Discussion of the Treasury

As detailed in this tweet thread https://twitter.com/juliankoh/status/1446871466801307652?s=20 and blog post Ribbon & Divergence Ventures. Context | by Julian Koh | Oct, 2021 | Medium. Divergence Ventures had farmed, earned a lot of $RBN, and dumped for ETH the other day.

~719 ETH has been returned to the Ribbon DAO treasury.

Opening this post to discuss what the community would like to do with it.

A few ideas are

  • LP RBN/ETH after the LM ends
  • Buy back RBN with the auction like what Yearn did
  • We have free cash now for us to spend for marketing

In the discord and on twitter there have been tons of messages regarding distributing back to the community and making LPs whole again, Please detail your ideas here on how to move forward with the treasury ETH.

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This capital should be held by a bunch of early users, but is not because they weren’t able to deposit. Therefore I think the money should be used with the goal of bringing in new users.

This could be done by marketing, additional liquidity mining (buy $RBN on market and redistribute), doing something such as lowering insurance costs (through nexus mutual shield mining) for users concerned with the risks so they can have economical insurance, a combination of the above, or something else.

But the end goal should be trying to bring in the “lost community” from the way this played out.

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20% towards marketing, 80% towards buying back RBN tokens at market prices over a week long period, with the intent to burn them. No offense to the team, but I do not believe they should personally benefit from poor VC behavior, especially as the evidence points towards a significant likelihood of insider trading.

I believe the best use of the 719 ETH will be ensuring further protocol growth. Just as our vaults are sustainable yields, we need to ensure our investments also generate sustainable growth. With respects to the suggestions:

  1. LP RBN/ETH may be an option if the liquidity is too low following the end of the current LM program. But this will likely generate small returns and thus be capital inefficient. I only see this being a great option if a) liquidity is too low post LM program and b) RBN is further distributed through a vault LM program. In that case, the liquidity we provide could help sustain (temporarily) supercharged yields on our vaults. Although this is a temporary increase in the vault’s yield, it will achieve similar goals as marketing in that it will incentivize new users to use the protocol.

  2. Buying back RBN is likely subject to being front-run. KeeperDAO has had significant issues with past buybacks being front-run, and price falls precipitously post-buyback.

  3. Marketing and increasing awareness of the project may be the best call. However, I do want to point out that these three options are not mutually exclusive. Some combinations of 1 & 3 may be optimal. The sustainability of the protocol’s growth comes from individuals USING the underlying protocol, not playing temporarily with yields. As such, marketing can supercharge the protocol’s revenues and help drive long-term value appreciation.

Additional Suggestions

  1. Engineering/Academics:
    Given the pace at which protocols advance (and often overtake one another), it is paramount that Ribbon Finance can move freely and nimbly from one venture to another. To keep our massive first-movers competitive advantage, new products must be regularly fleshed out and new endeavors must be periodically tested and attempted. To achieve this, it will be necessary to have a sufficient number of team members. If more members are needed to expand the operations, this could be an excellent use of the funds and help turbocharge growth far more than marketing or LPing could do, in the long run of course.
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I think for point 1 (LP RBN/ETH), we can put it in a simpler SUSHI xyk pool (0.3% fees) instead of using the UNIv3 pool we have now. The protocol owned liquidity shouldn’t need active management or farm RBN in the current LM programme.

Future of that SUSHI pool can be further expanded as we work with Olympus Pro to sell bonds of discounted RBN in exchange for more RBN/ETH SUSHI LP in the DAO’s treasury.

If liquidity was provided in the current V3 pool, the ranges could be set to infinity and thus no active management is needed. If the ranges were set to a tight band range, it would essentially act as a buyback. Bootstrapping additional pools(perhaps a stablecoin pool) would likely be beneficial as well.

With respects to Olympus Pro, I still have some research & learning to do :slight_smile: