BFIP-04 BattleFly DAO ARB to ARB / ETH LP

Summary

BFIP-04 is a proposal to swap ~50% of the BattleFly DAO ARB holdings to ETH and provide liquidity on Uniswap in the ARB/ETH liquidity pool.

Current Holdings:

1,309,627 ARB

Holdings if this proposal is approved:

• Swap 650k ARB to ETH (~50%)
• Use 500k ARB tokens with ~77% of the ETH to provide liquidity in the ARB/ETH pool.
• Keep 159,627 ARB for use by the DAO for things such as events, giveaways, promotions, and more.
• Keep ~23% ETH for use by the DAO for thing such as utility (gas), runway, market exposure, and more.

Rationale

Why to accept and what happens with the funds:

Accepting this proposal would mean that a significant portion of the ARB that BattleFly DAO received from Arbitrum would be swapped to ETH and used to provide liquidity on Uniswap in the ARB/ETH pool. Reasons to Accept:

• Providing liquidity would earn fees, estimated in the range of 10-30% APR. These fees can be used by BattleFly DAO to supplement Flywheel rewards, incentivise players within Battlegrounds, run giveaways, improve runway and more.
• Diversification of ARB holdings to gain exposure to ETH instead.

Why to decline and what happens with the funds:

Reasons to Decline:

• Swapping a significant portion of ARB to ETH would mean that the ARB holdings of BattleFly DAO would go below the minimum requirement for submission of a proposal to Arbitrum DAO (1 million ARB). This would limit the influence of BattleFly DAO within Arbitrum governance.
• Like all DeFi platforms, Uniswap has inherent smart contract and platform risks associated with it.
• Declining this proposal would mean the 1,309,827 ARB would remain in the BattleFly DAO treasury.

Indicative Poll

Accept: Swap 650k ARB of the BattleFly DAO ARB Airdrop to ETH and use both to provide liquidity in the ARB/ETH pool on Uniswap.

Reject: Keep ARB airdrop solely in ARB.