Abstract
The aim of this proposal is to request a loan of tokens from the RARI Foundation treasury to AlphaLab Capital Group.
Motivation
By lending tokens from the RARI Foundation treasury, the RARI Foundation can earn a yield on its tokens that are currently sitting idle.
Rationale
AlphaLab Capital Group (“ALC”) is a technology-driven trading firm that transacts over $2B a day in cryptoassets across 60+ exchanges, both centralized and decentralized. Since 2017, we have provided market liquidity and efficient price discovery. Our team of 70+ engineers have previous experience building technology and trading algorithms at companies like Citadel, Tower Research Capital, Goldman Sachs, and Stripe. We operate thousands of trading algorithms 24/7 on a globally distributed network of 500+ trading servers.
We are interested to borrow tokens from the RARI Foundation treasury for our own proprietary trading operations.
Key Terms (optional)
Volume-weighted average price (VWAP): The volume-weighted average price (VWAP) is a measurement that shows the average price of a security, adjusted for its volume. It is calculated during a specific trading session by taking the total dollar value of trading in the security and dividing it by the volume of trades.
Specifications
• Loan Amount: 1% of total token supply or 250,000 tokens
• Loan Start Date: When the tokens have been received by ALC
• Loan Duration: 18 months
• Interest Rate: 1% per annum
• Interest Rate Payment Terms: interest is to be repaid in $RARI tokens, at the end of the loan duration.
• Loan Repayment Terms: At the end of the Loan Duration, ALC will return any combination of loaned $RARI tokens and USDC with the $RARI token value based on the 7-day volume-weighted average price (VWAP) [as measured on Coingecko or Coinmarketcap after the Loan Start Date. For example, if the 7-day VWAP after go-live is $2.20, then at the end of the contract ALC may return either 250,000 tokens or $550,000 USDC or some combination thereof, plus any accrued interest.
Steps to Implement
The steps to implement the proposal, including associated costs, manpower, any legal documentation and risk assessment (if applicable) and other resources for each step where applicable. The steps must be described with sufficient specificity to leave as little room for the Board to exercise discretion in implementing the proposal.
To implement this loan, a loan agreement with appropriate covenants will be entered into with the RARI Foundation.
Upon approval of this proposal, the tokens would be transferred to an ALC wallet which will be provided at a later date.
Timeline
Relevant timing details, including but not limited to start date, milestones, and completion dates.
The tentative Loan Start Date is end December 2022, although this is open to revision depending on the DAO proposal and legal reviews.
The proposed Loan Duration is 18 months.
Overall Cost
The total cost to implement the proposal.
There is no cost to the RARI Foundation to implement this proposal.