Proposal for Inverse Finance DAO to cover operations of Treasury Working Group (TWG) in Season 1, running from October 1st, 2023 to March 31st, 2024. .
The core responsibility of the TWG is to enable efficient management of the DAO’s treasury funds. With access to the Treasury directly by 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 act nimbly to deal with general operations as they arise. Such actions involve the 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 modelling and management accounting to help inform decision-making and strategy across various other working groups.
2.1 WG Goals
- Continued management of DOLA and INV liquidity on DEXs at the highest possible efficiency, ensuring FiRM is able to scale
- Continued seeking out the most optimal venue to place vote incentives for liquidity, exploring opportunities for OTC/private deals (at better than market rates, or avoiding 3rd party fees)
- New liquidity partnerships for DOLA
- Facilitation of OTC swaps with the INV or DBR token when possible, using all received funds to help retire DOLA bad debt
- General finance and operational management within the DAO (ETH gas reimbursements, etc)
- Liquidity incentivization (“bribes”) for each of the 2 INV pairs and 12 DOLA pairs (DOLA pairs constantly growing across many partnered protocols and new L2s) and DBR pairs
- Directing the DAO’s voting power (sdBAL, sdCRV, vlAURA, veTHE, veVELO, veRAM, veCHR, veAERO) towards relevant gauges, either to collect revenue or direct rewards to DOLA or INV liquidity pools
- Management of revenue from AMM Feds
- Gas reimbursements to all DAO-related transactions, including contract deployments and prod testing
- Relationship management and business development with the various protocols we have or intend to partner with
- Direct assistance (modelling, transaction building etc) to the Fed Chair and Policy Committee
- Internal and external financial reporting or assisting other parties with financial reporting of the DAO treasury
- Drive and propose various new strategic opportunities for the DAO to consider (new FiRM collaterals etc)
- Facilitation of OTC transactions and trades
- Repayment of both DOLA and non-DOLA bad debt
- Cross-chain arbitrage for DOLA when significant deviations in price
While the majority of TWG’s work is BAU, or dealing with ad-hoc incidents and requests as they happen, a few planned projects to be undertaken are:
- Explore the building out of DOLA liquidity on Polygon’s POS chain via new partnerships
- Explore the various options available to build out DOLA liquidity on Base chain, with a particular focus on strengthening and utilizing existing partnerships
- Help rebuild partnerships on BNB Chain, with an emphasis on growing the DAO’s veTHE voting power
- Scale up DOLA/crvUSD liquidity TVL, strengthening the partnership with Curve, Convex and the community around those protocols
- Progressing projects that will reduce the INV cost per DOLA in circulation: Zero coupon INV bonds, DOLA liquidity positions as FiRM collateral, new or increased partnerships with other stablecoin protocols
2.4 Success Metrics
While many of the success metrics are influenced heavily by factors external to the TWG (DAO votes, general market sentiment, token price), broadly, success can be measured by TWG:
- Bring the DAO’s stablecoin runway back to 12 month or more: current runway has fallen to 9.4 months, with proposed sec-op spending expected to reduce this further to 8.7 months
- Value of DOLA liquidity on Base (highly dependent on incentive efficiency). Target is 5m
- Ranking of DOLA as a top 5 decentralized stablecoin on Base
- Number of weekly epoch of serious depeg from 1 USD of DOLA stablecoin (1 cent or more). Target is 0.
- Number of missed bribes or votes in the weekly or biweekly epochs. Target is 0.
- $INV cost per DOLA in circulating supply. Target is to continually reduce this
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 recipients removed who could not be fit onto proposal 80 due to action limit
2.6 SecOps Responsibilities
- Financial analysis to help inform spend decisions related to SecOps (audits, bug bounty etc)
In Season 1, Contributors agreed to move to a standard compensation banding system. You can view the full compensation bands here.
Contributors will be active within TWG, to be paid as follows.
|Name||FTE||Band||Pro-rata Monthly Salary||Total for Season 1|
As a long-standing user of Inverse Finance DAO products, cryptoharry began his involvement by enhancing sections of the official Docs in September 2021. Identifying the pressing needs related to treasury and liquidity management of the DAO, he initiated and spearheaded the Treasury Working Group in March 2022. Under his guidance, the DAO Treasury, excluding DBR & INV, saw an impressive growth of 110%, currently at $5.25m. This was achieved despite the challenges of a turbulent crypto market and the execution of $4.7m in bad debt repayments. Beyond leading the TWG, cryptoharry’s expertise spans pivotal roles in business strategy, business development, as well as smart contract code and logic review.
Treasury Working Group requests a flexible budget as follows to cover unforeseen expenditure that arises during the Season.
|Additional flexible budget in $DOLA||34,500|
|Additional flexible budget in $INV||450|
We’re proposing a flexible $DOLA budget of 28,500, which corresponds to 0.5 FTE (expected FTE will be between 0.25 and 0.5) at Band C for the potential recruitment of a part-time contributor to the TWG. While we are fully aware of the existing financial constraints on the DAO Treasury, we will only proceed with this onboarding if savings are found elsewhere or if there’s an improvement in the stablecoin runway. An additional allocation of 6,000 $DOLA and 450 $INV is included and meant to cover expenses and grants associated with third parties engaged by the TWG.
In summary TWG requested the following budget for the 6 months of Season 1.
|S1 $DOLA allowance||S1 $INV allowance|
|Ad Hoc & Tooling||0||0|
The TWG maintains large DOLA and INV allowances to the Treasury’s funds in order to complete day-to-day management, so the 34,500 $DOLA and 450 $INV will be added in addition to these.
- Current DOLA allowance = x
- Requested DOLA allowance = x + 34,500 = w
- Current INV allowance = y
- Requested INV allowance = y + 450 = z