[Updated according to the comments during Phase 1 on December 11, 2023]
Thanks for the comments provided in Phase 0 (Discussion). I’m submitting this proposal to Phase 1.
Also adding here the Google Doc reflecting one change in wording regarding the alternative solutions:
Feel free to use this doc for any other comments or suggestions.
The final call on the proposals in Phase 1 (Stablecoin allocation SEP + Strategies and Budget SEP) will be this Wednesday at 5pm UTC. Sign up here.
Title: [SEP #9] Stablecoin allocation
Authors: Andre Geest, Christoph Simmchen
This proposal delineates the terms under which SafeDAO shall receive an allocation in stablecoins from the Safe Ecosystem Foundation (“Foundation”) in return for the ARB/OP tokens held for SafeDAO (by the Foundation as legal entity). This funding mechanism enables SafeDAO to fund initiatives of the Safe Ecosystem under OBRA with stablecoins.
A. Terms of the proposal:
- SafeDAO shall be allocated USDC from the Foundation in an amount equivalent to the value of the Optimism (OP) and Arbitrum (ARB) tokens currently allocated to SafeDAO (stablecoin allocation). This amount corresponds to approximately USD 1.6 million based on the exchange rates available on CoinMarketCap on December 10, 2023. The Foundation shall transfer the USDC to SafeDAO’s designated wallet with the address [0x0B00b3227A5F3df3484f03990A87e02EbaD2F888].
- In return, the Optimism (OP) and Arbitrum (ARB) tokens currently allocated to Safe DAO shall be assigned to the Foundation. See the following table for the wallets and specific amounts.
|Approx. valuation in USDC
- The price of the OP/ARB tokens shall be determined based on the average relevant market price available on CoinMarketCap in the period of 30 days (closing price) before this proposal enters into effect on the date the voting period of this proposal ends on Snapshot as per the governance framework of SafeDAO (“Effective Date”).
- The transfer of the respective USDC shall be executed within 4 weeks after the acceptance of this proposal by SafeDAO.
- The aggregate value of the proposed exchange of OP/ARB tokens shall be capped at an aggregated value of maximum USD 1.5M on the Effective Date. If the aggregate value is higher than USD 1.5M, the amount of OP/ARB token to be transferred to the Foundation should be reduced proportionally.
To foster the Safe Ecosystem, SafeDAO can fund initiatives in accordance with OBRA. For this purpose, SafeDAO shall now be allocated stablecoins.
C. Enter into effect / Effective Date
This proposal enters into effect on the date the voting period of this proposal ends on Snapshot as per the governance framework of SafeDAO and upon acceptance of this proposal.
Purpose and Background
OBRA stipulates the funding of initiatives mainly using stablecoins. By obtaining a stablecoin allocation from the Foundation, SafeDAO can foster the Safe ecosystem according to OBRA and the constitution. This also ensures that SafeDAO has a part of its allocated treasury in stablecoins. The Foundation could use the OP/ARB token for treasury diversification or for future grants / ecosystem programs.
Effects and Impact Analysis
Ensures immediate funding for SafeDAO funded initiatives.
Allows to foster and grow the Safe ecosystem.
Enables SafeDAO to have part of its allocated treasury in stablecoins.
Since OP and ARB are not swapped on DEXs but will be executed as a direct change in allocation between SafeDAO and the Foundation, there will be no market impact.
- SafeDAO loses its opportunity to participate in Optimism and Arbitrum governance. However, this can be mitigated through the Foundation delegating the voting rights to SafeDAO or its members.
- Missing treasury diversification: By allocating the OP and ARB token to the Foundation the treasury consists of SAFE and stablecoins. However, the OP and ARB token were meant to profit the ecosystem and not for treasury diversification.
- Transferring SAFE upon transferability to Foundation instead of OP/ARB token: Instead of structuring a token swap with delayed transfer in the future with an unclear reference value, using the transferable tokens in the SafeDAO treasury provides an immediate and reliable solution.
- Relying on Safe Grants Program Wave 2: Similar to wave 1, wave 2 will allocate 500k USD to grantees. However the grants program comes with different limitations to the funding amount and duration in contrast to wider strategies under OBRA, see the terms of SEP #6.
To be implemented the proposal needs to be executed by the Foundation.
Request for administrative and technical support through SEF
- Who is needed? Finance department and Foundation Council
- Did you reach out? Yes
- Is there a roadmap? Yes
Special thanks to Dennison Bertram, Auryn, Nick, Georg Reichhelm, jengajojo, Lindsey, Bernard, Dmitriy, Nneoma, Charlie, and Varit for their contributions and feedback (list will be updated).
Copyright and related rights waived via CC0.