BarnBridge DAO Incentive Alignment, Vesting and Multisig Management

TLDR

Requesting 11.4% of token supply with vested distributed to contributors who’ve been historically under compensated. Two year vesting with semi-annual community review of continued alignment/commitment with the project. Multisig creation for DAO transfer to Optimism.

Overview:

This conversation was voted on via Snapshot in the past when we thought we were moving to the BARN token but we dropped the proposal because 20% was too much to ask from a fixed supply token.

However, since that vote the prior founding development team who helped build out BarnBridge obviously left the protocol. We had to rebuild almost every aspect of it. With a band of outsiders who I worked with both in our Discord, the Q Discord, and from prior work experience in the industry, we were able to revive BarnBridge by rebuilding: SMART Yield, the DAO, staking, bonding, governance, and the entire UI/UX of BarnBridge along with the website.

Obviously, this hasn’t launched yet but it is all coming within the month of August.

During that time, we lost a lot of people. Some of them because they weren’t comfortable with the drama, others due to apathy.

When people no longer thought there was a route to compensation or upside to BarnBridge’s success, they naturally pursued other opportunities. Some community members vocalized to me that working on BarnBridge felt like a public good.

I think if we are planning on succeeding we need to naturally realign incentives given the turnover over the past year. I’m not bitter about the people who left, I think that naturally happens in bulls and bears… people flame in and fade out. However, after 10 months of building out BarnBridge V2 there are a list of people I think deserve long term alignment with what we are building towards.

I also think our community should WANT to incentivize these people.

Tyler 2.50%
Stu 1.20%
Q.xyz 1.00%
Pavlo 1.00%
Christian 1.00%
Plug 1.00%
Vitalik 0.50%
Fully Allocated 0.50%
Zach (Solidity) 0.50%
Max 0.40%
Mike987 0.40%
Alberto 0.25%
Ser Link 0.40%
Discretionary Dev Allocation 0.40%
FEPO 0.10%
Erin Dana 0.05%
m0xt 0.05%
Bilbo Bondbags 0.03%
Gunner 0.03%
VaeVictus 0.03% 11.34%

Who is Getting What and Why:

It’s one thing to frame these % as $ amounts but I think we need to take into account that these people should have been compensated in this way already. This is a % of the network they deserve a say in… the fact it has a dollar price complicates the ask but this is how I framed this thought process.

This is my proposed breakdown. I know it’s front weighted towards me but also keep in mind… a standard founder in Defi makes around 15% of the token supply. With this, I end up with 5.5% for all of the work I’ve done and will continue to do going forward. I’m ultimately fine with that but should get it out of the way up front.

Q – this is obviously in some part going to me as well since I own a large chunk of Q but the bigger thing here is we have people and will continue to in the future who we want to align with BOND. Further, since it’s a private company with external investors this helps me justify any conflict of interest in focusing on BarnBridge over any other protocol since its inception.

Pavlo, Vitalik, Christian and Stu never received tokens for their work on BarnBridge.

Max also never received tokens for his work on BarnBridge and I think it’s in our best interest to align him given how critical FIAT and FDT will be to BarnBridge moving forward.

Plug (our team in NZ/Singapore) wrote all of the code for SMART Yield v2 and are already working on integrations to Curve and Velodrome to help with the fact that USDC into AAVE is 50 basis points in variable interest at the moment.

Fully Allocated wrote the DAO code to fit the Default framework. While Fully is anon, I have worked with them in the past so they’re not anon to me and I know they have high character.

Zach is a developer who Fully Allocated has helped us to recruit who wrote solidity code for ROME which recently voted to disband its treasury. He is doing an audit on Olympus V3 and coming on full time to work with us afterwards in early September.

Alberto works at Linum and helped us build the back end. He is an amazing developer and we’ve gotten permission to reward him directly to have incentive to focus on BarnBridge over other work. We lost one developer from Linum to Polygon and another to AAVE and Alberto really went above and beyond to help us finish the project. I think this incentive gives him incentive to not be someone we lose.

We’ve also allocated .40% for discretionary development which we need to find and recruit. This is the main gap on BarnBridge right now. Kostia from Q who also coded a lot of the FIAT front end has helped a ton. This may eventually go to him or some of the Linum team. Or we can divide it between them.

Everyone else are community members who went above and beyond to help when they had absolutely no incentive to help along the way to bring BarnBridge back.

It’s ultimately not fair to me that working on BarnBridge should feel like a public good or a mercenary task where people only gain to earn USDC. This is my attempt to fix this.

Vesting FURO:

This is slightly over 11% of the entire bond supply, vested over 2 years using Furo by Sushi. It’s a really cool new tool and the Sushi team has committed to working with us and marketing the use cases of how we plan to use it.

We also could use Furo to stream BOND rewards into the xBOND staking contracts.

We can set up custom vesting contracts using Fuse that can stream out and be canceled based on a community snapshot.

It’s pretty simple to set up here as you can see in the example above.

Multisig per Conversion:

So this part may end up seeming alarming until you realize that everyone on this list is either doxxed to me or is a fully doxxed person. Most of these are people who have been around our project for a while and have only acted in good faith. Or they are industry leaders who care about the long term prospect of BarnBridge.

I have concerns about how we set up the vote next week to move the treasury from Mainnet to Optimism. There are scenarios where we can get flash loan attacked or even vampire attacked on the new chain before people have time to move over.

If we vote on main net that our intention is to move our DAO to Optimism, we should move the entire treasury of the old DAO to a multisig that can also call functions in case SYV1 or SMART Alpha get an uptick in usage that accumulates a large amount of any token on the Mainnet treasury. We would then honor snapshots to move these funds to Optimism. However, the entire DAO treasury, the protocol owned liquidity in the community multisig, and the team multisig will need to move to Optimism and I think it is safer to use this multisig during the transaction so people have time to port over.

From there, this multisig can also control the Furo vesting and make sure we execute the alignment incentives.

When it’s all said and done it should all be moved to the DAO’s control but there will be a dangerous transitionary period where I trust this multisig more than actors who may have been accumulating BOND to attack the treasury before we have time to unstake, bridge, and move over.

It’s vitally important we do this, in my opinion.

Semi-Annual Review:

I propose we look at this vesting on a semi-annual (6 month) basis and make sure everyone is aligned the way we expected. The standard vesting in the industry is over 2 years and Furo lets us stream this, accelerate it, or end it.

So I propose that the BarnBridge community follows the doxxed wallets and ensures people are still held accountable and are active on the project.

From there we can honor snapshots and change vesting if someone tries to Farmwell us.

Transitional Multisig Members:

Multisig Signatory Public Wallet
Tyler 0x747dfb7D6D27671B4e3E98087f00e6B023d0AAb7
Troy 0x601c6D9efF76Ae8cd7bFF5fC4900f20F6F80734F
Mike987 0x387c9e47D1cE2B1580760766C46e780516E3eE99
Ser Link 0x17990Cb7FbE68b7c2A31a9976970466CD1e7FEd9
Erin Dana 0x4497B374B5536E3A93276185AF5E7BecDf9eF86F
Aaron McDonald 0x3483573534982883eDef09deDd57c0c90825fbEE
Pavlo 0xCafe32E515f8c6B29Fc0B817d443bDF0bb2A5aD7
Bilbo Barnbags 0xB9fcAD453647B87335629E2c0Ea2c5e2DFcA6473
EJ - 4RC 0x1749F051c45c814A9a4fAb5bEC7CF6851A4178Ca
Jordan - SNX 0x604F127145CAC2467389124f0871227D3fD6F628
Stu 0x52744218fa706e2A0782725Ea2F7034f109EA75e
Christian 0x71bB1e70B126a03DcEE7B88733E900f6fC20a469
Vitalik 0x6fdF84F02a4959AA40cA46473D4A2591Ec4a1e21
2 Likes

Hey everyone, Max from the proposed incentivization table here. For those who aren’t familiar, I’m currently serving FIAT DAO, a platform for unlocking liquidity against fixed term deposits.

While I’m honored to have been considered for a BOND allocation, I think the quoted sum (0.40% over two years) would be better served deepening the partnership between BarnBridge and FIAT DAO. Specifically, FIAT DAO will look to onboard SMART Yield v2 deposits as collateral for minting our CDP-based (i.e. MakerDAO-style) stablecoin, $FIAT. This presents a clear opportunity for doing so.

I would propose the following:

  • Allocate the 40,000 BOND to a joint venture multisig
  • Impose a similar vesting schedule
  • Direct vested BOND at liquidity subsidization of $FIAT

One example of liquidity subsidization is our current use of the Hidden Hand marketplace. Currently, FIAT DAO bribes Aura Finance governance participants to vote in favor of directing Balancer Finance emissions at the FIAT-USDC-DAI stableswap pool on a bi-weekly basis. In the future, similar strategies could be conducted in the Curve/Convex ecosystem, or the Velodrome platform on Optimism. To put this into perspective, the latest cycle saw $10,500 paid to Aura Finance governance and has resulted in enough $BAL emissions to sustain $10M worth of liquidity at 10% APR.

The value proposition in doing so for BarnBridge is that every marginal dollar of $FIAT secondary liquidity is a dollar that can be redeposited into SMART Yield. Given the short duration of SMART Yield positions, they will be able to receive relatively high loan-to-value thresholds in our current risk assessment model (e.g. 92.5 - 95%). This will allow users to effectively lever their SY v2 exposure by purchasing more of the underlying $USDC or $DAI.

The shortcoming of this model would be that BarnBridge could potentially be subsidizing competing platforms in doing so, as $FIAT is backed by collateral issued by a variety of protocols.


Happy to discuss further with anyone who has questions or concerns about this proposed change.

4 Likes

Do you see it being still over two years?

Also I’m in support of this. I was planning on looking to incentivize main net usage of FIAT for BarnBridge positions instead of incentivizing BarnBridge proofs of liquidity directly since we kill two birds with one stone so this makes it much more easy to support that given the alignment you are already showing here.

2 Likes

The emissions rate associated with a two-year vest would be meaningful and is what I had in mind initially. On the other hand, doing it via a 1 year or 18 month vest schedule could help with initial bootstrapping of SY v2.

Would defer to what others think here.

2 Likes

Is it possible, on chain… to ensure that we are incentivizing BarnBridge liquidity with these FIAT incentives?

Meaning could we somehow ensure the person receiving the rewards are driving BBSYV2 deposits?

This would help us with our incentives as well to be more geared towards FIAT (meaning if there was a way to bribe the weighting of FIAT towards BarnBridge deposits).

Would love to see that leverage loop for BOND, this would in fact allow the ability to scale that ordinarily wouldn’t not be seen with a capped token. If successful, we can could look at expanding this.

I 100% believe everyone on this list totally deserves these voting rights. While I’ve been less active in Discord. I’m still on calls with lawyers and ensuring the way most of what we are doing falls within the line of what regulators are looking for. I’ll also be attending events in the BarnBridge capacity and have ongoing work in talking with seed round contributors and updating people on what is going on in and around the BarnBridge ecosystem. I think it’s appropriate I’m compensated .3% of the supply for these actions as well as the people on this list.

I’m still technically a co-founder on this project and operate in that way behind the scenes. I’m also a co-founder on Q which needs to stay aligned on BarnBridge and the original breakdown for all this had a much larger allocation to Q so I didn’t have a problem losing my personal voting rights since the company would also be voting but in this situation I believe I should get the .3% so my voting is not as diluted.

1 Like

I agree with this. I was actually thinking while reading this I should request the same amount since people don’t really see all of that stuff (albeit it contributes a lot) but ultimately I think mine is looped into my ask.

1 Like

As a long time community member of BB, I fully support this vote.

Thank you for your service.

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I also fully support deepening the relationship with Barnbridge and Fiat through allocating the proposed token incentivization (0.40%) from Max to Fiat.

Troy proposes moving the vesting to 6 months instead of 2 years. Does anyone not support this?

That way the people that believe in the project can do their business and the ones where kind of contributed can leave.

I’m in for the long haul.

If someone stops contributing and wants to move on they would have their vesting rugged at the next 6 month review. We have had a lot of people come and go over the past ~ 2 years so the goal of having this over a longer period is to weed out anyone who who wants to move on before giving away their full allocation of BOND. In theory that gives us continued alignment over a two year period which should be plenty of time for SY v2 to gain product market fit.

I personally trust everybody on that list and they have shown that they deserve our trust, but I think we also owe it to the project to give it at least a year of guaranteed / forced alignment before relying on trust.

A strong argument for a shorter vesting period would be that we want the people on that list to have greater governance power so they can exert more influence over governance decisions early on into the release of SY v2. Not sure if anybody feels strongly about that, but I think it could justify a shorter vesting period more along the lines of 12 or 18 months instead of 2 years. We probably would want to do the review quarterly if moving to a shortened timeframe.

1 Like

The reason here is actually the alignment on power. I think we can review monthly if we do 6 months. I’m actually for this so we can get it all done.

Points well taken - I’m in the 6 month camp now

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At this point I think there should be no vesting. Does anyone have a problem with this?

Yeah we definitely need vesting at least for a few people so I think we keep it uniform.

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İ support this proposal for incentivize those people on the list who worked and put effort for BB.But about the vesting period,i m not sure for 6 months.İ think 18 months or 2 years would be better as Ser Link mentioned above,if someone wants to move on and gives away their full allocation,who knows? although for instance Troy said he is in for the long haul :slight_smile: Lastly i want to say that i fully trust all the BB community and its main people.Thank you!

I think the main ask for accelerated vesting has to do with ensuring the most active people can hit quorum and to decentralize further a bit. The number of people staking in the DAO is much lower than before and doing wallet analysis of Nansen… there are large wallets who aren’t involved in governance. I think that is partially what we are optimizing for which is why I said fine on the 6 months piece.

1 Like