It’s not every day that a DAO votes on a multi-year, $40 million protocol spend on a sports sponsorship. However, Terra holders have been voting on just that this week in what appears to be a first-of-its-kind event.
Do Kwon, creator of Terraform Labs, made a new proposal to the Terra community this week, allowing LUNA holders to vote on a new five-year, $38.5M partnership with an unknown team across one of the United States’ “big four” sports leagues (MLB, NBA, NFL, NHL). It appears to be the first time in the history of sports sponsorship that a DAO (or similarly structured entity) has had a collective vote to engage in a sponsorship.
The idea is the second of three big announcements made as part of Terra’s newest campaign, dubbed “[REDACTED].”
The first phase of the three-part announcement, Terra’s ‘Luna Foundation Guard,’ or LFG, was made just a few weeks ago.
The proposed funding is from the community pool, and the proposal itself is built on a few primary pieces: the first is the narrative, the idea that the premier decentralized stablecoin machine gaining this level of sponsorship is representative of a larger “DeFi to the masses” campaign. The second is the notion that being brave is primarily for the sake of advancement. The third rationale, arguably, is best stated in the proposal itself: “stimulating DAO governance inventiveness to fulfill its full potential.”
The NBA is the most likely target, with the MLB and NHL also being possibilities, and the NFL has a non-zero but low probability of showcasing the franchise involved in this arrangement.
The plan has sparked a heated debate regarding the degree to which the Terra network and the Terraform Labs team should be centralized. The Terraform Labs wallet has a significant amount of LUNA, but Do Kwon and the TFL team have been doxxed, giving the community cause to believe that Kwon’s vision of full decentralization is well on its way.
Kwon has mentioned a ‘killswitch,’ sometimes known as ‘Armageddon,’ that can switch the Terra ecosystem into a fully-decentralized mode with no Terraform Labs attachment required. It is widely assumed that any remaining funds in the TFL, as mentioned earlier, will be burned once that mode is activated. While Terra isn’t “as decentralized” as other participants in the sector right now, it’s certainly on its way — and it’ll be interesting to see how decisions like this one affect this decentralization in the long term.