Declaration of the DAO

This is the initial letter sent by the DAO members to the Particle team. It represents the entire history of comments circulating in the Particle forum since the outset of this project and is supported with comments from the larger community. While not exhaustive, it helps capture the sentiment the broad community has vocalized since the beginning of this project.

To the Particle Foundation and Particle LLC. Board of Directors:

The Particle Team has defined its mission as “[the acquisition of] some of the most important trophy masterpieces in the world and to put them in the hands of the wider community” with a vision to “leverage blockchain and NFTs to radically change the way people own, collect, experience, and ultimately enjoy art.” It is important to note that the title of Particle’s white paper starts with the goal of “Democratizing Ownership of Fine Art Masterpieces” as do many of the public statements and podcasts that brought this community together.

The Community has stated, time and again, that they were drawn to the Particle project by Particle’s vision, its mission, the quality of the first acquisition, the cornerstone artist, and the credentials of the leadership team.

In a world where decentralized, cryptographic edge-solutions are rapidly coming to market, it is clear that the social contract between suppliers and customers is redrawing the lines of many existing business and societal norms. Crypto-assets represent more, in-practice, than access; they represent security, trust, reduced friction, and self-sovereignty. The right to exist because you exist, with your proofs built in. Rights don’t need to be granted, they can be built; through protocols, networks, and applications. Trust does not need to be centrally certified, it can be cryptographically secured.

We have observed that these revolutionary constructs have been interpreted differently by the Particle team and by the Community. This is common in our transition from web2 to web3 which represents a rewriting of many existing social contracts. Particle’s ideas have been executed in many of the “old world frameworks” with one-sided partiality, a top-down leadership flow, and profit-center mechanics. The rules and terms protect the business with little regard for the rights and best-interests of the artists or the community. It is yet to be seen if this is intentional or by accident, but it has certainly caused confusion, disappointment, frustration, lack of confidence, and ultimately a loss of value in the assets that were purchased. In the past few months, Particle has managed to neglect the best interest of your two most important assets, the Community and the Artist, and in so doing have damaged the credibility and good-faith of the brand.

The foundation of this letter is based on the belief that:

  1. Ownership is not a subjective term and should be used to describe only its intended purpose
  2. Building trust in a trust-less system relies on access, communication, and transparency
  3. An ecosystem is built on a set of natural rules, an environment in which to interact, and a community of participants
  4. Appreciating value comes from the appreciating fulfillment of needs or desires and is supported by utility, function, elegance, stability, scarcity, assets, and design
  5. Thoughtful ideas require thoughtful planning, innovation requires agility, and current failures present opportunities for future success

Thus, we have attempted to provide a rough compilation of core concerns voiced by the Particle Community so that it is abundantly clear why we have come together to parlay. It is as much frustration in execution as it is belief in the vision that has brought this group together. It is ironic that the cornerstone piece, “Love is in the Air” by Banksy has come to represent our Community’s struggle against authority, subversion, propaganda, and profiteering in much the same way as the Artist’s intended message. While most of Us have come to believe that the intent of the Founders was well-intentioned, intent is nothing without follow-through.

Our first concern is that the current structure provides a limited and potentially harmful lack of defined rights to the Particle Community in the way of protection, ownership, security, governance, transparency, asset backing, and trust. This is the soul, the protocol, and the underlying value of the project and what should drive value for any representative NFT. While we appreciate speculation and the buzz surrounding so many projects today, we believe that lasting NFT projects of the future require more than hyperbole to build intrinsic value.

The second concern is around the inclusion and stewardship of the art. We believe that to support Art we must also support the Artist. To connect with Art we must connect with the Artist. When creating a collection, exposing it, or otherwise leveraging intellectual property, the creator should benefit, be considered, and ideally be included in that process from the beginning. We should be participating in the art market as partners, not wielding it solely for profit or gain.

The third concern is the lack of transparency. From this vantage point, there appears to be a lack of business resources, fiscal planning, fiduciary structure, and value proposition included in the launch of this product. While this may not be the case, line of sight is critical to keeping people engaged, interested, and excited.

This Community deserves first-look advantage, a stake in the entire ecosystem, and the ability to actively participate in both the Art and the future of this project directly. This is a nascent environment, full of smart and driven individuals. If we don’t find the drive to act quickly, someone else will. If there is one good thing that has come out of this project it is that the Community feels empowered to stand up and formally express itself. At this point, what else do we have to lose?

We feel evangelized to act on our own behalf by organizing our thoughts, resources, and minds toward a common vision. We believe that this project has the potential for change. We believe in the vision the Particle Team has presented. Now we must find out if everyone has the drive to push together to regain the momentum and passion with which this project started.

At this point, Particle holds all the keys, own all the locks, and have closed all the doors. You have neglected the Community in pursuit of your goals and many of us feel lied to and deceived. Without the Community, the halls will surely remain empty, the brand will be worthless, and the dream will be over. All that will be left will be a peaceful public protest and the antithesis of the vision that brought us here: a locked up Fine Art Masterpiece, far from public view, and owned by no one.

The Foundation, the Particle Corporation, and the Community must support each other equally. The nature of that relationship must be codified in canon with the Community at the center.

Thank you for your taking the time to hear these points and for your openness to constructive solutions.

Truthfully,

-The DAO

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I admit there has been a clash of cultures in this attempted “DAO transformation” and the resultant confusion, frustrations etc. I’m not convinced that is the cause of the LIITA price drop though. I really think it was silly for anyone to think the price would stay pegged even with no option to resale or a promise of investment profits.

I hope the new true ownership model is a solid step in the direction of fixing this and that this can be a new start for community members who are interested in participating. I don’t totally follow how artists are being cut out but I’m sure the DAO can work out some very cool and compelling on-chain royalties setup for future artists.

The old attempt to have all of these entities operate like a single company is dead and it was probably destined to fail. The more I learn of DAOs and their actual behind-the-scenes operations the more I see distinct entities with shared and overlapping incentives, not monolithic business units. The new direction and the only one that has any chance of working practically or legally is the new three distinct org units approach. The protocol is open to any community but will certainly cater to the Particle community. The foundation in the same way provides legal physical custody to any DAO. The community gets to be the first and prioritized consumer/consumer of these tools and resources and shares in the profits of the ecosystem via a future token. If we dig deeper beyond the DAO hype I think we will find this is actually how the other tokenized communities operate (ENS, bDAO, Maker, etc). Just a few of my thoughts on the matter.

I think it was silly for anyone to think the price would stay pegged when there was no ownership title on the artwork. A picture of a house has a different value than a title to a house that you can transfer to someone else in exchange for value. Even if the homeowner posted the picture on social media and then told anyone who bought a picture they could suggest changes to how the property is managed, it would not be the same as holding the title.

We felt the artist was being cut out or unfairly represented because we 1) did not have permission to use their trademark/copyright in the creation of the LIITA token NFT 2) because they don’t receive royalties on their artwork for any of the commercial activities Particle is engaging in and 3) because the model that has been proposed here is antithetical to the message of the painting.

The group that wrote this document felt that a DAO operating in this ecosystem should work to be better and should push Particle to be better. To provide a conduit to artists and their estates. To help change the world for creators. And make a change in the world that went beyond just profiteering, grifting, and centralized control.

We know this. But the DAO that Particle “created” is not separate and distinct. We presented a model for how this can be deployed. Our version of the DAO is currently operational (despite not being recognized by Particle). It is hypocritical to have Particle drafting and presenting the DAO materials, tie it to a Foundation we have no voice in, and to then call it independent. This is not an independent DAO model as it stands today.

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I think it was silly for anyone to think the price would stay pegged when there was no ownership title on the artwork. A picture of a house has a different value than a title to a house that you can transfer to someone else in exchange for value.

There is a nuance there. Whether the LIITA’s title was 100% imbued in the Particles or not, it would have not changed the fact that it could not be sold, and the proceeds not distributed. In practice, it is like if the title was 100% imbued as the foundation through the DAO will do whatever it is instructed with relation to the painting. The fact that there was no financial gain I believe is what contributed (in part) to the price drop.

Regarding artists being cut out the intent is to have artists participate. When Particle cannot reach out to them (e.g. Banksy) that is much more challenging. The goal once again was not to sell the image, but ownership in the painting –this means that the copyright does not come into play. As Particle has seen that people want to use the painting there needs to be a reevaluation of the fair use argument, followed by an assessment of whether we want to truly sell the rights to the images or not. I am very skeptical that any traditional artist of the caliber Particle and its community seeks to add to the collection would give those up or license them for that matter.

This is a decentralised decision making structure that allows for the governance of the works in the collection. When the time comes for an umbrella token to be released, then access to a treasury etc. can be organised. We could actually create a treasury now and have that be managed by the community.

Good morning @garold. I don’t believe that a treasury is necessary right now. I’ve outlined my thoughts under the Mission Statement thread.

I think the haste with which a vocal minority would like to operate in is premature. Let’s sort out the fundamentals. The fundamentals are not nitpicking on mission statements, working, and who said what when. The fundamental is a governance process that enables us Particle owners to make proposals on anything surrounding the art. Loic and Charlotte would be those the community would look at the most for proposals, but in essence anyone should be able to (naturally, checks, balances, and a process for proposals to get put live for discussion needs to happen beforehand).

The community can come together via Discord and Discourse and put together proposals outside of the standard “governing of the art pieces themselves”, and ask for funds from Foudnation etc. if its in line with the promotion of the ecosystem (PARTICLE ECOSYSTEM) as a whole. We would vote on this and the Foundation would enact. I don’t see why it wouldn’t right @garold? What are your thoughts @0xJustice.eth?

I don’t see the point in any of this being completely separate to Particle “HQ”'s mission. Just go and start a separate group like “Genesis” seems to have done and operate in a vacuum there. I am being pragmatic here and the most hopeful for the future!

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I’m sorry that you feel that the statements that have been drafted are representative of a vocal minority. During the last few months almost 30 active members have passionately spent time, energy, and resources developing a model for operating a community driven organization to work alongside Particle. All these members raised their hands to participate in the Genesis team and not one person who put in an application was ever denied access to our repository of produced materials or a voice in the materials produced.

It’s unfortunate that without understanding or talking to us that you have passed judgement that we should continue to operate in a vacuum. Without reviewing the comprehensive documentation we’ve produced for the project along with the research, planning, and diversity of experts participating in Genesis why you would assume that anything we’ve done is with haste? It is just as plausible to say that Particle has acted hastily throughout this process without a clear roadmap, fiduciary structure, transparency, and community focus. That they have continued to press forward while ignoring the concerns that have been brought forth across the project.

We have painstakingly documented community comments from the Discord and tried to remain impartial to any one issue, but rather to collect every concern and synthesize a way forward that includes the Community as a central pillar in the ecosystem. To treat us as owners rather than as passive participants and to recognize that trust is the most important thing to a successful relationship between supplier and customer.

The checks and balances you speak of for the Art already exist within the ecosystem. Particle, the LIITA and the Foundation are already completely controlled by a corporate “vocal minority” which represents the executive team at Particle and a silent, anonymous investor group. They do not need us to make decisions at this time. Any decisions we do push for with “our” painting are not binding. Those are things that should be clarified properly and mapped, rather than glossed over.

It appears your argument is to continue to put all your trust and faith in the Particle Team and to marginalize the community members who care about the art, the artist, and each other. What is the reason for that? You don’t believe we have aligned interests? Or you believe we are not capable? Or is it something else?

What has given you this level of faith in the Particle leadership so far?
Was it clear when the community put up ~$13MM to pay for these Particles that those funds would be redistributed back to the investors rather than used to invest in the ecosystem and returning value to us? That the treasury to operate this ecosystem would be completely empty at the end of a crowdfunded raise of capital? Would you consider that responsible use of resources?

When the first exhibition was put up in NY and the Particle team closed the exhibit 2 days early without notice, would you consider that fulfilling the promise of experiencing the art?

When the whitepaper stated Democratized Ownership as the foundation of the LIITA tokens, did you feel that the LIITA structure fulfilled the dream of “owning a Banksy”?

It is unfortunate that you feel like we have operated in a vacuum and I am sorry if you felt excluded. As mentioned, we are focused on community feedback, concerns, suggestions, and participation. We welcome your thoughts and hope to fold them into actionable next steps. Hopefully we can persuade you to align with helping us refine the statements we’ve put out and to help Unite the Community together.

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For those relative new into the community, or have been on the sidelines, it would be really great to get a roundup and clear understanding of exactly where we are with ‘ownership’, structure and opportunities in a super clear way. There’s a lot of ‘fluff’ around mission, etc. But what are the fundamentals of now, what’s the short, mid and long term roadmap, what’s the super honest short description of how we got here?
Maybe there’s a call we could put in to go through this seperate to the weekly community call as a round up?

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If you would like to set up a call, please just tag me in the main Discord. “@cimply”. Will be happy to answer any questions, and provide an overview or background, and fill in what my understanding is on where things stand. I’ll keep an eye out for your ping.