In the near future, we will see the fruition of a complete transfer to a DAO and the entire protocol will be managed by the DAO. This means that funding of development, implementation, and proposals for changes will be decided upon by the DAO. The DAO will be tapping into the treasury to provide funding to developers and there is a multitude of methods to handle this (open bounties, reserved bounties, continuous grants to developers, etc) but that is not the focus of this post. I wanted to draw attention to the fact that as the protocol progresses and grows, the expenses of developers will also likely grow as more are needed for the implementation of new features. The treasury is well funded at the moment but it should also make an attempt to generate some source of revenue to replenish it over time. One implementation method is to direct the BZRX and vBZRX held by the protocol to be staked and the revenue stream will be from staking. This would require no change to the protocol and would only require directing treasury funds (when the protocol transitions to a full DAO). The other method is to take a percentage of the fees collected by the protocol to push to the treasury. The percentage of fees would need to be decided upon and from where the percentage comes from too. This post is to just open the discussion regarding generating revenue for the treasury and I am interested in what everyone thinks about this and how to properly implement it.
Can we focus on rebrand, Fulcrum Pro and Permissionless Listings first please. Too much discussion lately. Before this post we had another distraction about BGOV, PGOV and now this on top of that and both on top of the rebrand. One by one maybe ? Lets all, devs and community focus on whats the most important now. Can we wait a couple of months so we can FLY first ? We didnt even discuss yet what to do with the extra PGOV mint, the funds we didnt give away to the Dino team. What are we going to do with that ? Or with the 100K given by Polygon. And now this. I know its important, but lets focus on the rebrand and developing the future of the protocol, lets get that revenue from fees generated, lets get those new users and then talk about yet another “problem” to solve ?
EVERYBODY FOCUS, lets get done whats the core of everything. Lets create a strong beating heart. The time spend on everything but what really needs to be done is lost time. I dont want Tom, Kyle, Kevin, Eugene and all of the other devs, including you Drypto, being busy with anything else then Fulcrum pro and permissionless Listings. Its now, or never. It must be now. All forces united, everything we have. We need focus now and no intellectual roadtrips through the wilderness. Please.
Nothing wrong with healthy community discussion as far as im concerned… Its what a community forum is for… Just because its under discussion, doesnt mean were asking it to be done right now.
Rather than asking us to sit and wait for what the team is currently doing, wouldnt it be good for the current community to be able to get involved for future ideas.
Just see no harm in discussing anything tbh… it should be encouraged for the community benefit
chill out frank, its just a discussion. ik agree we need those factors. but sharing opinions and ideas on the forum should be going on as wel, this topic is for the longterm also very important.
im leaning more towards staking the treasury in short term. its a simple idea and the treasury will grow parallel with the activity on fulcrum.
if its in the far future possible to funnel fees from all chains to eth-chain, i think its better that we can split those % on gov holders, bzrx holders on the eth chain (this includes the staked treasury also) and burn some bzrx.
love to hear more opinions!
I agree with the idea of staking treasury assets too as it is the simplest solution and makes the most sense. The treasuries and funding of the different chains deserves its own topic and discussion as that is a more complex situation. As for burning bzrx, it could be done in the future but I would much rather prefer a buyback and keep it in the treasury than an outright burn as it this benefits the protocol in the long term rather than an immediate satisfactory event.
How do other protocols do this, how do they fund their devs and future deveopement ? Can we just look for that instead of inventing the best wheel ?
There are various ways. Yearn for example funds devs from protocol fees (plus some inflation from the one off vote for inflation they had months ago).
Others have different routes - the VC funded protocols tend to use VC funds etc.
For us, it certainly makes sense for the Treasury to have a revenue stream.
The obvious solution is for the Treasury to stake, but we need to be clear that staking 400m vBZRX will affect staking rewards for everyone. Not necessarily an issue but just something to be aware.
Another option is to reduce/eliminate the burned amount of fees on Polygon and BSC and redirect that to BZRX Treasury. Another option is to take the 50% of fees that currently goes to the insurance fund (on Ethereum) and redirect some or all of that to the Treasury - seeing as how the Treasury is effectively the insurance backstop for the protocol anyway.
Or some combination of the above.
The strongest option for our DAO would be from the treasury which has 355 million vBZRX and 41 million BZRX in it at the moment. As Badri mentioned, the staking of the tokens will affect the staking for others. Regarding this, it will only affect BPT stakers and should not affect BZRX or vBZRX stakers which are the vast majority. I do think that we can reduce the flow to the insurance fund but I do still think at the minimum, 30-35% of the fees should go to it. As for the other chains, I am not entirely sure. I do believe there is already a flow to the insurance fund that is baked into the current fee model (50% to GOV, 15% to BZRX, 15% buyback, and 20% to native chain insurance fund).
One other thing to keep in mind guys - remember once this is a DAO we will need to fund the dev team, and that’s like 10-15 people. It won’t be cheap. We’ll need to plan for that and make sure that is done - ideally through cash flow and income from staking/fees, but it may be necessary to sell some BZRX/vBZRX for it.
It might also be helpful to sell some vBZRX/BZRX to a strategic investor (similar to Hashed who already invested and similar to the process Sushi is going through now). I seem to remember there was some BZRX set aside for strategic investments separate from the main treasury but the old article from July 2020 with the tokenomics breakdown is not on the site anymore.
However, I think taking strategic investment is a separate issue in itself and if the protocol and dApp are fully self-sustaining and self-funding that is the ideal situation - maximum independence and decentralization.
This is very true. Initially, there will be a larger draw on the balances of BZRX and vBZRX held by the treasury but as the protocol receives a higher rate of adoption, this draw will be minimized and the selling may not be necessary. The structure of all that deserves a separate post as it will be very intricate and needs to be designed properly or else funding may be used too quickly, too slowly, etc.