[1RC] Self - Earning DAO Engine V1.0

[ma70_supra]

Roxan, thanks for the opportunity to voice my opinion.
To be honest, I’ve been reading Shogun and Roxan’s posts of late.
I haven’t been able to keep up with my knowledge They are both great.

The part of this proposal that I find so brilliant is…
I understood that it takes into account that the decisions the DAO will make in the future will not always and permanently be correct. That’s what I found wonderful about it, because I am a worrier.

This industry is still unsettled and major newsworthy incidents are happening every year, and with the recent TerraUSD de-pegging incident, I am concerned about using outside projects anyway,
but in the extreme, would you choose to shut down completely to eliminate the risk altogether?
If you ask yourself, sure…I would come to the conclusion that a certain amount of risk is unavoidable.

[Roxan]

@3.1415r

concentration limit in addition to the diversification quota

I was actually thinking on the same Note but i think it may depend on the Type of protocol & how good it is in terms of security . BTW Divs. Quota already planned no less than 5 protocols for each category so if Treasury allocation is near 80 that means per project allocation will be less anyway

@3.1415r

explicitly restrict the list of stablecoins the treasury funds can get exposure too

I was always a bit reluctant in choosing any coin other than USDC [circle] or BUSD [paxos] btw
But UST scenario shown which stablecoins are the best & worst . Might help a lot in choosing .

@ma70_supra

I am concerned about using outside projects anyway,

Same , I was also not convinced to use outside projects for treasury but i think it actually seems to be pretty flexible like using Diversification & Health factor & Project reassessments .

IMO such things can really reduce the amount of danger they pose during an incident .

For example , Pulling out funds the moment Health Factor starts dropping . This actually made me feel a bit better . like during UST depeg some VC pulled out all money the moment ust gone 0.8$ or something & thus saved themselves from a Major Loss

[kravi]

A big clap for such a thorough proposal @Genkai.Shogun

I guess I got a chance to make a comment or two, as below.

@Genkai.Shogun

1. Treasury Fund Allocation %Age

Optimal allocation can be what’s left of treasury funds, after enough has been kept aside for meeting the next 6-12 months runway & any other contingencies.

@Genkai.Shogun

• If the Health Factor of a Project Drops -

A Careful restructuring will be proposed and after agreed upon between the committee members, 1inch Team will cast a snapshot vote with the whole DAO with a minimum of 2 days duration period. After that, the restructuring will be implemented.

Also, as previously pointed out in phase 1, timing can be too crucial, whenever it’s … eg., when there’s a sudden change in health factor! Wish that’s too addressed here.

The designated HC team should be able to take responsibility, and act at once, to avoid any extreme situation, without awaiting luxury of snapshot poll. What do you say?

[ma70_supra]

@kravi

The designated HC team should be able to take responsibility, and act at once

This comment gave me an idea.

Unlike the stock market, the cryptocurrency market does not have time to rest, so it is impossible to predict which time zone an incident will occur in.
I was wondering if the HC team could be selected from a variety of time zones to handle this?

I can imagine that if a small number of committee members were all spread across different time zones, it would be difficult to coordinate… so in the end, it would be a matter of finding the right balance…

[Genkai.Shogun]

@kravi

when there’s a sudden change in health factor! Wish that’s too addressed here.

I propose immediate extraction of funds from the affected project or contract at once with 0 delays until the situation is either clear or rectified .

Added .

@ma70_supra

time zones

I don’t wanted it to be burden . And it’s possible the way 1inch contributors co-ordinate with being inside diff zones , we can apply same strategy b/w the Members of HC too .

[Roxan]

@kravi

sudden change in health factor!

Fair point ! Sudden Drop mean just take out all without having second thoughts at all cost
Lesser the obstacles in pulling out money , the better .

After pulling money , we can decide what do next . but rescuing Funds take priority

[Roxan]

@Genkai.Shogun

Decision Pending . The poll showed an inclination towards 2 options. Close call

BTW what happens if options tie again ?

[Genkai.Shogun]

@Roxan

BTW what happens if options tie again ?

It can , but in that scenario our only option i feel would be right is to push this poll over to Snapshot Votings for THE FINAL DECISION .

[jisalazar]

This proposal is coming together really well. I’m happy to see the input of a solid group of members. What are the next steps needed to push this along? I firmly believe that this could really be positive for the project. We can even market it and spotlight it and give it an extra push once it’s finalized. Maybe with the help of the 1inch dev team.

[Roxan]

@jisalazar

What are the next steps needed to push this along?

Phase - 3 Temp check if @RoundElephant gives a Green Light

[Roxan]

@jisalazar

We can even market it and spotlight it and give it an extra push once it’s finalized. Maybe with the help of the 1inch dev team.

I was unable to find such a strategy in any of defi protocols so far as i tried to look out for similar strategy last night. I’m curious to learn if this is an entirely new ONE made from scratch or what .

But if it is then i think we should give this a try … Also I Request @RoundElephant team to please post its temp check on 1inch social media portals so that we dao members can flesh out even better from more better suggestions as visibility to forum is still low …

At last . It’s a significant change to Treasury model revenue so it must be dealt softly

[0x7751]

TL:DR After reading the proposal 1IP-10 we believe that it could well go hand in hand with our 1IP-08 and complement one another so that you can obtain a “Self-earning DAO Engine” with the most flexible and agile operational infrastructure.

We had previously assumed that asset management service would be a valuable addition in the absence of a dedicated treasury committee but we are happy to support by being a part of the Triad ourselves or just volunteering our support.

The asset management layer Avantgarde proposed (and associated fees) is not necessary if 1inch DAO has the capacity to manage its own treasury. The High Command, Berserkers and Watchtowers (the Triad) can use the Enzyme DeFi infrastructure in an autonomous way too and derive certain benefits from doing so. To list a few:

Operations
The strategies described in 1IP-10 would be operationally complex to implement. Owning an Enzyme vault via Gnosis and executing on decisions via permissioned delegation (which can be one or more members of the Triad) looks like a simpler way to implement your proposal.

Delegating trading to a member of the Triad can come with permissions and controls that the Gnosis Safe (owner of vault) can switch on and off. For example, one can specify that Bob has control to manage 100 ETH with a subset of protocols available on Enzyme. Bob is not allowed to trade any other assets or with any protocols other than those specified.

Another example could be Sam can trade or interact with any asset/DeFi protocols she wants but if she loses 5% in trading slippage on any 7 day rolling period, her trading permissions are revoked.

These permissions and controls are easily configurable and customisable.

Reporting
The reporting seems like it will be time-consuming and hard to keep track of via Debank or Google Sheets. Enzyme provides 24/7 real time NAV which aggregates all positions into a single dashboard. It also connects with 7 subgraphs to provide accurate and traceable historical on-chain data. This enables you to capture your DeFi performance history in an easily auditable manner and report it transparently among Triad members and the wider 1inch community.

Allocations
Looking at the specific DAO strategy / protocol choice, you lean towards “Medium APY Projects”. This is already plug & play with Enzyme via the protocol’s connectivity to Curve, Convex, Maple, Idle, Yearn and more.

All in all we believe that we could be of added value to your proposal and would love to help. We’re also happy to answer any questions you might have regarding Enzyme and its features or to share a demo on a community call or otherwise if you might find it helpful.

[kravi]

Great to know more about Enzyme DeFi Infrastructure. It certainly sounds to be a very much battle-tested, and i doubt if there’s any close competition to it.

Having said that, many in the forum, already expressed their unwillingness to even consider the idea of outsourcing. I presume, their reasons are well justified.

I suggest both sides to be open to other side’s vantage point, and see how both can stand to benefit, and help the cause of 1inch DAO.

I guess, it does not hurt, to have a demo, and an objective discussion.

What you guys say?

[Roxan]

@0x7751 I think we can make arrangments for next DAO Call to invite Enzyme Finance Team to handle the questions of community members. If not all , I think we can actually use their expertise to form a Custom Made treasury managment tool for 1inch that fits to this proposal and even enable 1inch grants etc. for them to work on it .

Even tools like Bancor’s DAO Treasury Management Solution can help

Also , While other treasuries are in native tokens . They have to deal with lots of things but Having 1inch Treasury in USDC from the start helped a lot & Thus we don’t need much complex strategies for yield generation .

Also , We have 1inch earn that already incorporated a Trading Strategy .

UI

and so I believe 1inch Treasury is Unique & thus needs a Unique Treasury management solution ever created before

[0xBaer]

hey, @Genkai.Shogun I really like your proposal and believe that we should implement some of these strategies to attract more people to the 1Inch token and the network
, and here are my comments,
my concerns are all rolling around

1. Risk and implied benefits
2. potential centralisation of the DAO implication to the DAO

first of all, the 50%-80% quote of the DAO treasury is too high to Degen with. in my opinion we should definitely reduce that amount to a viable form and have proper risk mitigation strategies implemented not just at the Triad level but in the DAO as a whole. and about the benefits of doing this, Degening,
I can’t see how the treasury (not the 1inch stakers) is benefiting from this at all. since most are paying out to the 1inch stakes and the treasury is risking liquidation of 50-80% of its holdings.

Speaking about triads, I think we are building unnecessary, hierarchical structures that fundamentally oppose the ethos of a ‘DAO’. well, it’s argumentative what the D in a DAO stands for but in my opinion, it’s a trustless nature where there isn’t any single point of failure. What I propose instead, is a treasury guild or office which doesn’t have the above-mentioned hierarchical structure and is open to everyone to handle the Diversification of the 1InchDAO treasury.
Speaking about Diversification we are probably the only protocol DAO (which I know of) that doesn’t have a single governance token of its own in the treasury. (it might be good as our treasury won’t shrink 50% overnight).

some tools to consider if we are planning for diversification: 1. llama.xyz, element.fi and Enzyme

[0x7751]

Yea we’d love to chat on a community call or similar. Let us know where and when!

[Roxan]

@Genkai.Shogun

@Roxan

BTW what happens if options tie again ?

It can , but in that scenario our only option i feel would be right is to push this poll over to Snapshot Votings for THE FINAL DECISION .

Like @0xBaer said about converting . I think we can say we should consider lower bounds for treasury fund allocation during the trials to see if the system can handle it properly or not .

So , I think we only have 3 scenarios here

a. if ‘more than 50’ wins then allocate treasury funds between 50% - 80% as the ‘more than 80’ option is lost

b. if ‘more than 80’ wins we should definitely allocate more than 80% funds from treasury

c. if ‘Tie’ then use use 50% Treasury but Allocation will always be open to go beyond 80% too if we have better protocols in hand

So ,
Lower bound is 50% Allocation which is viable in both case a & c , unless b wins

@0xBaer

the 50%-80% quote of the DAO treasury is too high

I think @Genkai.Shogun Already decided that in Stage - 1 Detailed Polls , Sentiment of members seem to Above 50% allocation as min.

@0xBaer

building unnecessary, hierarchical structures

I don’t know exactly how @Genkai.Shogun formed it but it doesn’t look like a Traditional Hierarchy
having a ‘Top - Down’ Managment style .

To me it looked like a Flatarchy or a Holocratic Organization

[Saitaman]

I Think thisis a great idea.,Building trust while earning incentives is a perfect way to gain even more mass adoption.

[jisalazar]

Has there been any news on this proposal? What are the next steps to move this forward? @Roxan , @Genkai.Shogun. the treasury continues to accrue funds and I think we need to make some changes to attract a bit of positive news. I know we are in the middle of a bear market, but it is cyclical, as we all know. And we need to think about attracting more stakers and having a larger community. It’s hard though, when every other day some token implodes and projects are dying.

[kravi]

No active treasury management means leaving a lot on the table.

If we can have all the core contributors ( request someone to take the initiative) on this thread, we can have a chance to know their mind about treasury management as well as the proposed solutions in here, and if this is going for vote, in particular.