Episode 31: Artorias.x | Cult DAO - Exploring the $CULT Ecosystem
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Cult DAO | Exploring the Cult Ecosystem (Artorias)
Timestamps:
00:00 - 00:44 - Introduction to Crypto Sapiens
00:45 - 01:34 - Guest Introduction
01:35 - 2:53 - Artorias Journey into web3
02:54 - 5: 51 - What is Cult DAO about
05:52 - 10:36 - Purpose of the manifesto
10:37 - 13:33 - Why the name “Cult”
13:34 - 16:55 - Purpose and selection of the guardian
16:56 - 23:35 - How are Projects funded?
23:36 - 25:10 - How does the voting mechanism work
25:11 - 28:01 - Ways of minimizing the whales' impact
28:02 - 31:49 - How does the structure of the token operate
31:50 - 32:25 - conclusion
Humpty: Welcome to Crypto Sapiens a show that hosts lively discussions with innovative web3 builders. To help you learn about decentralized money systems, including Ethereum Bitcoin, and Defi. The podcast is for educational and entertainment purposes only, and it is not financial advice. Crypto Sapiens is presented in partnership with Bankless DAO a movement for pioneers seeking freedom from the limitations of the traditional financial system, Bankless DAO will help the world go Bankless by creating user-friendly on-ramps for people to discover decentralized financial technologies through education, media, and culture.
Hello everyone and welcome back to another episode of crypto sapiens. Today, we are talking with Artorias, a founding member of cult DAO. I am pretty excited about this episode. As we take a deep dive into a project that has gotten a lot of attention from many influential web3 figures for their creative governance and tokenomics. Cult DAO is a decentralized venture capital platform whose manifesto, an evocative piece written by Mr. O'Modulus, an anonymous person that founded the DAO sets the tone for the project. We explore the DAO made up of guardians who propose projects for funding and the many, the community who votes on the projects that are funded, and the cult token with its hyper deflationary mechanism without further ado let's get started.
Artorias: So I've been crypto for some time now, I have working on other projects in which that I am normally docked, but obviously this was something a little bit different, so felt I needed to have an alter ego I mean everyone that's involved myself and Mr. O’Modulus we’ve not docked because there no need for it because it doesn’t impact the CULT DAO so that one of the reasons i have remained anonymous but I've been working in crypto can't say what it is I've been working on but I was contacted enormously by Mr. O’Modulus which is basically how I got dragged into this and yeah, he showed me what he had which was the bare bones, the meat potatoes of cold. He pretty much had this thing ready to go when I got involved. So, Yeah I don't really know how much more I can say.
Humpty: Let's talk about CULT DAO because that is really kind of one of the first rules of it Isn't it, we talk about cult So what is it?
Artorias: Well, I mean, it's one of the things most difficult to describe because it's something that, in my opinion, is quite new to the space to crypto, to web3. I suppose in the simplest terms it is a decentralized venture capitalist platform. You know, it's the very basic form. It is an investment fund, which is you know, Treasury's built from transaction fees and then you apply for investment if you are a guardian which is the top 50 stakers, and then if it gets approved by the many who's everyone outside the top 50, then you receive the investment for whatever project it is that you are backing, whether it's your own or whether it's on behalf of somebody else that you feel needs that investment. And then that investment is then used to grow the project or wherever it's going. And then those rewards are sent back to the stakers who are everyone who has stake, Not just the voters, not just the people outside the top 50, but everyone to receive the rewards. And then on top of that, there is the hyper deflationary mechanism, which is that every time one of these investments goes out you've got 2.5 ETH worth of CULT at the time of execution that is immediately burned. So you’ve got a total of 15.5 ETH of CULT leaves the treasury and 3.5 is burned instantly and 13 goes to the investee and then when the rewards are sent back, 50 Percent of all the rewards are burned and 50% are used to buy back CULT which is then sent to stakers. So there's a lot elements that makes this really beneficial but every time a proposal goes through you've three main things that are crucial for the longevity of CULT and which is why it is built to last and got the first, which is the instant burn. You've got the second, which is, another burn on delivery of the rewards. And the third is the rewards themselves. So, if you are staking and you are taking part in this whole ecosystem which is pushing these proposals through which are then benefiting grassroots, you know, small projects trying to get off the ground. It's really a win-win situation.
Humpty: Yeah, that's quite unique in this space, right? I think you are talking about the very thoughtful tokens that have been developed and also the way that CULT DAO has chosen to go about incentivizing their community of you know, stakers. So before we jump deep into the meat and, potatoes of this stuff you know, one thing that I thought was really interesting was your you know, the cult dao’s choice for, you know, the choosing the manifesto, and kind of, mobilizing the community and kind of sharing what they were about in that form, Can you talk a little bit about, you know, writing the manifesto, not necessarily saying that you wrote it, but you know, what was the purpose of that? And I guess what are some of the effects that you've seen? What are some of the feedback that you have gotten from the community from writing such a, you know, kind of thoughtful piece?
[00:06:13] Can you talk a little bit about, you know, writing the manifesto, not necessarily saying that you wrote it, but you know, what was the purpose of that? And I guess what are some of the effects that you've seen? What are some of the feedback that you have gotten from the community from writing such a, you know, kind of thoughtful piece?
Artorias: Yeah, I definitely can't take the quote for the manifesto because that's how I read that the same way that everyone else has. And you know, it's hard to say. You know where that comes from because obviously it's written by Mr. O’Modulus but you know, the kinda stuff that's in there, it touches on so many different facets of the world we live in feelings, you know there's bits about political leanings and you know, mental health and one of the things I've always said since I read it and publicly as well, is that there's a lot of stuff in there and not everyone's gonna call it, there's something in there anybody can relate to there's you know, not everyone got to believe in the rebellion that kind of environmental political and, you know, some people might think, oh, that's not me. You know, something like mental health that's a struggle that a lot of people have and it's clear that, you know, this guy's a lot of things that a lot of us are feeling too I've put that to paper and It's almost a rally for the people you know, aside from it being, you know, the section of about, you know, being for a cryptocurrency project, just a general idea that, you know, there are people that being taken advantage of and, you know, we don't deserve to be treated in some of the ways that we're being treated. I think that's, what's really resonated with a lot of people is that we're better than this and we deserve better this. And yeah it just seems to have rekindled that under people askes and i think that’s one of the things that has really got people, not just financially invested, but emotionally invested too, is that is being able to relate to that. You know where that's coming from.
Humpty: Yeah, certainly. I think we've seen a change over the last couple of years in terms of the way that the adoption of cryptocurrencies and just the whole decentralized ecosystem particularly I'm sure inspired by, you know, what has been happening around the world with the pandemic and everything else. So it, I always enjoy seeing projects that kind of lean into that and seek to inspire the community as a way to organize them. And you know, incentivize them for their participation and to build out an ecosystem that is different from, you know, maybe what is the status quo and certainly, I think for most of us, that's what we're here to do, right? We're hoping to build out something that's different, something that is a positive sum and we're creating value and not just necessarily extracting value from you know, the people that we interact with and the projects that we're building, and so on. That's really? Yeah, I was, I was personally very inspired by that as well in terms of reading that manifesto and kind of seeing the way that, that very personal and you know the evocative story was able to make a connection.
So something else in terms of Cult DAO that I think is worthy of kind of recognition is the whole you know, I guess the numeric value of it as well. You know, I would say that personally, when I first heard of cult dao I kind of scratched my head a little bit and I was like, oh, okay. I don't get it. You know, the word cult, especially in the crypto space, I think it is one of those things that can really drive a wedge, I think between people and communities but after hearing, I gotta be honest after hearing other people talk about cult Dao or just the word cult in general, as a way of like bringing people together. Through that numeric value of it, I started to understand it a little bit more and soften my stance on just the language, the narrative of it. I'm curious if you wouldn't mind, just maybe from your own personal experience and also the discussions that may have already happened within the discord about that type of narrative. What are some of the things that you've seen to be of value from kind of driving the project with that kind of, you know the meme, if you will, which is like the whole cult meme?
Artorias: Yeah. There's definitely an element to it where this whole you know, a lot of people almost treating cult as a meme coin which means people wants to feel that way, if you look at the chart it has that hype that you see a lot with meme coin and at the end of the day it wasn’t an intention to choose to be a meme, it helps in the way that although maybe it wasn't an intention. You know, just to be a meme it's, it's helped in the way that you know, the biggest thing that runs cult is volume and you've got people buying, people selling it's contributing to the treasury, which is the fundamental part of proposal mechanism, So I could understand people taking a look at the chart and seeing the mean value of CULT, which you know, I don't share that belief cause I think that's too shallow a look at the project, but you know, you can't help the way people perceive something. It's just if you scratch away the surface and take 10, 15 minutes out of your day to read the manifesto and would take a look at the discord it definitely shows itself to be a lot more than it has, you know real utility.
Humpty: Yeah. I mean, so. Let's talk about the guardians for a little bit. It was an interesting way of selecting guardians for cult DAO and, you know in fact, one of the reasons why I personally became more and more attracted to the project, and I think many people that I've talked to feel the same way is the people that that were engaged and even then, some of those who have become guardians of the project are people who I would say are staunch defenders of decentralization. They're working pretty you know consistently, you know not just like short-term, but long-term contributions to this space to kind of move decentralization forward. You know some of these folks that I saw being talked about as you know, guardians or having been reached out are, you know I would say people that I've talked to and engaged with to some degree, you know like Evan McMullen and, or, and CGEN David Hoffman, like a lot of people You know, run my circles as well. So just curious to understand the thought process behind the outreach for guardians and really their purpose in the ecosystem as well.
Artorias: Yeah, I think you've pretty much hit the nail on the head. These were the people that were chosen not by me, I admit that this was all Mr. O’Modulus doing that was as you say they were chosen because they embody, you know the kind of morals and ethics and beliefs in the decentralization that the cult DAOs they're all people that championing, you know web3 and trying to bring power back into the hands of the people, which is exactly what cult wants to do? I think it's been a success because I believe there's been one guardian, one person who was given a pre-allocation as a guardian who dumped and I was definitely out about on twitter afterward. Other than that, I believe all of those guardians are still guardians, as far as I'm aware and there were 50 that were initially shortlisted, but only 15 responded and were given that allocation, and I think that's a pretty good record that we've got, you know only one of those that basically just said no i’m not interested after getting, after having agreed to getting this allocation you know, take from that what you'll but yeah, it seems to have been the right people that were chosen because I believe they're all still actual guardians a lot of them are very active in the discord. I know there's a few who are working on proposing you know a lot of them are basic, they are guys who are, you know they're public figures, so they've got stuff going on so we don't in the telegram every day, we don't expect them to be in discord every day, but a lot of them are active which is good. And there are, we've got a few of them I know are working on proposals so I'm very excited to see what comes of that.
Humpty: Yeah. So actually, so you're thank you so much for that. Walk me through, I guess the process cause well, we're talking about, you know, this is a place for people and projects to be able to gain access to capital. It's like a Democratic or decentralized VC fund, if you will, so what's the process here in terms of, you know, the way that the treasury contributes to these funds and the way that you know, guardians are creating proposals and projects can submit ideas and get funding. Like what, what does that process look like? And what are some of these investments that may have already been made or are, you know, maybe made in the near future?
Artorias: Yeah, we've had, The discord is really good at the moment. It's like a proper hub of you've got, there's kinda two layers to it. There's the, there's the general Chit chat and people talking about the price You know, the sentiment changes in there depending on what's going on the charts, that's just natural but then you have this layer above that you've got all these guardians, there's a special channel for anyone that is a guardian. And in there, it is a constant flurry of these guys talking about proposal ideas that they've got people who are reaching out to them with their own ideas saying would you put this sport on my behalf that, you know, there's a few channels in there where people can submit their ideas where it can be picked up but a lot of it either comes from the guardians themselves having projects they believe in or, just chatting to people that have dropped, so there is pre-proposal courses whichis a channel where people put in there ideas and they could talk more about it and a workshop that's created in the discord. And then In there, people can talk about their proposals in more detail And then, you know, it almost becomes, like an can ask me anything with the people either proposing or from the projects which is, which is really good Cause it means that people have the chance to question and, and do their own research on these proposals before they just vote on them and it means, Instead of just blindly voting something through, just because you want to see the cult burn, it means people are actually, they're having that option to be able to do their own research the same way you would do your own research or you should do your research when you're gonna invest in a token. If you've got 1ETH to spare you don't just take it to the first coin that you see on the coin market cap and say, I'm gonna buy that someone that knows what they're doing goes and finds out a little bit more. They ask questions and that's what's really good, which I've been really impressed by at the moment is just, if you look at the proposals that have been submitted, We've had a really good mix of you know a good variety in the types of proposals, as well as you've got ones that are not passing, you’ve got ones that are passing they’ve got different levels of votes on that which shows You know people are using their heads and they're thinking about it and they're actually choosing what they think is worthy. Instead of just putting anything they can through and that was not something I was mildly concerned by when we first launched that it wouldn't really, it wouldn't become an actual you know, it wouldn't be investing in interesting projects. There would just be people putting any old rubbish in and it would get past and then we'd get a burn and that was that. But there's some really interesting stuff going through just off My head we've had ones for there's a marketing one, which just passes, which was to get up on a billboard in times square so we're in the process of getting that sorted, That's a nice way to try and spread the word, grow the projects more. And you've got ones like the inverse finance ones which are basically yield farming. So what that aims to do is bring in, you know start bring in steady rewards to stake. So at the moment where we're in the early stages of these proposals you know, there's a timeline for rewards coming in and that's what people are questioning the platform about because they're not seeing lots of rewards rolling in yet, but that's only because you know, we're looking long term when we've had all these proposals successfully go through and then we've got the successful project sending rewards back, you know in a few months time, we're gonna see a steady flow of rewards and burns. So its really going to pickup momentum impressed with the community honestly, with how they, you know taking it upon themselves to vote through the stuff they believe in and, you know to reject the stuff that they're doing.
Humpty: Yeah. That's great. So let me I guess, recap for my own benefit, it sounds like the process here is for cult holders to stake their tokens. This allows them to be able to use that both in terms of gaining rewards, but also participate in the governance or voting of these proposals that are coming through for anyone who is trying to build a project or get funding through, you know CULT DAO it sounds like they can write those proposals, but they only will be put through governance if a guardian sponsors it. So once that guardian has sponsors it goes up for voting and it sounds like even then the community is being very thoughtful about the types of projects that are being voted on. So they're definitely doing their research. They're vetting these projects to make sure that the funding is going to projects that are going to add value or create value back to the Cult DAO, did I follow that?
Artorias: Yeah, that's exactly right. Yeah. So anyone's taking, You get the governance token, which is the cult and then the top 50 holders of the cult are the guardians and then everyone else is the many, so yeah guardians propose, but can't vote, and then the many can vote, but they can't propose. So it stops. It takes some of the power outta the hands of the whales and it puts it in everyone else's hands.
Humpty: Yeah. That's interesting. So walk me through a little bit of that, because, so you touched on, you said two things there that really intrigued me. One of them is, you know, taking power away from the whales, but also the way that this voting mechanism works. Is this being managed you know, in a decentralized way, in other words, is voting done by smart contracts or how is that done?
Artorias: Yeah, it's completely decentralized. there's no human involvement whatsoever, other than the person proposing and people voting. So when a project is successful, that burn happens automatically and the funds from the treasury are sent automatically to the recipient's wallet. So doesn't rely on anyone getting in the way of contracts being renounced for cult, decult, the staking platform, the treasury, everything so there's no access to any of those contracts whatsoever anymore. So no one can withdraw from the treasury, you know, no one can play around with the tax it's all completely decentralized now.
Humpty: Ah, that's really amazing. So, I mean, I can see why. You know, the focus was on decentralization and onboarding these decentralization maxes, if you will right? Early on as guardians were to kind of promote that type of you know ethos, firstly, but also processes and so it sounds like you know, that's, definitely. Been implemented here even through the way that this funding gets distributed and will be voted on and then distributed so that's really great. So you were talking about ways of, or the way that you minimize the impact of whales. Can you talk a little bit about that? Like what was the thought process there and you know, what,maybe even like, if you wouldn't mind kind of reiterating How, you know, the process within cult dao is kind of minimizing that impact.
Artorias: Yeah. One that, that's something, it's a I haven't seen in another DAO before, which is you get a lot of problems. There was protocol the other day that I think it was bean stalked that got hatched. Cause someone was able to flash loan like a billion dollars worth of the token and gave them the rights to withdraw millions of dollars of funds and I think one of the things that is right about cult is just nothing like that happen because it completely you know it's all locked up and the idea of giving these the top 50, they've got the ability to propose, but not to vote means that whereas, in some DAOs, it's you know, it's weighted towards the people, the whales, so if someone wants to do something through a lot, people might vote on it, but then a couple of wallets would come along and say, no thank you and you know completely tip the scales. And I think the way we've done it is, i don’t think there will ever be a perfect DAO because there is just too many variable involved and I think we've done a fairly decent job of making it a fair system where you're leveling the playing field so that those people with the smaller wallets are able to, you know, they're able to have their say they're able to contribute rather than just being completely outweighed by more massive wallet.
Humpty: you know, maybe walk us through a little bit about some of the planning, like maybe how much of that was done before you came in, or maybe if you contributed to that, what some of the thought processes was to developing this really comprehensive, you know, tokenomics you know, structure in the way that it operates with both you know, using it as an incentive if you will for attracting guardians, but also using it as you know, the incentive for the community to also earn from both the liquidity of the token, but from the known funding of projects.
Artorias:
Yeah, that was another thing that was, it was delivered to me the same way that most people have seen it now I didn't have too much contribution into the token myself, But one of the things that struck me with it is that it's created a token that's built to last and it's built, it's literally built to function even at lower price points because all that matters for cult are volume because that's what fills the treasury, which funds the proposals. And one of the beautiful things is that when the price is lower, Because when the treasury when the proposals go through the value, the value of it is always calculated in comparison to Ethereum. So no matter what the price of when a burn is happening, it's happening values compared to ETH so obviously now 2.5 ETH worth of cult is a lot more cult tokens than it was when we were at our all-time high. So what that means is that even if there's cell pressure that's causing the price to dip, all that's doing is just taking more tokens out circulation faster. Which then allows us to continue growing exponentially. So, what that means is that it turns cult into just a waiting game. Because of how much is getting burned over time. Like if you look at the treasury now it's just under a thousand ETH worth of CULT. 16% of each proposal investment is burned straight away. So what we're saying is of that 16% of fowl food, which is 160ETH, that cult is guaranteed to burn because the only way that can come out is through proposals and that means that just the that's just on the way out as well. So you've got 160ETH in there which is guaranteed to burn. Plus you've got half of all the rewards coming back, which are burned as well. And you know, is the price dips, that's just more and more, that's going dead. So what happens is that there's a tremendous amount of pressure over time on the circulating supply. Obviously, if you've got cult in your wallet, that's not gonna burn. So it's gonna be all the stuff every time the transactions are made, it's ultimately, it's the treasury that's building up gonna cause the majority of the burn as long as there's the volume that means the tokenomics is sounds. It means that cult has a future
Humpty: and that's a wrap. I hope you've enjoyed this conversation as much as I did. If you'd like to talk about cult DAO, go to cultdao.io and on Twitter at wearecultdao. Thanks for listening to crypto sapiens. Please give us a follow, like, and a five-star review, wherever you enjoy your podcast, and stay tuned for our next discussion.