[FIP 006] - Treasury Diversification

[FIP 006] - Treasury Diversification

Summary

  • Swap up to 10% of planned Year 1 BANK token supply from the Protocol’s Treasury allocation for ETH from strategic partners.
  • For Float Protocol to flourish and solidify its position within DeFi it is important to onboard prominent members of DeFi into the Float ecosystem.
  • This treasury diversification provides the Protocol with funds to pay for the necessary costs to allow Float Protocol to reach its full potential without additional price pressure on BANK.
  • We believe this treasury diversification round will greatly benefit the Protocol going forward and look to confirm this decision via governance vote.

From the beginning, ever since our democratic launch, one of the main aims of the Protocol has been to get supporters behind us and with us for the long haul. In our democratic launch we only offered participation to those who were deemed active and engaged DeFi participants, with the whitelisting of addresses and caps on Phase 1 pools which allowed for broad distribution of BANK token, leading to over 4000 holders (BANKsters). So far we have distributed over 50% of the total BANK supply to the Community and continue to distribute more via the Phase 4 pools. Now we are looking to swap a portion of the Treasury allocation to aid with supporting the Protocol over the long term. We believe this is a necessary amount as it will help cover future costs such as audits, paying new team members, and fund Community incentives without leading to additional BANK price pressure.

Motivation

The Abbey Road Hackers are here to stay and are building Float Protocol for the long term. To support us on our journey we are diversifying our treasury; ~10% of total BANK token supply from our treasury is to be sold to key DeFi participants and builders who we believe will be advocates, strategic partners and resilient supporters of the Protocol over the long term. This diversification of the treasury will aid with potential integrations further down the line and allow the Protocol to hire and incentivise Community members as we grow towards becoming the unit of account for the crypto economy.

Structure

We have been having conversations with prominent DeFi participants, builders and founders over the past few weeks, and as these conversations come to a close we are starting to firm up on commitments. For the sake of privacy at this stage, we won’t release names, but these will be made public before any swap.

Terms

The terms of the treasury diversification are as follows:

  • 16,800 BANK tokens from the Treasury (~10% of total BANK token supply)
  • Discount to market price in return for 1 year lock-up on BANK
  • Inability to stake locked tokens
  • Voting power in the Float Protocol DAO according to locked tokens
  • On chain via a smart contract

Next Steps

It would be great to hear the Community’s thoughts on this before proceeding to a vote on snapshot. The Core Team is really excited by this move, and think the community will be equally excited to see those that are thinking on FLOAT and BANK long term.

Alternatives

This isn’t the only way to diversify the treasury, we could sell locked BANK via a one-sided Uniswap V3 liquidity provision, or via a Miso Style sale. This may get us a higher BANK price, but we think the “value-add” of these partners far outweigh any potential allocation.

4 Likes

1000% in favor of this kind of initiative. Float needs to bring in partners to get anywhere near the adoption we all want to see and this will be a good way to bring them in and have an incentive to see it succeed. The 1 year locking discount makes sense.

3 Likes

The proposal seems well thought out and like it would contribute to greater traction for float protocol. And also setting a good environment for continued development.

Is the one year vesting period set in stone? Would it be possible to allow for a greater discount and longer vesting time? The inability to stake locked tokens, wouldn’t the increased liquidity be useful for the protocol?

I truly believe in integrations and getting more people in the ecosystem. So this make sense.
Also the project need funds for the core team, community, infrastructure and future expansions. Other projects look at these things first, but FLOAT is different because till now the team not minted any of the treasury or team coins.

But I would like to get little more understanding around this initiative:

  1. We’re selling 10% of BANK supply to various DeFi participants/builders/founders for ETH, so not sure why someone will be interested in getting these from protocol and not from the market ? Do they get a discount to buy from protocol ?
  2. What is the expectation from these participants/builders/founders ? Is there any measure / parameters we can use to measure success of this initiative ?
  3. One year lock is good, but how can we further incentivize or de-incentivize, these participant for their contributions. Basically how can we make sure they are aligned with the project for long term.

Also can you please explain the alternative approaches a little more, how Uni-v3 1 side pool or Miso Style sale can be helpful.

Hey :wave: Looking to keep the one year lock. Some may see the one year lock as a guide, but actually hold for much longer. Once a BANKster always a BANKster, especially given the potential value accrual from the BANK burns via the auctions. One may argue that enabling staking goes against the idea of locking but we can leave that one up for debate :slight_smile:

Hey :wave: , appreciate it. Just to clarify

  1. so yes, with the lock there is a discount.
  2. Interesting question. We have been very careful with who we pick to engage with, the important thing we think to paraphrase is, what is the value added. This can be measured in different ways, whether it is a well known name bringing more public legitimacy to the Protocol, helping with hires, making connections to DeFi platforms via strategic partners where we otherwise wouldn’t have had the links, or even partners simply spreading the word as our Community grows.
  3. Great point. As mentioned earlier in a previous reply. The one year lock is a good step for long term support at this stage. I think the incentives of being a BANK holder become much more clear once the Auction burns kick in, apart from governance.

To take Miso as an example. Sushi offer the Miso launchpad. An easy way for users to mix up ingredients and launch their token. These tokens can be issued via different mechanisms such as batch auctions and dutch auctions. Something similar could be done with locked BANK from the treasury where it is offered via a Miso Dutch Auction potentially with a price starting at a premium to the market descending down towards a discount to the market for example. Similar to how our Auctions work for the Protocol.

Thank you!!

So personally I think Miso offering does not make sense, we may be able to get a higher rate for the BANK but the participant will not add any value to the protocol. Another way of thinking is that we may be able to hire more people for better value of BANK, but they may not be a fit for the project.

How Uniswap-v3 1 side pool may work ?

Great Idea, lets put it to a vote so I can vote yes, Partnerships are key!

1 Like

What’s the proposed discount to market price for the one year lock? Will the community have any say in approving or disapproving of the specific sales when they’re offered?

so it is like a public sale? because the price is really low now. a discount sale seems not good choice in such bear market.

A similar mechanism to MISO really just via a different means. You essentially provision only one side of the liquidity within a certain range (the values you’d accept for trade).

Again there is no way to control the participants in that system, but it would be a method to exchange treasury BANK <-> other assets.

The crypto market has certainly done us no favours! But equally partnerships are very important, as is having a source of funding we’re happy to spend (BANK price feels too low to just sell without a lock & value add).

I’d certainly want that - ultimately this is the treasury so it is a decision for the community. Although I think everyone will be excited by the partners we have on board already, I would like to have an approve / disapprove of the rolling “close” to validate that.

It’ll all be on chain too.

Well, it’s a discount sale with 1-year lockup.
Considering that almost any stablecoin yields you 10%+ on Convex or Curve while not being locked up, a discount makes sense.
I am kinda indifferent about it. Seems more like an endevour of last resort.

I am more curious about the terms of other DeFi participants.
If it’s just a token swap at market value, LFG.

Float just need to be more present on the map.

great, lets do it. expecting new partners

great, pls do it.

hope things better.

Welcome back @bitcoin! It’s live - https://snapshot.org/#/snapshot.floatprotocol.eth/proposal/QmZgSgeCWQuvGrZZcXL3H4iCCyKZFeSnAsBLz4TytGqY71