[ARCHIVED] A more decentralized treasury management

General Archive
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Proposal Title: A more decentralized treasury management
Authors: imsandwich
Date: 10/1/2022

How will your proposal, if activated, benefit BitDAO?

I am proposing the development of a new protocol sponsored by BitDAO that will push the envelope of treasury management. To date, DAO treasuries have been managed by vested teams who have control over:

  1. What assets to buy/sell using treasury fund within parameters set by the community, and
  2. The execution of these trades (e.g. choice of DEX, slippage thresholds, rebalancing schedules etc.).

While (1) is contingent upon discretion by a vested team with rigorous understanding of the markets, as discussed recently in thread, (2) can be achieved in a much more transparent and decentralized manner through open auctions.

Specifically, the treasury council will propose a certain change to the treasury portfolio (e.g. sell 1000 USDT, buy 10 ETH, buy 100 xSUSHI etc), which will then be routed to our smart contract, triggering an open auction. Anyone can bid on fulfilling a fraction of the trade with some cost, and at the end of the bidding interval, the most favorable bid offers will be executed. Most importantly, before the trade goes through, its cost will be compared to the slippage of a baseline swap through AMMs to ensure that it is always more favorable than the status quo.

I believe that such an auction protocol is uniquely suited for BitDAO due to its commitment to decentralized governance and large treasury size. An open auction removes the possibility of collusion by trading through select liquidity pools with subpar slippage for ulterior motives. Successful execution will motivate other DAOs to adopt the same practice.

What are the projected outcomes?

This proposal will work in conjunction with other treasury proposals to facilitate the diversification of BitDAO’s treasury positions, particularly in buying yield-generating assets. While the treasury council can execute low value trades manually, they have the option to utilize the proposed auction mechanism to execute large trade and minimize slippage.

How long will it take to complete your proposed changes?

6-12 months

Who is involved?

imsandwich

What are the milestones?

  1. Proof of concept. Regular updates on product MVP and functionality on testnet.

  2. Auditing of smart contracts to find out any potential exploits.

  3. Live testing with low volume auctions.

Specifications:

  1. Timeline
    -1 month of idea validation, scoping out best L2/off-chain solutions
    -1 month of team formation
    -4-10 months of development
  2. Budget
    $250k-500k funding
  3. Add technical details and/or links to source documentation
    One-pager doc
    Next Steps? If this proposal is accepted, what are the immediate action items?
    Team formation, forum discussion on best approaches.

Review Process

The BIT Community and delegates might discuss and verify the following before considering proposals.

Personnel

  • Is the team credible?
  • Are they qualified to do this work?

Technical

  • Does the proposal make sense technically?
  • Does this fit into, or compliment, other projects in the BitDAO ecosystem?
Would you like to see this proposal go to vote?
  • Yes
  • No
  • Needs work
0 voters
1 Like
2

@imsandwich
In accordance with the forum archiving policy, this discussion will be moved to the General Archive.