TIP-043: Coverage Pool Migration

Vote Type:

Token holder DAO snapshot, 5 day vote window

DAO Elected Representative Sponsor:

Luna

Overview:

This is a proposal to gracefully sunset the Keep-only Coverage Pool and migrate to a new T-only coverage pool.

The key components of this plan are: stealth deploy, self seed and reduce DAO cost.

Milestones and Deadlines:

  • The T-only Coverage Pool audit is complete

  • The T-only Coverage Pool is deployed the the week of Nov. 28th

  • The T-only Coverage Pool is seeded by the Threshold DAO the week of Nov. 28th

  • Rewards on Keep-only coverage pool end 30 days after this proposal is passed

  • The Keep-only Coverage Pool withdraw period is 21 days. Current depositooors are eligible for rewards during this time. A 30 day grace period is proposed to give ample time for current users to complete the withdrawal cool down without missing rewards.

Who Is Involved:

Threshold Treasury Guild, Threshold Council, Token Holders, Keep-only Coverage Pool Depositooors

Detailed Summary:

This proposal ensures that a Coverage Pool exists at all times to backstop risk in the tBTC system with a focus on the v2 launch. An initial amount of TVL is proposed but the DAO can decide to add more at a later time.

No gap in coverage is achieved by continuing rewards on the current Keep-only pool until after the T-only pool is deployed and seeded with TVL by the Threshold DAO.

Stealth deploy T-only after audit finished:

  • No concerned with attracting major TVL. Want to make a clean transition
  • Don’t fracture DAO marketing and growth efforts away from north start which is successful v2 launch and attracting deposits
  • No pressure to launch dashboard support for T-only Coverage Pool

DAO seeds with $250k in T:

  • DAO saves money by not paying other people to take this risk in the new pool
  • DAO can decide to deposit more in the future
  • This is here in case the bridge loses funds to malicious operators, vulnerabilities, etc. The T is used to either buy+burn TBTC, or buy+donate BTC to maintain the peg.

Risk Manager:

  • Treasury Guild becomes risk manager on the T-only Coverage Pool. This is the group responsible for claiming coverage out of the pool if needed. The Treasury Guild has autonomy over how this role operators within the DAO and can make changes when needed.
  • The DAOs funds in T are at risk only so the can call coverage from pool without limit
  • Move fast in event where coverage needs to be claimed. Not time for full DAO ratification
  • Further discussion on an extended risk manager role is discussed in this forum thread. This content of this discussion was determined to be outside of the scope of this proposal

Tx Details (If required):

N/A

Additional Info (Optional):

This proposal was discussed first at a Threshold Treasury Guild sync with previous conversation available in the Threshold Treasury Guild channel on Discord. It was also discussed at a DAO wide community call. Risk manager consideration and clarity where then discussed at another Treasury Guild call.

1 Like

This seems like a reasonable updated approach, particularly considering there’s also flexibility for a risk manager role in addition to the Treasury Guild, pending that separate proposal. Thanks for all the work on building consensus, @Will.

Just one clarifying point: I believe by “north start” you meant to say North Star - i.e., guiding principle.