KIP-37: Discretionary Swapping of Like-Kind Assets

kip: 37
title: discretionary swapping of like-kind assets
category: Delegation of Powers
authors: @DaddyMatty <[matt@rook.fi](mailto:matt@rook.fi)>
status: Sophon review
created: November 23, 2022
replaces: N/A
dependencies: N/A 

Proposal

Empower the Delegated Team to be able to discretionarily swap between Like-Kind Assets.

References

  1. Rook Treasury holdings
  2. Stablecoin Research

Background

Summary

The DeFi landscape is abundant with both opportunity and risk. These opportunities and risks are ever evolving and can materialize extremely quickly as a result of market and regulatory forces. To ensure that Rook DAO can nimbly respond to these changes in the operating conditions we must ensure that our execution processes are properly structured. More specifically, this document proposes that Rook DAO enable the Delegated Team with the ability to swap between Like-Kind Assets at their discretion.

Nature of powers to be delegated

This proposal delegates power to the Delegated Team to swap between Like-Kind Assets within each of the following three categories in Rook DAO’s Treasury [1] at their discretion.

  • Like-Kind Stablecoins
    • USDC
    • DAI
    • USDT
    • FRAX
  • Ethereum and Like-Kind Ethereum Derivatives
    • ETH
    • WETH
    • Liquid staking derivatives
      • rETH
      • sETH2
      • STETH
  • Bitcoin and Like-Kind Bitcoin Derivatives
    • BTC
    • WBTC
    • renBTC

Term of delegation

The powers as defined above will stay in effect until superseded or amended by a subsequent KIP.

Budget

No budget is required as part of this proposal

Mission Alignment and Rationale

Our goal here at Rook is to be on the cutting edge of blockchain technology and DeFi thought leadership. To accomplish this goal, we must ensure that we have sufficient runway and resources to support ongoing operations and development. The ability to nimbly respond to market and regulatory forces will enable the Rook DAO Treasury [1] to better preserve and grow the value of assets held.

Expected benefits for Rook

The expected benefits derived from this proposal are as follows:

  • Enables Rook DAO to more quickly respond to market, regulatory, or other risks that may materially impact our positions. Examples would include:
    • Protection against a depegging events
    • Protection from a potential freezing of assets by centralized parties
    • Protection against market contagion events
  • Enables Rook to take advantage of opportunities that may present significant yield or revenue generation opportunities

Potential risks and mitigation

As with all investments, the benefits earned through greater discretion come with risks that are both financial and non-financial in nature. These risks and related mitigations should be assessed by the DAO in conjunction with the benefits stated above and would include:

Risk Related Mitigation
Smart Contract Risk All swaps will be done exclusively through the Rook Protocol or other battle tested protocols such as Uniswap, Sushiswap, 1inch, and Matcha
Stablecoin Risk All 4 of the proposed stablecoin assets are relatively low-risk in terms of depegging. See stablecoin research [2]
Loss of funds via fraud or mismanagement Funds will continue to be held in the Treasury multisig controlled by trusted core contributors (“Delegated Team”).

Delegated Team

The parties to be delegated the powers in this proposal represent Rook Treasury’s current multisig signers

  • 0x00fA720A0943Cc51145b78775d2A4B8B5d83EcCc
  • 0x1C7ab7607DdDa01F3652CD5F985eA2F5e91100d9
  • 0xf251d356acF277507b78b0df07D82b94Df4B70A6
  • 0xf94ea804f840AA9e914E4288b84f52B99E29E9b8

Any adjustments to the list of multisig signers above will not be required to go through general governance, but will be disclosed within 7 days of the change made.

Oversight and Recourse

All actions taken using these discretionary powers will be reported back to the DAO within 7 days and will include the rationale for the actions taken.

Specification

Empower the Delegated Team to use discretionary to swap between Like-Kind Assets.

2 Likes

The added flexibility this gives to the delegated team will allow them to adequately respond to tail risks that are becoming more present in todays environment.
I support this proposal.

1 Like