Blockworks Research will be voting AGAINST this proposal on Snapshot.
We find the idea interesting, but it seems extremely risky at first glance. In our opinion, the current proposal includes too many deliverables. It would be more sensible to research the subject first and address the concerns raised by community members in this forum post before starting the development process for the solution. If the positive findings outweigh any negative ones, finer details related to the implementation could be ironed out and the development work could begin. We also agree with @swmartin that if the research findings are positive and the DAO supports a TBV implementation, the development work should be structured as an RFP process.
Disclaimer: Please note that as one of the Research Members of the ARDC, it is possible that Blockworks Research will undertake some parts of the research put forward in this proposal.
We also suggest that separating the research work with limited scopes and budgets first from the whole R&D proposal is a great first step for the further considerations within the DAO to achieve what this proposal originally aimed to do. As Joseph seemingly has already agreed with the general direction, we appreciate all the effort so far from the OD team and look forward to the revised proposal in the near future.
The Princeton Blockchain Club is abstaining from the Treasury Backed Vaults R&D proposal Snapshot vote.
Definitely think the research part is worth funding, but as other delegates have pointed out, we might not want to fund and pursue TBVs depending on the research outcomes.
Looking forward to the reworked proposal after the ARDC’s input!
We agree with the views expressed by many of our fellow delegates that the research and concepts entertained by this proposal are very interesting and worth further exploration. However, we have significant reservations about moving forward with a Treasury-backed vault without proper research and feel this approach will not end well in practice. There continues to be innovation in the lending space, with potential new projects such as Collar Protocol developing new models for borrowers that may make more sense for DAO treasuries.
We look forward to continued research here and thank @cupojoseph for their effort and communication throughout this process.
We voted against this proposal since more thought needs to be put behind the collateralization of native tokens directly from the DAO’s treasury. This is especially the case when the native token is incredibly volatile and subject to severe downside beta. Recent approvals of initiatives that have the potential of largely suppressing ARB price furthers this concern. The dormant, unissued ARB tokens in the treasury are effectively acting as a way to bail out the given loans in the event of a downward spiral. Of course this depends on how much ARB is placed in the savior module. I’d assume it’s relatively high since the DAO doesn’t want to face a liquidation and would rather bear the brunt of fronting more and more capital in the short term. An infinite line of credit, ie the treasury, tends to blind us from the risks–until the LOI begins to run dry. This is a dangerous setup. Hence, from a risk-adjusted perspective, we don’t believe that moving forward with this proposal is prudent.
That isn’t to say that this proposal is not interesting–it certainly is something we’d like to see researched. We look forward to seeing a more fleshed out proposal from the team and the ARDC considering a handful of these risks and other points of feedback from the DAO. The teams need to solidify what sorts of risks the DAO is subject to if we were to proceed. We would suggest first outlining the perspective that the DAO comes from in relation to the native token. Do we want to collateralize ARB in the first place? And how willing are we to top up a loan to prevent liquidation?
TBV research does sound interesting with a ton of learnings and concepts to unfold. However, we believe this proposal was indeed rushed as a couple of delegates already stated in the comments. We would appreciate if there is more due diligence in having conversations around this topic, discussing things thoroughly with the ARDC to find out how best they could potentially come in to help, and then defining steps to move forward.
This proposal for Treasury Backed Vaults (TBV) shows promise in enhancing DAO capital management. To add some feedback on it for improvements there should be more clarity integration with existing DAO strategies like grants, highlight use cases, and detail security measures and contingency plans for market conditions. More community engagement and transparency in refining these aspects would maximize impact and adoption within the DAO ecosystem.