One article to understand the Arbitrum community’s proposal to establish a Memecoin fund

Author: 0xkawz; Compiler: Deng Tong, Golden Finance

WIP will launch a memecoin fund independent of Arbitrum DAO. The fund will be responsible for selecting, participating in, helping the development of memecoin projects, and Fostering a memecoin-friendly culture in Arbitrum.

Overview

It is undeniable that meme coins bring new liquidity, users, and attention to their respective blockchains. This in turn stress-tests the dApp, the chain itself, and most importantly, brings new users and attention to real, practical projects.

Every day, we see headlines about how the Solana memecoin went from 0 to 100 million+ FDV in a matter of days. A) Brings retail investors, B) Provides more leverage for the Solana DeFi protocol, utility projects, etc.

The Arbitrum DAO has no reason not to try to stimulate memecoin initiatives. While one might think Arbitrum is “forcing acceptance” of memecoin, understand that every other blockchain is now doing the same. Avax’s announcement of a memecoin fund was met with some initial pushback, but there’s no denying that the fund inspired more memecoins, more eyes, and more attention on Avax.

While DeFi protocols and real utility projects are important to the chain, without new users and retail investors With friendly attention, growth will stagnate and as the saying goes, builders go where the users are.

Purpose

While one can argue how successful the $ARB funding has been for the Arbitrum protocol, it is difficult to argue that Solana and more recently BASE have attracted got all the attention.

Arbitrum has the highest TVL of any L2 and has some, if not the best, U/X. However, DAU has stagnated and the protocol has struggled to attract new users.

We are seeing famous VCs and even successful DAO and NFT projects investing in memecoin.

Memecoin has been experimenting with Arbitrum since its inception, but the defining "DeFi chain" narrative is entrenched and drastic measures will be taken not to eliminate but to include other categories.

In short, The motive of the memecoin fund is to help the entire Arbitrum ecosystem. Attract attention, new users, more chain usage, more DeFi activity, and more.

Basic principles

1. Aligned with Ethereum: Use and pay more attention to Arbitrum and Ethereum. Take Arbitrum further.

2. Sustainable Development: The main focus of the memecoin fund will be to create and support the memecoin/left curve ecosystem within Arbitrum. The long-term mission should be to break the narrative that Arbitrum is a DeFi-specific chain.

3. Safety: All memecoin fund contributors are thoroughly vetted and ensured alignment with Arbitrum. All funds are stored in multi-signatures with timely and transparent reporting.

4. Neutral and open: Memecoin fund investors are not allowed to invest in projects in which the fund participates. The fund must review every memecoin that passes initial conditions and standards.

Rules

Memecoin Fund Structure (WIP - requires more thought);

1. The five board members do not participate in the daily activities and decision-making of the memecoin fund. They are trusted builders within the Arbitrum community and ecosystem.

2. Three collaborators running the memecoin fund;

3. 5/9 multi-signature.

• Collaborators and board members are not allowed to invest in funding of tokens. If this is discovered, the relevant person will be automatically removed from the fund immediately.

• Collaborators must demonstrate alignment with Arbitrum from early on.

Preliminary review criteria (passing this criteria does not guarantee investment or access to funds) (WIP - requires further consideration).

Much of this is taken from the AVAX Fund’s criteria.

1. Fair launch

• Community generation Ownership of the currency contract is relinquished.

• Initial liquidity is burned or fully locked.

• Initially adopted whale protection measures such as purchase limits per address.

• No assignments are reserved for teams.

• No tax is payable anytime the token exists.

2. Security

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The contract must be verified.

• Audits, whether by professionals, the community itself, or through the use of time-tested and widely accepted contracts, should be conducted by teams.

• The address of the contract creator should undergo community due diligence.

• Automated tools such as DexScreener should be used and no issues need to be reported.

3. Large number of holders

• At least 1500 holders
  

4. Control the whale

• Whales should not make up a high percentage of the supply.
  

5. Liquidity configuration

• At the time of funding review, liquidity needs to be destroyed (preferred) or locked for at least 6 months.

6. Liquidity

• At least US$200,000 in working capital.
  

7. Life cycle

• The token should exist for at least 30 days.

8. Market value

• < p>The market value should be at least US$1 million.

9. Daily trading volume

• Trading volume should be >$100,000 at least one week prior to funding review.

Supporting tokens through funds (WIP - requires more thought)

Once collaborators agree on supported tokens, they will It was submitted to the board for review on Monday. If you agree to invest:

• Fund investment and TWAP are between US$50,000 and US$150,000 between;

• The fund may choose to increase liquidity by US$50,000 to US$150,000.

The fund must also provide a dedicated graphic designer/video renderer for the project.

This fund does not allow day trading. Once an investment decision is agreed upon, the investment must be held for three months. At the end of three months, the partners can consider A) discharging the assets or B) continuing for another three months.

Funds cannot announce investments until TWAP ends. Funds must announce investments after the TWAP closes.

Implementation Steps (WIP - requires more thought)

• Election committee;

• Elect partners;

• Fund information;

• Find 10 graphic designers/video renderers ready to help;

• Start investing.

Timeline (WIP - requires more thought)

Funds should be spread for at least for 6 months.  

Afterwards, the Abitrum DAO can vote to increase funds or terminate the memecoin fund entirely. If the fund is dissolved, any open assets will be converted to $ARB and sent back to the Arbitrum DAO. The 6-month term should be a relatively low-risk way to test a fund's interest and early success.

Total Cost

• $1,500 worth of $ARB per month per board member;

• $5,000 worth of $ARB per month per collaborator;

• Each graphic designer receives $3,000 in ARB value per month (if they are actively working on a project);

• $3,000,000 worth of $ARB is used to start the fund (initial 6 month distribution).

Total Cost: $3,315,000 worth of $ARB.

To be considered, additional funds ($1-2M worth of ARB) - are reserved as grants to the Arbitrum DeFi protocol to incorporate funded memecoins into their products. This bridges the memecoin <> DeFi landscape.