On Hold - Creation of 'EthLizard Approval' Project Rating Structure

[NOTE: Based on feedback from Dupree, some of the content here is included in the ongoing work of the Team and expectations of the Council. I am submitting for transparency for the rest of the DAO and to generate additional feedback for the Council’s consideration once they are installed.]

ABSTRACT
For decades, organizations like the International Organization for Standardization (ISO) and International Accreditation Forum (IAF) have served the physical and virtual worlds by providing accreditation methods for organizations. With the advent of web3, decentralization is the standard and old structures are becoming obsolete. While most of the changes web3 technology promises are good, the pace of change is rapid, the barriers to entry are small, and potential profitability is high. Because of this, many project founders take advantage of trust, fear, or greed to scam or ‘rug’ unsuspecting investors. This LIP ensures that the EthLizard community provides a service of evaluating, vetting, and providing a final stamp of ‘EthLizard Approved’ for emerging GameFi projects to prevent this.

Main Changes

  1. The EthLizards protocol will implement a process and checklist to determine whether to recommend emerging GameFi projects to retail investors.

  2. As new opportunities are provided to the DAO, the council would use this process to make a recommendation on whether the project meets reasonable standards for retail investors. Ratings of ‘EthLizard Approved’, ‘EthLizard Unsure’, or ‘EthLizard Rejected’ would be applied to each project.

  3. Implementation of a ratings page would be performed by the EthLizards team on the website including summary information of each evaluated project, an overall rating, and a place for rationale regarding the reason for the rating.

  4. Once a given evaluation is complete, EthLizards would publish recommendations for specific projects via the website and other channels as appropriate, allowing for appropriate time for any NDAs to run their course.

DiscordID
Animositas#5501

Example

  1. Kieran hears about project ‘Extremely Powerful Iguanas Combat’ (EPIC)
  2. Council vets EPIC based on our predefined criteria, the checklist
  3. EthLizards enter a non-disclosed position with EPIC for $250K in pre-seed
  4. On public announcement of EPIC, EthLizards releases information including ‘EthLizard Approved’ designation publicly
  5. Profit

Rationale

  1. With vetting of potential pre-seed and seed investments by the Council and EthLizard DAO, minimal additional effort would be expended to publicize our findings.
  2. Transparency in the web3 space is essential and DAOs like EthLizards should demonstrate how this can be accomplished. This increases the brand strength via recognition of the EthLizards community as a trusted source in GameFi.
  3. Quality of projects submitted to the DAO for a formal evaluation would be higher quality knowing that if they are found lacking, they would be openly shared with the GameFi community as such.
  4. Retail investors and gamers over time would shift to using ‘EthLizard Approved’ as a standard with confidence that due diligence has been performed by a professional team. Specific returns could of course not be provided but investors could have confidence that a project is not a rug. This will continue to develop broader user adoption of web3 technology while expanding the EthLizard brand.

Timeline
In parallel to the first seed investments being decided, the checklist and process for specific considerations should be developed and implemented. Website adjustments, a public discord channel, and Twitter templates can be developed quickly to share the evaluations.

Cost

  1. Estimated at 3 man-days for development of the template for the evaluation (also serves dual purpose for sharing information within the council for funding decisions).
  2. Estimated 5 man-days for development of website changes, discord channel setup and Twitter templates.

[Community members might volunteer to assist with some or all activities here as well.]

KPI

  1. User hits/views of recommendations (i.e. discord, Twitter and website combined) should be measured to determine effectiveness.
  2. If projects begin requesting evaluation for EthLizard Approval within 2 years of implementation while not seeking/expecting EthLizards treasury funding, the proposal will be deemed to have been successful. [This evaluates if we’ve become a true standard in the space.]

Miscellaneous
Potential artwork for various ratings can be derived from existing legendary lizards shown below or via three of the new 1/1 auction lizards still to be minted.
EthLizard Ratings

The EthLizard recommendation scale would come with the same caveats as other NRSROs (nationally recognized statistical rating organizations). The ratings are not financial advice and provide no feedback for specific token prices, buy/sell ratings, or market timing considerations. They are intended to speak to the validity of the project and likely ability of the development team to deliver on the planned scope.

Potential Future Expansion
Based on community feedback to this LIP, a possible extension LIP could be developed to allow more community involvement in evaluating projects that are not under NDA. The same rating system above could be used for community members or outsiders to request an evaluation of projects. All EthLizards (not limited to the Council) could then provide feedback for a recommendation. Leveraging the knowledge of the EthLizard family that we are applying for our own for degen/investing purposes anyway is a tremendous service to the broader GameFi community.

Thank you to many community members for input or feedback into creating this proposal. In particular Scoriox, Lizident.eth (Bowser), KakashiSama, Jeff, Dupree, Illuanor, and Brian the Brave.

5 Likes

Awesome write up @Animositas. You have done a great job and gotten a lot of good feedback from DAO members and implemented their requested revisions.

Based on feedback from the governance-chat channel, it seems that some adjustments are needed to keep it in line council responsibilities and avoid any issues with regulatory bodies.

Based on Kieran’s concern about potential regulatory risk being introduced, we will pause further discussions about this proposal. The Council will have to take decisions about what level of detail they release regarding investments that have been evaluated to both the DAO and public.