Before we get started on this post it is key to note two things; one The token BAE is not like the newly launched RARI token. The BAE token has been a part of the BAE since 2018 but it isn’t transferable and is more of a vote token and represents how much of the dao pot you get.
Two; the BAE token is not the same as our newly launched BAEPAY token the BAEPAY token is a roll social currency and is a benefit for buyers so they can get discounts on the BAE site. Now with all that said let’s get into how the BAE token works and what it is.
What is a DAO?
(decentralised autonomous organisation) in essence the idea of a DAO is create a system by which users of a platform or project can vote on where that projects goes. There have been a few DAO’s in the blockchain community Dash (formerly dark coin) has a DAO pot that has been used to get the project to do advertising campaigns. Another DAO is MakerDAO the project behind DAI. This DAO works great but all people really get to control are interest rates There have been many DAO’s that have come and gone and all suffer from a few major issues; regulation, governance issues and greed.
The main point
When building the BAE we wanted considered inputting artist royalties into the contract, but this comes with its own set of issues mainly no cross platform support . Further, we are building on blockchain why do something that’s been done before, we are on the bleeding edge after all. Instead we adopted the idea of a DAO pot. Before I get into the issues mentioned above and how we address them a brief overview of how the pot works: every time a primary sale happens on the BAE in ETH or any erc-20 5% of that sale is added to the DAO wallet, every time we tokenise an artwork 0.0075 eth is added to the wallet, every time a secondary sale happens on open sea or any other 3rd party platform 10% of the sale is added to the DAO wallet. So this wallet not only gets added to on secondary but also on primary sale.
Here’s the important part as an artist when ever you sell on the BAE primary platform as well as your normal commission (80%) you also get BAE tokens at a rate of 1 for every 10 USD of art sold. The only way to earn BAE tokens is by selling on the platform and they can’t be transferred between wallets (that’s why we call them marker or vote tokens). So what does this mean well a bae token is two things; a vote, and a marker of the percent of the pot you are entitled to receive.
Breaking that down further every 3 months (or after the pot is large enough 1,000 USD minimum). The BAE will hold a vote all the token holders will be asked what to do with the DAO money. One option will always be to distribute it between all the BAE token holders. But token holders and the BAE can put forward other options for example holding an art show, supporting a given artist or anything else you can imagine relevant to art.
Now if you’ve been following and I know it is a little complex you would have noticed that primary sales are added to the pot as well. What this means is the big sellers on the platform are helping support the less popular artists just by selling artwork.
A few things that need to be considered;
when the BAE takes payment via paypal on small sales the fees eat most of the DAO pot money the 0.0075 ETH is still added with each token minting. The other thing is regulation the BAE cant perform exchanges per say into the pot so only erc-20 or eth are added directly. Finally the pot has only be active for the last 2 months so it isn’t very impressive right now.
With all that being said here is the address 0xA152b92D5e3AC62De6a6AbBf7582B28251784512 . at the moment a lot of the BAE is manual the reasons for this is the lack of a web3 front end we have a fully functional auction contract that does all of this automatically but it isn’t something that can be used with our current front end build.
So when you buy an artwork on the BAE you are not just supporting that artists but the whole group of artists and when you sell you support every artist. But further than this you become a part of a new way of tackling the artworld one not one based on individual sucssuse but one where we all move forward together and have a say in where the industry and company goes directly.
At the start of this piece I addressed 3 issues with DAO’s regulation, governance and greed. Ive already talked about how we solved the first marker tokens they have no value and cant be brought only earned. The second governance well the DAO is only a part of the BAE (at the moment but more on that another time) At the moment it only controls the part of the platform and profit that isn’t required to keep it growing and running.
Finally greed what do I mean by this well the simple fact that all DAO’s other than ours you have to buy into. How do we solve that? With the BAE DAO you cant buy in it isn’t allowed you can only earn your way in by selling artwork with us it may not sound like a big thing but it hasn’t ever been done before. I guess all those economic theory books were not a waste of time after all. Put even more simple you need to have skin in the game to vote on something if it is just about pure profit that all you care about.