[BIP-61] Operating Procedures for DAO's Selling Their Locked BAL Position OTC

Recently it was announced the FEI Protocol would be winding down operations and liquidating their assets.

A proposal was made to allow TRIBE Dao to lock their BAL into veBAL here https://forum.balancer.fi/t/proposal-allow-tribe-dao-to-lock-vebal/2888

Part of the reason why ve systems disallow contracts from locking by default is because it is trivial to make that locked position liquid by reassigning the owner of the contract. This functionally means that anyone locking from a contract/safe would be at an advantage to those who lock through an EOA if we tolerated free transfer of contract locked veBAL ownership freely.

Recently there have been talks about Tribe selling their veBAL position OTC to interested parties by transferring ownership of a contract that would give ownership of said veBAL position. While I fully sympathize with their desire to sell their veBAL, I personally believe we should not set the precedent of allowing DAO's to freely transfer their locked positions.

What we can do on our side is call denyListAddress on the SmartWalletChecker contract which will disable the ability to relock any more veBAL from that contract. This forces the position to gracefully expire and unlock, meaning it would need to fully expire for anyone to max lock it again. In the meantime, they can still direct emissions, collect veBAL rewards, and boost LP positions. This is, in my opinion, a good middle ground.

In summary:

If someone locks veBAL and they can transfer ownership freely, did they really lock veBAL? :slight_smile:

I would like to hear other opinions on this topic. This discussion is not meant to single anyone out but rather provide us an opportunity to set precedence over how contract locked veBAL positions can be transferred.

Specification

The DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) will call denyListAddress on the SmartWalletChecker Contract at 0x7869296Efd0a76872fEE62A058C8fBca5c1c826C with the contractAddress parameter being TribeDAO’s address