It’s not often that we see a DAO vote on a multi-year, $40M protocol spend on a sports sponsorship. Terra holders have been voting on just that this week, however, in what’s seemingly a first-of-its-kind event.
Terraform Labs founder Do Kwon presented a new proposal to the Terra community this week, allowing LUNA holders to vote on a new five-year, $38.5M sponsorship with an unnamed team across one of the ‘big four’ sports leagues in the U.S. (MLB, NBA, NFL, NHL). It is seemingly the first time in sports sponsorship history that a DAO (or similarly structured organization) has had a collective vote to engage in a sponsorship.
The proposal is the second of three major announcements that have fallen under the latest campaign for Terra, referred to as “[REDACTED].”
Terra & It’s Three Serialized Announcements… What We Know
The first piece of the three-part announcement came just a couple weeks ago, with Terra’s ‘Luna Foundation Guard,’ or LFG, announcement.
The proposed funding is from the community pool, and the proposal itself pillars it’s pitch on a few major pieces: the first being the narrative, the idea that the leading decentralized stablecoin machine securing a sponsorship of this pedigree is emblematic of a broader “DeFi to the masses” movement. The second being the idea that being bold is essentially for growth. And the final justification is arguably best stated in the proposal itself: “inspiring the creativity of DAO governance to realize its full potential.”
A club in the NBA is the likeliest target, with the MLB and NHL certainly being possibilities, and the NFL being a non-zero, but slim chance of featuring the team that this deal is with.
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Luna is the mechanic behind the UST stablecoin, and now looks to chew a big piece of exposure with the latest sports sponsorship deal. | Source: LUNA-USD on TradingView.com
The proposal has led to a heightened debate about the degree of centralization between the Terra network and the Terraform Labs team. The Terraform Labs wallet holds a substantial amount of LUNA, however Do Kwon and the TFL team has been doxxed, giving the community strong reason to believe that Kwon’s eventuality of full decentralization is a vision well on it’s way.
Kwon has mentioned a ‘killswitch,’ commonly known as ‘Armageddon,’ that can send the Terra ecosystem into a fully-decentralized mode with no attachment from Terraform Labs required. It’s generally believed that these remaining funds in the aforementioned TFL wallet will be burned once that mode is in place. While today’s state of Terra might not be “as decentralized” as other players in the space, it’s clearly on it’s way – and it will be interesting to see how moves like this one impact this decentralization in the long run.
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Featured image from terra.money, Charts from TradingView.com The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.