Defining the Process for Requesting Stablecoin Withdrawals from the TM Track
Abstract
As per the original “Treasury Management V1.2” proposal that passed on Tally, the TMC was tasked to: “Design and host an RFP process seeking treasury managers with predefined overarching strategies. E.g., the process for converting ARB to stables, how the stables can be deployed when sitting idle, the process for a DAO contributor to request stablecoins from this program within their proposal, whitelisted stablecoin/ARB strategies or protocols, etc”.
This proposal specifically relates to defining the process for service providers and proposal authors to guarantee dollar-denominated payments in the event of downward ARB price movements that leave a proposal underfunded.
Suggested Process
Due to the fact that the Arbitrum Foundation will be in custody of these funds, and that the TMC’s Snapshot recommendation split a relatively small amount of dollar-denominated funds amongst 3 different strategies/service providers, the TMC believes the Arbitrum Foundation should wield the power to make decisions on when to cover and not to cover service provider shortfalls with accrued yield only.
The rationale behind this choice is to ensure the Arbitrum DAO has a base of stablecoins earning yield and that the stablecoin balance isn’t rapidly depleted in order to cover shortfalls. The Arbitrum Foundation will cover shortfalls for service providers from the yield earned on this portion of the TMC’s funds at its discretion for previously funded DAO proposals currently facing shortfalls, but any proposal moving forward needs to define the existence of shortfall coverage from the checking account in its initial Tally proposal in order to be eligible. The Foundation should retain the right to deny requests as it sees fit, and also have authority over which strategy deployments to withdraw from e.g., the yield accrued from Treasury managers A, B, or C, or potentially a small portion from all 3. Operationally speaking, this should make it easier for the Arbitrum Foundation to move nimbly.
For the sake of simplicity, any service provider who passes a proposal through Tally with language included that stipulates the TM Track’s yield will cover shortfalls beyond an ARB price buffer just needs to make a comment under the initial Forum post requesting the funds and tagging the Arbitrum Foundation in order to submit a request. Again, this verbiage must be included in the original Tally proposal moving forward. All previously funded initiatives that face shortfalls can make requests by following the same process, but the verbiage in the original Tally proposal is not required, given that the process is just now being defined. The backfunding for previously funded proposals that did not include verbiage related to the TM Track’s yield covering potential shortfalls beyond the ARB buffer will be left to the discretion of the Arbitrum Foundation.
In short, the process is as follows:
Previously funded proposals facing shortfalls: Tag the Arbitrum Foundation in a forum comment under the original forum post, stipulating the amount of stablecoins being requested and where the funds should be sent. The Foundation will have complete discretion over which requests get approved or denied.
Future proposals facing shortfalls: The same as above, but the original Tally proposal that passed must have included language specifying the use of the checking account in the case of shortfalls beyond the ARB buffer.
Only the yield earned over time is eligible to be requested.