KIP Draft: CVX Positioners

KIP Draft: CVX Positioners

kip: TBD
title: CVX Positioners
co-authors: Trepe, Whatsthedeetz, Curmudgeon, Yung Peso, Sha-har, DaddyMatty, Cole, Daniel
status: Draft
created: 2021-12-TBD

Proposal:

Create a team of three individuals to explore, execute, and document the management of the acquired CVX assets. Together they will oversee the entire lifecycle of the strategies they research and form. Special attention will be given to transparent communication and community integration. This team will be voted in by the DAO, and will receive compensation for their time and effort.

Background:

The Curve-Convex-Votium ecosystem has continued to evolve as a venue for income and influence, both active and passive. The complexity and hands-on approach required to maximize the benefit generated by our CVX assets creates the need for a small, dedicated team. Upon establishment of a performance baseline and reporting cadence, the team will operate in a largely autonomous fashion to create the best possible return for KeeperDAO using our treasury’s CVX voting power.

Until this team is formalized and in-action, the CVX votes will be locked directly on Convex to accrue platform rewards. This will begin as a compounding position with all proceeds TBD :speech_balloon: until initial research into strategy ROI, opportunity costs, and their broader implications are presented to and accepted by DAO leadership.

You may wonder, for an asset that could manage itself with considerable ROI (outside of a few clicks every two weeks), why is a three person team necessary? How is it better than two or one or full automation? The hypothesis goes something like this: While KeeperDAO pursues coordination and cooperation at its heart and aligns its organizational efforts in that light, it is imperative that we seek and seed talent that can find balance in their approach to collective ideas and decision making. Creating multiple opportunities around a well-defined focus (see: Responsibilities) is seen here as a worthwhile experiment in that vein and a strong signal that our DAO champions diversity of thought. It also demonstrates a healthy awareness of the possibility for unintentional or deliberate misuse of resources when exploring new territories, and the premium our DAO places on mitigating that risk.

As for automation, in our early days of scaling and governance we must first look behind that would-be curtain to expose and understand the potential being staged. Only then can we responsibly proceed toward any abstraction in a supremely knowledgeable fashion. Operating a team of positioners for an initial six month period is a bet that the team’s collaboration will unlock greater potential in a very fertile area of DeFi. This aligns with the DAO’s understanding that intentional cooperation has a positive multiplying effect on results.

As the results of the initial single-quarter term become apparent, a KIP will be drafted regarding the team’s continuation or dissolution. If the team is dissolved, its individual members will be strongly considered for other opportunities at KeeperDAO.

Eligibility:

  • Active participant in the DAO
  • Be able to attend all Positioner team meetings
  • Needs to hold ROOK token

Qualities sought:

  • High reliability factor
  • Asks critical questions
  • Listens carefully
  • Can adapt an approach quickly based on new information
  • Empathetic communicator
  • Natural collaborator

Responsibilities:

  • Deeply understand the governance of Curve-Convex and detail the scope of the team’s focus.
  • Establish a timeline of voting responsibilities and detailed instructions for the collaboration with KeeperDAO’s multisig team to delegate votes and claim rewards.
  • Develop a transparent framework for acceptable bribe scenarios and the timing of their communication to the community and public.
  • Develop a framework for internal team checks and balances, and coverage of responsibilities.
  • Create strategies for deploying votes, forecast the ROI of each, and coordinate the management of assets received from these activities.
  • Conduct and document related inter-protocol communications and prospect development including, but not limited to, bribe discussions and OTC opportunities.
  • Build meaningful ecosystem relationships that support the DAO’s overall mission and execution layer ambitions including, but not limited to, Hiding Book integrations, collateralizing ROOK on different platforms, and driving volume through our platform.

Structure:

Commitment: Full Time Position

Location: Remote

Base compensation: ROOK

Incentives: TBD :speech_balloon:

Program Costs:

Base compensation:

  • 12 weeks (Initial trial period)
  • 3 positions
  • 10 ROOK each/2 weeks (Voting cycle length)
  • 180 ROOK (Initial trial base cost)

Incentive compensation:

  • Performance beyond benchmark (PBB) is the additional economic value created by the team’s actions each voting cycle. The current benchmark estimate for the full CVX position is ~400k USD/2 weeks. The benchmark will be set using the team’s initial ROI research and may be a variable value. The PBB incentive will be paid in TBD :speech_balloon: (ROOK, token earned from voting, other treasury asset) according to the following proposed schedule:
  • 24% of PBB, split evenly (8% each).
  • 3% increases as length of benchmark-exceeding streak increases (voting cycles successfully surpassing benchmark revenue).
    • Round 1: Benchmark exceeded, 8% of PBB each.
    • Round 2: Benchmark exceeded, 9% of PBB each.
    • Round 3: Benchmark exceeded, 10% of PBB each.
    • …
    • Round 6: Benchmark exceeded, 13% of PBB each.
  • 4% of PBB for the lead generator/strategy initiator (of internal or external origin), that does not reduce the team’s incentive pay.
  • Total incentives capped at 43% of PBB for this initial program.
  • Incentive increases are frozen (not reset or slashed) if a streak is broken, and is resumed after a new streak begins (at least two voting cycles surpassing benchmark revenue).
  • Any earned ROOK through this program will be vested via TBD :speech_balloon: schedule.

Total costs of operation = base compensation (~27k USD, ~9k/month) + incentive compensation (28-43% of PBB) + all transaction costs (to be estimated by team) + PBB opportunity costs

Net proceeds of operation = benchmark revenue (~2.4m USD) + 57-72% of PBB + emergent/aligned/captured benefits

Selection:

Any eligible individuals may compose a short bio (< 100 words) and answer the following questions:

  • Question 1: Please define ROI in a context of your choosing.
  • Question 2: How might the CVX Positioners program cover it’s costs of operation?
  • Question 3: How might the team maintain transparent communications with the KeeperDAO community?
  • Question 4: Please offer a brief projection of the future of the Curve-Convex sphere along with the broader implications of that future.

Responses will be collected via form by a deadline TBD :speech_balloon: and published together as a forum reply to this KIP as well as in a Discord channel TBD :speech_balloon:, with ample time for exposure ahead of the Snapshot vote.

Once the proposal goes to Snapshot, each of the candidates will be listed as a voting option. The proposal will use the Ranked Choice voting system with a minimum percent of votes needed TBD :speech_balloon:.

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