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Determine what language must be avoided to list on OpenSea #19

Open inverted-capital opened 2 years ago

inverted-capital commented 2 years ago

We hope that our Automatic Capital model means we wouldn't be saying anything prohibited anyway, but it would pay to know exactly what OpenSeas policy on NFT listings are. As well, we should have some examples of tokens that were delisted and we should understand why. I believe DAI based tokens must only offer membership, never profits or royalties.

This fits our model exactly anyway, but we should be familiar with the environment of OpenSea, as this is where we will list NVN tokens for purchase, which gains access to the Dreamcatcher Network (aka DAO).

A good starting point is here: https://www.theblockcrypto.com/post/120022/opensea-delists-dao-turtles-project-citing-financialization-concerns

inverted-capital commented 2 years ago

Here is some more light on Opensea's policy: https://www.twitlonger.com/show/n_1srre8s

TemperBead commented 2 years ago
  1. It appears DAO Turtle was thrown on based on two issues which violate Opensea's terms:
    1. First is whether it's a security. (See more on that below). The specific terms are that you cannot:
      1. Use the Service to carry out any financial activities subject to registration or licensing, including but not limited to creating, selling, or buying securities, commodities, options, or debt instruments;
      2. Use the Service to create, sell, or buy NFTs or other items that give owners rights to participate in an ICO or any securities offering, or that are redeemable for securities, commodities, or other financial instruments;
    2. The second is that it was offering a royalty. However, Opensea appear to have changed their terms recently. In this article in Oct 21, OpenSea's terms ban NFTs that “entitle owners to financial rewards.” Ie royalties. However, this has now been removed.
    3. I suspect that OpenSea and DAO Turtle came to some kind of arrangement and OpenSea dropped the 'financial rewards' clause, but I don't have evidence of that.
  2. That Oct 21 article is also interesting because of the main topic - that quotes FTX.US as saying that NFTs that provide royalties to anyone other than the artist/creator is uncomfortably close to securities. Now, that's just his opinion, and it stops short from saying they are securities, but worth watching.

I'll keep an eye out for how this progresses, we we could argue that for us the NFTs that remain with a user are definitely not securities, that our NFTs can attract 'financial rewards', but only through the use of the code/thing that underlies it, not because of the future effort of others as it was with DAO Turtle who were promising a game/future sales.

inverted-capital commented 2 years ago

Could you include this info into the Request for the Securities Guardian, somehow ? I think that would close this ticket ?