[10/16/23 Addendum] — We ultimately did not move forward with Hawthorn, Character DAO, or Media DAO. Please refer to this article for more information.
Back in January, we shared a vision with you for two DAOs: the Character DAO and the Media DAO. In this Medium post, we explain a change to that previous vision. The Character DAO and the Media DAO will be merging to create one decentralized organization. This DAO will be named Hawthorn.
Below we’ve provided a refresh on the original vision for the Character and Media DAOs and then we explain how we believe they can achieve more success by merging together.
Ultimately, this change is rooted in one thing: How can we make this as fun, engaging, and beneficial as possible for Writer’s Room members?
The Writer’s Room is our original community and it’s the group of people who have shown that they believe the future of content is community-driven. The changes we are making will put this group of community members in the driver’s seat over more than just characters.
Background on Character DAO
Our vision for the Character DAO then was that it would be a group of people (Writer’s Room holders), who believed in the community-based creation of characters. We wanted to welcome our community into a deeper level of engagement and governance over our most beloved and important characters. Character DAO would share ownership with Tally Labs in Jenkins the Valet, Jenkins the Mutant, Goodboy, and the Azurian Legends whose stories are beginning to unfold before you.
To make this happen, we worked with incredible blockchain counsel to pioneer an entirely new structure that would allow a private business (us) and a foundation company governed by a DAO (you) to come together and share ownership of IP.
To do this, we created a novel legal framework where Tally Labs would contribute its intellectual property (these same characters) to a newly-formed entity. We call that entity an “IP Company”. Then Tally Labs would contribute ownership of part of that IP company to a Foundation. Tally Labs would make that contribution to the Foundation in exchange for a portion of the governance tokens of the Character DAO.
The Foundation was to be established in the same way that most are when they relate to DAOs. It would be established in such a way that decisions would be governed by members of the DAO, bringing your global creative vision and imagination to the future of these great assets.
We also anticipated that you, as members of the DAO acting through the Foundation, would purchase and create characters of your own. If you did that together with Tally Labs (or another private business), then those characters might live in a different IP company with a similar shared ownership model. If the DAO members did this entirely on their own, then the IP rights associated with the characters would either be owned directly by the foundation company or by a separate legal entity established by the foundation company.
Background on Media DAO
We also shared a vision for the Media DAO. This would be a group of people (Book NFT stakers), who believed that a decentralized group of individuals could create amazing worlds, stories, and content. Our vision for this DAO was to put in place the same ownership structure as the Character DAO.
Tally Labs would contribute IP around certain worlds that it builds (Azurbala, the Jenkins Audio Experience, and more) to an IP Company and then propose to the members of the Media DAO that Tally Labs contribute [approximately] half of that IP company to a foundation governed by the members of the Media DAO in exchange for its help.
Similar to the Character DAO model, if the Media DAO worked with Tally Labs (or another business) on a new project, then it might use the IP company model. If it owned something entirely on its own, then the IP might just be 100% owned by the Foundation (or an entity owned by it).
We’ve Been “building”
Since last November, we’ve worked with our blockchain lawyers and international accounting firms to bring these DAOs to life. At the same time, we’ve been studying the DAO landscape intently. We’ve been watching what works and what doesn’t. We’ve seen that many DAOs that were all the rage back in January have not sustained their momentum. Sometimes this is due to poor governance structures, other times it’s poor token design. Almost all the time there are a long tail of other issues in between.
Community governance as a way of developing creative properties is still very early, and at times it can feel a bit like a Model UN. At the beginning, it’s fun. Then it gets boring. Often, there isn’t enough for the members of the DAOs to do on a daily basis and so ultimately people decide that they don’t want to actively participate anymore.
Across all these learnings (and from conversations with so many of you), we’ve learned that bringing one DAO to market that has a chance of succeeding at the level we dream of will be hard. Doing that twice with two slightly different groups of people would almost certainly not reach the level we all dream of. Our ambition is the same as it’s always been: for a decentralized community of people to lead a reimagination of collective creativity. We owe it to each other to do that in the most thoughtful way possible.
Merging the DAOs: Introducing Hawthorn
With that said, we will be making some changes to the DAOs that we bring to market.
Here are the changes we will be making:
- There will be just one DAO, to be named Hawthorn, after one of the most durable trees in the world. Hawthorn trees are known for standing the test of time due to their ability to tolerate varying conditions. Planting trees takes time and so does incubating a DAO. But when it’s planted, the Hawthorn tree will be able to weather any storm, just as we expect the DAO to do with all of you at the helm.
- The Foundation governed by members of Hawthorn will have ownership interest in characters and worlds (thereby merging the concepts of the Character DAO and Media DAO). We will contribute partial ownership of various IP companies that own Jenkins, the Mutant, Goodboy, Azurian Legends, and Azurbala itself to the foundation in exchange for Hawthorn governance tokens.
- In the future, Tally Labs may propose that Hawthorn join it in other IP endeavors. Tally Labs expects to make a range of different proposals to Hawthorn, and when success from working with Hawthorn is proven, we can see other major brands wanting to tap into Hawthorn’s global imagination as well. The proposals that Tally Labs makes to Hawthorn will likely include contributing ownership interest in new projects developed by Tally Labs as well as special perks like exclusive events, access to premiers, project-specific merchandise/experiences, and more.
- What Tally Labs will look for in exchange for these new projects is Hawthorn’s collective imagination. We expect that Hawthorn will ideate on new pathways for worlds and characters to develop. You will bring diverse creativity and passion to what we all believe can be some of the world’s most impactful franchises, and the DAO will reap some of the benefits of it.
- As many of you know, Tally Labs is as much a software company as we are an IP company. As we continue to build out our tools, we will look for ways to propose bringing them into Hawthorn as well. In the future, we can even envision “The Writer’s Room” software platform being underpinned by tokens. We can imagine one day making a proposal to the members of Hawthorn where we suggest that we use Hawthorn tokens to power the software platform. That day is not today. In the meantime, we plan on continuing to build out the Platform and iterate on product-market fit across character development, licensing, and all of the other tools that let communities collaborate with projects they love and characters they govern.
- To get things started, the tokens that will be used to govern Hawthorn (and any future protocols or services ideated by the DAO) will only be available by staking Writer’s Room or Book NFTs. They’ll be distributed on a tiered basis with the most going to Yachts, then Stands, then Keys, then Tickets, and then finally Books. For any Writer’s Room member who stakes a Writer’s Room NFT plus a book, they’ll receive a bonus allotment of tokens. In other words, the most tokens you can possibly get is to stake a Yacht and a Book together.
- To make sure Hawthorn launches as successfully as possible and to ensure we maintain the timelines we’ve promised, the DAO will not come out at the same time as Azurbala. In other words, you’ll have the opportunity to burn your books for Azur Roots before you have the opportunity to stake them for Hawthorn tokens. If you’d like to stake books for Hawthorn tokens down the road, you should choose not to burn them during the burn window.
- The DAO landscape has changed, and our tokenomics and incentive design is not yet where it needs to be. The regulatory environment has changed, and like everything else we’ve done to date, building above board is the most important thing we can do. There is only one chance to kick off a new DAO! When everything is ready to go, this DAO will launch and the way to receive tokens in it will be via staking Writer’s Room NFTs and/or Book NFTs.
- We believe you can make Hawthorn the greatest content creation platform in the world using Hawthorn’s native token to drive engagement and creativity.
We wanted to share this with you now so that you know what’s ahead. In the next week, you’ll get a look at the first iteration of the Hawthorn brand and website, because we want you to see what’s coming. But staking will not go live immediately after book burning. There will be time in between as work continues to happen.
So what does this mean for the burn window? How can I burn a book if I don’t fully know what I’ll get for staking? Great question.
In the short term, you’ll have the ability to burn your Book NFT for the right to purchase an Azur Root. There will be a multi-week window to burn your books. You’ll then be able to redeem your Azur Root for an Azurian.
If you don’t burn your book during that window, then later you’ll be able to stake it to be part of Hawthorn from Day One. Hawthorn membership will mean the ability to build a new type of global brand that participates in the creation of some of the world’s most interesting creative projects.
Overall, we’re excited about these changes for a few reasons:
- Token distribution for Hawthorn will be proportional to the NFT you own with books yielding fewer tokens than all Writer’s Room tiers if they’re staked alone, and earning a special bonus allocation if they’re staked alongside Writer’s Room tokens. This structure allows Writer’s Room NFT holders to maintain a significant portion of the DAO’s governance tokens (if they choose to stake) and allows them to govern more than just characters!
- Writers room holders now have the opportunity to manage not just characters, but also whole new universes, along with all of the excitement that world-building can bring.
- Everyone can work together as a single community now, rather than being siloed to separate DAOs with a predetermined way of how they should work together.
We believe that a decade from now people will look at Hawthorn as well as all of the worlds it has brought to life (talking to you, Azurbala) and view it as the first and most prominent example of a decentralized and global community influencing culture and the future of collective creativity. With the changes in structure described above, we wholeheartedly believe this. The future of community creation is bright.
Long live Azurbala, long live the Writer’s Room, long live our future IP, and long live Hawthorn.