Treasury Growth Plan (Phase 1)

Treasury Growth Plan

With the launch of the coordination game, treasury inflows are focused on Rook over non-native assets. This proposal aims to rectify this by using our existing inflows strategically in order to enable several self-sustaining flywheels that will allow for the constant inflow of non-native assets. The merit of these proposals stands on 3 pillars.

  • Does it increase non-native asset inflows
  • Does it directly add value to the Rook token
  • Does it directly add value to the KeeperDAO ecosystem

If the answer is yes to 2-3 of these questions then I view it as a productive use of treasury funds.

The Current State of Treasury Inflows

Ninja Revenue

KeeperDAO’sd proprietary keeper bot, Ninja, is currently standing as our largest source of revenue averaging at ~$200k per week based on current Hiding Book volume. This revenue can be liquidated and deposited into the treasury in whatever asset the DAO prefers.

CVX Bribes

The revenue generated from Votium bribes is ~$205K per lockup period. As it stands we are using these funds to bootstrap Rook staking through periodic buybacks and subsequent treasury deposits. This revenue can also be liquidated and deposited into the treasury in whatever asset the DAO prefers once the coordination game is launched.

Coordination Game Bids

This stands as our largest source of Rook treasury inflows. It is hard to predict the value of these inflows but one thing is certain, we need to find ways to convert this Rook into other assets without providing additional sell pressure to the market. Alternatively, we need to use that Rook to benefit the Rook ecosystem by staking treasury Rook onto other protocols.

BNT for Bribes

The current state of our CVX bribes consists of an unoptimized distribution of votes when using Votium in an attempt to maximize the $/vote value for our CVX. This is the maximally bearish use of our CVX.

Alternatively, squeezing the most “juice” out of our CVX through backroom deals with other protocols where the team decides on a vesting period for the bribes, and as compensation for the additional market risk the DAO would carry, we would be compensated at a premium over the Votium amount. The DAO could get an even higher premium over Votium through the LP’ing of the bribes through Bancor.

Bancor has agreed to emit BNT in the Rook-BNT proportional to the dollar value of the liquidity we provide to the protocol. This can then be maximally captured by the treasury through LP’ing a significant portion of our Rook to absorb the lion’s share of these BNT emissions.

This approach of vesting and LP’ing Bribes while at first glance could be seen as the DAO taking on additional risk instead compounds the revenue gained from a specific lockup period. This is accomplished through earning a premium over the Votium rate per vote, deepening Rook liquidity while also capturing supplementary BNT emissions proportional to TVL provided, and earning trading fees from the provided Rook and from the LP’ed Bribes.

Ribbon Flywheel

RBN’s upcoming ve-token model entails that RBN holders control which vaults receive RBN incentives. Emission projections are not possible since vault incentivization has not begun. With that said, the benefits of the proactive acquisition of RBN are that the market is not crowded for the trade and our acquisition will expedite the Rook vault creation.

This makes a hasty RBN token acquisition both a good directional bet on the direction of the market, enabling a highly liquid on-chain options market for Rook which is otherwise absent. The benefits of this beyond increased composability is an increase in Rook trading volume due to the newly formed options market for the token, this would inch us closer to the 2m daily trading volume required for a Chainlink oracle.

When the emission cap has been reached for the Rook vault a second vault will be created using accrued BNT from LP’ed Rook on Bancor and the supplementary RBN emissions will be diverted into that vault ensuring that all our RBN is used to divert emissions to KeeperDAO strategies.

TLDR

  • Buying Ribbon enables RBN inflow into our treasury
  • A Rook covered call vault creates a liquid on-chain option market for the token
  • Rook vault increase Rook composability
What percentage of CVX bribes should go into RBN buys?
  • 0%
  • 50%
  • 75%
  • 100%

0 voters

Tokemak Value Proposition

Tokemak’s vision for the project is to serve as a sustainable liquidity manager for tokens that chose to have their liquidity created and managed by one of their reactors. The pool 2 dilemmas that have plagued DeFi where mercenary capital has consistently dumped on community members or long-term investors, punishing this behavior in a pavlovian loop. This aims to be rectified by Tokemak by providing the liquid half of a pair while investors or protocols provide their native asset.

This effectively removes pool 2 inflation for projects that opt for this style of liquidity management and results in liquidity that is constantly managed and directed to where it is most needed. Rook has always had a liquidity problem and securing a token reaction would not only be beneficial for the health of the Rook token. Once Rook’s liquidity problem has been rectified, the Toke held in the treasury could serve as a source of revenue similar to how CVX’s bribe model works.

Tokemak Flywheel

At this point in KeeperDAO’s development, securing healthy and constant liquidity for our token and positioning ourselves as a market leader in vote control should be a top priority. A multi-pronged approach to accumulating a sizeable position of Toke would be the best where we use our weekly revenue to DCA into Toke. In the event Tokemak does a CORE-3 event, treasury Rook should be used to bribe existing Toke holders and a subsequent DAO-DAO swap of 3m of assets would follow in the event of securing ourselves a reactor.

From there, our relationship between protocols can deepen through the routing of Tokemak MM’ing through the Coordination Game.

What percentage of Ninja revenue should go into Toke buys?
  • 0%
  • 50%
  • 75%
  • 100%

0 voters

Seed Investing

Using the KeeperDAO treasury to incubate promising projects is sensible both with respect to the value we can provide as a VC with respect to developer acumen and potential integrations. this effectively enables KeeperDAO to create its own ecosystem and provides additional value for each subsequent project incubated using the treasury. From there, treasury growth from the assets acquired investing is quasi-granted from the perspective of the value we can provide to seed-phase projects compared to traditional VCs.

3 Likes

Personally I think we should def focus on the last one.
For example, I would contact the team of VarenX which recently integrated RenVM on their platform and ask them if they want to integrate with us too. Investing or just simply convincing smaller and new projects to integrate our services will eventually lead to more volumes and higher and more significant integrations.

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Great writeup, i propose similarly to seed invest our treasury into other DAO’s and projects. Seems to offer both; a higher return and a lower risk. Investing into a single project such as a tokemak and/or ribbon in this case confer higher risk to the treasury than seed investing into numerous projects. Seed investing can also offer signifcant upside in the way of voting and governance of new and upcoming projects, thus aligning them towards our vision. Alternatively, Bancor is also a solid project with a long track record spanning years, also very risk averse when compared to other yield farming platforms which is precisely what our treasury should be doing.

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Great job Peso. My personal opinion is that the last one is the best route to take. From a long-term perspective, the most optimal (external) move we can make is one that increases our product reach and product diversity. If we are able to use funds to support partners that support us back that is a situation where 1+1=5.

I would love to see you get more granular with why you feel CrocSwap and Curvance specifically are the best options to contribute seed funding to.

Again, very good work!

I have been speaking with some community members who are more knowledgeable about options than I am and they have raised so valid remarks about Ribbon, YFI also has an incoming ve model, the value prop of acquiring YFI is different but still valid as seen here, KIP Draft: Strategic YFI Aquisition. would you guys be open to switching the assets from RBN to YFI with our CVX bribe revenue?

Switch CVX revenue acquisition from RBN to YFI?
  • No
  • Yes, 50% of Bribes
  • Yes, 75% of Bribes
  • Yes, 100% of Bribes

0 voters

Peso, you’re going a bit too fast here, I dont understand the details of this mechanism.
thnx!

we LP using the bribes and Bancor rewards us for TVL, simple as

We vote with our vlCVX for some kind of BNT curve pool. That gives Bancor liquidity and they will compensate us (the bribe) dollar-for-dollar in ROOK (which they buy off the market?). We then have to put that ROOK into a ROOK-BNT pool at Bancor (for a certain time?), earning also LP fees.

Is that what you mean? I guess I dont understand why and how Bancor will “emit ROOK” in the ROOK-BNT pool

Or are you simply saying: we take our backdoor bribes to Bancor and they will give us extra rewards (in BNT?) for that liquidity. (then I still don’t understand the “emit ROOK” part)

Yes, it was a typo thank you for pointing it out, BNT emissions not Rook in the BNT-Rook pool

Getting a reactor is indeed the key thing to get liquidity through Tokemak (rather than accumulating TOKE). Once you are in with a reactor you will get TOKE votes on your reactor quite automatically because of how their voting system incentivizes a balancing of the whole system (i.e. if people dont vote for the ROOK reactor, the TOKE rewards APR goes up on our reactor, so people do vote for our reactor).
So, as long as this is how the TOKE system works, it is not super important to get a lot of TOKE. Just bribe once at a CORE event to get a reactor. (which may get expensive though, but worth a try).

Our alternative to get more (and probably cheaper) liquidity: simply use the treasury.
If we put a significant chunk of ROOK and ETH in a Uniswap V3 0.05% pool and actively manage the range (or let someone do that for us) we create quite some ROOK liquidity. The impermanent loss will not be huge (if we are careful enough to pick a wide range), and is probably covered by the trading fee income. In any case, if there is impermanent loss it is probably because the ROOK price went up a lot, which is a luxury problem, and then it is fine if we take the impermanent loss collectively through the treasury. Most likely it will be compensated by the ROOK value increase anyhow.
And if the ROOK price goes down, we collectively buy more ROOK, which is also fine for us believers.

We have the luxury of a large treasury, so no need to get involved in bribe wars to get liquidity.

The thing with opting to buy Toke instead of opening a V3 position is that we can use our accrued Toke as a source of revenue once Rook liquidity is deeper using bribes from smaller protocols who are relying on pool 2 emissions to retain their liquidity. What happens during a CORE event is that Tokemak does a DAO-DAO swap with the winning reactors for Toke and our native asset, usually worth around $3m.

Hey everyone, Tiago from Bancor (BizDev) here.

Great strategies, happy to see KeeperDAO treasury being used actively!

The proposal to match rewards with BNT from our side has been voted and passed on Snapshot
https://snapshot.org/#/bancornetwork.eth/proposal/0x582b507168cfecef199d3e45cf1723229824c6e4f7bac7681c22fdda7dffd137

Essentially, we will match the dollar value amount of any ROOK rewards at the time you commit the funds to the Bancor ROOK pool with BNT rewards, up to 50,000 BNT (roughly $154,000). The program lasts 24 months.

There is currently space for $1,012,000 of ROOK to be staked single-sided.

Should also note that a proposal to deposit 6,400 ROOK has recently passed and the funds were LPed to the Bancor ROOK pool. This means that there are already significant KeeperDAO treasury funds deployed on Bancor that would benefit from the LM program.

1 Like