TAP-15: Pilot Bribes Budget

balotelli45

Summary: Authorize OlympusDAO to use a maximum of 100,000 DAI from the Treasury to bribe its Protocol-Owned Pools.

Motivation: Olympus owns almost the entirety of its liquidity which puts the protocol in a good position to profit from token incentives emitted from various DEXes. Generating positive returns on bribes paid out would allow Olympus to generate additional income from its POL and use the proceeds to further reinforce the size of its Treasury.

Specifications:

Bribes could be conducted on various platforms (Hidden Hand, Votium etc.).
Bribes would mainly be used as a tool to acquire specific strategic assets more efficiently such as $BAL.
Due to market volatility, there is always a risk that the value of the token emissions received does not make up for the bribe paid out. Policy will tightly manage this risk by accounting for large drawdowns in token prices when computing bribes profitability.
Once the test budget is exhausted and if results are positive, a formal OIP to establish a bribe strategy will have to be approved by the community.

Proposal:

Authorize OlympusDAO to utilize 100,000 DAI from the Treasury to fund bribes for its protocol-owned pools. Once the budget is exhausted, further deployment of Treasury funds would have to be community approved.

json

I don't think that Olympus should participate in bribes personally. If we purchase AURA or BAL we can vote on our own gauge which was approved via Balancer governance over a month ago. This would be similar to what is happening with our convex gauge/LP position.

dr00

json This makes sense from a pure POL perspective, but it seems to make less sense in the direction we are going with Mint & Sync and such. If we are to encourage people to provide liquidity, then it makes more sense to participate via incentives through bribes - no?

balotelli45

json Currently, bribes provides Olympus with a cheaper way of acquiring such assets. This is the main motivation for pursuing this, otherwise I would agree with you.

dr00

Budget sounds good to me, if the experiment proves profitable we can always scale up from here!

Thanks for putting this together and exploring all the opportunities at hand in the Balancer ecosystem and beyond.

json

dr00 This isn't about people providing liquidity, this is about cost-effective asset accrual.

json

balotelli45 Yeah I know the why and financially it makes sense but I just don't think Olympus should "bribe". Does that make sense?

balotelli45

json hmm can you expand on why Olympus should not bribe?

json

balotelli45 Perhaps its the nomenclature associated with it but Olympus "bribing" for rewards with RFV/legitimate backing seems like it could have legal/reputational implications. I would feel better if we didn't call it bribing and it wasn't DAI. We have 300k+ of USDC sitting and is more risk-on than DAI.

Relwyn

With any speculative endeavor, I'd love to make sure that we create a mechanism to report on how we're performing to plan. If we commit $100k DAI to this, could it be something that's tracked the quarterly to show the return (Favorable or Unfavorable) so that people can make an informed decision if we chose to continue? Always good to have a mechanism to report back how a thing did.

json

Relwyn You can just calculate rewards/$ spent on utilizing Hidden Hand or whatever. You can measure it now and that's why this proposal exists.

balotelli45

Relwyn Indeed. Would love to discuss this with you if the proposal goes through.

@json Yes good idea, I'll amend the proposal to use USDC instead of DAI.

Relwyn

json Agreed that the formula is simple. It's more about creating metrics around the performance of an exercise such as this. For example: is 10% ROI enough? 20%? What does Treasury objectively aim to hit on a risk on effort? Etc.

We can be good about voting to do a thing and then less good about evaluating if it was the right move in hindsight. I think that's easy to change and is a positive effort that can be shared with the partner protocols we're targeting new relationships with as well as retail users.

json

Relwyn I just don't think Olympus should bribe anyone or anything for asset accrual no matter the capital efficiency, its a game that I would think Olympus should be above.

Why not just OTC with a close partner protocol or organization for vote weight?

@balotelli45

Relwyn

Ah, I see the disconnect. Your asserting an opinion on if Olympus should participate in bribes and I was commenting on if we do participate on them or anything else risk on, we should have better reporting metrics.

So I actually agree with you json on if we should doing something with treasury assets called "Bribes". DeFi vernacular memes hard and at times its hard to say what's acceptable and what's not.

If we want strategic governance power why couldn't we OTC for it vs. bribes? Conversely, if we incubated Redacted and provided them Flex Loans and partnership knowing Hidden Hand is Bribes, where's the objective line that shouldn't cross?

My comment on metrics is more general asking that if we do a TIP or OIP we track success or failure so that we can collectively scrutinize, discuss and iterate. That just happened to come up in this discussion.

balotelli45

json What do you mean by OTC for vote weight ?

Again, I want to emphasize that ''Bribes'' are currently the most efficient means of acquiring Balancer governance power at small scale. Essentially, it means Olympus Treasury would have to spend less $ to reach its acquisition target (Still TBD).

json

balotelli45 OTC payment for their votes on our gauge. I understand why we're doing this because of the cost effectiveness I just don't think Olympus should be bribing.

balotelli45

json isn't it the same as bribing? paying somebody to vote for your pool…