[RFC] - Introduce Treasury Operators w/ Trade Team

Governance Archive [RFC] Request for Comment
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[RFC] - Introduce Treasury Operators w/ Trade Teams:

  • Introduce Treasury Operators & Trade Team
  • Do Not Introduce Treasury Operators & Trade Team
  • Make Significant Changes to This Proposal

0 voters

Name: [RFC] - Introduce Treasury Operators w/ Trade Teams

Scope: It is the goal of this proposal to lay out responsibilities for the Treasury Operator role, establish guidance for expectations of performance, ensure secure and effective deployment of treasury assets, and suggest additional positions that would help facilitate maintaining treasury allocation in line with Holder’s interests when without an elected Treasury Manager.

Link to previous [DAO Discussion]:
“[DAO Discussion] - Introduce Treasury Operators w/ Trade Teams”

Objective:
Secure Wonderland treasuries and ensure effective strategy deployment by introducing a role to facilitate these goals. Further introducing additional positions, available to community members who can assist in seeking out profitable strategies and maintaining our positions.

High Level Overview:
Propose bringing on Two Treasury Operators to oversee and maintain the treasury when without an elected Treasury Manager. To incentivize performance, these individuals are eligible for a services reward, in addition to a % of profits from strategies they personally propose and develop.

Treasury Operators can foster communication, monitor team productivity, and guide cooperation in developing and monitoring trading strategies with a team. They can help keep the multisig running smoothly and maintain reward payments when an elected Treasury Manager is in place.

A Trade Team is suggested to reward individuals with expertise in various positions for adding valuable insights and direction to treasury management strategies alongside the Treasury Operators during periods Wonderland is without an elected Treasury Manager.

Low Level Details:
When Wonderland DAO is without an elected treasury manager, Two Individuals should act as Treasury Operators. They should be incentivized to, but should not be considered responsible for, developing trade and market analysis.

Treasury Operator Responsibilities:

  • Submit and Approve Mutilsig transactions to maintain treasury diversity
  • Assure team submitted Multisig requests are checked and approved quickly
  • Settle Rewards, Incentives, and Redemptions
  • Provide Multisig key to new Treasury Manager
  • Provide Multisig key to new Treasury Operator

To maintain the functionality of WIP 8 and provide guidance in future situations: While without an elected Treasury Manager, the Treasury Operators are to be consulted by and give approval to Daniele Sesta and/or any other Multisig participants for all investments, trades, or strategy changes. Until Two Individuals hold Elected Authority to approve multisig transactions for Wonderland and are added to all treasury multisigs: All treasury activity outside of quarterly redemptions, wMemo staking contract refills, adding elected members to the multisig, and other necessary operational functions shall require community consensus through governance.

Application for Position:

Anyone who wants to be Treasury Operator should be a known member of the community that can prove they understand the requirements of the position with a forum proposal. Doxxing is not required in full, but Treasury Operators should be Doxxed to our Senior Community Support Manager and two other trusted community members in a way that ensures adequate privacy for elected Treasury Operators.

Due to regional restrictions, some candidates in areas like the United States will not be able to initiate certain strategies, but should be able to approve these transaction on a Multisig. It would be preferable to have Treasury Operators residing in regions with limited operational restrictions, but a diverse team should be able to work together to maintain treasury operations effectively even if one or more reside in an area with various trading limitations.

Reward for Service:

The responsibilities and liabilities involved in this position should not be understated. Treasury Operators should be rewarded for the service accordingly with 0.15 wMemo per month when an elected Treasury Manager is not in place. When we have an elected Treasury Manager and the Treasury Operators only need to settle rewards, offer additional perspective, and approve Multisig requests - their reward for service should be reduced accordingly to 0.05 wMemo per month.

To incentivize Treasury Operators and Trade Team Members to develop and present profitable trade and investment opportunities, one individual should be eligible for 2% of profits from strategies that individual proposes, if approved and deployed.

To incentivize Trade Team members and Treasury Operators to assist in the development and deployment of investment opportunities they did not personally propose - Individual Treasury Operators and Trade Team members should be eligible for 0.5% of profits generated in strategies they provide significant assistance to.

A maximum of 4% of profits from any strategy should be allocated to rewards for Treasury Operators and Trade Team members. An individual is only eligible for one reward per strategy.

Duration and Accountability:

The Treasury Operator position has no predefined expiration date. They are either removed by governance, disciplinary action, or they step down. If they act against the interests of the protocol or exhibit an extended period of inactivity (28 Days) - they should be removed.

In order to foster continued progress when without an elected Treasury Manager, managing members of the protocol should communicate with Treasury Operators on a regular basis - at least every 14 days. Failure to communicate regularly will have negative impact on that member’s desirability.

To ensure Treasury Operators are acting in accordance with community interests AND they are receiving adequate communications to perform their duties from other team members - there should be an expectation for communications to be released quarterly. This is to encourage compliance and ensure holder’s are provided necessary insights into the effectiveness of the protocol during periods without an elected Treasury Manager. This can be achieved by creating a private team channel on discord for these members to maintain discussions and hold recorded votes. It should be noted that Treasury Operators and Trade Team members are expected to communicate with the community about most strategies being considering on a regular basis.

In the event Any managing member or trade team member is reasonably considered to exhibit behavior that is counter to the interests of Holder’s, or a fundamental lack of contribution to their post for a period of 30 days, a series of actions should be deployed to limit the capabilities of that team member and allow the community a chance to vote for their removal. This is further defined in the attached document.

Further Considerations:

In periods without an elected Treasury Manager, on occasion team members may suggest investments that should not go through governance - both to meet time requirements but also to avoid front running. To approve these investments or trades without DAO approval: a majority vote in favor of the strategy must be obtained out of a group of Five members from the elected trading team, elected treasury operators, and founders.

Rewards for Service and Trade Rewards should be paid out quarterly, before the whitelist period of the quarterly redemption. This should clean up any issues about being paid in Stable coins as they are free to quickly redeem their rewards or pass on redemption and grow their position. All Trade Rewards shall have adequate references to account for contribution and analysis, released to the community when trade rewards are dispersed. Trade Reward calculations are further defined in the attached document.

Treasury Operators are not Treasury Managers - they are established for operational stability, to maintain necessary functions when an elected Treasury Manager is not in place. Two Treasury Operators should be enough to secure the multisig and keep transactions moving smoothly in most conditions.

Trade Teams:

We shall open positions for a Trade Team; for continued support with proposing profitable strategies, developing actionable market data, maintaining treasury accounting, and assisting in the deployment of strategies and investments. These members should receive perpetual service rewards as they build strategies, assist with other’s efforts, and help the Treasury Operator implement various strategies brought forward through governance. The average suggested service reward for a trade team member is 0.075 wMemo for every 30 days of service, paid out quarterly, immediately before redemption periods.

All Trade Team Members are expected to provide reasonable contributions each month when holding the position. Trade Team members should report to a Treasury Operator in a secure discord channel at least once every 7 days. In preparation for deployment of any approved investment or trading schedule, All Trade Team members should be expected to provide assistance in any area they are specialized. All Candidates wishing to apply for a Trade Team position should acknowledge in their proposal in some way that they have read, understand, and are willing to meet the expectations in this particular paragraph.

Below are a few Trade Team positions that may be useful in maximizing our potential. This list is not exhaustive and community members are encouraged to submit applications for any positions they believe would bring value to our protocol.

Market Analysis and Treasury Accounting: A Trade Team Member responsible for compiling market data, tracking investment health, and organizing Treasury Data for use by Wonderland Community and Managers.

Candidates should have experience in accounting and developing actionable reports. Should not require trading experience. Applications should include references to examples of previous work along with a breakdown of Wonderland treasury holdings and activity over the 14 days prior to submitting their proposal - in a format they would feel comfortable producing every other week.

Directional Asset Strategies: Responsible for researching and proposing strategies to acquire and/or deploy directional assets. These members should continuously monitor any positions they propose, if approved and deployed.

Candidates should have experience in trading directional assets. Applications should include suggestions for strategies they would consider implementing if approved for the position.

Stable Asset Deployment: Responsible for researching and proposing strategies to deploy stable assets. This member should be capable of seeking out new opportunities that arise in the market, prepare investment strategies, and continuously monitor approved positions they proposed.

Candidates should have experience in trading. Applications should include suggestions for strategies they would consider implementing if approved for the position.

Shorting Strategies: Responsible for seeking out, assisting with, proposing, and monitoring Shorting Strategies. Should be capable of providing adequate market analysis to support proposed shorting strategies for internal approval.

Candidates should have considerable experience in implementing shorting strategies. Applications should include suggestions for strategies they would consider implementing.

Trends and Seeds: Responsible for seeking out new projects and following market trends. Should present potential opportunities and strategies for further internal research and consideration. Not necessarily responsible for developing investment proposals, but should be capable of presenting market sentiment reports to managing members and the community on a regular basis.

Candidates should be following and connected to many social groups within the market. Applicants should have legitimate experience in conducting research and networking. Applications should include an outline of their experience, examples of current noticeable trends, resources they historically use for research, and a condensed list of social connections they feel bring value to their insights.

Conclusion:

With these Trading Team members and oversight of Two Treasury Operators: Wonderland DAO should be in a reasonably safe position to monitor market conditions, provide adequate data to our community on trading schedules, and maintain a treasury in line with Holder interests.

A more thorough breakdown of this proposal and further definitions for each point is linked in a PDF below:

Treasury Operators & Trade Teams RFC 1.1

Dedicated Wonderland Community Members who are willing and capable of maintaining Treasury Operator responsibilities are encouraged to put your hat in on the forum. Everyone is encouraged to consider Trade Team positions they feel they could bring value to, whether the position is on the list or something else you’ve got that you think we need. Rewards suggested in this proposal are suggestions — you know your value.

Business and/or technical requirements of the implementation of the proposal:

  1. When without a Treasury Manager: Cease Treasury Operations outside of activities listed in this proposal until Two Elected Individuals are added to the Multisig

  2. Add Two Treasury Operators to all treasury Multisigs

  3. Create One or More secure discord channels for the team to discuss and document strategy analysis and internal voting

  4. Allocation of 0.15 wMemo per month, per Treasury Operator

  5. Allocation of 0.2 - 0.4 wMemo per month for Trade Team members collectively

  6. DAO approved outline of Treasury Allocation Suggestions to help Treasury Operators and Trading Teams maintain treasury diversification in line with Holder’s expectations in various market conditions

8 Likes
2

Full support from me, lets make Wonderland grape :partying_face:

6 Likes
3

Fully support this proposal! We shall achieve grape and peachful Wonderland!

4 Likes
4

I love to see the option “make significant changes to this proposal”. Proposals are often presented as all or nothing and it’s refreshing to see openness to the possibility to send certain parts back to the drawing board.

There are now a few proposals for TM that I can see, @z0li @TaeKwonDo and @bottlecapman . Can you guys have a look at this proposal and see if you would be willing to apply for Treasury Operator if this structure passes governance?

To be honest, this kind of bothers me, I feel like there should be full transparency with wMemo holders about the strategy and as well as internal votes that take place.

It could be a channel where only certain members are authorized to post and debate, but it should be read only for everyone.

1 Like
5

My intention with calling for a set of secure discord channels is to allow for internal analysis about trades, investments, and strategies that could be front run if publicly discussed before deployment. The channel(s) could act as a repository for these discussion to make sharing the communications each quarter easier and more organized.

I believe that the team will need a level of discretion in many of their activities before deploying strategies, but I also believe holder’s have a right to those communication at some point. Specifying how and where we want the team to document these communications seems important to me, so we don’t find ourselves in a situation where the team communicated in a variety of ways that are almost impossible to piece together for release each quarter.

I think it would be great to have a channel for the team to discuss some strategies openly, maybe even push all messages from the private channel to the public channel each quarter.

2 Likes
6

I agree with this but it should be open only to active forum members, anyone can join discord buy some WMEMO and join the private channels with minimal effort

7

I can definitely see value in some parts of the internal debates being performed in a private setting, especially if you have more junior members who end up taking on the role of TO. Avoiding basic questions or knowledge gaps being exposed - leading to a lack of trust in the team. Not to mention there can be confidential deals being worked out, but that’s more common sense imo.

However, I think the risk of frontrunning is overstated in the level of impact it would actually have. Even with the size of our treasury, I don’t believe a Wonderland investment will move the needle much on many projects we invest in; unless we are chasing super low market cap/high risk plays on the open market.

Do you have an example of a hypothetical move Wonderland could make where wMemo holders being able to frontrun it would be detrimental to our investment?

On the other hand, even if Wonderland is capable of significant price impact with our investments, perhaps having this info available to holders should be an incentive to holding wMemo? I’m sure you’ve heard of pump and dump discord servers with paid tiers of access. While these are typically scams, the concept of giving your community a market edge could serve as an indirect way for those who lost a ton of money with Wonderland to get themselves back into the green - lord knows we’ve already paid the price of admission.

Unless you had other plans, I imagine the access to the information would be limited to TO, trade team, and the WL mods. So the gate that you would be setting up here would, by default, give some members of the community the advantage I described above and others not.

I also think having the information available to the community in the heat of the moment is an excellent learning opportunity for anyone interested in these topics. Releasing it after the fact will make it less meaningful and the market context, as well as the general sentiment at the time of the decision will be crucial information that is not easily sourced.

Ultimately, my view is centered around community empowerment, improvement in transparency and incentivizing growth of holders. To me, this could be a missed opportunity to stand out from other projects in an extended bear market.

1 Like
8

Adding at least one member to the multisig that is permanent there, no matter if we have TO or not seems like a good idea - like what you proposed Alice for.
In case there is no TO that person could get the right to execute community approved investments, running operations such as farm etc.

Just as extra thought, as we might have times without TO and a 2/2 multisig should always be avoided. That person would stay on multisig always, TO or not, basically.

2 Likes
9

That’s a good point. This is a gap that was addressed in the initial discussion, but not in the RFC.

Honestly, I dont think it would be a bad idea to keep a “neutral” person on there permanently. Someone the community can trust. They wouldn’t have to help with the trading, but could sign when required to avoid delays if a “regular” signer is not available.

It would also help close the gap when there is no TM/TO or during transition periods.

3 Likes
10

I see both points - but think some info would need to be limited, other things open discussed.

Holders chat might be a good middleway (or a channel there) - but it costs about $50 of Wmemo to be a holder, so it’s hardly comparable with paid alpha discord groups.
I think frontrunning is generally a risk when discussing detailed strategies too open, be it by individuals or other projects, but that also depends on what is discussed.

In the end I’d maybe cater both and leave it up to sensitivity of the investment/strategy/time sensitivity etc discussed.
I believe most topics will be discussed in the normal discord channels anyways, but some topics may need that limited alpha chat, so having it is important as well.

2 Likes
11

I respect your position.

The middle ground approach seems logical to me; so long as those taking on the TO/trade team job intend on acting with a high degree of transparency with the community and not by default hiding away in private channels for most trading discussions. Perhaps a baseline rule could be established to reserve the private conversations for situations where the answer to the question “if I share this with the community, this will harm the protocol or our investment” is a clear yes.

The metaphor about having paid the price of admission was in regards to those who have lost significant sums of cash on the protocol, not specifically that they qualified for the holders chat lol. Though, my point here is more along the lines of why shouldn’t we offer Wonderland holders that same tier of alpha? I would see that as an excellent incentive to generate interest in the protocol, especially if the TO/trade teams start to make successful plays.

1 Like
12

I have a slightly different perspective on this proposal.

Overall, I think it would be great to have more dedicated team members working on deploying the treasury. While this is a great idea in theory, in practice, investment by committee is very hard, and doubly so in crypto.

Negatives
Many of the most profitable and highest EV trades require quick reactions and the ability to adapt to changing market conditions. You simply will not be able to execute a long or short safely with Wonderland treasury if it takes committee meetings and then multisig approval to execute any transactions - this is a recipe for disaster.

Moreover, VC/seed investments in tradfi are typically on a 5 year plus timeline - the days of crypto seed rounds being able to realize a profit within one year are over. Do we really want treasury making long term seed investments when in all likelihood the people responsible for the investment will not stick around to see it through? I fear that seed deals executed from WL treasury would be ripe for self-dealing and kickbacks…

Problem Summary
We need investment strategies that are:

  1. Suitable for slow moving committee/multisig (ie, not quick moving trades)
  2. Sustainable long term (hard to initiate new strategies/wind down old ones when using size like WL treasury)
  3. Prepared for prolonged downturn in crypto

at 0.25-1% of profits of a trade/strategy, I think treasury operators are not properly incentivized to generate the types of strategies that are most suitable for WL treasury. For example, a quantitative market neutral strategy might be expected to generate 10% over a year, which is a great return, but would result in only $30,000 for the strategy initiator at 1% of profit on a $30mn investment.

This is not great compensation for what is great value being added to the treasury (it is REALLY HARD to generate a market neutral 10% return at size!)

Solution

  1. Pay the Treasury Operators more, a scale according to complexity of the trade, ranging from 2-5% of quarterly profits, and additional 0-5% discretionary bonus voted on by community at end of year
  2. Acknowledge the difficulty in investment by committee and with the size of the WL treasury, and focus on more suitable investments (less trading, more sustainability)
3 Likes
13

I see where you’re going with this, and I agree that sounds like a very good idea. I was under the impression that TO’s and trade teams would only use private channels for confidential stuff - most comms should be had publicly to ensure the community is in on the action. There is more liability for TO’s and trade team members when they propose, develop, and deploy Any strategy privately. Communicating openly in real time is the best way to ensure they’re always acting in holder’s interests. I realize now that I never put language in there to articulate this and it might not have been reasonable of me to assume all TO’s and trade team members would automatically act in this way.

Especially considering the private channels are specified, it may be prudent for us to further indicate our intention that these channels shouldn’t be the standard form of communication for team members - they should use public channels as much as possible and get community input in the high majority of situations.

The holder alpha channels sound like a good idea that I think we should develop further in another proposal, in addition to other cool ways our community can trade alongside us. I’m going to spend some time trying to consider language that could be inserted into this proposal, to make it clear that strategy discussions should primarily be held in public channels and better specify that the private channels should be used sparingly. Do you think that would help here?

2 Likes
14

I think that we should organize a budget/trade wallet for quick trades, as it‘s only favorable to the protocol to be able to do that, imo.

Not 100% sure on the how and what and how much - but I feel that (considering the TO‘s will be doxxed internally) there should be a way to ensure safety and efficiency for trades like that.

1 Like
15

I think you make a lot of valid points. Personally though I still like VC/seed investments…even if the payoff takes awhile the return is typically worth it…BSGG is a great example as we quickly were in profit on that deal thanks to Sifu. Given the market conditions going forward, the payoff will likely be longer on VCs as you stated, but I think it may still be worth the risk as long as the treasury allocation is a small %. The real issue with VC investments is you need a specialist with extensive experience to evaluate these deals as they can be pretty complex. Regarding the ability to make quick trades, you have a valid point although I think the main focus of team trading would be a bit more mid/long-term oriented (farming allocations and moving positions accordingly). There are a lot of good opportunities here that are not “quick trades”…e.g. farming tokens such as GLP, stables, etc. I don’t think the focus should be “day trading”…but there are some examples where quick entry/exit and timing are critical–for instance if you’re trying to arbitrage a MIM depeg for example. Bamchicka also provides a good solution where we could have a DAO approved allocation for quick trading if that’s something we decide on with specific limitations and guardrails to reduce risk exposure. I also think the profit % might be a bit on the low side, given the value added so I agree with you there as well. As a comparison, a TM would usually take a 10% cut of profits, so I think 0.25-1% may be a bit low.

2 Likes
16

I agree small allocation for directional trading could make sense.

But the trader must be very good for the risk of having a non multi-sig wallet.

1 Like
17

I was going to respond with much of what @Deal already said. I’m not sure if it would be better to have a different proposal to further flesh out some capabilities for a trade wallet - for both TOs and TMs. It may be useful to have this kind of thing set down for anyone managing the treasury in the future.

I’d like to alter the Reward section of this RFC to increase the % TO’s and Trade Team Members are eligible for, as @yieldchad recommended. What do you think of this change:

“To incentivize Treasury Operators and Trade Team Members to develop and present profitable trade and investment opportunities, they should be eligible for 3% of profits from strategies they propose, if the strategy is approved and deployed.

Treasury Operators and Trade Team Members should be eligible for an additional 3% of profits from strategies they propose and deploy if the community approves that bonus in a separate WIP describing the strategies and performance for each member, to occur immediately before redemption periods.

It should be noted that TO’s and Trade Team Members should reasonably expect to receive these bonuses when they are working in good faith. Continuous disapproval of bonuses should signal the need for that member to be removed or replaced.”

Can I get everybody’s input on that?

  • This is a good change for Trade Rewards
  • Too much %
  • Too little %
  • I don’t like something else

0 voters

18

I would also like to edit the Duration and Accountability section to include language that makes it clear TO’s and Trade Team members should use public channels as often as possible, as @isthatlowfat suggested. What do you think of this addition to the end of that section:

“It must be noted that Treasury Operators and Trade Team Members are expected to communicate with the community about strategies before deployment in the majority of cases. Under limited conditions, it may be reasonable for Treasury Operators and Trade Team members to maintain a level of discretion in a designated team channel, but this mechanism should be used only when absolutely necessary.”

Can I get everyone’s input on this?

  • This seems sufficient
  • Needs to be better defined
  • I don’t like something else

0 voters

19

I’d mention private channels nd not all stats be public knowledge before execution to prevent front running. But generally public convo is good but has to protect integrity of strats pending execution.

1 Like
20

As mentioned in discord define these limits n caps better as in per strategy etc. And max cap per strategy = x%

2 Likes