[Discussion] Unpause SAFE Token Contract (Enabling Transferability)

Title: [Discussion] Unpause SAFE Token Contract (Enabling Transferability)

Authors: LuukDAO (Kolektivo Labs), Nneoma_StableLab (StableLab), jierlich (Den), ittaisvidler (Den), calchulus (Impossible Finance), Daniel, Vijay (Superfluid), 0xAA (PeopleDAO, WTF Academy), coolhorsegirl (Tally), bonustrack87 (Snapshot), auryn (Gnosis Guild), abbey (Radworks), blockchainjames (FireEyes), maxdesalle (Sablier), Soptq (Soptq), tarungupta1475 (Coinshift).

Created: 2024-03-22

Abstract
​This proposal will call the unpause method of the token contract (using the SafeSnap module), which would make the SAFE token transferable. Unvested tokens would remain in the vesting contract and thus would not become transferable after unpausing the SAFE token.

Due to safeguards in place, the earliest possible date for the SAFE token to become transferable is eight days after the voting period ends, tentatively Tuesday, 23 April 2024.

This proposal is a direct follow-up on completing all milestones established in SEP #3 Towards clarity on milestones before voting on enabling transferability again.

Proposal types
SEP: Constitutional Proposals
SEP: Governance Proposals
Other SEPs

Proposal details

Purpose and Background
When the SAFE token was launched in September 2022, it was non-transferable, with SafeDAO governance in control of the unpause function in the token contract that could make SAFE transferable.

An initial SafeDAO proposal (SEP #2) to call the unpause function to make the SAFE token transferable was submitted in November 2022. SafeDAO governance voted against (73.63% no votes) making the token transferable, as many stakeholders felt there was a need for more clarity about the function of the token and operations of SafeDAO.

After the denial of SEP #2, SAFE stakeholders defined milestones that should be met before Token transferability is again put up for a vote. SEP #3 was submitted and passed in December 2022 (58,28% votes out of three options), ratifying a list of five milestones that SafeDAO Governance agreed must be met before SAFE transferability is put up for a vote again.

The final milestone was met on March 18th, 2024, with the passing of SEP #21. As such, SAFE transferability can be voted on again.

This proposal aims to call the unpause method of the token contract (using the SafeSnap module), which would make the SAFE token transferable following the successful completion of all milestones established in SEP #3.

Overview of Milestones
An overview of Milestones defined in SEP #3 and proof of completion is provided below.

Milestone Completion
A. The claim period has passed The initial period to claim the Safe token ($SAFE) ended on December 27, 2022, at 12 PM CET.
B. An SEP on a constitution proposal has been ratified SEP #4 - SafeDAO Constitution passed on February 23rd, 2023, with 99.79% of votes in favor.
C. An SEP on a governance framework has been ratified SEP #7 - Governance Framework passed on October 20th, 2023, with 99.6% of votes in favor.
D. An SEP on a resource allocation framework has been ratified SEP #8 - Outcomes-based resources allocation framework (OBRA) passed on November 28th, 2023, with 99.98% votes in favor.
E. An SEP on token utility has been ratified SEP #21 - SAFE Token Utility passed on March 18th, 2024, with 96.41% of votes in favor.

Transaction payload

[

{

"to": "0x8cf60b289f8d31f737049b590b5e4285ff0bd1d1",

"operation": "0",

"value": "0.0",

"data": "0xe009cfde00000000000000000000000029067f28306419923bcff96e37f95e0f58abdbbe000000000000000000000000a0b937d5c8e32a80e3a8ed4227cd020221544ee6",

"method": "disableModule(address,address)",

"params": [

"0x29067F28306419923BCfF96E37F95E0f58ABdBBe",

"0xA0b937D5c8E32a80E3a8ed4227CD020221544ee6"

]

},

{

"to": "0x8cf60b289f8d31f737049b590b5e4285ff0bd1d1",

"operation": "0",

"value": "0.0",

"data": "0xe009cfde0000000000000000000000004ecefc422c98a096ed8b56ead67477c4b6e8702b00000000000000000000000029067f28306419923bcff96e37f95e0f58abdbbe",

"method": "disableModule(address,address)",

"params": [

"0x4ECeFC422c98a096eD8b56EaD67477c4B6e8702b",

"0x29067F28306419923BCfF96E37F95E0f58ABdBBe"

]

},

{

"to": "0x8cf60b289f8d31f737049b590b5e4285ff0bd1d1",

"operation": "0",

"value": "0.0",

"data": "0xe009cfde0000000000000000000000000000000000000000000000000000000000000001000000000000000000000000c0fde70a65c7569fe919be57492228dee8cdb585",

"method": "disableModule(address,address)",

"params": [

"0x0000000000000000000000000000000000000001",

"0xC0fde70A65C7569Fe919bE57492228DEE8cDb585"

]

},

{

"to": "0x5afe3855358e112b5647b952709e6165e1c1eeee",

"operation": "0",

"value": "0.0",

"data": "0x3f4ba83a",

"method": "unpause()",

"params": []

}

]

Summary of the Snapshot Proposal
The Snapshot proposal should be set up along the voting options as follows:

  • Option 1: Enable token transferability
  • Option 2: Make no changes
  • Option 3: Abstain

Type of voting system: Single-choice voting

The default SafeDAO Snapshot settings and norms apply.

Effects and Impact Analysis
Calling the unpause function to make the SAFE token transferable will transition SafeDAO into a new stage, significantly increasing stakeholders’ ability to move in and out of the SAFE token. It will also expose SafeDAO to new market forces and responsibilities, as the SAFE token will become liquid and thereby increase its utility.

Another key part of having a transferable token is strengthening token utility as outlined in the recent token utility proposal [SEP #21] SAFE Token Utility. In the short term, SAFE transferability will enhance the day-1 utility of the Safe Activity Program.

Additionally, it enables outside contributors to participate in Safe Governance’s voting mechanisms, which supports Safe’s ecosystem growth. In that regard, a more diverse holder base will also contribute to a more decentralized governance infrastructure.

Once the token contract is unpaused (and therefore, the token is transferable), it is impossible to pause it again (e.g., once transferable, forever transferable).

Regardless, the benefits of having a transferable token and the ability to use it to grow SafeDAO and generalize value likely outweigh the costs of transferability.

Alternative Solutions
The main alternative is to not put SAFE token transferability up for a vote; however, based on the significant majority votes on each milestone (each proposal having at least 96.41% yes votes), there is sufficient reason to assume stakeholders want to vote on SAFE token transferability again.

Implementation
No significant additional code is required to make the token transferable.

A 3-day (259200 seconds) SafeSnap/Reality timeout period begins if the proposal successfully passes. During this period, anyone can request the execution of this proposal and set an outcome, provided they have posted the required bond.

Unless the outcome is challenged within this timeout period, the outcome is finalized, and the 5-day (432000 seconds) cooldown period starts. Once the cooldown period has ended, there is a time window of 7 days (604800 seconds), the answer expiration period, during which the outcome can be executed as a transaction by anyone.

The token will become transferable no earlier than eight days after the voting period ends. Since the voting period ends on Monday, 15 April 2024, the earliest possible date for the token to become transferable is Tuesday, 23 April 2024.

Payload breakdown
Using the enabled Reality module (eth:0x4ECeFC422c98a096eD8b56EaD67477c4B6e8702b), the SAFE token controller (eth: 0x8CF60B289f8d31F737049B590b5E4285Ff0Bd1D1) will first remove the three airdrop modules made redundant by this proposal (eth:0xC0fde70A65C7569Fe919bE57492228DEE8cDb585, eth:0x29067F28306419923BCfF96E37F95E0f58ABdBBe, and eth:0xA0b937D5c8E32a80E3a8ed4227CD020221544ee6), and will then call the unpause() function on the Safe token contract (0x5aFE3855358E112B5647B952709E6165e1c1eEEe).

The payload is simulated here.

Disclaimer
The tx payload and other details of this proposal are still in review and open for further SafeDAO stakeholder input. There is no guarantee that the final proposal will include any of the details written in this document. Consider this a working draft until passed by SafeDAO governance.

Copyright
Copyright and related rights waived via CC0.

16 Likes

Let the $SAFE out!
LFG!

3 Likes

Thank you @LuukDAO and all other contributors for driving this proposal forward.

1.5 years after the first discussions on SEP #2 and reaching all milestones set in SEP #3, we have managed to put SAFE transferability up for discussion again. SafeDAO is ready for this step.

Yes, we at Greenfield fully support your assumption and are ready to put transferability to a vote again.

Onwards!

5 Likes

Отличные новости!
@LuukDAO Please tell what happens during the shutdown of the modules?
Do they need to be disabled?
The vesting has not yet been completed.
Maybe need to say a little about it?

The modules are contracts that facilitate the vesting. There are two ways to claim vested tokens, defined via two functions on contract level: claimVestedTokens and claimVestedTokensViaModule

  • Code can be found here: safe-token/contracts/Airdrop.sol at main · safe-global/safe-token · GitHub (Note: Airdrop inherits from VestingPool)
  • claimVestedTokens is the standard way where the vested tokens are directly transferred to the beneficiary. This method cannot be used as long as the Safe token is not transferable. The tx will fail.
  • claimVestedTokensViaModule is only a workaround to trigger the transfer before the token transfer via the SafeDAO Safe which is the owner of the Safe token and can transfer tokens even before generally transferability is enabled.

With transferability the workaround via claimVestedTokensViaModule is not required anymore. The vesting won’t change. Any users can claim their vesting via claimVestedTokens . The Claiming app on Safe{Wallet} will use this new way and will work as before.
It is merely good practice to only have the minimum number of modules enabled on a Safe for security reasons. Hence the tx payload also removes the modules.

6 Likes

@Andre if this proposal get passed .what will happen to vesting schedule of backer ,team ,foundation etc tokens

The vesting remains the same. You can find more info on the vesting of all stakeholders in the SafeDAO Governance Hub.

4 Likes

Thank you to @LuukDAO to all the authors for driving this proposal, I have been watching from the sidelines and it has been great to see how the path to SAFE Token transferability has evolved. I have seen too many DAOs launch a token with little to no utility, which could have benefited from a milestone-based path to transferability. I hope SAFE DAO sets a future precedent for many other DAOs.

6 Likes