Flamingo is an NFT-focused DAO that aims to explore emerging investment opportunities for ownable, blockchain-based assets. NFTs are not just cat pictures. They encompass digital art, collectibles, and in-game assets and other tangible assets. These new forms of digital property are poised to play an increasing role in helping to create, monetize, and incentivize online digital content.
NFTs are not interchangeable, and they thus introduce a new form of scarcity in the digital world. They can represent digital or real-world assets, providing verifiable proof of authenticity and ownership (assuming they are created by the original author or owner) using a blockchain network.
Blockchain developers began introducing NFTs as early as 2016, with projects like Age of Chains and Rare Pepes using Bitcoin to create blockchain trading cards. These early experiments morphed into larger projects during the halcyon days of 2017 to 2018, with the launch of Cryptokitties. Seemingly overnight, Crytpokitties took the Ethereum ecosystem by storm, generating tens of thousands of transactions and clogging the network as users traded lovable cats with one another.
While interest in Cryptokitties may have waned in recent years, the mechanics and growth of NFTs has not. Next generation NFT platforms and marketplaces are incentivizing a new generation of creators to digitize artwork, digital land, and in-game items. Recently, we've seen the emergence of next generation NFTs and platforms, expanding into digital art, land purchasing, and we're beginning to see NFTs intersect with trends in Decentralized Finance ("DeFi").
The growth of NFTs is just beginning, because NFTs represent the digitization and financialization of digital property and intellectual property. Trillions of creative works swirl around the Internet and are difficult to monetize, except through licensing models. NFTs hold out the hope of bringing back to the Internet an ownership economy. Creators can create, sell, and fractionalize ownership in their works, opening up a new chapter for creative endeavor. NFTs can be:
Over the longer arc, NFTs hold out the hope of becoming increasingly financialized, interacting with other core blockchain-based financial primitives. They may prove to be a core primitive for decentralized identity solutions, and may increasingly serve as a cornerstone for monetizing emerging metaverses and other gaming platforms.
Flamingo aims to develop a strong foothold in this emerging ecosystem, bringing together the "hive mind" of a DAO to the world of NFTs. Flamingo will give its Members the ability to develop and deploy NFT-focused investment strategies. Purchasing NFTs with Ether or some other base digital assets pursuant to the terms outlined in these FAQs.
Once purchased, Flamingo could evolve in a number of different directions. Members will have the right and ability to factionalize its NFT holdings. Any purchased NFTs can be lent, held, displayed in a digital art gallery, or used as collateral in other DeFi platforms. The direction is up to the Members.
More details about Flamingo's legal structure, operation, and funding process are outlined in these FAQs. Please read them carefully before applying or becoming a Member of Flamingo.
Flamingo is organized as a Delaware limited liability company.
The rights and obligations of Flamingo Members are set forth in an operating agreement (which will be provided when you are verified to contribute to Flamingo) and are supplemented by the Delaware Limited Liability Company Act. YOU SHOULD RETAIN YOUR OWN COUNSEL FOR PURPOSES OF EVALUATING WHETHER TO JOIN FLAMINGO AS A MEMBER.
At its core, Flamingo will be member-managed and rely on a DApp and related smart contracts to facilitate the purchase of NFTs.
Flamingo's operating agreement expressly limits the Members' liability and limits any fiduciary obligations amongst Members, in each case, to the extent permitted by applicable law.
Flamingo will rely on a service provider (initially, OpenLaw) to facilitate various administrative functions on behalf of the Members, including preparing and sending annual K-1 tax forms, updating and maintaining the DApp, validating information related to projects selected for purchase, and handling other interactions that may come up during the lifetime of Flamingo (e.g., receiving the proceeds from the sale of securities in fiat and converting them to a digital asset for distribution to Members). For these services, the service provider will receive a fee, pursuant to a schedule outlined here.
Flamingo's operating agreement was prepared by OpenLaw's outside counsel.
As set forth in the operating agreement, and except as otherwise provided under Delaware law, no Member (or former Member) of Flamingo will be liable for the obligations of Flamingo for any amounts in excess of the amount of the Member's contributions to Flamingo, plus:
To the fullest extent permitted by applicable law, Members shall not have any fiduciary duty to Flamingo or any other Member. Under the operating agreement, Members agree to interact in good faith and to engage in fair dealing.
The terms and provisions of the operating agreement may be amended if 50% or more of Flamingo Members or their delegates (as measured by the Members' units) vote to approve an amendment. Voting will be based on the number of Flamingo Units held by the Members at the time of the vote.
Each Member of Flamingo must rely on the Member's own tax and legal representatives as to the tax consequences of joining Flamingo or making purchases through Flamingo.
Membership in Flamingo is currently limited to accredited investors, as defined under U.S. law. The total number of members will be capped at a maximum of 100 members.
Members have the opportunity to contribute Ether to Flamingo by purchasing between 100,000 and 900,000 units representing an ownership in Flamingo ("Flamingo Units").
Units will be sold in blocks of 100,000. Each block of Flamingo Units will be sold for 60 ETH and provide a member with 1% of the voting rights in Flamingo, along with 1% pro rata rights to any proceeds from purchases. Each Member will be permitted to purchase 9% of the Flamingo Units. The LAO will be allocated 200,000 Units of Flamingo for its role in helping to formulate Flamingo.
The members reserve the right to create a Flamingo Token to represent Flamingo Units via a Member vote.
Flamingo Units have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States, or any other global regulatory authority.
All contributions are currently only limited to Ether, unless the Members agree otherwise.
As noted above, the U.S. Securities and Exchange Commission and/or equivalent government bodies in other jurisdictions have not determined whether membership interests in Flamingo (represented as units) are securities.
In the abundance of caution, the limits in membership and accreditation status for U.S. contributors are put in place to:
To contribute Ether to Flamingo, Members will need to go through accredited investor, anti-money laundering ("AML"), Know Your Customer ("KYC"), and Office of Foreign Assets Control ("OFAC") checks as defined under U.S. law and as discussed further below. A joining Member will need to deposit a sufficient amount of Ether from the Member's Ethereum address in order to complete the membership process.
A Member will also need to submit sufficient information to verify the potential member's identity for AML, KYC, and OFAC checks, including:
Accredited investors include:
With respect to legal entities:
The full definition can be found here.
In order to register and validate members, a potential member will need to supply Flamingo with sufficient information to assess whether the member meets these legal requirements, which will be confirmed by Flamingo's service provider.
Once a Member makes a contribution, Flamingo's underlying smart contracts will need to whitelist the Member's applicable Ethereum address. The process for validating and whitelisting the Member's Ethereum address will be done in order of contribution and will take at least 7 total days to complete. The process takes 4 days to process the proposal and another 3 days to provide Members the right to "rage quit" if they so choose.
During Member onboarding, Members will be asked to provide applicable documentation in order for Flamingo to verify your status as an accredited investor. This may include:
If you're acting on behalf of a legal entity, you may need to provide:
Non-U.S. based investors are permitted to become Members of Flamingo. Non-U.S. based contributors must verify their identity in order to contribute and will need to confirm their accreditation status.
Accreditation and verification of Members will take several business days to be processed by Flamingo. We will notify you during the verification, with any questions or concerns. Please fill out the application for accreditation here.
The documentation that you upload as evidence of your accreditation status are kept private and are used to verify that you meet the definition of an accredited investor.
Using a digital wallet, such as MetaMask, or a wallet compatible with WalletConnect Members can contribute to Flamingo after they have been approved (i.e., verified as an accredited investor, passed KYC/AML checks, etc., as applicable and as further outlined here).
Ether contributions will be wrapped as ERC-20 tokens (wETH) to allow for a seamless interaction with Flamingo's smart contracts (described further here). The ERC-20 standard streamlines how tokens are tracked and transferred between parties. Ether itself predates the ERC-20 standard, and it did not come with a built in standard of how to track and trade tokens amongst parties. The conversion from Ether to wETH addresses this concern.
The Members, acting by majority vote, have the right to elect to invest capital contributions to Flamingo in either Ether, Bitcoin, and/or fee or interest bearing cryptocurrencies or other digital assets. The vote will occur via the dApp and voting procedures can be varied by the Members.
As noted above, the U.S. Securities and Exchange Commission and/or equivalent government bodies in other jurisdictions have Voting rights will be based on the total number of Flamingo Units that each Member holds for any relevant vote posed to Members.
Members will be prompted to vote via Flamingo DApp (or, over time, other online services) at various points during the lifecycle of Flamingo, including to evaluate purchase decisions, weigh-in on the structure and form of Flamingo, and/or other strategic decisions related to Flamingo.
Voting will be facilitated by blockchain-based smart contracts and via the DApp based on ownership records maintained on the Ethereum blockchain.
Members are not required to vote on all matters. At any point in time, a Member can transfer or "delegate" the member's right to vote on purchase decisions by designating via the DApp an Ethereum address for which such right is delegated to. Decisions to delegate any voting rights are entirely up to each Member.
No.
A Member can cancel and/or re-delegate its voting rights through the DApp at any time.
Flamingo is entirely member-directed and managed by the Members through democratic voting. As a Member, you should have some experience in evaluating or purchasing digital assets.
To preserve privacy and to prevent front running, and unless otherwise agreed, Members will periodically agree to allocate a portion of Flamingo's assets into a side-pocket (i.e., 20% of Flamingo's assets) initially maintained by Flamingo's Service Provider with the aim of having it managed in-part by the members. Once set aside, Members can propose to other Members the purchase of one or more NFTs. If a proposal passes (as outlined below), the Members themselves or the Service Provider will take steps to acquire the assets at issue.
The process of side-pocketing assets will occur through a Moloch-style vote (i.e., an on-chain vote). Each decision to side-pocket collected assets will have a 4 day voting period, with a 3-day period for Members to "rage quit." If during the 4-day period, there are more yes votes than no votes, the assets will be set aside. If there are more "no" votes than "yes" vote, the side-pocketing will not pass.
Individual acquisition decisions will occur via the dApp and will not require the expenditure of gas. Each Member will have the opportunity to outline and nominate an NFT or NFT-related project or opportunity to other Members. Once nominated, Members or a Member's delegate will have the right to vote on whether to support the proposal.
A Flamingo Member should understand and acknowledge that they must bear the economic risk of any purchase.
No, unless the Members make such a decision to appoint a general partner (but that wouldn't be in the spirit of things).
Flamingo is an emergent experiment and thus there is no express thesis. Members can work together to formulate a thesis and explore purchase opportunities. They have the right to develop any thesis they agree on.
Member decisions will occur through the dApp based on proposals made by Members.
Flamingo has no express purchase period. Members can make purchases until all contributed capital has been allocated or withdrawn, as discussed further in these FAQs.
The Service Provider has no role in making purchase decisions.
The Members have complete agency in making such determination. To preserve privacy, Members likely will create pools of funds that can be used to make purchasing, collecting, or other acquisition decisions. Flamingo's Members then can vote on whatever NFT they would like to purchase, and if the vote passes, the service provider or a Member can purchase on behalf of Flamingo.
Members are free to contact artists, collectors, game-designers, metaverse creators, or or other third parties to gain insight on trends, styles, and other relevant information when making decisions on what Flamingo should purchase.
For communication between Members and these third parties, Flamingo will maintain a Discord, Telegram, or other relevant communication channels. If requested by the Members, Flamingo's service provider can schedule meetings or facilitate other interactions with any creators or artists for NFTs being contemplated for acquisition.
The Members will also have Curators to seek help and advice on style, quality, trends, and/or commentary on specific NFTs.
Members have the right to control all operations of Flamingo and any changes are expected to be implemented by the service provider.
Purchases contemplated by Flamingo are inherently speculative and are made by the Flamingo Members or their express designees and agents. The results of Flamingo's purchases will likely vary from period to period, and purchases made by Flamingo will involve a high degree of financial and market risk that can result in a complete loss of any Member's contribution to Flamingo.
Flamingo will be the record holder of all securities and/or any other rights secured via Flamingo-related purchases. Members, acting via a vote via the Dapp, will have the right to determine the amount, timing, and form of all distributions related to proceeds from those purchases.
Since these are NFTs, Members reserve the right to fractionalize the NFT for the benefit of each Member, lend the collection to other gaming platforms, or show any purchased NFTs at digital galleries, etc. The Members have full discretion on how the NFTs will be used once acquired.
Members will receive proceeds, if any, on a pro-rata basis based on the number of Flamingo Units each Member holds.
If a Member rage quits, the Member will be entitled to receive their pro rata portion of any undeployed capital. However, the Member will not be entitled to distribution with respect to any purchases made by Flamingo after the date the Member quits Flamingo.
Please note, that prior to proceed distribution, Members must provide a copy of the applicable Form W-9 or Form W-8, when requested by the service provider.
Members have the right to determine how proceeds will be paid.
Members acting by a majority vote (based on the number of Flamingo Member Units) may reinvest or retain for purchase any proceeds to effect Flamingo purchases, pay expenses (outlined here or otherwise provided for in Flamingo's Operating Agreement), or create reserves.
Yes, the Member would benefit from the future profits even if the Member voted against the purchases. In effect, you're agreeing to the will of the voting members and if you don't like the decision you have the right to rage quit all or part of your undeployed Ether.
Flamingo and its Members are responsible for the costs and expenses related to Flamingo's activities, operations, and maintenance, as detailed in the operating agreement. This includes any fees charged by the service provider.
As noted in these FAQs, Flamingo's organizational documents expressly contemplate the use of a service provider to help facilitate, on behalf of the Members, activity by Flamingo. As compensation for these services, the service provider will initially charge the following fees.
Flamingo and its Members are responsible for the costs and expenses related to Flamingo's activities, operations, and maintenance, as detailed in the operating agreement. This includes any fees charged by the service provider.All fees are payable on a quarterly basis to the service provider and will begin to accrue once Flamingo launches. Members have the right to terminate the services of the service provider at any time.
In addition to the fee schedule outlined above, the service provider will be entitled to a fee of 2% of the gross proceeds of any sale it facilitates of an NFT previously acquired by Flamingo, as well as, if the service provider fractionalizes ownership interest in an NFT acquired by Flamingo, 2% of those ownership interests in the NFT.
Membership in Flamingo is currently limited to accredited investors, as defined under U.S. law. The total number of members will be capped at a maximum of 100 members.
Members have the opportunity to contribute Ether to Flamingo by purchasing between 100,000 and 900,000 units representing an ownership in Flamingo ("Flamingo Units").
Units will be sold in blocks of 100,000. Each block of Flamingo Units will be sold for 60 ETH and provide a member with 1% of the voting rights in Flamingo, along with 1% pro rata rights to any proceeds from purchases. Each Member will be permitted to purchase 9% of the Flamingo Units. The LAO will be allocated 200,000 Units of Flamingo for its role in helping to formulate Flamingo.
The members reserve the right to create a Flamingo Token to represent Flamingo Units via a Member vote.
Flamingo Units have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States, or any other global regulatory authority.
All contributions are currently only limited to Ether, unless the Members agree otherwise.
As noted above, the U.S. Securities and Exchange Commission and/or equivalent government bodies in other jurisdictions have not determined whether membership interests in Flamingo (represented as units) are securities.
In the abundance of caution, the limits in membership and accreditation status for U.S. contributors are put in place to:
To contribute Ether to Flamingo, Members will need to go through accredited investor, anti-money laundering ("AML"), Know Your Customer ("KYC"), and Office of Foreign Assets Control ("OFAC") checks as defined under U.S. law and as discussed further below. A joining Member will need to deposit a sufficient amount of Ether from the Member's Ethereum address in order to complete the membership process.
A Member will also need to submit sufficient information to verify the potential member's identity for AML, KYC, and OFAC checks, including:
Accredited investors include:
With respect to legal entities:
The full definition can be found here.
In order to register and validate members, a potential member will need to supply Flamingo with sufficient information to assess whether the member meets these legal requirements, which will be confirmed by Flamingo's service provider.
Once a Member makes a contribution, Flamingo's underlying smart contracts will need to whitelist the Member's applicable Ethereum address. The process for validating and whitelisting the Member's Ethereum address will be done in order of contribution and will take at least 7 total days to complete. The process takes 4 days to process the proposal and another 3 days to provide Members the right to "rage quit" if they so choose.
Flamingo has certain strong rights for members to withdraw their capital if they are unhappy with the performance or administration of Flamingo. This right—often called "rage quitting"—gives members a degree of control as to their participation in Flamingo and the use of any contributed capital.
Even though Flamingo is member-directed and managed, Members are not obligated to participate in any proposed purchase. Once a purchase is authorized via the dApp, all members will have the right to opt-out of the purchase and receive any undeployed capital that they contributed to Flamingo back (i.e., "rage quit").
The right to rage quit is accounted for in the operating agreement and facilitated via the DApp and underlying smart contracts.
If a member rage quits, the member's pro rata portion of any unallocated capital contribution will be returned to the member. The member's Flamingo Units are retired (i.e., "burned") and the member loses any right to participate in future purchase. If a member wants to sell their interest in Flamingo, it is permissible, but subject to approval by other members.
A member can rage quit at any time, including after any NFT purchase. The only restriction is that any proposal that the particular member voted "YES" for is processed by Flamingo's smart contract initially.
With limited exception, as detailed in the operating agreement, Members cannot transfer Flamingo Units or Tokens, if created, unless otherwise agreed to by the Members, via a vote facilitated by the Dapp.
Members via a vote facilitated by the group can accept new capital commitments from new joining members and admit them into Flamingo. Any new Member (or, if applicable, group of Members) must provide the same initial contribution as an exiting Member, unless otherwise agreed to by the Members.
Members of Flamingo may be required to leave if Members of Flamingo vote to remove the respective member. The Service Provider cannot remove any Flamingo unless otherwise authorized by a vote by a majority of the Members.
Once a proposal is submitted for a specific NFT, the proposal will be submitted to the Flamingo Members to decide whether to nominate the NFT for purchase.
If a purchase proposal is nominated, the Flamingo Members will then vote on whether to acquire the NFT or NFTs at issue. If approved via the DApp, either the Service Provider or a Member will purchase the relevant NFT on behalf of the Members of Flamingo. Purchases may be held by Flamingo or allocated fractionally in the form of tokens to each Member based on the number of Flamingo Units each Member holds.
Where NFTs are purchased from is up to the membership of Flamingo. NFTs can be purchased at various digital marketplaces (SuperRare, OpenSea, etc.), and individual owners.
NFT purchase proposals are viewable by the Members and potentially by the public. If you're an NFT artist, collector, or other creator and have additional questions regarding privacy concerns, please email us at hello@flamingodao.xyz.
Members of Flamingo can vote by majority to wind down Flamingo. Other circumstances include a judicially ordered dissolution or disposition of all the assets of Flamingo.
If dissolution were to occur, a person appointed by the Members via a majority vote will handle the wind down of Flamingo based on the terms of the operating agreement.
At the time of dissolution, Members of Flamingo are responsible for the expenses associated with the liquidation.
Any additional losses or liabilities incurred will be in accordance with the terms of the operating agreement and the service provider reserves the right to set aside funds to facilitate dissolution activities.
In the operating agreement, Members agree to tag- and drag-along provisions to deal with the possibility that members may want to transfer all of Flamingo's assets to another entity or party. These rights will only be triggered if a super-majority of the Members vote to effectuate such a transfer.
Flamingo uses various smart contracts to administer its activity. Primarily, the smart contracts are used to facilitate:
Flamingo currently uses v2 of the MolochDAO's smart contracts, which can be found here.
OpenLaw, the initial service provider for Flamingo, has worked with the MolochDAO to develop v2 of the MolochDAO smart contracts. More information about the collaboration can be found here.
Flamingo smart contracts have been audited by ConsenSys Diligence, MolochDAO, and MetaCartel.
Flamingo's smart contract code will be publicly available on Etherscan and GitHub when it is complete.
The Flamingo DAO, LLC ("Flamingo") seeks to be as diligent as possible in compiling and updating the information on its website. However, there is no guarantee of the correctness and completeness of the information provided here. Equally, Flamingo does not guarantee that this information is up to date and such information may qualify to change.
Certain capitalized terms are described in the Glossary at the end of this FAQ. The FAQs is a summary based on legally binding documents, namely Flamingo DAO, LLC Subscription Agreement and Operating Agreement. If there is any discrepancy between the information provided herein and the Agreements, the terms of the agreement take precedence. Members should consult his or her own tax, financial, and legal advisors prior to making any investment in Flamingo. Nothing in these FAQs shall be considered to be tax, financial, or legal advice. For questions, please reach out to members@flamingodao.xyz