As blockchain products continue to push the boundaries on value transfers through the use of different crypto-economic models, we have the opportunity to explore the forefront of new mechanisms for funding.
Earlier today, SAINT FAME – A DAO focused on creating the world’s first internet owned fashion house – released the presale pool for their Genesis Shirt through the issuance of $FAME tokens.
By partnering with Uniswap and leveraging a bonding curve, 100 $FAME tokens were made available for purchase at a marginally increasing price.
The genesis shirt is being designed by Matt Vernon (aka @dApp_boi), a leading designer behind notable DeFi projects including Dharma, Set Protocol and Synthetix just to name a few.
About a year ago, Matt issued $BOI tokens which each represent 1 hour of design work. The team behind SAINT FAME was lucky enough to claim some of the highly elusive tokens and have now chosen to put them into action for the design of the SAINT FAME genesis shirt.
Are we far enough down the rabbit hole for your liking yet? Good. Let’s keep going!
What Makes This Unique?
While the idea of a continuous token model is something that has been tossed around for quite some time, SAINT FAME’s genesis shirt builds on a trend established by Uniswap for their Unisocks campaign.
In practice, tokens represent claims over merchandise, with the price of any given token being dynamic relative to where we’re at on any given bonding curve.
In the case of SAINT FAME, tokens are being issued before the shirts are actually made, effectively creating a market for the future value of the shirt based on the designer himself.
This model allows SAINT FAME to collect funding in the form of a contract account that can then be used at a later date once the tokens are redeemed for merchandise, rather than the ETH that is held in the pool.
By using a gradually scalable pricing mechanism, early purchasers are able to capture the upside on merchandise demand by being the first ones to the party.
To highlight this upside, the first $FAME token was sold for $8 (in ETH) while the last $FAME token is set to sell at $170,000. While these prices are certainly a bit ludicrous for ownership over a future shirt, the concept is one worth taking note of.
We’ve seen similar projects such as MetaFactory emerge with similar views – effectively using these structures as a way for users to not only get cool merch but also capture the upside. Furthermore, it’s expected that future designers will be responsible for the pricing of their bonding curves, further adding in another creative element of marketing.
How is this DeFi?
First and foremost, anyone in the world can purchase $FAME tokens in a permissionless fashion. Each token is based dynamically through a contract account, meaning that there is no third-party responsible for processing the order or custodying the funds.
Secondly, SAINT FAME governance is handled in a distributed fashion, with shareholders putting a vote on how collected funds should be used.
Lastly, the primitive to leverage Uniswap for the purchasing, issuance and trading $FAME tokens add a significant degree of trust beyond the legacy ICO model in which tokens are sent to an address owned by the core team. For those unfamiliar with DAO structures, SAINT FAME must reach consensus onchain in order for any of the funds within the curve to be redeemed and distributed.
Looking Forward
Over the course of the next few months, we’re curious to watch this new Kickstarter model play out. It’s likely that many will experiment with different forms of bonding curves but the principle remains the same: How can we leverage smart contracts to aggregate value from a global audience?
While these experiments are currently limited to those with a sophisticated knowledge set, we expect that these concepts have the potential to be leveraged to a more generalized audience in the near future.
In a future where users can exchange scare goods through cryptocurrencies, marketplaces become that much more efficient.
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Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.