Treasury Working Group - S2 Proposal

cryptoharry · May 3, 2024, 2:07am

1. Summary

Proposal for Inverse Finance DAO to cover operations of the Treasury Working Group (TWG) in Season 2, running from May 1st to November 31st, 2024.

2. TWG @ Inverse Finance

The core responsibility of the TWG is to enable efficient management of the DAO’s treasury funds. Due to the DAO’s on-chain governance system lagging by 5 days (3-day proposal vote time and 2-day timelock if successful), there is a need for the TWG to have direct access to the Treasury, and to act nimbly to deal with general operations as they arise. Such actions involve ongoing management, incentivization, and bribing strategies for DOLA, as well as leveraging partnerships with partnered protocols to assist in deploying effective liquidity management strategies. On top of this, TWG also supports economic modeling and management accounting to help inform decision-making and strategy across various other working groups.

2.1 TWG Goals

The north star for Season 2 remains the reduction in DOLA bad debt. Significant progress against bad debt was made during season 1, with $1,782,130 of DOLA bad debt repaid since October 2023. The TWG will continue to optimize operations to prioritize further progress against DOLA bad debt. WG goals include:

Continued management of DOLA, INV and DBR liquidity on DEXs at the highest possible efficiency, allowing debt on FiRM to continue to scale up
Test new and upcoming venues for liquidity incentivization and accumulating of voting power (such as veNFTs)
Executing on new liquidity partnerships for DOLA
Continued and high quality financial and operational management within the DAO

2.2 Responsibilities

Liquidity incentivization for all INV pairs (2 currently), DOLA pairs (14 currently), sDOLA pairs (2 currently), and DBR pairs (1 currently)
Weekly or biweekly voting of the DAO’s voting power (Curve, Balancer, Bunni, Aerodrome, Velodrome, Thena, and Ramses) towards relevant gauges (either supporting liquidity or profit-seeking)
Management of revenue from AMM Feds, with over $4.4m during Season 1
Gas reimbursement for all (approved) DAO-related transactions, including contract deployments and production testing
Represent the DAO and lead relationships with the various protocols partnered with from a liquidity perspective
Lead on financially related decisions internally, providing key assistance to the Fed Chair, Policy Committee and more
Proactively drive and propose new strategic opportunities for the DAO, such as new collaterals on FiRM and new products
Facilitation of OTC swaps
Repayment of both DOLA and non-DOLA bad debt
Management of the Treasury’s assets, such as liquidity positions

2.3 Projects

The majority of work done within the TWG is weekly BAU, as well as dealing with ad-hoc incidents and requests as they happen. However, a few planned areas of focus are:

Management of liquidity for sDOLA on new chains, as well as creation of new organic demand for sDOLA (without the DAO needing to pay any additional excess on top of the the intrinsic DBR yield via DSA)
Expand DOLAs presence via liquidity on new L2s
Enable borrowing against sDOLA (and potentially DBR) as collateral on lending protocols such as Curve’s Llama Lend
Increase the operational resilience of the DAO via strengthening the stablecoin runway (expressed in # of months)
Further the redesign of Contributor INV grants
Scale use and liquidity for sINV once launched
Work with AWG and PWG to improve live reporting of Treasury operations on the Transparency portal

2.4 Success Metrics

While many of the success metrics are heavily influenced heavily by factors external to the TWG, broadly, success can be measured by:

Keep the DAO’s stablecoin runway above 12 months (12.0 months of stablecoin runway achieved by the end of March 2024)
Keep DOLA in the top 5 stablecoins on Base (currently ranked #2, behind USDC, via DefiLlama), and grow DOLA into a top 5 stablecoin on Optimism (currently ranked #8 via Defillama)
Number of weeks of large depeg (3%+) from 1 USD of DOLA stablecoin: Less than 4
Number of missed bribes or votes in the weekly or biweekly epochs: Target is 0
Cost per DOLA in circulating supply: Have it less than the current DBR price for the majority of the season

2.5 Decision-making Power

Approved access to the DAO Treasury in order to carry out the roles listed above
fundingCommittee role on the DOLA payroll contract: gives power to add or remove recipients on the contract. This has only been used a few times historically: when a contributor quit (recipient removed), when a contributor wanted to change the address they received DOLA payroll to (recipient removed and new recipient added), and a couple of recipients removed who could not be fit onto proposal 80 due to action limit

2.6 SecOps Responsibilities

Financial analysis to help inform spending decisions related to SecOps (audits, bug bounty etc)

3. Budget

The TWG seeks to operate as lean and efficient as possible, as demonstrated by utilizing 0 of the flexible budget approved in Season 1.

3.1 Contributors

No contributor compensation changes are requested within the TWG.

Name	FTE	Band	Pro-rata Monthly Salary	Total for Season 2
cryptoharry	1.0	A	14,500	87,000

cryptoharry [WGL]

Cryptoharry is a longstanding user and contributor at Inverse Finance DAO, with first contributions dating back to September 2021. After identifying pressing needs relating to both treasury and liquidity management within the DAO, cryptoharry spearheaded the creation of the Treasury Working Group in March 2022. Under his guidance and leadership, the DAO Treasury has increased its USD-denominated value 1,128% (Feb 2022 - March 2024), whilst managing over $7.3m in bad debt (DOLA and non-DOLA) repaid. Beyond leading the TWG, cryptoharry’s expertise is utilized in practically all other areas of the DAO.

3.2 Ad hoc & Tooling

None requested.

3.3 Flexible Budget