Aim of the proposal
Enabling full-fledge community governance of 1inch protocols, facilitating a sustainable, long-term model for revenue stream distribution.
The 1inch Network’s DAO-based governance system has existed since December 2020. In June 2021, it was revamped. Now, time has come to make another step towards transparent and sustainable governance by introducing the Treasury.
Proposed Treasury scheme
The DAO makes all decisions on the distribution of funds accumulated in the Treasury, new token minting, adding and removal of modules from the network.
The Treasury’s central component is the Trading Strategy, a stable liquidity pool powered by the 1inch Aggregation Protocol. The Trading Strategy is executed as a newly-created fund subsidized exclusively by the 1inch Network protocols’ current revenue streams.
Treasury governance includes two layers of Instant Governance and a separate Governance system focused on community proposals and administered via Snapshot and SafeSnap voting.
On tier 1, 1INCH stakers and vested token holders vote on the revenue stream distribution, choosing among all available options, including token burning, payouts to referrers and depositing of tokens to the Trading Strategy.
Two types of tokens can be used for voting. st1INCH represent staked 1INCH tokens, and v1INCH tokens represent 1INCH tokens held in the vesting smart contracts and owned by backers, advisors and core contributors. (For more on 1INCH distribution, see this post.) st1INCH and v1INCH have the same voting power.
On tier 2, 1INCH stakers and vested token holders decide on the allocation of Treasury funds via Snapshot voting. The majority of these funds cover project development costs, while the remainder would be sent to a secondary burn address.
The Trading Strategy
The trading strategy is a 1inch liquidity pool of two industry-standard stablecoins (USDC-USDT). This automated market maker (AMM), highly profitable and optimized for the USDT/USDC pair, will be integrated as a liquidity source to the Pathfinder algorithm. Earnings are estimated to be around 5-10% APY. The Trading Strategy is viewed as fully open-source and available for various integrations.
The governance process uses SafeSnap as a module enabling on-chain execution of off-chain votes.
SafeSnap facilitates the execution of transactions that have been approved via a Realitio question for execution. A question asked on Realitio consists of a proposal ID (e.g. an ipfs hash) that can be used to provide more information for transactions to be executed, and an array of EIP-712-based transaction hashes representing the transactions to be executed.
Overall, the 1inch Network Treasury is expected to come as a major step towards mature community governance of 1inch protocols, which, in turn, leads to long-term sustainability and growth.
Your feedback on this proposal will be appreciated