RALLY NETWORK DECENTRALITION OUTLINE:
- Decentralizing Rally
-What is decentralization in the context of blockchain?
-What are the goals of decentralization for Rally and why is Rally doing this now?
-What specific actions is Rally taking to decentralize?
-Summary of capital commitments and approach
-Budget for each of the five entities
-Summary of proposed governance for each of the five entities
- Conclusion & Next Steps
-Timeline & Next Steps
Dear Rally Community -
I am Kevin Chou, one of the co-founders of Rally, and I’m excited to share a proposal to help the $RLY ecosystem take the next big step forward by embracing decentralization, which has been one of the core principles behind the project since inception. The $RLY ecosystem is designed from the bottom up to be owned by the $RLY community, and the only way that can truly happen is to remove any singular entity from controlling the whole of the network. Today, we lay out our plans for the community to decide the future of the network.
To be clear, this proposal will not get us to the end-goal state of true decentralization just yet, but will be a major step forward in that direction.
In the proposal below, we lay out the context for what the $RLY network’s unique approach to decentralization is and why Rally is doing it, the specific actions and new entities that will be created, the budgets required to execute this, the new governance structures for each entity, and the timeline for this proposal.
I am grateful for you taking the time to read, reflect and ultimately vote on the proposal below. We will be having calls later this week to introduce and discuss this proposal. Without further ado, please find the Rally Decentralization Proposal below.
Rally’s mission is to deliver the next 100 million users into crypto by tokenizing economies for creators, communities and brands. Based on the early success of the $RLY protocol and the Rally.io application, we are doubling down on that mission by initiating the expansion of the $RLY protocol to include more projects beyond the initial creator portal of Rally.io, as well as new businesses with a global focus. Additionally, we are taking steps to deliver on our intention and commitment to turn the controls of the system over to the $RLY community progressively (see “Tokenizing Content Creator Economies: An Introduction to Rally Network”.
As a first step, the non-profit $RLY Network Association will be launched to build and maintain the core blockchain technology, oversee network protocols and rewards, and oversee the $RLY community treasury. Rally.io and the forthcoming Rally Asia Project (a similar project to Rally.io serving the Asian Creator market - name TBD) projects will be region-specific creator monetization projects that will provide a blueprint for further global creator-focused expansion. Fourth, a venture studio called SuperLayer Labs aimed at supporting the launch of new tokenized consumer products leveraging the $RLY protocol will be unveiled soon. And fifth, we propose creating a $RLY Ecosystem DAO, which will be directly run and governed by the $RLY community, that can disburse grants or loans from the DAO treasury and oversee projects for the broader ecosystem. With this new set of decentralized infrastructure in place, the $RLY protocol should become even more attractive for third-party development, creators, or anyone to build a business on the $RLY Network without any singular centralized entity controlling the ecosystem.
With a supercharged global roadmap in place and new opportunities enabled by decentralization under way, we will accelerate our core mission of delivering the next 100 million users into crypto.
II. DECENTRALIZING RALLY
A. What is decentralization in the context of blockchain ecosystems?
Decentralization refers to the shifting of decision making authority (i.e., control) from a centralized entity (e.g., an individual like you or me, or a corporation like Facebook or Bank of America) to a distributed network (i.e., a broad set of participants where actions, business entities and decision making rights are broadly distributed). At a practical level, decentralized networks are created to decrease the need for trust that a centralized entity typically provides, while limiting the power of any one or group of participants to exert control over the network.
B. What are the goals of decentralization for Rally and why is Rally doing this now?
At its core, Rally was built to help individuals tokenize their interactions with their communities. We knew that there were some core components that individuals needed in order to enter the crypto space (regulatory compliance, seamless end-user onboarding, use-cases for social tokens, etc.). Over the past three years, we have built out the core infrastructure and capabilities to help creators and their fan communities onboard into crypto via both the $RLY Network as well as the first consumer-facing application, Rally.io. By progressively increasing decentralization at this point, we believe we can more effectively achieve the original ambition, specifically by decentralizing the core infrastructure (to be run by $RLY Network Association) apart from the applications creating more choices for creators (Rally.io and Rally Asia Project), putting more control in the hands of the community ($RLY Ecosystem DAO) and accelerating additional product development (SuperLayer Labs). Specifically, we see five primary benefits to decentralization:
- Ensure no singular entity will control all the rules of the protocol by firmly establishing $RLY Network Association and the projects built on the $RLY protocol, like Rally.io, as separate projects with different missions, goals and leadership. For the success of all entities, it is important that there is a clear separation between the $RLY Network Association and the individual projects built on the $RLY protocol, including Rally.io. The $RLY Network Association is a non-profit project that maintains the $RLY protocol technology, oversees network-wide protocols and rewards, and oversees part of the community treasury. The Association will not develop any consumer-facing applications, but rather focus on helping new products and applications build on the network as well as provide much more data and transparency into what is happening throughout the network. Rally.io is the first creator monetization project that utilizes the $RLY protocol, and will be just one of many projects independently built on the $RLY protocol. By forming this non-profit $RLY Network Association, we are ensuring that the $RLY protocol can continue to develop and maintain network level oversight for the benefit of the whole network, setting the stage for Rally.io and future projects to leverage the $RLY protocol.
- Clearly delineate the governance roles and responsibilities of $RLY token holders. One of the tasks of the $RLY Network Association is to clearly define the governance and responsibilities of $RLY token holders. As part of this decentralization evolution, the $RLY Ecosystem DAO will be launched and $RLY holders will immediately control the $RLY Ecosystem DAO community treasury. In the future, $RLY holders will vote on representatives to govern the $RLY Network Association. The initial leadership of the $RLY Network Association will be tasked with shepherding the launch and establishment of the Association with the goal of transitioning its governance to the $RLY community over time.
- Enable global expansion: Mirroring the success of Rally.io, the Rally Asia Project will launch as a standalone project to attract creators, artists and fans in the greater Asian region, who share a similar desire to be empowered to build their digital communities directly with fans, with different cultural and geographic characteristics that drive their content and fan base. This will serve as a blueprint to build and launch similar projects in other regions around the world.
- Empower experimentation to build and launch next generation apps that leverage the $RLY Protocol: Rally.io and Rally Asia Project are just the start. A new project, SuperLayer Labs led by Kevin Chou, will partner with developers to build new applications and venture-fundable businesses leveraging the $RLY protocol. In addition, the $RLY Ecosystem DAO will be independently run by the $RLY token holding community to identify opportunities for new projects to enable further development on the network.
- Embrace the promise of blockchain: This move towards greater decentralization of governance and stakeholders through the creation of independent and symbiotic projects is enabled by the power of blockchain technology. This has been the vision of the $RLY protocol from the beginning - that a gradual evolution towards greater decentralization will contribute to the stability of the network while also cultivating a vibrant, engaged community who will own, control and continue to drive it. We are at an inflection point now with the $RLY protocol heading into a new era of rapid development and scalable growth. We could not have gotten to this point without the power and passion of the $RLY community. By further empowering the community today by fracturing the large central actor at the center of Rally, we believe we’re entering a phase of exponential growth of the network in multiple dimensions.
C. What specific actions is Rally taking to decentralize?
At its simplest, the $RLY ecosystem is evolving from a single organization focusing primarily on enabling the Rally.io application into a new system of five separate projects: 1) Rally.io, 2) Rally Asia Project (name TBD), 3) $RLY Network Association, 4) $RLY Ecosystem DAO, and 5) SuperLayer Labs. All five projects share the common connection of being built on, developing or supporting the $RLY Network:
- Brief Summary: Creator monetization and community engagement project built on the $RLY protocol
- Empower creators and artists to launch their own personal cryptocurrencies and NFTs in a seamless digital economy with their communities by offering multiple benefits and access points.
- Attract, recruit and retain successful creative communities and help them launch and grow their independent economies.
- Leverage team’s decades of experience in music, gaming, sports, art, and other content to help creators and artists (and their communities) launch successful economies.
- Business Model:
- Creators own 100% of their tokens
- Rally takes no transaction fees during this time where it’s the only Creator business on $RLY
- Employees are compensated in a mix of USD and $RLY to ensure that Rally.io employees succeed when creators and their communities do
- Key Leadership:
- Bremner Morris, CEO
- Carol Chen, VP of Engineering
- Chris Fortier, VP of Product
- Mike Li, Co-Founder and CTO
- Jason Maestas, VP, Community
- Nick Millman, VP, Creator Partnerships
- Kurt Patat, Head of Communications
- Stephanie Pereira, VP, Creator Success
- Jeremy Tan, VP of Engineering
- Johnny Tong, Head of Finance
- Michelle Vautier, VP of Payments
- Rally Asia Project (a similar project to Rally.io serving the Asian market - name TBD)
- Brief Summary: Yet-to-be-launched project built on the $RLY protocol for creators, artists and brands in Asia to launch their own personal cryptocurrencies and NFTs in a seamless digital economy with their communities by offering multiple benefits and access points.
- Attract, recruit and retain successful creative communities in Asia and help them launch and grow their independent economies.
- Serve the unique cultural, language and regulatory needs of their creators as well as the unique social media and creator platforms native to the region that are not present in the West (LINE, Kakao, WeChat, Douyu, etc).
- As separate projects, this team can work more quickly than a single monolithic project serving creators, regulators, and social platform integrations across Asia.
- Business Model:
- Creators own 100% of their tokens
- A potential transaction fee structure will be utilized (still TBD) to enable sustainability of the project
- Key Leadership:
- Weiwei Geng, CEO
- Robb Spitzer, Community Advisor
- $RLY Network Association
- Brief Summary: Non-profit Association that builds and maintains core blockchain technology, oversees network protocols and rewards, and oversees part of the community treasury.
- Ensure the continued maintenance and success of $RLY protocol and community treasury.
- Enable consumer friendly, trust minimized, decentralized, tokenized communities by providing technical and economic infrastructure that simplify development, reward positive interactions, and ensure ample network liquidity.
- Drive expansion and adoption of the $RLY protocol via licensing and grants
- Seek innovation and investment opportunities for $RLY.
- Business Model: The Association is a non-profit that invests the treasury like an endowment with the objective of becoming self-sustaining.
- Key Leadership:
- Amit Ranade, Executive Director and Head of Product & Engineering
- Executive Board
- Amit “DaddyFatSax” Ranade
- Ronen Kirsh
- Weiwei Geng
- $RLY Ecosystem DAO
- Brief Summary: A decentralized, autonomous organization run directly by $RLY token holders to govern and distribute a periodically refreshed budget for the benefit of the network.
- Objectives: Foster an organic, rich community-driven ecosystem of developers, creators, businesses, and service providers for the $RLY Network ecosystem.
- Business Model: Annual grants from the Association, with the first grant totalling 20M $RLY and $2M USDC. Another forum thread will initiate a conversation concurrently with this post to enable the community to further discuss what was covered in this post.
- Key Leadership: No central leadership from the original Rally core team. $RLY token holders will directly govern and allocate the DAO funds to $RLY ecosystem participants that create value for the $RLY Network. The community should discuss the appropriate structure for optimal team operations and KPIs.
- SuperLayer Labs
- Brief Summary: A new venture studio that incubates and builds new tokenized consumer products and applications on the $RLY Network.
- Launch independent businesses built on top of the $RLY protocol, facilitating their launch, staffing, go-to-market, compliance and fundraising.
- Raise outside capital for these independent businesses once the products find product-market-fit that can attract independent venture investors.
- Focus on creating products and services that will attract and support the next 100 million consumers, creators, and communities using crypto.
- Provide returns to the $RLY community treasury through its incubated projects.
- Business Model: SuperLayer Labs incubates projects alongside founding management teams. The venture studio will be structured to enable the aggregation of capital from multiple sources, with a focus on both strategic and financial investors, that will be deployed similar to other leading venture studios (e.g. Atomic and Science). The $RLY community will receive a return on the capital that it invests through the community treasury as outlined in the budget below.
- Key Leadership:
- Kevin Chou, Managing Partner
- Mahesh Vellanki, Managing Partner
- Gary Coover, COO
- Ira Lam, General Counsel
A. Summary of capital commitments and approach
For the purpose of this proposal, each project has developed a budget that will carry it to the end of 2022 (~17 months). The overall budget being requested is 345M $RLY and 86M $USDC, which is aggregated from the budget requests of each of the five projects. The total budgets requested from each project are listed below in Section IIIB.
B. Budget by project
Investment opportunities and credit facility
The $RLY community will have the opportunity to participate in up to 25M $USDC in new venture investments that SuperLayer leads. These investments will be in projects and companies that will build on the Rally ecosystem focused on network and community growth initiatives.
Additionally, the $RLY community will have the opportunity to provide a 20M $USDC credit facility to SuperLayer at a five percent (5%) annual interest rate payable annually with a loan term of thirty-six (36) months from the date of tranche draw. The credit facility will be drawn in tranches of 5M $USDC with the first tranche released to SuperLayer within five (5) days from the date of approval of the proposal. Each subsequent tranche will be released upon request by SuperLayer. The request will be made to the Community Treasury Manager and will be payable within five (5) days of receipt.
C. Release Schedule
The budgets will be released in five (5) tranches as follow:
a. Tranche 1
Upon approval of the proposal, the first tranche will be released to each entity within five (5) days of approval in the amounts of:
b. Tranches 2-5
Rally.io and Rally Asia Project will submit requests for additional tranches on a quarterly basis by the submission deadline. Each project will provide a detailed forecast for the following quarter, outlining the funding request for the quarterly tranche and most recent KPIs as requested by the $RLY Network Association. The $RLY Network Association will have thirty (30) days from submission deadline to review and discuss any requests. The $RLY Network Association will retain discretion to approve in full, or in part, the amount of the funding request, based on a funding approval policy determined and set by the $RLY Network Association. The aggregate funding for any project will not exceed its approved budget outlined above in Section III.B (Budget by project). Upon approval, the tranches will be funded within fifteen (15) days based on the funding schedule below:
Distribution of funds will be managed by the Community Treasury Manager. The Community Treasury Manager will determine the split between $USDC and $RLY to be distributed at each tranche based on the $USDC available in the community treasury.
*Total $USDC distributed at each tranche shall be limited to the amount available in the community treasury. Any $USDC amount not available at the time of disbursement will be payable in $RLY equivalent.
c. Volume restrictions
The granted $RLY will be subject to transfer volume restrictions as determined and set by the $RLY Network Association.
Each of the Rally.io and Rally Asia projects will provide quarterly reporting on spend and results based on guidelines provided by the $RLY Network Association. Further, each project will provide monthly volume trade activity to the $RLY Network Association to demonstrate compliance with the volume restrictions. Reporting will follow the schedule below:
A. Summary of proposed governance for each of the five projects
- As a Delaware corporation, Rally.io will continue to be governed by leadership from its executives and from its existing directors.
- Creators and Developer stakeholders will be empowered via elected councils who will have direct access to executive leadership, as well as budgets for rewarding and incentivizing activities aligned with the Rally.io mission.
- Rally Asia Project:
- This project will be launched as a project based in Asia and led by a team focused on the geographic, cultural and creator platform nuances of the markets for creators, athletes, celebrities, and other participants in the greater Asia region. The Asian market is active in the crypto space, and the growing success and adoption of Rally.io in western and English-speaking markets has resulted in strong interest from key parties and potential partners in Asia to adopt a similar platform. A project focused on Asian markets will make it possible to navigate regional business priorities and strategies, language localizations, and compliance and regulatory regimes of Asian countries.
- $RLY Network Association:
The $RLY Network Association is a non-profit association based in Switzerland, a jurisdiction that has historically encouraged and supported the growth of crypto projects and the development of governance innovations. This organization will be governed by an Executive Board.
Initially, the Executive Board will be comprised of 3 members:
- Amit Ranade: Blockchain and technology leader at Rally Network since early in its life, with core expertise on network protocol design and growth. Amit will also serve as the Executive Director and Head of Product & Engineering of the Association.
- Ronen Kirsh: Crypto and economics executive, founder/co-founder of various crypto projects including San Francisco Blockchain Week, Dekrypt Capital, Forte and Blockchain at Berkeley.
- Weiwei Geng: China-based executive with core experience in network infrastructure, organizational leadership and deal strategy.
As the community of $RLY token holders becomes more established and the $RLY protocol achieves scalable growth, stability and sustainability, we anticipate that within the 18 month period following the launch of the Association, new governance will be adopted to increase the number of the Executive Board members to include individuals appointed by the $RLY token holder community. It is anticipated that key leaders will arise from the $RLY community. More on this evolving governance structure will follow in future forum posts.
- $RLY Ecosystem DAO:
- DAO is an acronym for a “decentralized autonomous organization”, a project with no central leadership. Decisions are made by the decentralized community that is organized around a specific set of rules enforced on a blockchain. DAOs are internet-native organizations collectively owned and managed by their members.
- In the $RLY Ecosystem DAO, every $RLY holder is a member and has the authority to vote to influence the direction of the $RLY Ecosystem DAO. Like typical DAOs, the $RLY Ecosystem DAO has a funded treasury that is only accessible with the approval of its members. Decisions are made via proposals that the $RLY community votes on during a specified period. The existing Snapshot platform will initially serve as the governance mechanism, and in the near future, the $RLY community can vote to use a different platform or method for governance.
- As governance for the DAO project will be new, the primary control mechanism will be starting with a smaller annual budget than anticipated for future years but to turn over full control of this budget and project directly to the $RLY community.
- SuperLayer Labs:
- SuperLayer Labs will utilize a General Partner/Limited Partner structure that will enable the aggregation of capital from multiple sources that are interested in becoming a part of the future growth of the $RLY protocol. As noted above, the initial investment made through the $RLY community treasury to SuperLayer will (i) fund the operations of the project, and (ii) form the first portion of the investment fund through which, as a Limited Partner, the $RLY community treasury will receive a return on the capital invested.
V. CONCLUSION & NEXT STEPS
To summarize, Rally is doubling down on the mission to deliver the next 100 million users to crypto by expanding to include more products and especially new projects with a global focus, while taking concrete steps to deliver on our intention and commitment to turn this system over to the $RLY community as quickly as possible. To help achieve these goals, the $RLY ecosystem is evolving from a single organization focusing primarily on enabling the Rally.io application to a new structure with at least five separate projects: 1) Rally.io, 2) Rally Asia Project (name TBD), 3) $RLY Network Association, 4) $RLY Ecosystem DAO, and 5) SuperLayer Labs. All five projects share the common connection of being built on, developing or supporting the $RLY protocol. Each of the projects will have their own budget (Section III - totaling $86M USDC / 345M $RLY), investment opportunities ($25M USDC) and credit facility ($20M USDC), and governance (Section IV) to enable their success.
We are submitting this proposal for the $RLY community review today and will discuss it in person at Friday’s Rally Community Call. Once we have addressed the outstanding questions, we will move to vote and hope to get your support to move Rally to the next phase of its evolution.
B. Timeline and Next Steps
- TODAY: Forum Proposal posted
- FRIDAY, AUGUST 20th, 2021: Rally Community call
- MONDAY, AUGUST 23rd, 2021: Enable time for debate, earliest time Snapshot vote goes live in case you want to have $RLY ready in your Ethereum wallet to vote
- WEDNESDAY, AUGUST 25th, 2021: Snapshot vote concludes
- THURSDAY, AUGUST 26th, 2021: Results announced on Discord