MetaCamp, an unconference event organized by MetaCartel in Costa Rica, has taken a $30,000 DAI Community-Backed Credit Line on Debt DAO to finance event production in the 3 months leading up to it. Interestingly, the lender was another MetaCartel community members with a 0% interest rate even though there are no tokens put up as collateral. Instead the lender is being paid with perks at MetaCamp resort in Costa Rica and the event organizer, Yalor.eth, has tied the debt to his public ENS thereby backing it with his personal reputation within the MetaCartel community.
Welcome to MetaCamp!
MetaCamp started as an idea in the aftermath of MCON 2021, bubbling first up in the MetaCartel forums, inspired by the connections and collaborations that came about at that first event in Denver. The community was seeking to find more ways to strengthen the connections of their network and excited by the possibilities of getting out into nature for a few weeks. The goal of this event is to share the groups lived experience of DAO’s in conversations and collaboration. DAO's are not just communities, they are living and feeling groups of amazing humans that benefit massively from these intimate gatherings focused on creativity, wellness and community alignment, this is an opportunity to share the designs and creativity of like minded organizations, and collaborate with people from all over the world. Costa Rica rose to the top of the list due to it’s lush tropical environment, abundance of nature and wildlife, and the easy to reach travel opportunities afforded by direct flights from Miami, New York, and Dallas, so with help from a handful of motivated organizers, led by Yalor Mewn the go-to event guy from MetaCartel they launched into planning.
Troubles In Paradise
MetaCamp is facing the same issues most event organizers face. Unpredictable ticket sales, last minute sponsors, and lack of upfront capital to secure venues and vendors. They also face issues many unofficial communities and formal DAOs face, a lack of access to fundamental banking services like loans.
By lending these funds for 90 days it has taken the pressure of having to focus on selling out the event and allows the focus to shift towards making the event even better for attendees, organizing experiences further in advance, thereby lower the costs of each service, and giving greater negotiation power to the organizers.
How To Create Community-Backed Credit?
The idea of “Community-Backed Credit” first got pitched to Debt DAO at Devcon Bogota by @RenegadeRegen from the Cosmos Community. It stemmed from the classic problem of “how to fund open-source public goods that benefit the entire ecosystem but is not directly profitable itself?” With Community-Backed Credit, the community at large puts up the collateral for an individual member to take out a loan, spend it on R&D, events, product development, or some other value-add activity. Then the member either pays back the debt from the direct proceeds of their activity and community gets its collateral back or the community expects the indirect value created by the member outweighs the collateral put up by the whole community and give the original collateral to the lender.
We took this concept from the Cosmos community and are deploying it on Ethereum mainnet with MetaCartel as the initial community to get credit for MetaCamp.
F is for friends that do things together!
Borrowing from your friends is so much better than trying to go to banks or financial institutions. Even better, it lets your friends support you while you get to give them special perks for the service they are supporting. This means non-transactional, micro-solidarity practices that focus more on emotional and cultural connections between community members instead of shared financial incentives e.g. ”ape stronk. numba go up”. This is exactly what MetaCamp was created to do too.
This also opens up new ways for people to participate and join the MetaCartel fam. While not officially a holder of DAO shares, Kiba has been MC-adjacent since 2019 and is friends with most of the community. So while Kiba might not be a DAO member, he can still provide value to my friends and their community. We are also ecstatic at the opportunity to work together which we’ve never had the pleasure to do before.
The main reason MetaCamp and Yalor decided to get their 0% interest loan from Kiba, instead of a competing 0% offer from the Union.Finance team, is to engender deeper connections between MetaCartel community members. “Because Kiba has been a long time contributor to MetaCartel initiatives. I’ve seen more of Kiba then I’ve ever seen of them 🙂 So loyalty and trust” Yalor responded when Kiba asked him why he didn’t take Union’s offer which he received first.
Getting Community-Backed Credit with Debt DAO
Debt DAO has built a fully permissionless, onchain credit marketplace where DAOs and other onchain communities can get credit anonymously by trustlessly collateralizing their revenue with a Spigot. Anyone can decide they want to create a line of credit, like an on-chain credit card, and define the terms they want to borrow on - 1. % of revenue to split with lenders to repay their debt 2. % of collateral needed 3. how long they want to borrow for.
Based on the terms and collateral provided by borrowers, anyone can price the risk and propose a deal to the borrower with the interest rate, token, and amount of tokens that the lender is willing to lend the borrower based on their terms. Multiple lenders can offer different rates and amounts to borrowers and borrowers can pick and choose from one or all of them to accept.
With our focus on servicing DAOs and other underserved onchain communities plus our years of experience working within them, we have designed our UX to streamline clunky DAO governance processes to enable daoists to do more. Most importantly, debtdao.finance has first class support for Gnosis Safe wallets. For the MetaCamp deal, Yalor did everything entirely through the Safe app interface!
DAO Revenue As Collateral
Yalor and MetaCamp offered to hook up their ticket sales to a Spigot contract to trustlessly collateralize their cash flows for lenders. Unfortunately, their revenue is on Gnosis Chain using Unlock Protocol where Debt DAO isn’t deployed yet otherwise the revenues from MetaCamp and other events organized would secure his loan to lenders and automatically repay his debt. The Debt DAO team is researching how to integrate Unlock Protocol with our Spigot so MetaCamp and any other community can automatically repay their debt as sales occur on Unlock when we deploy to Gnosis Chain.
DAO Assets As Collateral
In addition to attaching his revenue on Unlock protocol and ENS name to the debt, Yalor also offered to put up 20 ETH as collateral from MetaCartel’s events budget multisig. At current prices ($1,600/ETH) that would fully collateralize the loan. Unfortunately these funds are also on Gnosis Chain and lien of credit is. taking place on mainnet.
DAO Reputation As Collateral
Yalor is a prominent community member of the Ethereum ecosystem as well as a member and delegate to DAO’s like MetaCartel, Moloch, Gitcoin, RaidGuild, and ENS. Yalor.eth and its address have been heavily active for nearly 3 years with over 2,000 transactions on mainnet, 1,200 on Gnosis Chain, and 400 on Polygon. Quite an impressive record including contributions to DAOs like MetaCartel, Gitcoin, Bankless, DAOHaus, SPORK and other prominent communities.
On top of the reputational risk of defaulting on-chain, the line of credit is due on the last day of the conference. If Yalor defaults, he can be publicly shamed at his own event in front his friends for not paying back the money he used to throw the event we’re all at! There is, of course, the threat of physical violence too 😈 (lol jk???)
MetaCamp’s Final Terms Accepted By Lenders
For the lender, Kiba, the reputational risk was sufficient to ensure Yalor would repay the loan. And at the very least Kiba gets a much better experience at MetaCamp. Unless Yalor completely rugpulls and takes the money and doesn’t throw the conference but that obviously increases the detriment to his reputation within MetaCartel even more.
100% to Lender
Min. Collateral Ratio
Misc. Lender Perks
Vacation in Paradise
In return for charging 0% interest on the loan, Kiba will receive special perks onsite at the MetaCamp event. He gets free meals for the entire trip by a private chef at the beach resort plus unlimited activities like surfboarding lessons or horseback riding through the forest. A pretty great deal for a short 3 month line of credit.
Apply to Join MetaCamp!!!
May 6-14th in Costa Rica