On Feb. 8, the Terra (LUNA) community voted in favor of spending $40 million from the network's community pool to fund a brand partnership between the Terra ecosystem and Major League Baseball's Washington Nationals.
The proposal, Prop 186, passed with a vote of 98.41 percent "yes," 1.06 percent "abstain," and 0.53 percent "no." Over 70 percent of the community voted, which activated the 40 percent quorum, or the minimum acceptable number of individuals with a vested interest in a company or organization needed to make a vote valid.
Voting in favor of this community funding opportunity, which was proposed by Terraform Labs founder Do Kwon, initiates the process of sending $40 million worth of UST, the network's stablecoin, to the Nationals franchise.
Terra is one of the largest DAOs in the cryptocurrency industry.— Washington Nationals (@Nationals) February 9, 2022
Terra has experienced a meteoric rise as a market leader.
𝐓𝐞𝐫𝐫𝐚 𝐢𝐬 𝐚 𝐠𝐫𝐨𝐮𝐧𝐝𝐛𝐫𝐞𝐚𝐤𝐢𝐧𝐠 𝐩𝐚𝐫𝐭𝐧𝐞𝐫 𝐨𝐟 𝐭𝐡𝐞 𝐖𝐚𝐬𝐡𝐢𝐧𝐠𝐭𝐨𝐧 𝐍𝐚𝐭𝐢𝐨𝐧𝐚𝐥𝐬.
🔗 // https://t.co/ESel7phptn pic.twitter.com/MzQ3UxzMpc
"Should the proposal pass, the 40 million UST will be distributed to a multi-sig (multiple signature wallet) controlled by a newly formed Guernsey Trust, the Terra Community Trust (TCT)," the proposal reads. "The TCT has been set up so that the Terra Community Pool (i.e., DAO) is the beneficiary of the trust, where the three trustees selected are beholden to acting on behalf of the will of the beneficiary -- the Terra Community Pool's governance outcomes in applicable cases such as this instance."
The proposal goes on to state that the Nationals will own the agreed upon $38.15 million worth of UST, and the franchise will sell the UST for USD through a reputable OTC trading firm. This process has been confirmed and the Nationals announced the partnership on Feb. 9.
Details About the Franchise and Partnership
Despite the secrecy involved in not naming the franchise outright, Kwon offered plenty of details about the proposed partnership.
"The franchise's most premium club and lounge will be rebranded as the Terra Club, and be emblazoned with the Terra logo and messaging," the proposal reads. "The [premium club and lounge] is also ideally situated on national TV broadcasts."
Details about the club in general (taken directly from the proposal):
Over the life of the partnership, the prior Club sponsor saw a 94% increase in fan likelihood to use their service compared to the general population.
34% of their fans are more likely to try a partner’s product/service, with that number doubling when the partner supports a cause, charity, or community initiative as part of the partnership.
The Club’s current account holders maintain a total market cap of over $1 trillion, including:
6 Fortune 100 Companies
8 Fortune 500 Companies
67% of Club Season Plan holders have an individual income greater than $125K
42% of Club Season Plan holders hold a post-graduate degree
The Club is the preferred year-round venue for high-profile, non-game day events
90% sell-through rate
Kwon also detailed many elements of the brand partnership, including the entitlement of Terra to the interior and exterior branding of the premium club and lounge, the venue signage (580 feet of LEDs, 5 rotating LED boards hosted on the exterior of the venue, etc.), and the television network advertisements (44 exposures per game, 400 x 850 size ad panel, etc.).
The franchise's digital team will produce a five-part video series about Terra and its digital ecosystem. Each video will be 30 to 60 seconds, and the videos will be co-promoted via the franchise's social media accounts.
Finally, the proposal offers hope for UST adoption in the venue, which creates utility and real-world adoption for the Terra network.
"Once the partnership is approved, the franchise will use all commercially reasonable efforts to implement UST as an accepted currency in venue transactions," the proposal indicates.
Why Partner With a Sports Team?
Do Kwon lists three reasons to approve the proposal: the narrative, dynamism, and the acceptance of DAO (Decentralized Autonomous Organization) governance.
The narrative is clear. With a major sports franchise partnership, Terra establishes itself as one of the premier cryptocurrency assets with real-world connections and utility. The goal for Terra has always been massive mainstream adoption, and posting the network's logo on a major sports franchise's entire advertisement network, including social media accounts, is encouraging to the community and gets people outside the Terra ecosystem talking.
"It stokes further exploration into the question that so many people ask themselves," Kwon writes. "Why should I care about crypto?"
When referring to dynamism, Kwon is speaking to Terra's aggressive and ambitious pursuit of popularizing decentralized money and, in turn, a decentralized economy.
15/ Finally, it allows DAO governance to reach its full potential. With the TCT, #LUNAtics will extend their reach beyond the confines of the DeFi ecosystem alone, expanding access to decentralized, censorship-resistant money around the world.— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) February 1, 2022
The world of cryptocurrency moves fast. Terra must meet the demands of a hyper-competitive market. And successfully aligning itself with a major sports franchise does just that.
"Branding Terra to a massive, untouched market of potential users unlocks future synergies that would otherwise not be available," the proposal reads. "The network effects take care of the rest."
And finally, Kwon wants DAO governance to meet its full potential, which means taking risks and inspiring creativity.
DAOs have the potential to significantly alter the financial landscape, and this proposal speaks to that potential.
"Moving forward, the hope is that unveiling governance proposals such as this will broaden the scope of how the Terra community considers and realizes the use of DAO capital," Kwon writes.
Speculation over which franchise (now known to be the Washington Nationals) Do Kwon was talking about in his community funding proposal started almost immediately.
Danny Nelson of CoinDesk suggested the Washington Nationals make sense due to the language within the proposal itself. Nationals Park is equipped to fill the branding requirements outlined by Kwon, and only two teams refer to their "season ticket holders" as "season plan holders" (terminology the proposal uses): the Nationals and Baltimore Orioles. He was correct in that suggestion.
This was, of course, pure speculation at the time. Other possibilities included:
- The Dallas Mavericks, Mark Cuban is an adamant cryptocurrency supporter and is aware of the Terra ecosystem (he even announced the Mavericks would accept Bitcoin for tickets and merchandise as far back as April 2019)
- The Los Angeles Lakers, the franchise recently renamed Staples Center to Crypto.com Arena in a deal worth $700 million
- The Miami Heat, the franchise recently renamed its stadium FTX Arena in a deal worth $135 million
- The Washington Wizards, Ted Leonsis (former senior executive with America Online, or AOL) has called blockchain technology the birth of a new internet and is pro cryptocurrency