Testing Phase (M1 - M2)

See About page for more on milestones

Coffee tokens have not launched on any blockchain. We are currently testing our tokenomics by simulating the minting and distribution process by improvised procedures using ETH signatures, Google Sheets, and surveys. Though this is an imperfect representation of a blockchain, this process allowing us to quickly & affordably test, learn, and iterate before finalizing a solution. During M1 - M2 test phase, we will be minting and distributing iCT (imitation Coffee Tokens) and plan to air drop real CTs to iCT holders at launch. See the current distribution of iCTs in the Distribution page and learn how you can get iCTs on the Earn Coffee Tokens page.

Guiding Principles

The CT also serves as the governance token to manage the DAO. An individual/group has more voting power over the DAO with more CTs they possess. It is imperative CTs are fairly distributed to the following guiding principles:

  1. Incentivize those who add value

  2. Prioritize those who are actively adding value in the moment

  3. De-prioritize those who are no longer adding value

  4. Keep it simple stupid


CT Creation Process

Coffee Tokens are minted when the Café DAO generates revenue and burned upon paying expenses.

The diagram below describes the minting process. (Step 1) A customer purchasing a 12oz cup of coffee for $5.00 will (Step 2) mint 1 CT (coffee token). The treasury will hold onto the CT and $5.00 until operating expenses have been accounted for. Assuming operating expenses total up to $3.50 for every $5.00 coffee, (Step 3) the Treasury will burn 0.7 CTs and expense the $3.50 to pay for operating expense. The DAO treasury will always hold $5.00 for every CT in circulation.

(Step 4) Coffee tokens are distributed among the following 3 parties: Customer, Employee, and DAO. The DAO treasury will hold onto its own CTs while ensuring all CTs in circulation are backed by the appropriate amount of USD. Distribution of CTs to each party will be voted on by the DAO. You can see the historic and live CT distribution by reviewing the past and active proposals. Coffee Tokens are earned from the Café DAO; you cannot buy CTs directly from the Café DAO. Here, value is neither created or destroyed.


1 CT = 1 Vote

Token holders have proportional voting rights to govern the DAO. The token holders can vote on what is done with the CTs held in the DAO treasury. For example, the DAO can vote to profit sharing treasury held CTs to staked CT holders or fund coffee proposals.

Exchange CT for USD

The DAO treasury will always honor exchanging each CT for the USD price of coffee and burning the exchanged CT. Even if all token holders want to exchange their tokens for USD, it will be possible because the DAO Treasury will always hold an equivalent amount of USD per each CT in circulation.

Exchange CT for Coffee

Since a CT is worth the price of a 12oz coffee, CTs can also redeem for a cup of coffee. However, it is not possible to buy CTs directly from the the Café DAO. All CTs are minted from sales and distributed through the process shown above in "Distribution".


See Earn Coffee Tokens page on how to participate

Coffee Tokens cannot be directly minted by purchasing CTs to fundraise. Instead, the Café DAO funding mechanism allocates future DAO CT distributions. To be eligible for future CT distributions, an individual will need to improve the DAO in one of the following ways: create a coffee proposal, execute a coffee proposal, or fund a coffee proposal with a loan.

Here is how the Café DAO fundraises to execute a project it cannot self-fund. (Step 1) A token holder submits a CP (Coffee Proposal) to improve the Café DAO. The DAO will review and elect to pass, reject, or request the submitter to include more information. If the proposal passes, it will go to (Step 2) the "DAO Deliberation Queue" where the DAO needs to determine (1) how much ROI the proposal is worth, (2) terms of the DAO loan, and (3) how to incentivize a team to execute on the proposal. When the DAO has finalized all details, (Step 3) the DAO will open the proposal up to be funded by Lenders and identify an Execution Team to work on the project. Upon project completion, (Step 4) the repayment period begins. In the example below, the amount needed to fund the proposal is $100. The Café DAO will still distribute CTs to the Customer and Employees but will re-distribute the DAO's CT share to pay off the loan to the Execution Team and Lender. The coffee shop will need to generate well over $100 in profit to pay off the principle + interest to the Lender and interest to the Execution Team.

Current Transaction Process

Here is what is actually happening when you buy coffee at an event

For full transparency, here is what is actually happening when coffee is purchased at the distribution events. (Step 1) Customer gets coffee. Anybody who attends the event can have coffee even if they do not want to participate in the distribution. (Step 2) Customer sends a Venmo transaction to @dann-carr with their discord handle as a message. Dan is acting as the treasury and managing all USD transactions ensuring every CT in circulation is backed by $5.00. (Step 3) Customer needs to fill a short survey stating their ETH address and discord handle. You may generate a new ETH address if you do not want to tie your primary wallet address to your discord. The ETH address will be used for governance and for the future airdrop and the discord handle is used to tie the Venmo payment to the customer. Lastly, (Step 4) the survey will automatically update the Google Sheets and the treasurer manually confirms the paid transaction on the Google Sheets. Once both inputs have been provided, Google Sheets records the CT distribution following the tokenomics detailed above.

CP1 - Coffee Proposals 1 explains why the current distribution to the customer is 0.4 CTs. You can find this on the "Proposals" section on the Earn Coffee Tokens page.


Will the Café DAO sell anything other than 12oz coffee?

Yes, other common café drinks and food items will also be available and you can exchange them for CTs proportional to its price relative to a 12oz coffee

Will every item sold mint exactly 1 coffee token?

Other sold items will mint different amounts of coffee tokens based on the relative price each item is relative to a 12oz cup of coffee

Is there any advantage to exchanging a CT for a cup of coffee rather than exchanging it for cash and then purchasing a cup of coffee?

Nothing material other than some convenience

Is this intended to be a stable(coffee)coin?

The Café DAO will always honor 1 CT for a 12oz cup of coffee, an equivalent menu item, or the price of a coffee. However, DAO will not attempt to control the price of a CT on any secondary market whether it is above or below the price of a cup of coffee. Though it likely will be relatively stable, we will not attempt to correct any secondary market if it de-pegs.

Is there a supply cap?

Coffee tokens are minted when coffee is sold. So the supply cap is whatever the dollar amount of the global wealth converted to coffee! Practically, no. See the distribution page for more info.

What happens if the price of coffee changes?

A decrease in price will require token holders the ability to redeem additional CTs upon a snapshot taken at the time of price change. This can be redeemed upon next visit to the café or upon redemption of CTs to USD. An increase in price will require the DAO treasury to increase its reserves backing each CT in circulation to continue to allow token holders to redeem each CT for the price of coffee.

What happens if a customer simply wants coffee but does not want CTs?

The customer CT will be split evenly between the DAO and employee. A DAO member suggested we give the customers an option to "tip" their CT to the employees, however, that feature will further down.

As a Lender, would I receive CTs immediately upon issuing the loan?

No, CTs are distributed over time after the proposal has been executed and new revenue is generated unless otherwise specified.

As a Lender, what happens if the proposal I am funding cannot be completed?

The loan can only be used for the purpose of the proposal. If the project cannot be completed, all remaining funds are proportionally returned to the lender unless otherwise specified by the proposal.

Is there anything you are not telling me?

There is a lot we do not know and much of the issues comes as we begin to scale to multiple coffee shops. For example, we will eventually hit a problem where the price of coffee cannot remain the same across all the Café DAO coffee shops. We encourage you to join us (even if you do not want to buy our delicious coffee) if these problems interests you!