1. Summary
Proposal for Inverse Finance DAO to cover operations of the Treasury Working Group (TWG) in Season 2, running from November 1st to April 30th, 2025.
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 and incentivization 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 Season 2 Lookback
The Season 2 period was highly successful for the TWG, with some key metrics achieved:
- $797,844 profit realized to the DAO Treasury via the uitlization of voting power and AMM Feds
- Net 0 INV inflation achieved for all DAO liquidity operations since mid October
- Stablecoin runway maintained, implementing the new bad debt and runway strategic approach
- DOLA stable liquidity TVL reaching an all time high of $210m
- Solidifying DOLA as the 2nd largest stablecoin on Base, only behind USDC, building significant brand equity
- No DOLA depegs (over 3% off 1 USD)
- Not missed incentivization rounds
- Expansion of DOLA partners, working closely with Anzem (USDz) and Overnight (USD+)
2.2 TWG Goals
The north star for Season 3 remains the reduction in DOLA bad debt. Significant progress against bad debt was made during season 2, with $1,531,544 of DOLA bad debt repaid since May 2024. 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
2.3 Responsibilities
- Liquidity incentivization/managmeent for all INV pairs (3 currently), DOLA pairs (14 currently), sDOLA pairs (cross-chain), 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 $7.1m during Season 2
- 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
2.4 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:
- Complete new strategic approach to Etheruem mainnet DOLA liquidity, luanching and supporting multiple new pools and offboarding current ones
- Continued support (such as incentivizing lenders) of markets that allow for borrowing against sDOLA, with current options on FraxLend and Curve Lend
- Further improvement to the DAO’s stablecoin runway (expressed in # of months), increasing operational resilience and ability to weather market downturns
- Redesign of contributor INV grant project
- Support sDOLA and sINV liquidity on L2s once launched
- Support AWG and PWG to improve transparency of Treasury operations on the Transparency Portal
- Set up on-chain automation bots, with a focus on minimizing ETH gas cost
- Lead the set up of a leverage DBR market, enabling for specualtors to take both leveraged long and short positions on the DBR token
- Set up a derivative market (including seeding liquidity via the TWG) for sDOLA, giving users the ability to fix the yield, such as via Spectra Finace or Pendle
2.5 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 (current runway is 14.8 months)
- Keep DOLA in the top 5 stablecoins on Base (currently ranked #2, behind USDC, via DefiLlama) via utilizatioin of the TWG grown veAERO position (current market value of AERO locked within: ~$12m)
- 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
- At least $1m in DOLA bad debt repaid
2.6 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
2.7 SecOps Responsibilities
- Financial analysis and input to help inform spending decisions related to SecOps (audits, bug bounty etc)
Budget
The TWG seeks to operate as lean and efficient as possible, as demonstrated by utilizing 0 of the flexible budget approved in Season 2.
1. Contributors
No contributor compensation changes are requested within the TWG.
| Name | FTE | Band | Pro-rata Monthly Salary | Total for Season 3 |
|---|---|---|---|---|
| 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 800% (Feb 2022 - November 2024), whilst managing over $9.1m in bad debt (DOLA and non-DOLA) repaid. Beyond leading the TWG, cryptoharry’s expertise is utilized in many other areas of the DAO.
2. Ad hoc & Tooling
600 DOLA budget requested for the set up and maintenance of on-chain automation solutions, such as bots for updating oracles, updating the exchange rates for sINV and sDOLA cross-chain, and other general DAO requirements.
This allowance will not be requested on-chain in this proposal given the already very large DOLA allowance for Treasury management.
3. Flexible Budget
None requested.
4. Summary
In summary, the TWG requests the following budget for the 6 months of Season 3:
| S3 DOLA Allowance | S3 INV Allowance | |
|---|---|---|
| Contributor Payroll | 87,000 | 0 |
| Ad Hoc & Tooling | 600 | 0 |
| Flexible Budget | 0 | 0 |
| Total | 87,600 | 0 |