DEPARTMENT or DAO: This proposal addresses the whole DAO.
WHY:
Thoughts
Since its inception, the goal of Lobis has always been to acquire and utilize Treasury assets to participate in DeFi governance. Governance includes both votings on governance proposals and gauges; however, we have been unable to use all treasury assets in this way while reconciling with the mission and values of Lobis. There are multiple reasons for this, but for this LIP, we can consider the lack of ‘Lockers’ that let the ‘Owner’ retain voting rights over the ‘Locked’ assets.
As a result, the DAO has either forgone ‘yield’ the ability to govern or both. In some cases, this has stagnated our ability to execute on D2D swaps, grow the treasury, and ‘LOBI’ on underlying protocols due to gaps in the Lobis governance ‘flywheel’.
Any reasonable community member can say that the LOBI token is significantly ‘under backing value,’ this is not necessarily incorrect, but, in my opinion, unspecific. Evaluating the ‘value’ of each LOBI token has always been driven by each tokens’ ability to influence gauges and governance of the underlying protocols. i.e., Treasury Tokens / Total LOBI supply. It indicates that the LOBI token is trading below ‘fair value’ by ~50%.
Considering that our CRV, ANGLE, SDT, and OHM (paired with LOBI) do not provide the ability to direct liquidity or incentives, they cannot satisfy the criterion stated above. On the other hand, FXS, TOKE, and to some extent gOHM do provide the power to LOBI, taking this into account provides a different picture with ‘Backing’ is at ~$59, much closer to the current ‘value.’ We should also consider that our LOBI token stayed at hOHM with the only pair being LOBI/OHM. However, the community is undertaking initiatives to provide alternatives here.
Rationale
The fundamental goal for Lobis has always been to maintain the decentralization of the pillars of DeFi. Unfortunately, incomplete ‘governance flywheels’ have presented impediments to the DAO. Recently, Stake DAO published their iteration of the ‘veToken’ model that provides the option to ‘Lock’ assets while retaining the voting power of the ‘Locked’ token with avenues to exit via curve pools for TOKEN/sdTOKEN. This presents us with a new option to potentially utilize the full spectrum of our assets, and we should vote on the appropriate next steps. To do this, first, we must review our ‘Current-state.’
Current-state
FXS
Currently, our FXS is locked as veFXS and enables us to vote on FXS gauges that will continue to be instrumental to our partnership with partner protocols such as Angle and Stake DAO. As a quick recap, a short lock was maintained to capture any potential ‘FPI airdrop’ from Frax and to enable governance on the Frax Protocol. Though controversial at the time, these steps helped us to approve partnerships with Angle Protocol and Stake DAO. In addition, they grew the treasury by ~$2m through D2D swaps, not including returns from ‘yield.’ Lobis ‘Locked’ FXS unlocks at UNIX timestamp 1645056000 or on Thu Feb 17, 2022, 00:00:00 GMT+0000 (Greenwich Mean Time).
Decision:
Convex and Stake DAO have deployed versions of veFXS with different design choices, so we should consider what is most appropriate for our DAO FXS.
- Relock as veFXS
- Lock with Convex
- Lock with Stake DAO
- Split across protocols
ANGLE
To date, the ANGLE from our D2D swap isn’t locked and, therefore, is unable to generate ‘yield’ or attribute governance power to our LOBI token. For those unfamiliar, the Angle Protocol employs ‘veToken’ gauge voting similar to the ‘veCRV’ model; therefore, only veANGLE can claim ‘yield’ and retains voting rights over gauges and governance proposals. You can learn more about veANGLE here.
Decision:
Currently, only Stake DAO has deployed a version of veANGLE as sdANGLE.
- lock as veANGLE
- Lock with Stake DAO
- Split across protocols
SDT
The SDT we gained from our D2D has been staked as xSDT to earn SDT and can be used to participate in Stake DAO governance but doesn’t currently enable us to direct incentives or liquidity. This is sent to change with the release of veSDT.
Decision:
Currently, there are no other options for our SDT, with only Stake DAO signaling the introduction of veSDT. It’s important to note that this means the end of incentives for xSDT and the use of veSDT to direct SDT incentives. Therefore, we can decide on our future aims here.
- lock as veSDT
- Keep as SDT/xSDT
- Wait for a veSDT Locker.
CRV
Lobis CRV was converted into cvxCRV and is staked on Convex. At present, this represents ~$40k/week in CRV, CVX, and 3CRV. In my opinion, we should continue to stake our CRV on Convex until an alternative option is present, as this enables us to grow our CRV and CVX returns while earning stables that can be directed to DAO Operational Costs or liquidity.
Decision:
Currently, no DAO has deployed a version of veCRV that satisfies our criterion. Therefore, the options remain the same.
- Keep on Convex
- Lock as yCRV
- Lock as sdveCRV
- Split across protocols
TOKE
Our TOKE bonds can be considered one of the most intelligent decisions by the DAO as it currently enables us to direct liquidity and earn TOKE, therefore, satisfying our criterion. Given our pursuits to gain a TOKE reactor, it would make sense to avoid any change here.
Decision:
- Continue as per LIP-9
- Other
Protocol Owned Liquidity (LOBI/OHM SLP) and gOHM
Potentially the most integral component in our treasury, in my opinion, we should continue in our pursuit to build out POL in a pragmatic manner through bonds and lending OHM against gOHM.
Decision:
- Maintain status-quo
- Other
I propose only considering our FXS, ANGLE, and SDT for ‘Locking’ in this draft LIP.
WHO: Exalted
WHAT: Lock (edit: a to be determined portion of) treasury FXS and ANGLE as sdTOKENs and lock SDT as veSDT to ‘boost’ our voting power.
HOW:
1. Attain consensus within our community for the next steps (lock, no lock, split across options).
2. Deploy relevant allocators and lock assets.
3. Enable community and partners to vote on gauges/governance for the underlying protocols.
WHEN: Before the end of Feb 2022.
