Mint and Sell Range Tokens for Treasury Diversification

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FOX Tokenomics

Jul 18, 2021

Using the proposal template that can be found here:
ShapeShift Proposal Template

This post will walk through a proposed format for making a governance proposal on ShapeShift. A ShapeShift Community Proposal (SCP) is a formal mechanism for making decisions about how our community grows. The goal of governance is to create a more inclusive and empowering system for all stakeholders. We encourage proposal creators to center their ideas around how a proposal helps ShapeShift users, partners and team members better interact with one another, and how these changes create a more f…

1. Summary -
Proposal for the DAO to mint and sell a set of “range tokens” in collaboration with UMA to diversify treasury and raise some stablecoin for operational reasons.
2. Abstract -
This discussion is just to start the conversation, and start to hammer out some details of what our Range Token may look like. With more details, we can better understand if this is a good idea for the ShapeShift DAO.
Range Token Info: Treasury Diversification With Range Tokens | by Kevin Chan | UMA Project | Medium
3. Motivation -
There is a lot of research that DAO’s should have a diversified treasury. At the moment, all we hold is FOX. For practical operational purposes, it is very likely that before the end of the year we will want to contract with some core engineers to keep the product running and fix bugs, at a minimum. To offer contracts in stablecoin to core teams is a best practice for many DAOs. Having the option at a minimum I think is essential to the success of the DAO.
4. Specification -
This discussion is meant to hammer out exact specifications.
5. Benefits -
More coins than FOX in the treasury. Diversification. More resilient treasury to handle multiple possible future market conditions. Specifically, stable coins are a hedge against a down crypto market. We have lots of FOX, let’s not keep all our eggs in one basket.
6. Drawbacks -
Would need to sell the minted Range Tokens via OTC and through connections. No precedence for selling through distributed protocols.
Would love to hear other drawbacks.
7. Vote -
An eventual “For” vote (after hammering out specs) would be a vote to use FOX to mint Range Tokens and engage in some method to sell the Range Tokens for stablecoins.
An “Against” vote would vote to not take any action in this regard. To leave everything as is.

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jonisjon • Jul 21, 2021

I think that was posted before the discord conversation, posting in when things begin would be great 🙂

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SS-Matt • Jul 21, 2021

It was a comment earlier today when we were trying to coordinate when we were going to have the event but that is all taken care of now

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Beorn • Jul 21, 2021

This is a fantastic summary, thank you !

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Beorn • Jul 21, 2021

Big fan of this idea (either RT or ST) for two reasons:

Diversify treasury a bit
Engage and collaborate with another innovative DAO, learn a new system, and help pioneer some new financial tooling.

Win win win win
A couple principles I’d suggest as this moves toward specific scoping:

It’s important this first experiment is successful, which means whatever token is created it needs to be quickly bought. Let’s err on the side of being overly generous to the buyer of the token by weighting the pricing range or other attributes to be a “killer deal” for the buyer.
Whether we do an RT or ST should primarily depend on what buyers are most interested in. How can we assess that? Perhaps we can design/spec both an RT and ST and before creating them, see whether one specific example has more interest.
We don’t need to perfectly design this first iteration.

I’ll very likely support this once it turns into a specific proposal. As a cool bonus, it’d be nifty to create a Uniswap liquidity pool of these.
Looking forward to seeing this idea develop, and great thanks to the UMA folks for engaging here.

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clayton • Jul 21, 2021

I think you make some very good points here. UMA went ahead and created a 2-month range token and sold $2.6M quite easily. It was a good proof of concept, but of course 2 months isn’t terribly long – But it did a great job at testing how it would work.

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