Community Call Governance Workshop - March 8, 2023

In this Gov Workshop, the community is joined by Pierandrea and Fabio from Iconium, an early Rook investor, to discuss their draft proposal about the ROOK token model.

Rook branding with white cubes; recap by Starbased
Governance Workshop is a biweekly, open meeting where we discuss specific proposals that are in progress and workshop new ideas about Rook's governance process.

To participate in the calls and ask any questions you may have, join our Discord!

View the agenda for this event.

Sophon Nomination Officially Adopted

Proposals Currently With the Sophons

  • KIP-36 - Expand Funding and Strategies of Testing Wallet: Originally $600K was allocated to the testing wallet effort. Due to the success in generating yield, an additional $400K in DAI funding is being requested.
  • KIP-37 - Discretionary Swapping of Like-Kind Assets: Currently, the treasury must go through the slow governance process to swap like-kind assets. This proposal would mitigate risk by giving the treasury the discretion to swap between stablecoins, Ethereum/ETH derivatives, and Bitcoin/BTC derivatives.
  • KIP-38 - Replenishing Discretionary Allocation Fund: This gives the treasury the ability to quickly react to and take advantage of market opportunities in a non-public manner. This proposal would replenish the cap to the lesser of $5M or 5% of the treasury’s notional value.
  • KIP-39 - Deployment of Additional ETH for Yield Generation: The ETH yield generation experiment has been successful, so there is a desire to increase the limit to 80% of idle ETH.

Treasury Proposals

  • Draft: Treasury Yield Management for USDC via USV - This proposal suggests investing 20% of the Rook DAO Treasury USDC holdings in Phuture’s USDC savings vault (USV).
  • Draft: The Origin team has introduced the OUSD Treasury Utilization Proposal. In order to reduce risk, Origin monitors circulating supply, redemptions, liquidity, and the borrow rates on Aave and Compound. Members of the Origin team joined a recent Treasury Tuesday call to provide more color on the proposal and answer questions (Rookbase recap).

Improving the ROOK Token Model

  • Pierandrea Rollo and Fabio Pezzotti from Iconium Blockchain Ventures, an early investor and contributor to Rook, joined this week’s Governance Workshop to discuss their draft forum proposal about improving the ROOK token model.
  • Initial ROOK tokenomics changes were made with KIP-35: Streamlined tokenomics. The authors’ concern is that this change reduced ROOK to a simple governance token, so the discussion during today’s call focused on enhancing the attractiveness of ROOK to investors from this new starting point.
  • The models discussed include both buy-back and revenue-sharing staking mechanisms to deliver bid pressure to the platform’s native token. [7:40]
  • The revenue-sharing model would be similar to that of GMX, which has proven to be well received in the market. However, there are counterexamples that suggest that the model has little effect on token price (e.g., LINK), whereas top projects such as UNI and LIDO do not offer these mechanisms and are among the most valuable in the market. [8:29]
  • Avoiding being classified as a security is an important consideration, as Rook does not have the capacity to mount a major legal defense. [11:30]
  • Reinvestment into the project in effort to gain market share could offer more long-term benefits than buy-backs, which have historically not made a lasting impact on token price. [13:23]
  • Unfortunately there are no clear regulatory pathways with the SEC, so insight from inside and outside legal counsel (which can be led by Guard) is an important step to take.
  • This conversation will continue to develop, so stay tuned to future Governance Workshop calls to follow the discussion!