Proposal to Set Up Temporary INV Grants for Inverse Finance DAO Contributors
Background and Summary
In 2022, current Inverse Finance contributors were granted INV with a two-year linear unlock period to align their interests with the protocol. In mid-2023, contributors, with assistance from r3gen finance, initiated a redesign of the INV grant structure. This led to the release of the “Contributor INV Grant Redesign” proposal on the forum.
Need for an Interim Solution
The implementation of the redesigned INV grant structure is currently delayed due to limited development resources within the Product Working Group (PWG). The PWG is prioritizing other high-value tasks, temporarily deprioritizing the development and testing of the new smart contracts for the INV grant redesign.
To ensure continuity in contributor compensation, we propose utilizing the legacy INV Grant smart contracts as a temporary solution. This interim measure will provide contributors with the “Fixed INV Grant” portion of the redesigned proposal, based on the Full-Time Equivalent (FTE) and Band results ratified in Season 2.
Note that INV vesting contracts for all contributors have expired, some beginning in Q4 2023. A separate proposal handling any back-issuance will follow this proposal.
INV Grant Implementation
These INV grant contracts will be set up with a start date of May 1st, 2024, and will run for 6 months. The assumption, however, is that the new contracts will be ready to launch before the end of this period in which case all currently running legacy INV grant contracts will be cancelled upon governance approval of the proposal that launches the new, redesigned contracts.
Key Points:
- Grant Structure: Contributors will receive the “Fixed INV Grant” portion as outlined in the redesigned proposal, using the legacy smart contracts.
- Duration: The temporary grants will start on May 1st, 2024, and run for 6 months.
- Transition: Once the new smart contracts are developed and tested, a proposal will be submitted to transition to the redesigned grant structure, cancelling this contract.
As the INV used for this does not fall within the standard quarterly INV mints (used for xINV staking rewards, DOLA and INV liquidity incentivization, OTC swaps, bonding, and TWAP sells via Policy Committee), the INV required to set up the grants will be minted within this proposal. The newly minted INV does not increase the circulating supply of INV until they have vested.
INV Grant Amounts
The grant amounts are determined by the “Fixed INV Grant” portion of the original proposal, using the results from Season 2:
| Contributor | Band | FTE | xINV/Year | INV/Year | % of INV Current Circ Supply Distributed via xINV Fixed Grant in Year |
|---|---|---|---|---|---|
| Patb | A | 1.0 | 278 | 2,082 | 0.38% |
| Alien | A | 1.0 | 278 | 2,082 | 0.38% |
| 0xMT | A | 1.0 | 278 | 2,082 | 0.38% |
| Tabboz | B | 1.0 | 230 | 1,723 | 0.32% |
| Naoufel | B | 1.0 | 230 | 1,723 | 0.32% |
| cryptoharry | A | 1.0 | 278 | 2,082 | 0.38% |
| Karm | B | 1.0 | 230 | 1,723 | 0.32% |
| Edo | B | 1.0 | 230 | 1,723 | 0.32% |
| Total | 2,035 | 15,224 | 2.81% |
With the following breakdown for each working group:
| Working Group | xINV/Year | INV/Year | % of INV Current Circ Supply Distributed via xINV Fixed Grant in Year |
|---|---|---|---|
| PWG | 787 | 5,888 | 1.09% |
| RWG | 461 | 3,447 | 0.64% |
| GWG | 278 | 2,082 | 0.38% |
| TWG | 278 | 2,082 | 0.38% |
| AWG | 230 | 1,723 | 0.32% |
*As the grant contracts hold xINV, which has an increasing exchange rate of INV (dilution protection), the INV amounts will grow over time.
Conclusion
This interim solution ensures that contributors continue to receive fair compensation while the DAO completes the necessary development work for the new INV grant contracts. By maintaining the Fixed INV Grant portion, we uphold the principles of fairness and alignment with the protocol until the redesigned system can be fully implemented.
On-Chain Actions
- Mint 7,612 INV to the Treasury
- Approve 7,612 INV to be spent by the invGrantFactory contract
- Deploy a cancellable INV grant contract of Y INV to contributor W, with an end date of October 31st 2024