatingsupply supply, through disbursement, which is contingent upon futarchy market approval.


This approval process is predicated on the market's demonstration that a proposal not only merits passage but also ensures that the value created by issuing new tokens surpasses the potential dilution effects. However, this model has led to a significant concentration of tokens within the treasury, resulting in a limited float. Consequently, the Meta-DAO suffers from the negative conotations of "low float, high FDV"[$^{[2]}$](#get_2) dilemma, which constrains the broadening of participant engagement.


Transitioning to a dynamic token supply model presents a solution by allowing the DAO and its associated markets to adjust the supply as needed, ensuring a balanced alignment between the market capitalization and the fully diluted valuation (FDV). This approach not only addresses the limitations imposed by a static supply model but also enhances the DAO's adaptability and responsiveness to market conditions and governance outcomes

## Implementation

There are three primary components required for enacting the proposal upon finalizing. The time estimate for this undertaking is approximately six (6) weeks. The execution of these activities will be enforced with a timed expiry which when reached will automatically execute.

**Burn/Redeem Program**
This program enables individuals to exchange existing META tokens, by locking them into the program and redeeming the newly minted (n)META. This program will hold the existing META tokens and either through BURN execution instruction or once the time limit has expired.

**Autocrat V0.x**
The updated version of Autocrat will require capacity to burn and mint the new token as well as trigger the burning of the existing META.

**Supporting UI/UX**
Required to ensure users are able to interface with the program, this can be a simple UI for the burn/redeem mechanism.

The loose timeline is as follows with many pieces moving forward all at once:
| Task Timeline | Task |
|-|-|
| Week 1 | Build burn/redeem program |
| Week 1 | Iterate on Autocrat and migrate to new version |
| Week 1 | Build the UI |
| Week 2-4 | Review / audit systems and plan |
| Week 4 | Create new token mint with dynamic supply |
| Week 4 | Mint the current amount of circulating $META and transfer them to the redeem valut of the smart contract |
| Week 4 | Transfer mint authority of the new token to the Autocrat program |
| Week 4 | Open the burn/redeem program to public |
| Week 6 | All tokens migrated, burn the remaining DAO treasury (existing $META mint) |

## Ask

Given the complexity and security of this precarious process we'd require up to three (3) people with the primary work undertaken within the first 80 hours. At a rough estimate we'd expect this to cost <$50,000 but >$30,000 (~240 (wo)man hours). The skills required would be smart contract development, UI/UX and tokenomics understanding.

For executing the undertaking we'd assess a 8 META fee.

## References

<span id="get_1">[1]</span> Cryptocurrency Token Supply Mechanisms. Jon Law. Feb 22, 2022. https://medium.com/coinmonks/primary-cryptocurrency-token-supply-mechanisms-524f42c62a23
<span id="get_2">[2]</span> Back to Basics: Market Cap and FDV. Defi Education. Jan 20, 2022. https://defieducation.substack.com/p/back-to-basics-market-cap-and-fdv