This Request for Comments (RFC) is initiated to spark a discourse on refining the treasury management of ShapeShift DAO. While this document serves as a starting point, it is by no means a conclusive or definitive proposal ready for formal DAO governance. The intention is to propose a novel approach to treasury management, inviting robust debate, feedback, and alternative suggestions to enhance the governance and operational framework of the DAO. The initial parameters and structures suggested herein are preliminary; therefore, community engagement in discussing, critiquing, and augmenting these ideas is highly encouraged. The core aim is to facilitate a comprehensive discussion on treasury management, ultimately leading to a cohesive and DAO-aligned proposal that significantly advances the DAO’s treasury strategy.
This proposal aims to overhaul the ShapeShift DAO’s Treasury Ecosystem, introducing a structured and strategic reallocation of treasury assets into three distinct tranches. Each tranche, interlinked via smart contracts, serves a specific purpose, ensuring financial stability, enabling strategic asset allocation, and fostering innovation and community engagement through new product mechanics on the ShapeShift platform.
The ShapeShift DAO, amidst the evolving DeFi landscape, has maintained a steadfast focus on product improvement and user acquisition. However, the DAO’s treasury management has not been subjected to a similar level of strategic evolution. This proposal seeks to introduce a sophisticated treasury management system that segregates the treasury into three distinct tranches. Each tranche is meticulously designed to address specific operational, strategic, and innovative needs of the DAO, thereby enhancing financial control, security, and promoting a decentralization ethos through automated smart contract governance.
The motivation for this proposal stems from a need to:
- Enhance financial security and operational stability by establishing a precautionary tranche.
- Strategically allocate assets for growth and community engagement through targeted tranches.
- Foster transparency, accountability, and decentralization in treasury management.
- Mitigate risks associated with asset concentration and enhance the DAO’s adaptability to participate in diverse DeFi activities.
Upon approval, this proposal will gradually phase-in the following treasury structure:
- Precautionary Tranche (Tranche 1): This tranche represents an 18-month operational runway for the DAO, approximating a monthly expenditure of $150k. It will be entirely composed of stablecoins held outside of platforms (on wallet).
- TMDC Allocation Tranche (Tranche 2): This tranche will encompass the 180M FOX allocation for TMDC, and include any assets accrued by TMDC actions that are beyond the scope of the precautionary tranche. This tranche serves as a strategic reserve for growth-oriented initiatives and asset appreciation.
- Innovation and Incentivization Tranche (Tranche 3): Dedicated to fostering innovation and community engagement on the ShapeShift platform, this tranche will finance new product mechanics, gamification, and incentivization schemes, as ratified by DAO governance.
Until Tranche 1 is filled, all TMDC actions (TWAPS, limit orders, etc) would result in additions to Tranch 1. Tranch 3 will remain empty. TMDC would have management responsibility of all grant and non-fox incoming transactions to the DAO wallet.
Once Tranche 1 is filled, TMDC would retain its 180M fox allocation, but any resulting TMDC actions would result in additions to Tranch 3.
If TMDC actions result in a deterioration of the 180M fox allocation, then TMDC will go to governance to top-up their allocation.
The interlinkage of these tranches through smart contracts ensures a seamless and automated governance mechanism, promoting transparency, efficiency, and strategic cascading of assets based on pre-defined rules and community governance decisions.
- Enhanced Security and Financial Control: Multiple wallets with distinct asset allocations mitigate risks and enhance the granularity of financial tracking and control.
- Strategic Asset Allocation: Tailored tranches allow for focused asset management, aligning with the DAO’s (1) operational needs, (2) strategic growth initiatives, and (3) community-driven innovation, in that order.
- Decentralization and Automated Governance: Smart contracts facilitate decentralized and automated treasury management, aligning with the ethos of DeFi and minimizing manual intervention.
- Increased Smart Contract Risk: The reliance on smart contracts introduces potential vulnerabilities and necessitates rigorous auditing and security measures.
- Reduced Maneuverability: The structured nature of tranches, especially the precautionary tranche, may limit the DAO’s flexibility in reallocating assets swiftly in response to market dynamics or emergent opportunities.
Voting “For” this proposal signifies support for the gradual restructuring of the ShapeShift DAO Treasury Ecosystem as outlined, recognizing the potential benefits in terms of security, financial control, and strategic asset allocation.
Voting “Against” indicates opposition to the proposed restructuring, preferring the current treasury management framework or suggesting alternative approaches for consideration.