On Wednesday, 21 November, Maecenas’ co-founder and CEO Marcelo Garcia Casil spent nearly two hours answering questions posed by members of our community. Topics ranged from our newly-proposed Token Economics, the upcoming auction of a Picasso, and the ART token listing on Gibraltar Blockchain Exchange (GBX-DAX). In case you were not able to participate in the AMA itself, we have prepared a summary of its key themes and takeaways.
Staking ART and the Dutch auction
We received a lot of questions about our newly proposed Token Economics. Marcelo explained in depth the new idea of the Dutch auction model’s ART staking system, which is designed to improve token liquidity and to be more investor-friendly. Specifically, Marcelo says:
The main purpose of our new token economics is to give ART a central role in the Dutch auction process and, at the same time, improve the transparency and stability of the process.
This system is designed to support and promote demand for ART. For example, Marcelo explained that a minimum staking threshold will be established for every auction. ART tokens will help determine auction winners, with the highest stake determining the winner if all bids are equal in price. Instead of bidding for price over the reserve threshold, bidding will now be based on ART staking. Furthermore, bids are no longer set in stone. Investors can increase their ART stake to improve their chances of winning.
Even though each final bid will still be expressed in US dollars, the stake will be made in ART. All investors involved in each transaction will have to commit some of their ART tokens to a lock-up period. And investors will soon have the opportunity to witness the new proposed token economics in action, since our goal is for the Picasso to be the first auction to use this procedure.
These changes will benefit investors in a few important ways. As Marcelo explained, the final price for an artwork will be calculated as “reserve price + ART stake commission value”. This is designed to increase transparency without raising costs for bidders. To further this goal, the reserve price will be announced in advance and ART stakes will be public (but anonymous), allowing investors to see in real time whether they stand a chance to win, and giving them the chance to increase their ART stake if it's not high enough.
Some participants had questions related to volatility in the price of ART. Marcelo responded that all collateral will be converted to an equivalent amount of a stable coin to eliminate the adverse effects of volatility during an auction. So while there will always be some degree of volatility in the ART token, it will only affect a small fraction of the bid. Maecenas may also give users the option to freeze the value of the commission stake at a dollar-value equivalent.
Marcelo also answered questions regarding the mechanics of staking. Stakes are calculated at their dollar-value equivalent at the time of bidding. If ART’s price goes up, then you need to bid less ART for the same dollar value. The same goes for BTC and ETH bidders. Bidders can stake more ART to increase their chances of winning, but the lock-up period only applies if the bid is successful.
Project Phoenix: Picasso, Ethershift and McAfee
Many participants asked about Project Phoenix, our plan to fully tokenize a Picasso. A recurring theme was the nature and extent of our partnership with Ethershift and its cybersecurity advisor John McAfee. Marcelo’s response was candid and aimed to set the record straight:
First of all, we hear the concerns expressed by some community member about John McAfee. To set the record straight, I would like to clarify that there is no contractual obligation between Maecenas and Mr. McAfee as an individual. Maecenas has not made any payments to Mr McAfee (either in fiat or ART).
Marcelo also clarified that the Picasso auction will be fundamentally different from our typical tokenization process. ART tokens will have a role in the sale and post-auction, including holding voting rights over the painting.
With regard to Ethershift, Marcelo reiterated that our partnership is part of a bigger plan to increase liquidity for the ART token and provide exposure for Maecenas. We believe the Ethershift partnership helps us achieve these goals, and that the support of Mr. McAfee will create the necessary awareness within the crypto community, which will be beneficial for the project and for Maecenas.
Finally, we are working to lower the bidding threshold for auctions as much as possible. This upcoming Picasso auction will see a significantly lower minimum than our last sale. Full details for the Picasso auction, including the piece, the price and the date, are yet to be disclosed. We will be updating the community in the coming weeks.
The future of ART
Community members were also keen to learn more about the future of the ART token, and why Maecenas does not switch to Ether or adopt a Security Token model. Marcelo shared his insights as follows:
We're looking at a fully revamped tokenomics, we've secured a listing at GBX, we are pushing a project with Ethershift and McAfee to gain visibility and we are about to auction a Picasso. We've listened to our community and decided to put more efforts into creating awareness in the crypto space. And that is what is this about.
Marcelo pointed out that more than a thousand users have gone through the KYC process and registered on the platform, with the numbers increasing every day. While the bear market essentially reduces our runway, we have diversified our ICO funds between ETH and fiat. We have put in place a strong overall team and are in a good position to start scaling up with more frequent auctions. Marcelo also noted that the secondary market is on track and we’ve started hitting the necessary milestones.
Finally, a number of participants asked about regulatory issues, particularly in light of recent statements and enforcement actions on the part of the U.S. SEC. Marcello stressed that the Maecenas team is constantly assessing the global regulatory landscape. In particular, we are working to make Maecenas available to people in the U.S. in a way that is fully compliant with all local laws, rules and regulations.
We were impressed both by the large turnout and the quality of the questions posed during the AMA. We want to thank everyone who participated as well as those who could not make it but who continue to support us as part of the community. We are in the midst of a lot of positive developments right now and are excited to continue growing Maecenas into a fully decentralized art marketplace. Please stay tuned to this blog for regular updates, and feel free to share any questions or thoughts in our Telegram channel.
Thank you again for your support.
If you would prefer reading the AMA discussion in detail, please check this telegram link.