Whitepaper

The general strategy is to grow the fund continuously with a Capital Cashback Strategy (CCS) invested in 2 styles, Strategic and Tactical.

Capital Cashback Strategy: Buy more than you need approach, aiming for the ability to sell a part of the assets to cash out our initial investment while keeping enough assets to benefit from what the project has to offer long-term. This would allow us to constantly grow our portfolio while protecting our capital from projects risk

Strategic Investing: Acquire an asset that would grow in value with time while generating a type of passive income.

Tactical Investing: An opportunistic approach, with defined entry points and exit points based on a target profit.

Both strategies can be applied to the same project with specific allocations for each depending on the general investment strategy agreed upon. The fund is designed to invest in 3 main categories, NFT projects, Crypto-Gaming, Coin Portfolio, and a few in-betweens.

We encourage Team members to reach out to other projects to try and secure whitelist spots from other projects for Kong holders. There are plenty of things that could be offered in return for whitelist spots. A marketing boost from the K.I.N.G. socials and its members are some of the free ways the DAO can help other projects. Financial investments to cover promotions, smart contract development, etc. for a percentage of the sales or any other way the DAO can benefit financially from helping projects financially. We’ll call these seed investments. It doesn’t necessarily have to be for NFT projects, it can also be as venture capital for businesses within the crypto and NFT space, although this would likely require a corporation formation. An example would be the new marketplace “LooksRare” which took venture capital funding from prominent figures in the space to initially launch their marketplace. For seed investments there needs to be a clear plan in place regarding legalities for the specific investment and the formation of an entity. A proper investment proposal and discussion around it is needed. Not only is this a great way to increase the value of the fund, but it’s also a great way to invest in founders within K.I.N.G. as well.

The DAOs purpose is simply to invest its funds into projects/assets within the crypto and NFT space that ultimately will benefit the DAO or its members, whether it be financial, social, or something else. However, there are limitations to the investments. The DAO should not cross into different markets than originally intended. Such as stocks, real-life businesses, etc. Unless there is a connection to the NFT & Crypto sphere that makes logical sense to fall under one of the DAOs main investment categories. Now that we have outlined what markets the DAO invests in, there are still rules that need to be placed about the risk of the investments. For example, the DAO cannot invest in projects where you could potentially lose one of the assets for no meaningful return. This is not intended to mean the asset’s value going to zero as a bad investment, but rather that the asset has the potential to no longer be under the DAOs ownership/control. Examples are using our assets for gambling purposes where you would lose the asset with no meaningful asset/amount in return. This definition is a bit broad as there are situations where you could put an asset at risk, but only because it makes financial sense in the sense that the return would be worth it. If there’s a chance of losing the asset/amount for zero gain, the DAO cannot participate.

The team consists of 10 members in total that each has their responsibilities. Five team members will be dedicated to a specific section, while the other five will be somewhat fluid and can move across sections depending on where they are needed. These are the five main categories:

• Financials (Portfolio updates and keeping the Team in the know about what funds are available for proposals etc.)
• Social media (Twitter, Instagram & Discord management)
• Investment coordinator/manager (takes investments from start to finish)
• Project manager (oversight of developing tools for the DAO)
• Alpha manager (negotiating for whitelist spots for other projects and staying in the know about upcoming projects that Kongs can benefit from).

The members should specify what role they are applying for when the election is taking place. The person with the most votes from each category will be added to the team, and the five most popular in the general vote will be added to the team as the fluid role.

The election process takes place twice a year, the 30th of June and the 31st of December. It lasts for a week in total, giving the Kong holders ample time to vote. You need to own a Kong to be eligible for the Team and you need to announce your candidateship before the election begins. A channel dedicated to announcing your candidateship will be opened 7 days before the election begins in the Discord. During the election process every Kong who wants to be part of the team should have a dedicated post in the Discord where they can write about themselves and what they are good at, and anything else that’s relevant. After the vote is finished the ten members until the next election cycle.

Team members can lose their spot through an impeachment process. Impeachments happen if the DAO thinks the Team members have stepped out of line or mismanaged their responsibilities or power. At least 30% of the Team must agree to an impeachment vote for it to happen. If an impeachment takes place and the Team member is released, then another election will be held promptly for the open spot. The same happens if a Team member resigns before their period is over.

To compensate the Team, they will receive 13% of the profit from the DAOs investments. That’s 1.3% each. Further bonuses for milestones etc, can be discussed and voted on a case-to-case basis. The compensation is paid out once an asset is liquidated completely.

Note: On a vote hosted in the DAO (https://snapshot.org/#/kongsdao.eth/proposal/0x243ab22a1986387eceea35515806842018fa712e1782a9720444438835aa4770) it was determined that “Members applying for Team/Controller can’t vote on themselves for the election, but others.”.

Note: On a vote hosted in the DAO (https://snapshot.org/#/kongsdao.eth/proposal/0xaa49a58e392529076fd28e186a69a7db4e0e28283d2a18656c96c024707dd8a6) it was determined that “Votes are stackable for Team Elections just like other DAO proposals. Meaning you get as many votes as Kongs you have.”.

The Controller is a person or company that ensures all rules are being followed. The Controller should not interfere with the DAO unless necessary and should not act like an owner of the project, rather overseeing that everything is running smoothly. This includes having the ultimate control over socials such as Twitter, Instagram, Discord, website, etc. The Controller has the power to make proposals void but should only do so if the guidelines and rules of the DAO are not being followed – More about this specific scenario in the “Proposals” section. Controller can also make decisions on behalf of the DAO if an emergency were to take place, such as a serious threat to the assets of the DAO (or any other valuables the DAO owns/operates), a potential hostile takeover, a rogue Team (a Team that violates the rules of the DAO). The Controller has a lot of power in the DAO but does never own or run the DAO, this is extremely important. The Controller has a 1-year period at a time, it automatically renews if no new Controller is a possibility. If there is a possibility of a new Controller, then a vote will be held. The Controller can also lose its spot through an impeachment process where the DAO thinks the Controller has stepped out of line or mismanaged its responsibilities and/or power. However, there needs to be a 75% majority vote for an impeachment of a Controller to happen.

The Controller is compensated by 2% of the profit from the DAOs investments which is paid when the assets have been liquidated completely. The Controller cannot be a part of the Team at the same time as this leads to bias.

The Kong Council is where every vote is hosted for the DAO. This is where decisions are made, and the final say about suggestions/proposals are made. Every Kong is worth an equal amount of voting power in the Kong Council, and voting power is stackable. Meaning if you own 2 Kongs you get 2 votes in the Kong Council, if you own 1 you only get 1 vote

Team members have the responsibility of creating proposals on behalf of the DAO. The controller has the responsibility to ensure that Team members follow the guidelines for making proposals. Before proposals are made there needs to be a discussion about the proposal in the correct channels for the DAO. An example could be an investment into a new upcoming NFT, after an investment proposal has been made and the dedicated Discord channel goes live there should be enough discussion/interest in the proposal to make a DAO voting proposal. The proposal needs to follow these guidelines: ICINPN

• Informative (the proposal should include information about the proposal for those who might have missed the discussions).
• Concise (short and precise, DAO members shouldn’t have to read a book for a proposal).
• Investment strategy (what are our proposed entry points and what are our proposed exit points).
• Neutral (the proposal should be neutral in tone and stay completely unbiased).
• Positives (what were the positives that were being discussed).
• Negatives (what were the negatives that were being discussed).

The best way to ensure a neutral/unbiased proposal is by compiling a list of Positives and Negatives people bring up from the very start and not mention your personal stand or opinion in the proposal itself. The best way to keep track of the positives and negatives of a potential investment is by making key comments sticky.

An example of what a proposal could look like:

• Short introduction of the NFT project and what its ultimate goals are.
• Include information about its utility (if any) and plans for the future.
• Link to more resources about the project.
• The proposed investment strategy with entry points and (potential) exit points.
• The positives of the investment that were discussed within the community.
• The negatives of the investment that were discussed within the community.
• Final line about what the voting outcomes are at the end.

The controller may take down a vote if the proposal does not meet the requirements or breaches with the rules of the DAO. If such a case were to happen the controller should inform about what needs to be changed.

The funds and assets are to be stored in a smart contract that requires multiple signatures from Team members for transactions to pass. We should look for pre-existing solutions at first, before deciding whether we need a custom one or not. If we are to use a custom one then it should be similar to the following Elrond multi-sig contract https://elrond.com/blog/elrond-multisig-contracts/. For a transaction to pass it should require a minimum of 50% of the Team members signing, which would be 5 team members with the current setup. In special cases where the asset needs to be actively managed and it’s not possible to do so through the contract, such as Rollbots and DeRace horses. The Team member who the DAO voted to trust with the asset should be using their dedicated «Tactical wallet». What is a tactical wallet? A tactical wallet is a wallet that both the Controller and the Team member have access to. The Controller is responsible for the setup and safe delivery of the private key to the Team member. The Team member is responsible for the safe disposal of the private key once in. We use the tactical wallets for DAO purposes and to not mix personal Team member’s wallets with the DAOs assets. In certain cases such as minting a project, the tactical wallet can be used on behalf of the DAO.

Once an investment has returned the original amount invested (either through its passive income or through liquidation of the asset itself), it’s time to decide what happens to the profit. The profit should be split according to the mean percentages from the two options:

1. Back to the DAOs fund.
2. To the payout wallet.

The payout wallet is a wallet dedicated for payouts to the owners. It is operated through a smart contract that requires 50% of the Team to sign before a payout is sent and the ETH is sent to the addresses holding the Kongs. The payout should be split according to how many Kongs you own. 2 Kongs receive double the payout compared to 1 Kong. The payouts happen once a year (end of the year) OR when the threshold of 50 ETH is met.

This whitepaper and the rules outlined within it cannot be changed without a 75% consensus vote that has to be active for a minimum of 1 week (7 days).