Hmm, I think rETH2 from treasure should be used to reward SWISE holders / stakers. I thought that was the plan 
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Going forward rETH2 will be distributed to SWISE holders, but I am not sure if the current rETH2 bag will be distributed.
Question for @kiriyha:
- For the SWISE that is reserved for the community, where will the rETH2 that is distributed to those SWISE tokens go? To the treasury?
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Out of the 3 ideas I think it would make more sense to go with option 3 and seek for an investment which provides a higher return, I really like the idea @foghog suggested about looking into curve and taking part at the curve wars using some SWISE which will not only provide revenue but will also increase liquidity and visibility to the protocol which is something I feel we need urgently.
I also suggest to anyway leave some liquidity that can be easily accessible in case some costs need to be covered so I would not invest 100% maybe just 50%.
@bZ1 thanks for bringing up this topic as I feel is something really important
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I really like this proposal, I think it’s great, I’ve casted my votes as well. When it comes to addding liquidity, it is possible to consider adding very one sided liquidity, which would have 2 effects:
-
If we pool in a very one sided manner, we would add very little rETH2 to the rETH2/sETH2 pool, and almost all the sETH2 we deplete by compounding, while still allowing the DAO to earn staking rewards and compound the rETH2 in the treasury
-
Pooling this way would significantly reduce the amount of SWISE earned by the liquidity pool position, and considering the biggest intent with this is to earn from staking rewards (in rETH2), it would mitigate reducing SWISE APR for liquidity providers that are not the DAO and it would still allow the DAO to earn staking rewards.
Other than this minor idea/proposition, I’m in full support of this proposal. My only concern would be knowing the opinion of rETH2/sETH2 LPs on this, which would be the most affected ones.
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Sorry I never got around to publicly responding to this question. According to the earlier proposals, the plan is to distribute rETH2 only to those SWISE tokens that are already in circulation, ie SWISE in the Treasury wouldn’t be receiving any rETH2. Hope this helps
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I think @dreth’s idea of one-sided pooling resolves my biggest concern about the DAO diluting farm rewards for liquidity providers. I’d say do it!
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hey G would you mind elaborating on the one-sided pooling? like which range would we choose for example?
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This range is quite wide, but it’s an example of what could be used:
This range would basically make SWISE rewards a whole lot smaller and would effectively provide the entire 63.5 sETH2 portion taken from the pool at the disposal of traders. The position is ~13-14 ticks to the left and one tick to the right, 0.98807-1.002. This uses the maximum amount of sETH2 possible, while providing very little rETH2 to the pool.
I’m not sure how much this would reduce SWISE APR exactly, but I know it’s significant because I pooled like this on the sETH2/ETH pool for a while to avoid loss of principal (since I staked early) and to maximize staking rewards even if SWISE rewards were lower.
Using this position though, the DAO would feel the change in proportions of rETH2 and sETH2 as other liquidity providers whenever a trade happens, but would retain the maximum possible amount of sETH2.
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Just to make sure I understand - is the idea here to:
- Convert a portion of rETH2 in the Treasury into sETH2 to earn a staking yield
- Deploy this sETH2 (and a small amount of rETH2) in the sETH2 / rETH2 liquidity pool to make sure sETH2 liquidity can be accessed by the community if necessary
I see this would allow the protocol to earn staking rewards on the unutilized amount of sETH2, not steal the farming rewards from the community, and still keep sETH2 liquidity accessible to our stakers. If this is what you have been thinking, it hits on all points G. Awesome work!
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I dig it. Whoops I need 20 characters.
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Yes! correct. I think it’s the most practical way to do it \o/
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@bZ1 G, I think it’s time to submit this as a formal SWIP! Pls consult with Dimi re specification part where the txs need to be written up. Let’s Fkn Go!!!
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@kiriyha Will do. I will look into drafting up a formal SWIP this weekend and will reach out to DImi for help on the specification part.
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One thing that’s still unclear is how this plan will work in relation to the plan to distribute treasury funds to token holders?
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@ottodv i believe the treasury distribution was not considered to happen retrospectively ie distribution would only affect the incoming Treasury revenue stream. still a question of what to do with the funds in the Treasury accumulated so far, and this proposal aims to address this.
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If it’s not for distribution, then what’s the purpose of the funds in the treasury?
For instance: Is it a fund to cover possible slashing losses?
That’s something that would make sense to keep funds for.
There may be other purposes.
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@ottodv All good points. In the meantime, we can grow the funds in the treasury and figure out what to do with them later. I spoke to Dimi and he mentioned he will think about a way to include the distribution of the rETH2 that is earned from the sETH2 that will be purchased with this proposal, which can help increase the yield of SWISE holders (the same can be done with the other 50% if we so choose to use it that way). Could also think of the treasury as an emergency fund.
I am sure we can also utilize the rETH2 (and sETH2 if we would like to) to fund future SWAT proposals, investments, etc. (in addition to to paying in SWISE as well).
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there are some ideas on how to use the accumulated funds but in any case they’re community’s own, and therefore can be applied in various ways that benefit protocol users & SWISE holders. we just need a proposal in place to discuss
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Anything the DAO decides:
- Future SWISE buybacks
- Funding DAO operations
- Funding marketing campaigns
- Funding the purchase of another project (assuming the treasury grows to that extent)
… etc…
Is it a fund to cover possible slashing losses?
Maybe that too!
In general distributing the entire 10% protocol fee as a whole may not be the smartest way to pay dividends to SWISE holders even, perhaps only a portion of it should be used for that task in order to keep the treasury earning a healthy income in protocol fees (as well as earnings from any other investment the DAO may make).
But that’s perhaps a discussion for another thread \o/
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