kip: 36
title: expand funding and strategies of testing multisig
category: delegation of powers
authors: @DaddyMatty [[matt@rook.fi](mailto:matt@rook.fi)], @Pai-Sho [[paisho@rook.fi](mailto:paisho@rook.fi)], @zakhtar [[zakhtar@rook.fi](mailto:zakhtar@rook.fi)]
status: draft
created: 2022-11-15
replaces: N/A
dependencies: KIP-30
Proposal
Amend KIP-30 [1] to expand the funds in the Strategy Testing Wallet (“Testing Wallet”), extend the period of delegation and expand the types of trading strategies allowable within this wallet.
References
[1] KIP-30
[2] Testing Wallet Analysis
[3] Testing Wallet Dashboard
[4] Rook Treasury Holdings
Background
In August 2022, Rook DAO unanimously voted to adopt KIP-30 [1] that established and funded a new multisig wallet for the purposes of testing passive strategies using the Rook Protocol, and empowered a Delegated Team to create and test these strategies. The initial budget and set of approved stablecoins is outlined below:
| Asset | Amount (Units) |
|---|---|
| USDC | 150,000 |
| DAI | 150,000 |
| USDT | 150,000 |
| FRAX | 150,000 |
| ETH | 1 |
| Total Funds Requested | 600,000$ + 1 ETH |
As seen in our Testing Wallet Analysis [2], in the first 64 days of testing, these strategies produced an adjusted ROI and APY of .45% and 2.58%, respectively. More information about key performance indicators and other data can be found in our Testing Wallet Dashboard [3], with full details of Treasury’s net positions and performance in our Dune Dashboard [4].
Our success in developing and testing stablecoin swap strategies has given us new insights that we propose to build on as we continue to develop new strategies that will support product testing and development. This proposal builds on the arguments and rationale first laid out in KIP-30, as well as the insights gained in the past two months, to request additional resources and discretion to enable us to further develop these strategies.
Nature of Powers to be Delegated
This document proposes that the powers delegated be expanded from those in KIP-30 [1] to allow for the Delegated Team to engage in non-1:1 swaps between Approved Stablecoins. More specifically, the Delegated Team would be empowered to swap Approved Stablecoins at prices above or below a 1:1 trade.
In regards to swaps priced below 1:1, the Delegated Team shall not set orders below 1:0.98 except in the case of Depeg Risk. A Depeg Risk event is defined as an event where a stablecoin price drops below 0.95. In this case, the Delegated Team would have the discretion to set an arbitrary price to exit the position to better protect DAO funds.
Expanding these strategies in this manner would enable the Delegated Team to:
- Take more advantage of various arbitrage events
- Rebalance out of temporarily unproductive assets into assets with a higher likelihood of capturing rebates
- Rebalance out of assets that may hold additional risks due to market or regulatory conditions
- Better protect the funds from potential depeg risk
Additionally, this document would enable the use of other protocols such as 1Inch, Matcha, or Uniswap in cases that require greater nimbleness to react to market conditions and other risks.
All other powers delegated under KIP-30 [1] will remain in effect.
Term of Delegation
The powers as defined above will stay in effect until the program is either terminated at the discretion of the Delegated Team or the DAO approves through general governance to end this program. This is a departure from KIP-30 [1] which required funds be transferred back to the Treasury after 180 days in effect.
Budget
This document proposes that the Testing Wallet receive an additional $400k in DAI (“Additional Funds”) to be used for the purposes of swapping Approved Stablecoins.
Mission Alignment and Rationale
Information pertaining to the mission and alignment of this proposal will adhere to what is adopted under KIP-30 [1].
Expected Benefits for Rook
All expected benefits as outlined within KIP-30 [1] are still applicable with no changes of note.
Potential Risks and Mitigation
All risk and mitigation measures remain in effect as stated in KIP-30 [1].
Delegated Team
The full-time contributors to be delegated the powers are to remain as follows:
| Contributor | Signing Address |
|---|---|
| @Deetz | 0x722f531740937fc21A2FaC7648670C7f2872A1c7 |
| @Pai-Sho | 0xDAAf6D0ab259053Bb601eeE69880F30C7d8e5853 |
| @Zakhtar | 0x3C3ca4E5AbF0C1Bec701375ff31342d90D8C435E |
Oversight and Recourse
All oversight and recourse requirements under KIP-30 remain in effect. Transparency into the performance of these funds can continue to be found in our Testing Wallet Dashboard [3] and in our Testing Wallet Analysis [2].
Specification
- (0x9a67f1940164d0318612b497e8e6038f902a00a4) to deploy the Additional Funds ($400k) as defined above to the Strategy Testing Wallet (0x6d956a6aaca9bb7a0e4d34b6924729f856c641de) within 60 days of ratification of this proposal
- Delegated Team continues testing Approved Assets within Rook Protocol at their discretion