[BSP:02] Profit Mandate

TLDR: A steering proposal aiming to help define our direction by answering what we expect of Beefy when it comes to protocol profits. Should we aim to continue growing (internally or externally), or focus on maintaining our position? And should we retain earnings, or return them?

Background:

How should Beefy handle its profits? Though this question may feel like a distant concern in recent markets, the issue is central to every $BIFI holder’s investment. Unlike traditional organizations, DAOs have no predefined mandate for how to treat profits. Community members and investors lack a clear path for recourse if they are not happy with how profits are managed. Indeed, communities may become divided, when swelling treasuries pit whales against contributors against speculators.

This proposal posits that the wrong time to debate how to use profits is in the midst of a bull market, when adrenaline is high and crowds can be easily swayed. Regardless of what you think Beefy’s mandate should be, the risk of disputes over how profits are handled gives rise to some collective interest in establishing a mandate in calmer times.

With some more clarity around our direction, community members and investors can participate with certainty over both where their efforts are being directed and what they can hope to receive in return. And contributors can feel empowered to execute their plans with broad discretion, based on the confidence of the mandate.

Steering Proposal:

This proposal suggests several approaches for how to handle profits, and allows holders to use weighted voting to express their preference across the full range. To keep the proposal light, the options are simple and capable of a range of interpretations without prior information. A more detailed review of the options is covered in a separate paper, linked below.

It should be noted that this proposal considers only “pure surplus” earnings, which are earnings beyond what is needed both to allow the protocol to operate and to maintain its competitive position long term. This includes assumptions that ample budget is already being allocated to competitive contributor compensation and effective marketing of our products, and that our treasury is healthy and covers a substantial runway in any market conditions.

As a steering proposal, the results will be non-binding. No abstain option is included, as the intention is purely to canvas opinions. The “None of the Above” option should be the default for those not wishing to express any view.

Proposal:

In a future where Beefy is generating “pure surplus” earnings, how should it use the surplus?