[PASSED] BIP-14 Updated Parameters and Initiatives

[Curated Archive] BitDAO treasury management
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Context

This proposal has been inspired by community feedback regarding: 1) the pathway for decentralization of $BIT holdings and reduction of total supply; and 2) a focus on building and user adoption.

Proposal

Parameter Updates

  1. The Contribution Asset Mix shall be changed to 100% $BIT starting 2022 September 16th.
  2. Contributed $BIT shall be burnt (by sending directly to the nominated burn address).
  3. Target Daily Purchase Amount (TDPA) shall be paused from 2022 September 16th.

New Initiatives

  1. Bybit shall bootstrap the R&D and go-to-market of BitNetwork (temporary name).

Additional Information

Commentary on Parameter Updates

Based on strategic needs, the parameters (Contribution Asset Mix, Burn, and TDPA) can be dynamically adjusted via proposal for strategic needs. Factors to consider include:

Burn and Decentralization

Decentralization of $BIT holdings is required for the long-term security of BitNetwork, and governance function of BitDAO. We can kick start this process by Bybit contributing and burning $BIT.

Use of Funds

The current BitDAO treasury holds ~$1bln of non-$BIT assets, and 3bln+ $BIT units — which is sufficient to fund existing ecosystem partners (e.g. Game7 and zkSync / zkDAO, etc.) as well as a handful of new large initiatives. Going forward, we recommend that BitDAO is highly selective with new initiatives, by applying a “flywheel for growth” mentality, and prioritizing synergies with BitDAO ecosystem partners from a user and technology perspective.

More on BitDAO x Infra

As a follow-up to the original forum post

BitNetwork (temporary name for BitDAO Protocol) will be a suite of Ethereum scaling solutions including an optimistic rollup and zk rollup built using an iterative modular chain approach, and supported by BitDAO’s native token $BIT. More details will be provided shortly.

It is designed to bolster support for high throughput decentralized applications (dApps) — from decentralized derivatives exchanges (DEXs) and gaming, to operations of decentralized autonomous organizations (DAOs).

Immediate go-to-market advantages include synergies with BitDAO ecosystem; and synergies with Bybit users, distribution networks, relationships, and exchange onramps. To accelerate the timelines for BitNetwork, Bybit will commit people and resources to bootstrapping: global R&D efforts (including core protocol development, protocol research, user portals, developer portals); and go-to-market efforts (grants, accelerators, ecofunds).

$BIT, BitDAO, and BitNetwork

$BIT will represent: the protocol value of BitNetwork, value and governance control over the existing BitDAO treasury and initiatives, exposure to BitDAO ecosystem partners, the Bybit contribution, and continued use cases across on-chain and off-chain platforms.

We predict that the circulating supply of $BIT will decrease over time through the following mechanisms: contribution and burn, direct treasury burn, the tokenomic design of BitNetwork, and utility integrated into BitDAO ecosystem partners.

The focus on “build” will allow BitDAO to participate in the fastest growing sectors such as ETH scaling, zero knowledge technologies, Web3 applications, etc. This direction coupled with significant reduction in the supply of $BIT will have many advantages for $BIT holders.

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Hello @Ben.Zhou ,

These changes are very important and impactful, it is good news that Bybit will participate even more in the future development of BitDAO and BIT Protocol.

The change in Bybit’s contribution by cutting stablecoins is inevitable given the sanctions that have taken place and the use of Tornado Cash. However, the market has a good view of the BitDAO balance sheet mainly because it is one of the most diversified treasures compared to other DAOs, a greater centralization of BITs (with or without burning) can be even more critical due to market price fluctuations.

If possible, creating a stablecoin from Bybit or directly linked to BitDAO to work with the interests of stabilizing the treasury and benefiting the BIT Protocol tokenomics and dapps would be excellent.

In addition to the treasure, this change directly impacts the planning of soft-proposals authors (myself included), projects were developed and planned for months to be in sync with the plans and information that we were given, it is important to listen to this part of the community, after all, they maintained the interest of the community and the market for long periods of scarcity of news/proposals, participated in community calls and discussions on official channels… that is, they were always active in favor of BitDAO. Some proposals even have features (mass adoption, charity, climate neutral, etc.) that would allow them to be a direct part of the BIT Protocol and not just independent-partner projects (this would also add more BIT use cases).

On the topic of burning BITs, it is one of the oldest and permanently discussed topics, given the inevitability of approval of this resource, I would like to indicate that there was also some instrument that would allow the pause in the burning of tokens, as could occur in periods where the derivatives market is spot dominant and a burn would not add benefits to holders.

I used the term " BIT Protocol" because I think it sounds better, but I’m looking forward to seeing the official name too! :grinning:

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Great to hear! …the.temporarily named BitNetwork seems like an excellent potential growth avenue.

How does burning the contributed $BIT help towards decentralisation?

Burning $BIT, an interpretation; the entity burning tokens reduces their power, indirectly transferring it to the remaining holders by increasing their relative holding of the overall token supply.
In this case, the BitDAO Treasury is reducing it’s power, increasing the power of all other holders (as the contribution being burnt, would otherwise end up in the Treasury)

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Bybit will burn our portion of the Bit token, this will lead to Bybit holding eventually becoming less significant.

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Thanks for clearing up my misunderstanding!

My assumption had been that the medium of exchange would be $BIT, where ByBit would acquire it from the open market (creating additional demand), rather than reducing their holding.

It’ll be interesting to see the effect of this approach, as I’'m guessing the ByBit holding is not really circulating.
The effect of reducing the market cap, while not reducing the circulating supply, although there’ll be nothing stopping the contributing being a combination of both :thinking:

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I do not agree with this proposal, I think it is better to continue with the TDPA and above all NOT to burn now, but to wait for more favorable market conditions and with a more “mainstream” BitDAO.
I think it would be best to start with the burn in the course of 2024.

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the contribution burning from bybit is from the contribution asset mix (100% bit ) in future or bybit taking extra contribution to burn the bit token? I think for the Parameter Update for the main 3 should be categorize one by one proposal to clarify the information

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I’m still questioning, whose $BIT is going to burn?

I don’t think anyone wants their $BIT to be burned, let alone burn the $BIT available in the Treasury to reduce the value of BitDAO.

Because we know bybit is the majority of current $BIT holders, although some are still locked.

Burning is not the solution. Better to use $BIT as a use case in Bybit for all available features.

  1. Make $BIT the sole requirement for bybit users to be able to join launchpad.
  2. Make $BIT a condition for the user for ByVotes, not the stablecoin used.
  3. Whitelist $BIT holders on Bybit NFT Marketplace like GrabPic and mystery box.
  4. So $BIT as an option for withdrawal fees outside bybit
  5. Make $BIT holders a condition for participating in various trading events on Bybit.

I think burning $BIT tokens will only have an effect in the short term. Don’t make this the future, because many tokens that burn eventually useless and die :v:

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If the burning continues, I think there should be a maximum of tokens from the total burned supply.

Example:

Total supply: 10.000.000.000 $BIT
Total Burn: 5.000.000.000 $BIT (50% of total supply)

So after the burned reaches 50% of the total supply, the burned system will be stopped. Because I think the $BIT system is burned only for the short term, not sustainable.

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Big plans!

And yeah, saying you are going to burn BIT will of course get lots of support from bag holders. Would really all come down to the details I suppose.

Optimistic rollups and especially zk tech. This is not simple stuff. Any idea which devs would build this?

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Apologies if I missed this but what will happen with the existing treasury assets (ETH, USDC etc?).

How will purchases of $BIT work? I am guessing something similar to what exists for ETH and USDC but this is a fundamentally different market than those two because of how much more illiquid it is. Right now we’re averaging around $1m <> $3m in daily net purchases. For this to happen on $BIT both the token price and liquidit profile would substantially change. When iwll the vote go live for the proposal?

Interested in hearing more about this part of the conversion process!

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Hi @Ben.Zhou , I was wondering if you’ve considering a variation of this proposal where the asset mix and contribution type are shifted more gradually and iteratively over some time period. While I definitely appreciate the proposed burn of Bybit’s BIT holdings so that the ownership of BIT is more diversified and community owned, I also believe that ETH contributions into the treasury is what gives BIT its current value.

We’ll certainly see greater diversification of BIT’s value proposition over time, but my hesitation is that a dramatic immediate shift may not give the DAO enough time to progress in building those other value propositions. If the transition happened more gradually on a defined timetable, it would allow both Bybit and the community to measure the impact the transition is having, and to make necessary preparations in building greater growth flywheels like you’ve described.

Obviously, your contributions to the DAO have been immense and I think we all as a community are profoundly grateful for these, so I certainly also want to respect whatever your preference is.

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Hey @jacobc.eth I agree with you, but the proposal has already been sent to governance (you can check this link: Snapshot).

#

To be able to submit a proposal to the governance you need 132,000 USD (200,000 BITs), for approval it is 66,000,000 USD (100,000,000 BITs). All decisions, significant votes and proposals are currently authored by BitDAO Core, even proposals and projects with good approval in the community cannot move forward due to lack of support or options (we do not have independent delegates in contact with the community).

Continuing in this way, excluding the proposal and financing approach or leaving it as a second priority, BIT will become practically equal to BNB and this may even make speculators happy, but I think it’s a waste of greater potential.

I hope that some improvements or adjustments can still be made.

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@Ben.Zhou
I have some confusion about BIP-14. When Bits of contribution on a daily basis will burn ? Did it set the date?
Bits on the treasury (nearly 3 billion bits) will burn or not? because you mentioned that “direct treasury burn”.
Please explain to me.

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As BIP-14 has passed, this discussion will be archived in Curated Archive: BitDAO Treasury Management