TIP 47: Liquidity Bootstrappening and Growth Part 2 - PCV (Temp Check)

Proposals
1

TIP 47: Liquidity Bootstrappening and Growth Part 2 - PCV

Proposal Type:

Token Holder DAO Governor Bravo

Overview:

This is a multi-phased proposal intended to deploy a DAO-owned strategic plan to deepen tBTC liquidity and develop essential Threshold BTC-based Protocol Owned Liquidity.

It builds a DeFi revenue flywheel owned by the Threshold DAO and managed by the Threshold Treasury Guild (TTG) through four phases. This proposal was originally authored by Matt.

Important Note:

This version of TIP 47 is the result of multiple working sessions and iterations with the TTG. The Threshold DAO onchain proposal flow process requires a successful temp check snapshot before queing into Governor Bravo. The governance plan is to conduct the Threshold DAO temperature check to gauge the spirit of this proposal while the TTG conducts the final diligence and parameter determination required to execute the proposal.

If the temp check passes, this proposal will be amended to include final details before moving onto Governor Bravo vote if it successfully passes the temp check stage. To improve readability any such detail will be identified by a :pencil2:.

Milestones and Deadlines:

  • Threshold DAO Temperature Check
    • 04/07/23
  • Amended proposal submitted to Threshold DAO
    • Week of 04/10/23
  • Governor Bravo proposal kick off
    • Week of 04/07/23
  • Dates for each bond phase are intentionally left open to provide execution flexibility for the TTG.

Who Is Involved?:

Threshold Token Holder DAO, Threshold Treasury Guild

Detailed Summary:

Phase I

The first phase is a test of the bonding mechanism, and our ability to get the word out.

We do a public campaign to retire v1, in coordination with Curve and maybe Convex: and offer all LPs a deal to sell their position for T. Initially we use Bond Protocol, the latest iteration of Olympus Pro, to avoid writing our own smart contracts.

:pencil2:Bond details:

Phase II

In the second phase, the DAO goes hard, converting as much Curve BTC LP tokens as quickly as it can to Curve tBTC v2. The focus should be on “dead” pools with little trading volume, whose LPs are likely open to switching pools (lazy mercenaries).

In this phase, LPs are offered both Curve tBTC v2 LP tokens and T for their other LP tokens… Because T isn’t used primarily to reward LPs, there’s less pressure than in Phase I — instead, the DAO is spending down its diversified treasury for growth, periodically unwrapping the BTC variants it receives.

We can do a public campaign around “Retiring renBTC”, ideally in coordination with Curve and Badger. “Have renBTC LP tokens? The Threshold DAO will buy them off you!”.

:pencil2:Bond details:

Phase III

At this point, the DAO will have a large Curve tBTC v2 position. The DAO will incentivize votes on the Curve tBTC v2 gauge, further strengthening growth and brining more immediate value back to the DAO. The TTG will have discretion in determining the incentive schedule based on a budget proposed later in this document.

This is a great time for a Yearn Curve tBTC v2 factory vault.

Phase IV

In the final and optional phase, we deploy an ongoing bonding strategy. This exact venue for these bonds is out of scope of this proposal and will be discussed later.

:pencil2:Bond details:

  • The bond is for T. If possible, new stakers should be able to skip any vesting period
  • enabling a constant discount on T.
  • Bonds are bought for
    • Curve HBTC
      • Make sure we have a way to unmint HBTC consistently
      • Low discount, this is about getting people to switch.
    • Curve tBTC v2
      • This is our ongoing long-term PCV incentive

Cost and other parameters

Without testing the market, it’s difficult to know the cost of liquidity over time, or how sticky the liquidity will be. Thus , this proposal sets aside a high-level budget, managed and reported on monthly by the Treasury Guild.

  • :pencil2: 10M T for use on vote incentives via platforms like Votium
  • :pencil2: 40M T for directly purchasing BTC-denominated PCV

The TG can then start low, and increase or decrease investment where appropriate.

TX Details:

Additional Information:

7 Likes
2

Are we giving the Treasury Guild enough flexibility here in case these LPs aren’t responsive? Eg maybe none of them are around / interested, and we need to pivot to different liquidity sources?

EDIT:

Ah, this sounds flexible enough that the TG can manage to outcomes.

3 Likes