I’d like to start off today’s newsletter by thanking everyone who reached out to me yesterday, either in Discord, via Twitter, e-mail, DM, or other methods. I really appreciate all the kind words, and it makes me feel like I am doing my job as a simple newsletter writer in terms of having a good idea of what the community is feeling at times. I appreciate all of you very much, and I hope to continue representing you well.
I’ll be honest - I knew yesterday’s newsletter would probably drum up some conversation, but even I was kind of blown away by the (generally) positive reception to it. It led to one of the best conversations that we have seen in the lounge to date, as it was obvious that the topics mentioned were on people’s minds - they were just looking for a chance to feel comfortable broaching the subject. And yesterday’s edition of Proof of Update certainly provided that, as shortly after it went out the lounge became more active than I’ve ever seen it outside of the CC0 fud debacle.
The entire morning yesterday in PROOF’s Moonbird’s lounge was poppin’ as people voiced their opinions, specifically around the idea of equity in PROOF Holdings, Inc., and how many long-term community members who held since mint (whether it was the PROOF pass, Moonbirds, or Oddities) had hoped to have a shot at obtaining a “piece of the pie” instead of it being handed over to traditional VCs in the web2 mold in another situation of the rich get richer.
At first, there was some pushback on the idea that we as community members even had the risk-tolerance for such an investment.
However, I think most of us would agree that this sentiment is misplaced - I’d argue that most NFT investors have far higher risk-tolerance than a fund receiving equity in a company, and that the latter is far less risky than buying a jpeg. Similarly, we are always told that this is a long-term game even as NFT holders, so the time-horizons for people buying NFTs “long term” and those who would seek an investment in PROOF Holdings, Inc., itself would generally align.
Some members of the community agreed, and while that is not in any way a reliable poll, I can unequivocally state that somewhere in the realm of 99% of PROOF NFT holders would trade their NFT in for real equity in the company were they offered the opportunity. The question then became, would we ever have that opportunity?
Part of the ethos of web3 is community ownership - no longer being a “product” of some megacorporation that sells your community to investors, but rather being able to own that corporation and value yourself. This quickly became the topic of conversation - as after all, there had to be some reason that a16z wanted equity and didn’t instead sweep the Collective/Moonbird/Oddities floor. And I think the answer is simple there - they know the value is in the company itself.
So it’s only logical that a company extolling the virtues of web3 would be offering that equity to community members over traditional funds - otherwise, what is the difference between these companies and every company in the past like Facebook? While there had been some hand-wringing and beating around the bush, my good pal Bobby got straight to the point asking for clarity on whether the team sees holders as investors or not, which Stevey responded to below:
While we did receive the answer that we are not viewed as investors as simple NFT holders, this doesn’t mean that the community never could be investors, as many in the NFT space are accredited investors to begin with. After all, Special Purpose Vehicles (SPVs) exist for exactly this reason - to allow a bunch of accredited investors to combine funds and invest directly in a company itself. Check this out for more information on SPVs. So that begged the question - is this something PROOF had interest in?
While it appears they aren’t taking any more investments right now, that doesn’t mean they won’t in the future - and perhaps this whole conversation got the ball rolling in at least letting the team know about how much people want this opportunity. In a similar vein, I’m sure any community members offered the opportunity to invest in PROOF Holdings, Inc., would also be happy to not ask for any board seats - a sentiment echoed in the lounge. Truthfully, it’ll be very interesting to find out exactly what A16Z did get, as I’m sure the details will leak out eventually.
In the end, we had a lot of great conversation, and we had some great responses from the team overall that show the door has been opened to this conversation going forward.
Finally, while a lot of great talks took place yesterday, this doesn’t necessarily mean that every NFT company should offer equity to their community members even if that would be the web3 way - as no two projects are the same, either in scope or in terms of how far along they are in their own timeline - a fact I even addressed in the lounge.
It just seems to me and a large part of the community that this type of model would fit very well with the mission that PROOF espouses, even if it wouldn’t necessarily make sense everywhere else. Going forward, I hope that we can continue to have these types of conversations and always work to ensure that the community is the first priority when it comes to value-return in everything that a team does. With that said, I will leave you with a great write-up from Mattness of Poorbirds.
That’s it for today - I hope you have a great Wednesday!