[RRC-XX] Formation of a Treasury Committee
Author: cr1st0f
Date: 28/04/2025
Abstract
The proposal seeks to establish a Treasury Committee for Rari DAO to address current financial management deficiencies. The committee would serve for an initial 12-month period at a total cost of $120,000 paid in $RARI tokens.
Motivation
Rari DAO currently lacks a treasury management function, this has resulted in the DAO’s finances lacking oversight and leading to some disorganisation of the treasury, with lack of $RARI liquidity and an undiversified treasury being the major issues.
Rationale
It is proposed that a Treasury Committee is formed for an initial period of 1 year, to carry out the following functions:
- Deploy on-chain liquidity for $RARI.
- Earn safe yield on non-RARI tokens held by the treasury.
- Explore grant opportunities on chains we’re deployed on and apply for grants where appropriate.
- Provide a dashboard for treasury monitoring similar to: Gearbox Analytics | TokenLogic and Aave Analytics | TokenLogic
- Provide quarterly reporting on the performance and status of the above activities.
Specification
The treasury management committee will be responsible for the following four functions which aim to improve the financial management of the DAO. The initial period of the Committee will be for 12 months following the passing of this proposal - this ensures enough time for strategies to be optimised.
Deploy liquidity
There is little on-chain liquidity for RARI, with only circa $90,000 worth of liquidity on-chain, this results in a $10,000 buy incurring just over 16% slippage (source). It is proposed that $RARI be deployed into a single sided Uniswap V3 pool for the RARI-ETH pair. The benefit of this approach is that there is no need for ETH to pair the RARI with and it allows the DAO to slowly sell RARI for ETH whilst deepening buy side liquidity for the token. It is proposed that fees from this V3 position are added to the DAO treasury. Once the token price goes above the range it is proposed that this ETH is either paired with RARI in a wider range UniV3 position, or is added to the DAO treasury and a further single sided V3 position be created at a new price range.
We may also explore using $ARB tokens owned by the treasury to deploy a Balancer V3 boosted pool on Arbitrum. This approach makes use of the few non-native tokens owned by the DAO treasury to pair with the most RARI possible to provide deep liquidity and maximise fees. It is proposed that fees from this position are also returned to the DAO treasury. If this approach is chosen, we will attempt to secure vlAURA support to generate yield. We will also explore bribing for votes on Paladin during market conditions when earnings from emissions outperform costs.
This plan is provisional and there may be modifications made based on deeper analysis once committee is created and work begins, or based on observed market behaviour. The guiding principles for any changes made will always be to improve the onchain trading experience for $RARI and to maximise fees earned to the DAO treasury.
Earn yield
Once the DAO Treasury has generated token balances from the above activities, the Committee will explore deploying these into low risk on-chain strategies to earn yield.
Explore Grant Opportunities
Several chains regularly run grant programs for protocols deployed on them. We will monitor and explore opportunities when appropriate including applying for grants to be distributed as incentives to Rarible users.
Report on Treasury Committee Activities
Provide quarterly reports on the status of the treasury and the performance of the Treasury Committee activities along with a treasury management dashboard similar to Gearbox Analytics | TokenLogic and Aave Analytics | TokenLogic.
KPIs
- Slippage on $RARI buys and sells.
- Fees and interest generated on deployed capital.
- Value of grants secured for Rari DAO.
Steps to Implement
- Creation of multisig to hold compensation of Treasury Committee members.
- Formation of committee and transfer of funds for compensation as outlined in this proposal.
- The committee formalises a concrete plan for liquidity deployment.
- Tokens for liquidity are requested from DAO Treasury in a future proposal where the initial plan is presented.
- Liquidity is deployed and managed on an ongoing basis, with funds returned to treasury and future requests from treasury as needed.
Timeline
1-3 months:
- Liquidity simulations carried out with a plan formulated.
- Proposal requesting tokens to deploy into liquidity pools from the DAO treasury.
- Liquidity pools deployed.
- Exploration of vlAURA emissions on Balancer pools if deployed.
3-6 months:
- Comparison of observed and expected LP behaviour.
- Reformulation of LP strategy if needed.
- If significant non-RARI tokens accumulated, consider seeking yield with a portion.
- Treasury dashboard created.
9-12 months:
- LP strategy further optimised.
- Non-RARI tokens deployed in yield earning strategies.
- Actively bribing Balancer pools when profitable.
Overall Cost and Committee Composition
We propose that the committee is compensated with a fixed fee structure. All dollar values quoted below will be based on the price of $RARI at the time of payment. The responsibilities and compensation are as follows:
TokenLogic
TokenLogic provides financial analytics and treasury management services for Aave and Gearbox. TokenLogic has extensive experience in curating DEX liquidity, DAO finances and on-chain yield strategies.
Compensation: $5000 of $RARI per month.
cr1st0f
cr1st0f currently works for Aave DAO through ACI as the External Governance Lead. He is an active delegate across DeFi, has applied for multiple external grants for Aave, and recently proposed strategies for Arbitrum DAO treasury to deploy funds resulting in a 4,500 ETH allocation through a competitive proposal process.
Compensation: $5000 of $RARI per month.
Multisig Signers
Stablelab have agreed to carry out oversight and multisig signer work uncompensated in order to maintain reasonable costs. We will request 2 further signers from the community, preferably from the security council to act as multisig signers on a three of five multisig.
Total cost
For the initial 12 month term, the cost to the treasury of this work is $120,000 paid in $RARI. We request 130,000 $RARI paid to the treasury management multisig to provide a buffer against price volatility. Any excess at the end of the committee’s term will be returned to the treasury.