Authors: StableLab / Kaf
Reviewers: Anna Riabokon (RARI Foundation)
- Abstract
This proposal seeks authorisation to exchange the ETH currently held in the Rari Chain DAO treasury (~24 ETH) for an equivalent USD value of $RARI tokens. The RARI Foundation will receive the ETH and, in return, deposit the corresponding amount of $RARI into the DAO treasury. The swap converts an idle asset into governance tokens that can fund DAO initiatives while enabling the Foundation to manage the ETH more effectively.
- Background & Motivation
- Idle ETH on Rari Chain: The DAO still maintains assets on Rari Chain (~24 ETH). Due to limited tooling and integration, the DAO cannot efficiently deploy these funds.
- DAO needs liquid $RARI: The DAO finances many programmes (delegate incentives, grants, creator fund contributions, etc.) in $RARI. Converting the ETH to $RARI increases the DAO’s usable treasury without diluting existing token supply.
- Foundation’s operational agility: The Foundation can hold or sell the acquired ETH when market conditions improve. This approach aligns with the broader Treasury Management Empowerment initiative, which aims to optimise capital allocation for the benefit of the ecosystem.
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Proposed Mechanics
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Determine swap value:
- Snapshot the ETH price at a mutually agreed time (e.g., a 7‑day TWAP prior to the transaction).
Use the same methodology to price $RARI. - Calculate the USD value of the ~24 ETH at that snapshot price.
- Execute transfer:
- The DAO bridges the ETH from the Rari Chain treasury to the Foundation’s designated wallet.
- Once the ETH transfer is confirmed, the Foundation transfers an equivalent USD value of $RARI (from its treasury or the open market) to the DAO treasury.
Both transfers should occur in a single transaction batch (or back‑to‑back transactions) to minimise price risk.
- Governance execution:
- Post this proposal on Tally with the relevant contract calls: one call to bridge the ETH out of the DAO’s wallet and one call to deposit the appropriate amount of $RARI into the DAO’s treasury.
- Standard voting period (≈5 days), followed by the veto period (≈2 days).
- If approved, execute the transaction through Tally’s on‑chain process.
- Considerations
- Size of the swap: At the time of drafting, 24 ETH is worth roughly USD 60 000 (assuming ETH ≈ $3 000).
- Price volatility: Using a time‑weighted average price reduces slippage risk. Should prices move unexpectedly during execution, the swap ratio may be adjusted within a pre‑defined tolerance (e.g., ±2%).
- Post‑swap obligations: The RARI tokens received by the DAO will be subject to the same governance processes as existing RARI treasury funds. The Foundation commits to reporting the status of the ETH (whether held or sold) in its transparency reports.
- Next Steps & Timeline
- Forum discussion (7‑10 days): Gather community feedback on the swap mechanics and timing.
- On‑chain submission (mid–early 202X): If consensus is reached, submit the proposal to Tally for an on‑chain vote.
- Execution: Upon successful vote and cooldown, bridge the ETH and transfer the equivalent $RARI.
- Summary
Exchanging the DAO’s idle ~24 ETH on Rari Chain for $RARI tokens enables the DAO to deploy those funds more effectively, while giving the Foundation flexibility to manage the ETH as market conditions permit. This small, transparent swap is an incremental but pragmatic step towards better treasury utilisation.
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