Treasury Working Group DOLA Allowance Refresh
Summary
Refresh the Treasury Working Group’s DOLA allowance so that bad debt repayments can continue, as well as treasury stablecoin management and liquidity rebalancing.
Background
Throughout 2023, the main of the TWG DOLA allowance has been for the repayment of bad debt associated with Inverse Finance DAO, such as DOLA bad debt. This proposal seeks to authorize the Inverse Finance TWG multisig with the necessary permissions to facilitate the final repayment of the recovered funds stemming from the Euler exploit and the continued bad debt repayment using DAO revenues. The funds related to the Euler incident have been secured via the coordinated recovery efforts led by Balancer and will be utilized, together with the remnant recovered funds, to pay down DOLA bad debt.
History of the Euler Incident
(relevant transactions hyperlinked)
- March 13th - 863,157.88 DOLA bad debt accrued to the AuraEuler AMM Fed as a result of a ~$200m exploit of Euler.
- March 29th - 21,864 Aura and 6,330 BAL rewards that had been farmed by the AuraEuler Fed harvested after rewards stopped. Swapped into 110,847.77 DOLA and sent to the Inverse Finance treasury.
- April 19th - 248 ETH, 114,771 DAI and 8,846 USDC recovered from Euler. Swapped into 615,166.38 DOLA (tx 1, tx 2), and sent to the Inverse Finance treasury.
- June 8th - After the unpausing of all Euler pools on Balancer, the Fed Chair is able to rescue the remaining amount of DOLA left in the DOLA/bb-e-USD pool, amounting to 8,405.43 DOLA.
- June 14th - Through a specialised arbitrage, Balancer are able to rescue remaining DAI and USDC in the Euler boosted pools. Inverse is sent their share of this, being 152,911 DAI and 146,838 DOLA. This is swapped into 301,266.05 DOLA and sent to the Inverse Finance treasury.
This has resulted in 1,027,280.20 DOLA recovered and held by the Inverse Finance Treasury, and the final AuraEuler bad debt standing at 854,752.43 DOLA. 100% of this bad debt will be paid down using the recovered funds, and the surplus 172,527.77 DOLA will be used to pay down DOLA bad debt from Frontier exploits.
Overview
The current TWG DOLA allowance to the Inverse Finance Treasury is ~806k, which is not enough to deal with bad debt repayments outlined in the near and medium term future. This proposal seeks to request this DOLA allowance is refreshed to 5m DOLA in order to deal with future DOLA bad debt repayments. As well as this, the TWG will conduct liquidity rebalancing across multiple blockchains. There are times where DOLA’s price on other blockchains is not inline with Ethereum, but there is not incentive enough for 3rd party cross chain arbitrage due to reasons such as challenge period delays. In these circumstances, the TWG will be able to conduct these arbitrages, helping generate a profit for the DAO and alignthe peg of DOLA across blockchains.
On-Chain Action
- Grant the TWG a DOLA allowance of 5,000,000