• General

  • RFC: Remove unvested pKLIMA from Treasury

TL;DR Return of Dispose of unvested pKLIMA in good faith. In a post Cooler world without a working DAO Olympus will not be able to provide active continued support and value to KlimaDAO.

Disclosure: I hold a very small amount of Klima (~$650 worth).

Context

KlimaDAO was formed as a friendly fork of Olympus’ codebase to build a Carbon backed currency on Polygon Mainnet. Unlike most other forks, KlimaDAO has maintained a very different vision compared to OHM and has targeted a very different market and yet did share a close community and was launched with full support from Olympus. In return for using the codebase and support from Olympus Devs prior to launch KlimaDAO provided Olympus with 70,000,000 pKLIMA (pKLIMA can be converted to the liquid KLIMA token by providing 1 BCT). **OlympusDAO did not have to provide any additional capital or seed funding**.

Olympus to date has vested 19,178 of these pKLIMA and staked them, with the last vesting happening 651 days ago. The 19,178 BCT required to vest these was acquired OTC for ~68 OHM (equivalent to around $75,500 at the time) from a broker, paid in OHM. Important to remember, that at that time the narrative for OHM was one of “liquidity blackhole”, and Olympus treasury was largely averse to selling tokens it accrued, instead these tokens (and those accrued from other similar deals and Olympus Pro) were viewed as growing the diversity of the treasury and making OHM backed by a diverse basket of assets. These staked KLIMA eventually grew to 339,077.72 KLIMA tokens. As part of treasury conversion to stablecoins (as mandated by TAP28), Olympus sold these KLIMA tokens for $374,440.594451.

Proposal:

We propose that the above realized return of (at least) ~$300,000 is a good compensation for the code and initial dev help that OlympusDAO provided. Given that the working DAO is going to be dissolved post Cooler and On-chain Governance, there’s no continued value that OlympusDAO can provide to KlimaDAO. The pKLIMA OlympusDAO holds vests exclusively based on bonded supply expansion, and without liquid bond markets at KlimaDAO it is highly unlikely any remaining pKLIMA will accrue further value to OlympusDAO. With this context, we propose that OlympusDAO dispose off (or return to klimaDAO) the remaining pKLIMA as an act of good faith to remove this overhang and uncertainty that this may result in for Klima Protocol and Klima token holders. (we note that Olympus recently agreed to forego its future claim on Redacted Protocol for similar reasons and in good faith - after realizing some of the value in the form of an OTC deal).

The options that can be presented in a formal TAP can be the following (final poll options will be based on community feedback)

  1. Burn all remaining pKLIMA by sending it to polygon burn address.

  2. Send remaining pKLIMA to KlimaDAO treasury.

  3. Keep at most 1,000,000 pKLIMA, burn the rest.

  4. Keep at most 1,000,000 pKLIMA, send rest to KlimaDAO treasury.

  5. Do Nothing


Given the pKLIMA were gifted, redeemed, and sold - would be great to do the same as Redacted and remove the overhang and any responsibility on Olympus's end to exercise or utilize the illiquid remainder of the gifted pKLIMA position.

Great initiative. Much appreciated Z !

Strongly against and will be voting for option 5.

Differences w Redacted situation are stark:

We received funds in excess of the value of liquid tokens, specifically to compensate us for the forgoing of the unvested portion. Here you propose giving them back for free.

Redacted team worked with us to come to a solution via OTC - Klima's team refused to engage, hence having to sell the liquid portion on an AMM for a discount to the spot price at the time.

If Klima had properly engaged in some kind of OTC deal whereby we received at least the spot price for the liquid portion (remember, Redacted paid this and a lot more in order to rid themselves of the future overhang), then I'm sure they could have rid themselves of this overhang too. However, to just burn it/send it back to them after they've failed to engage in a deal, forcing us to realize much less than the market value, is not only a terrible financial decision for Olympus, but also a slap in the face to Redacted's good will shown in coming to an agreement and paying a lot of money for their overhang to be burned. I'm sure Redacted would feel hard done by if they were to learn that future vesting is now just being burned for free, and they could have saved a few million.

TLDR; If this pKLIMA is indeed more than likely worthless due to the lack of a liquid bond market, then it's as good as burned anyway. If, however, there is some value to it in future, then this should remain with Olympus. Firstly, for the benefit of OHM holders and their backing; but secondly, because Klima decided not to take the same decision that Redacted did, to engage and come to a win-win arrangement during treasury consolidation.

    I agree with what RFV has written above. Additionally, I think this would set a bad precedent for other holdings that have not been consolidated leading up to the launch of Cooler Loans.

    From a treasury standpoint there is no harm in doing nothing, and no upside to burning the tokens.

    • z_33 replied to this.

      rfveth thanks for your comment RFV. I'll let folks from both the DAOs chime in on the negotiations part 🙂

        hOHMwardbound How is Olympus going to provide future continued support to KlimaDAO post OCG? There's also very unlikely to be a practical and profitable way for anywhere close to that number of klima to vest? WHy leave an absurdly large looking (but yet practically useless) overhang over a partner protocol?

        (These tokens are almost certainly largely worth nothing… but that's not how they are perceived.)

          [unknown] please link where you are pulling quotes that are used in the post.

          If its unlikely for them to vest then thats okay… I don't understand the rush to burn something (in general). Are other pKLIMA holders burning all of their tokens as well? Are there negotiations from the team to buy them back from other holders? I might be missing some context here if thats the case. From my understanding this is a one off ask.

          Is the real aim here to remove theoretical speculation?

          • z_33 replied to this.

            hOHMwardbound Sorry if this is a formatting issue. There are no quotes in the post. The italics are for emphasis.

            Other pKLIMA holders are not transitioning to a new state. OlympusDAO is. To the point that in effect the DAO as an entity would hardly exist post OCG.

            and yes, the real (and I hope the stated aim) here is to remove the overhang which leads to theoretical speculation that Olympus will be dumping 70million Klima forever, without providing any further value.

              I agree that it makes no sense to burn the pKLIMas. Suggest to review the genesis of Klima to understand the drivers. Agree with RFV and hohmward so no need to repeat their arguments.
              For pKLIMas to vest, Klima has to grow in supply. Olympus will vest then and only then. And as its a small share of the supply, you will never have a dumping event of the size of the pKlimas.
              If for the contrary pKLIMas never vest, then holding is worth 0. So why burn an option? Does not seem to be in the best interest of the protocol. Just my 2c.

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