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
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.
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.
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.
- 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
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.
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.
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.