[RFC] - DAO GOVERNANCE OVER TREASURY ACTIONS AND STRATEGY
Yes, Specific DAO approvals for Treasury Management and Usage
No, Allow full discretion to Treasurer / Founding Team (no change)
0voters
Please note that the RFC has now been changed as per feedback from users and timing of this proposal. This amended version here only will look at specific actions derived from original RFC.
The amended proposal is the following:
Explicit DAO Approval for allocation of tokens of stablecoins into long term defined lock ups (over 1 week for example) such as CVX. (note that Sifu Tokens was a DAO WIP process, and things such as CVX should be no different).
Explicit DAO Approval for economically impactful or impactful voting the DAOâs holding tokens in other protocols. For example, this can be CVX for bribes or in the future voting on a DAO action that might have considerable effect on the other protocol.
DAO Community can propose via the WIP process to instruct the TM to liquidate positions as needed.
Additionally, the community has expressed since April the conflict of interest over Convex and its gauge voting activity with Abra. In order to clear this conflict, there has been desire from the community to liquidate the position (thus enacting 3. above). I propose that a sub WIP will be proposed along side this one on this matter. Please also express any interest here.
Yes, Liquidate CVX as it unlocks (July 22nd batch, and August 5th Batch)
No, Keep CVX as it unlocks (July 22nd, and August 5th Batch)
0voters
For reference only, you can examine the previous RFC below:
Scope:
This RFC examine the proposal made to create limitations on Treasury Investments such as capital allocation risk limits, and also DAO approval on actions such as token voting delegation.
Voting or Voting Delegation (exerting voting power on other protocols)
Risk Limits
1) Re-Allocation of liquid Assets to Illiquid Assets
The DAO should decide whether liquid assets (such as USDT, USDC, MIM, WBTC, WETH, etc) can be turned into which illiquid assets, which includes non-liquid staked tokens or VC investments. These are decisions that TM (or anyone) should not be making unilaterally.
If this proposal isI suggest explicit DAO approval (YES/NO) is obtained through an official vote and if passed, to vote on item 1A and 1B below.
A) For example, should have CVX been staked into vlCVX? I would propose that we would vote on this retro-actively as there are un-staking events in July and August. (YES/NO) <- This will be a WIP X.1
B) A VC Allocation headroom (excluding current ones) should also be voted for. This can be for example max 5.0% of the Treasury before a TM would seek for more headroom for example. (YES/NO) â This would be WIP# X.2
2) Voting or Voting Delegation
Currently, this is directly related to vlCVX voting, but this may apply to other situations. A TM (or this protocol) should not acquire assets for the sole purpose of influencing a vote in another protocol. A key control factor is having the DAO to determine the voting or vote delegation action.
The two questions to be asked here is:
A: Should the DAO determine through a vote on how WL should vote with held tokens. Such voting direction request should come from the TM ?
B: Provided the answer to 2A is favorable, should the vlCVX votes be delegated to Votium and to the Bribe Pool Optimizer with the earliest possible Gauge Vote ? Note that the previous vote into Votium would have yielded US $380,000 by my calculations and votes occur every two weeks.
3) Risk Limits
Should the DAO give certain risk limits over % of asset holdings in its Treasury as proposed below ?
Provided this proposal passes, below are the proposed risk limits:
Non Stable-coin Directional Exposure 30% of Liquid Assets (BSGG Excluded)
Stable-coins risk:
a. USDT 25% (about 52 mm USD)
b. USDC 30% (subject to temporary raise for redemption)
c. DAI 25%
d. MIM 25%
e. Combination of all others (or any) 15%, and among these max individual limit 10%
With these DAO decided limits, the treasury manager will have better guidelines to limit conflict of interest, and manage risk. wMEMO holders can be also rest assured that material changes to the liquidity or risk profiles would have to be proposed to the DAO for approval.
Business and/or technical requirements of the implementation of the proposal:
None are needed.
Since an RFC is a âwork in progressâ Proposal, not all of these points need to be filled out from the beginning. They can be added over time as the RFC evolves into a mature Proposal.
I support this concept but I would not vote for it as it is currently written.
I would suggest the DAO should be approving proposed treasury strategies/parameters and then allowing the TM to operate freely within those strategies.
For WL this may require a healthy debate about âwhat kind of DAO/protocol is WLâ in the first place.
Sorry for sounding like I just stepped out from under a rock, but where the fuck is our TM going âin a couple of weeksâ? Was it something I said?
Seriously though, is this because the 90-day window is expiring? I think this should have an auto-extension unless the DAO specifically votes to terminate, in which case we must have someone or some entity lined up to step in. Perhaps we consider turning to professional hedge fund to outsource our treasury management roles to?
As an aside, you can throw your hat in the ring as an replacement!
Nonetheless, TMâs may at their on choosing not want to continue for a variety of reasons. Its not an obligation. I think if I asked for an extension, I had a good chance of another appointment.
Iâm a good defense player (and Iâm generally a perma-bear). But with the markets already rekt, or near full rekt, I donât pick up things cheap as I should. Its time for me to kick the ball to the other side of the pitch you know.
There are clear pros to each option. Why not split the treasury into two parts. Part A requires full DAO governance. Part B can be freely managed by TM. The DAO can vote at anytime to change the split between the two sections - for example it might start as 75% Governed and 25% TM, but that can change overtime by the DAO voting to move assets from governed to TM or vice versa.
Considering whatâs happened recent with other DAOâs we should consider a hybrid where TM has a free hand over some assets up to certain limits over which DAO voting will be required. Again we must consider the dynamics of the market and not stymie our capacity to move quickly in order to take advantage of time bound opportunities.
Iâm not sure with this. Maybe Iâm not understanding, but is the proposal to give control over to general DAO instead of a qualified TM?
No offence to the investors here, but in my opinion we voted for a TM, over a fairly long and slow period I might add, based on their qualifications, investment history, basically we voted for someone who knows their shiz to control the treasury.
Now weâre handing over that control to general opinion, which, if anything like my own, is dangerously underqualified to be managing a treasury of this size, in a bear market when quick timing is everything, and weâre proposing (and it looks like a lot of people voting FOR) tying up action for Wonderland Treasury in long and lengthy, often ill-informed (Sifu FUDsters Iâm looking at you here) discussion and debate, talking for ages instead of doing something?
Iâm all for this DAO and democracy in general is great and good and fair and blah blah blah blahâŚbut letâs not forget Brexit as an example of where Democracy can maybe beâŚletâs say misdirected?
I think my point here is that it doesnât make sense to me to tie up our investments in long-discussions where then potential-opportunity is missed.
Hire someone qualified like SkyH or just do the SifuVis thing and let the masters do their work. Leave it to the pros I say.
Not at all. It is more about providing some guidelines to the TM (or the DAO in the absence of a TM) on how Wonderland is expected to be managed.
For example. with these risk limits, a TM canât go all in on BTC without asking the approval from the DAO. Right now, there is no indication that a TM canât have the whole treasury in one asset. Itâs also putting a limit on how much of the treasury should be spent on VC deals and asking the DAO to decide on certain votes coming from tokens held/locked.
The CVX bribe/vote being a good example of currently being used in a way that resulted in significant losses for Wonderland where there is a conflict of interest. Having the DAO vote on those would remove the conflict and put the responsibility on the DAO.
I think itâs good if the responsibility returns to the DAO. I think the concern still stands that this might limit the TM.
We already voted to define Daniâs role, I wasnât aware of another conflict of interests or loss because the TM was left to do their thing. If anything, isnât that kind of how Wonderland was born?
Imagine if weâd tried to put guidelines on Dani and Sifu in the beginning, I think we wouldnât have been where we are now.
That said, this sounds progressive, and I donât pretend to understand the complete ins and outs, so having the opportunity for the DAO to have their say, as long as we donât go all âBrexitâ with big propaganda busses, I can see how it would be a good thing for WL moving forward
SkyH, thatâs an honest point and I respect your pragmatism. Makes me realize the wisdom behind a suggestion made way back that having a diversity of managers should be considered.
Hybrid EOAâs might work, only need 2 or 3 DAO-Traders (DTâs?) with similar allocations, performance hurdles, etcâŚ
POLL
Create a market making desk that engages in automated liquidity operations (e.g. price arbitrage, liquidations on other protocols, opportunistic liquidity)?
Yes
No
0voters
POLL
Should there be a âSellâ override option whereby the DAO can exit the position through a vote?
Based on some of the discussion around the CVX, I think it might be fair to add a âsellâ option. Voting for bribes is fine, but if the DAO wants to exit the position, it might be a good time to ask the question
Ok, I think we can table some of the earlier more complicated RFC I proposed - we can use it as a basis if it is ever useful for other RFCs etc.
I think we can change the RFC as follows as TaeKwon Says, to be specific actions.
Explicit DAO Approval for allocation of tokens of stablecoins into long term defined lock ups (over 1 week for example) such as CVX. (note that Sifu Tokens was a DAO WIP process, and things such as CVX should be no different).
Explicit DAO Approval for economically impactful or impactful voting the DAOâs holding tokens in other protocols. For example, this can be CVX for bribes or in the future voting on a DAO action that might have considerable effect on the other protocol.
DAO Community can propose via the WIP process to instruct the TM to liquidate positions as needed.
As a rider to this, then the community may want to discuss putting Abra âconflict of interestâ tokens as perceived by the community - for sale. This would be:
A. Convex as it unlocks and
B. Spell
There can be sub WIPs under this one if this moves on.
I think this alteration is gold. This is clear enough to tackle our current issue but also broad enough to handle some situations I imagine we may encounter in the future.
Just one example; I see no reason why we shouldnât take advantage of some other DAOâs activities, possibility by acquiring and utilizing a controlling interest or reaping rewards of other opportunities (redemption anyone?). This a great way to deal with how a TM (or others) should go about making those moves.
So I really liked your original RFC with specific guardrails included, and this discussion seems to have taken a sudden turn into a new area more focused exclusively on Abra/locked tokens. I really think both areas need to be addressedâŚthe Abra related concerns you and TKD mentioned as well as the guardrails/risk limits youâve mentioned earlier. How we achieve this doesnât really matter I suppose whether through your proposal or Mattâs or multiple WIPs. Iâm thinking since your the acting TM maybe its best you determine the specific guardrails/risk limits before you leave and try to get that passed (perhaps in discussion with the new qualified candidate for TMâYieldChad).
