Redemption Option and Timeline

Spice DAO multisig signer Soby raised the idea of allowing $SPICE holders to redeem their tokens for ETH in a tweet on May 23, 2022. This proposal seeks to make that possible, while also allowing those that want to continue do so.


  • Deliver the Frank Miller Presents: Ancient Enemies NFT drop (Core Team member Kortelin has said public sale begins Aug. 1) and sell out the collection.

  • If the collection does not sell out within 4 weeks then redemptions will continue with what funds have been acquired from the sale

  • This will top up the Spice DAO Treasury with maximum ETH. Provide a window of time (1 or 2 weeks) that allows $SPICE holders to redeem their tokens for ETH.

  • Write a smart contract that lets holders decide if they want to process redemptions or stay with the dao to keep building. There should essentially be a “burn” function where a user can burn any amount of spice they have and get their piece of the ETH. Unburnt amounts are considered those that want to keep building and are staying for the DAOs future.

  • At exclusive decision of the core team, 10% of treasury assets can be held back and not be included in the redemption calculation. Once the drop happens funds need to be available to support the community that buys the NFTs (mods, leaders, future ideas, etc.) incase too many spice holders want to leave. If the core team feels sentiment is fine and this isn’t needed then it’s not required.

Due to the sustained market downturn in 2022 there have been multiple precedents set of DAOs allowing holders to redeem their piece of the treasury. Examples include:

  • OLYMPUS DAO (although via reverse bonding)


  • Once the redemption contract is launched, give members two weeks to exercise an option for redemption.

  • Take a snapshot of all $SPICE holders before the NFT drop so there is no arbitrage opportunity for bad actors to accumulate $SPICE afterward just for the arb.

  • Launch a contract where snapshotted addresses can choose to either burn their $SPICE for their pro rata piece of the treasury, or do nothing ie. keep building.

  • Those that want to keep building are opting into future products of the DAO and benefit from the Phil Gelatt collab and anything else the DAO builds. Those that choose to leave get a fair exit.

  • Before redemption all non ETH and non SPICE or NFT assets should be swapped for ETH

  • The redemption math should be as follows:
    let assets = ETH in the treasury
    let circTokens = total supply of spice less any dao/treasury/unvested spice (essentially spice that is actually owned by end users)
    let fee = a number between 0.9 and 1 where 1 is no fee and 0.9 is a 10% fee (funds to stay within the dao to support the NFTs recently minted) incase too many people want to claim

redemptionAmount = (assets * fee) / circTokens

Spice DAO has a full-time Lead Dev so they can write the smart contract.
Within 4 weeks of the NFT drop, launch the contract and begin redemptions.

@dcfgod on twitter and SPICE holder

I support this proposal. Under present market conditions DAOs that are confident in their value proposition should be moving forward with their most engaged, active and dedicated community members. Long term builders vs short term speculators. As you say in your prop, “Those that want to keep building are opting in… Those that choose to leave get a fair exit.”

In 3 of the above precedents, distribution of funds represented a cease of the protocols functioning. For Olympus DAO, it’s a core protocol function; while Wonderland DAO had pivoted into a hedge-fund inspired organization.

Spice DAO does not have any similarity to the above, highly generalized attempts at a DeFi-native currency unpegged to the US Dollar – Spice DAO is an organic community organized and distributed over the internet with the SPICE token, representing the leverage of the Treasury’s capital.

Because this is a mere representation of that potential [in the form of capital], SPICE had historically traded significantly its Treasury’s funds value – the appeal went out to those who were committed to the cause and maybe wanted to participate in the governance flow which extends over several individuals who have a large stake or influence in the organization.

With the recent price depreciation, this is a terrible moment for everyone to distribute the funds, because the economic potential is being surrendered: most of the Spice DAO treasury is ETH, and seeing as there were governance flows with the notion of selling ETH at ~$3600 per, this would be quite a irresponsible matter of handling the Treasury if its purpose is to be redistributed to holders.

While I think this proposal is not presented with malintent, it is severely damaging to the community and I would advise everyone to vote NO on this proposal.

I would like to add that if the Spice DAO community/governance stakeholders feel the Treasury’s capital is at risk, we could collectively work on a strategy that fits the risk-appetite && the runway for the team to continue working.

responded to you in cord, pasta here

  1. its pretty valuable for holders taht like spice to stay

  2. [8:17 PM]

those that leave just get their piece of eth

  1. [8:18 PM]

those that stay retain the eth, up to 10% extra, get all of the value from the book ($3m+ value which is already 3x the entire market cap), potential 2nd drop from frank miller, and the animation result

  1. [8:19 PM]

insane value for stayers

  1. [8:19 PM]

and reasonable value for leavers