Proposal: Token Treasury for PGOV

Dear all

I want to propose creating a Token Treasury for PGOV similar to the BZRX treasury, and similar to many other DeFi protocols.

This recent article by Kain Warwick of Synthetix has some good information on market standard tokenomics for projects and suggests that 10-30% of the total tokens in a project should be allotted to the project treasury.

We don’t have to follow what he suggests - for one thing he is talking about funded projects which have to allocate tokens to investors etc, and not fair launch projects like PGOV. But it is a starting point for discussion.

The idea will be to have a token treasury under the control of PGOV holders, and we can vote on how to spend the funds for the benefit of the protocol.

The treasury will be created by a one-time mint of PGOV. The total supply (250m) of PGOV will NOT be increased. It will stay at 250m. Instead, the the farming program will end early to compensate (so for example, if a vote approves creating a token treasury of 25 million PGOV, or 10% of supply, then the farming program will end at 225 million PGOV, so that the total supply does not exceed 250m).

PGOV holders can choose to spend the tokens for any purpose by a vote - marketing, funding development, partnerships - anything.

This could include approving the current DinoSwap proposal (although I personally think that is a bad idea), or funding development efforts like the funding given from the BZRX treasury for Drypto to work on limit orders (great idea), or marketing - anything the community wants.

I think the biggest advantage of having a Treasury is that it formalises and gives some structure to the process of spending tokens for the benefit of the protocol. I do not think it is a good precedent or good governance to have ad hoc one-off votes for one-time mints of tokens for particular partnerships or funding needs. If you know how much money you have in the “bank”, you know how much you can afford to spend.

The right way to do it is to have a token treasury with a fixed number of tokens in it. Once we know how many tokens are in the treasury, we know that’s it for the whole lifetime of the protocol, and there won’t be any more. We can then make a decision on any individual spending proposal from the treasury and decide whether it is worth spending on each proposal.

So for example, if the treasury has 25 million PGOV for the entire life of the project, we can decide if it is worth spending 5-6 million out of that (more than 20%) on Dinoswap (in my opinion: No). On the other hand, we could also decide whether it is worth spending (for eg) 300,000 PGOV on funding development of stops/limit orders for Fulcrum Pro, and in my opinion the answer is clearly yes (this is an example only: stops/limit order development has already been funded from the BZRX treasury and is not a proposal for PGOV).

The size of any proposed token treasury is up to the community. As a starting point for discussion I suggest 25 million PGOV (10% of supply), or if people want a larger treasury, perhaps a maximum of 50 million PGOV (20% of supply). I do not think a larger treasury is feasible.

While the purpose of a Treasury is to clarify and formalise the process of spending money to benefit the protocol (and NOT to pump the token price), it should be noted that creating a treasury means a significant chunk of the token supply will be locked up for a long time and will not add to selling pressure. On the other hand, it also means that those tokens (in the treasury) will not be available to be distributed as farming rewards, which could make generating protocol liquidity and TVL more difficult - these are the concerns to be balanced.

What does everyone think? I want to emphasize that even if the community wants to approve the DinoSwap proposal, it makes more sense to create a token treasury and then spend out of that, instead of doing a one-time mint in response to an ad hoc request from Dinoswap.


we can work out the exact % later but for now I want to voice my opinion and I fully agree that this should be implemented for both PGOV and BGOV

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Also fully support this idea.

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I am in complete agreement with this, and i have just switched my current vote on the dinoswap proposal to disagree instead of agree, as I also believe we need a proper structure, and one off mints is not the way forward, as this sets a precedent later on when a better project comes up, to do it time and time again.

We could also raise funds after your proposal by implementing the burns as the other things do, but alloocate a portion of the burn funds to treasury fund. to keep some kind of permanent income…

The tokens minted should not be alowed to be part of the farms either, as this would direct earnings away from others.

Solid proposal. I think each chains governance having its own treasury to work with will be beneficial for the engagement of the respective communities as it will further encourage them to participate in the decision making process by giving them more responsibility/accountability.
Aside from the obvious benefits you’ve listed as well.

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This proposal is taking a little bit of the farming incentive and gives it to the community to spend it in another way or form. It’ll be interesting to see how this further decentralizes the platform (like Chris said). Let’s give this a try!

To be honest this idea has me more excited to be part of than any of the other ideas ive seen…
My opinon how it could work would be no more than 10% of total supply initially to the fund (for minimal reduction in farming incentives), and implement the current bgov burning plan into pgov, but split the burn % in half between actual burn and treasury fund.

This would give a way to grow the fund more organically for the long term…

Or we could actually allocate 0%, and implement the burn% for time being to grow us to the 25mil pgov completely organically, then change the split later on for real burn/treasury…

If this were implemented it would be good to have a live stats page so all members could see it growing and being spent…

You could also come up with some kind of plan to prevent the treasury from a massive dump on a future project by converting some into a stable coin as it accrues, thereby the funds we would hold would not have to impact future prices all at once.

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Thanks for the support guys - I think formalizing the structure like this is a great idea. Everyone else please keep commenting and also please give your thoughts on how much of the PGOV supply should go to the Treasury?

I think 10% (25m PGOV) is a sensible starting point - are there people who want more? 15% or 20% (35m or 50m PGOV in round numbers)?

Also any suggestions like Stealth made on further rules/principles to operate the Treasury by?

I suggest that we can figure out a PGOV Treasury and if the proposal for that passes, we can then try and adapt it to BGOV which is in a slightly different position.

I agree, but think there should be a treasury for the entire project. This is getting to complicated after the next chain additions.

Agree with this a treasury for the entire project sounds like a good idea.

A lot may be incentivised by personal bags to have PGOV or BGOV focused on alone but improving all chains is key to overall success. Having this means a less “successful” chain could be improved through success of others.

10% is a great starting point.

There is already a vbzrx treasury although I’m not 100% sure of this. This is under the control of the bzrx holders. I understand the idea of a common treasury but the reason why there’s such a price difference in bzrx, pgov and bgov is also partly because of this power to control the treasury.

If all chains have their own treasury, then we could think about combining them, but for now I would start small and use pgov as a testcase, see how this goes.

I agree. I think it makes sense to start with PGOV, and then consider separate proposals to have a BGOV Treasury (and there is already a vBZRX Treasury).

For the same reason, I think it makes more sense to keep this proposal simple and just set up a PGOV Treasury. There was some interesting discussion on Telegram about ways to fund the Treasury (perhaps by allocating a share of trading fees into it, instead of burning it etc), but that can be discussed and implemented at the next stage - for now, let’s just set the Treasury up.

With that in mind, this is the language I am suggesting for the formal proposal to be put to a vote (on the basis that everyone agrees with the 10% number) - please let me have comments:

Proposal For PGOV Treasury

This is a proposal to create a Token Treasury for PGOV, under the control of PGOV holders, who can vote on how to spend the funds for the benefit of the protocol.

The treasury will be created by a one-time mint of PGOV and will total 25 million PGOV (10% of the total supply). The total supply (250m) of PGOV will NOT be increased. It will remain at 250m.

Instead, the the farming program will end early to compensate (so for example, if this vote passes, then the farming program will end at 225 million PGOV, so that the total supply including the treasury does not exceed 250m).

PGOV holders can choose to spend the tokens for any purpose by a vote - marketing, funding development, partnerships - anything. At a future stage, PGOV holders can also vote on ways to grow the size of the Treasury if desired (for example, by allocating a share of trading fees to it instead of burning it).

One other thing to point out by the way - even if we don’t vote in a share of total fees to go to the treasury (instead of burning etc), the treasury will still be growing because the PGOV in the treasury will be entitled to the fee rewards that go to all PGOV holders, so the treasury will automatically get 10% of platform fees distributed to PGOV holders and grow.

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I Like the above proposal and also think it should go to a vote… 10% is the perfect amount imo

Yes, I’m in favour of having the treasury pgov staked in order to accrue a portion of the fees and have it a little bit self-sustainable in a way.

Something to keep in mind is that the farming will end sooner, and with BGOV there’s currently a discussion going to figure out what to do when farming ends.

Increasing the max supply isn’t necessarily bad if it would mean the farming can still be kept at an interesting level when the rebrand and Fulcrum Pro are launching… new people will like to try new things when there are nice incentives going on

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Agreed,will avoid the issues bgov is currently facing.

another thought, and is related to bgov current problems…

Could we not also use this treasury to completely cancel the future pgov burns but instead add to the treasury instead, so we can then just choose to burn some in future once we know we have the balance right.

I say this because, im not sure why we wont face the same problems bgov is facing further down the road without some changes, as were following in their footsteps.

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Send this to a vote so we can vote on it please.

I agree. I think it is time. I will ask the team to put it up on Snapshot for a vote using the final proposal language above.