I’m voting AGAINST this proposal in the temp check.
First of all, motivation seems unclear.
This is what is stated here. In the initial discussion, which I don’t know why it wasn’t linked, it was instead presented with a different motivation.
The initiative has been moved from treasury diversification to growth of the chain, with a partial common goal of alignment of the protocols. But even here, the treasure example to me doesn’t hold: we are giving for granted that, if our treasury would have held magic, treasure would have stayed in our ecosystem. I don’t think this holds true.
For these reasons, seems like the end goals are a bit unclear.
Also, and maybe is me, I think this program is more a “virtue signal” than anything. Let me try to analyse the reasons why a protocol should do a token swap, knowing that the following are the terms.
Using for OpEx / Incentive program
The protocol will start to receive to get unlocked arb, at a rate of 10%, after 3 months. I see little reason for a protocol to get into this deal for covering opex since these are the terms; but neither the terms are such that the protocol can use the sum easily to spin up their own incentive program, at least not before several months (and they could do it through their own token at that point).
Using as yield generating mechanism
We still don’t have staked arb. We are currently working on it, but will take some time to be implemented; as such, is quite difficult to project the economics in an exchange. Matter of the fact, most token swaps are done because not only you signal alignment, but also because is bad optic for yourself to farm your own protocol with your own token but is instead ok to farm a friendly protocol. How can we even put the real value proposition of arb if we don’t yet know how staking will look like?
Using for voting power
This is the only case currently that would make sense to me: a protocol wants to participate to the governance of Arbitrum. But, looking at the list of the 19 protocols whitelisted, almost all the upperhalf of them is already participating to the governance; the lower half, will be quite difficult IMHO to involve them in governance unless there has been specific contacts on this regards. Happy to be proven wrong, would be good to have more builders involved in our DAO directly.
There is also a final consideration on the management of these coins. Assuming swaps will go through, and let’s even assume we have everything vested, at that point there is definitely a different reputation consequences for the protocols selling the arbs, or for our dao to sell the protocols’ tokens.
For the protocol, selling the arb token will likely be ok, or even go unnoticed.
For our DAO, it will likely be negative (“you don’t support external protocols”) to sell non arbitrum native protocols’ tokens. It will be extremely negative to sell instead the token of arbitrum native one (“the dao doesn’t even support GMX/Camelot/insert name of native arbitrum protocol”). It could potentially be ok to utilize them in yield generating strategies through a treasury manager, but the amount exchanged, since we have a cap of 500k, won’t be worth the hassle in my opinion; plus, we are assuming that there will be good way to generate yield or that we will also have a treasury manager. TLDR: whatever token swap we do, it will be quite difficult for the DAO to sell these tokens.
In my view, the DAO should take a totally different approach to align protocols to the chain and foster growth: we should invest in protocols.
This doesn’t mean buying the token, but literally participating to raises of the protocols, and get a portion of the equity. This, to me, would make way more sense.
We are not there yet because we need legal infrastructure that we don’t have for example. But to me, not having yet the tools doesn’t mean we should go for the path highlighted above.
As a final note, i want to say I appreciate the work done so far. I think the proposal is for sure better than the initial one, and I think the people added (paper, castlecap) add a ton of experience and professionality to this group. Despite this, I really can’t find a way to frame the token swaps idea as a good idea for our DAO, sorry.