BIP-59: Increasing BottoDAO’s Protocol Owned Liquidity

Summary

Please note that this Snapshot has a default 72-hour voting window.

BIP-59 proposes allocating a percentage of Botto DAO’s weekly net revenue to increase POL in a committed and consistent manner. Voting options vary from 15% to 20% of net revenue being allocated to POL, allocated monthly, accounting for reductions in the treasury's cut or reductions in both active rewards + the treasury's cut.

If approved, the proposal would be valid for one year, and will automatically renew unless otherwise voted against later on. Up to 500K BOTTO from the treasury is allocated for this initiative from BIP-42.

Voting Options

Rather than proposing one option over another, this BIP presents different options discussed with their arguments and can be decided by a ranked choice vote where governors order their preferred options. If an option does not receive 50% of the initial vote, the bottom choice is eliminated and those governors’ votes are moved to their 2nd ranked choice. This process repeats until one option has >50%.

Available Options:

• 50/30/20: 50% of auction revenue allocated to active rewards, 30% to DAO Treasury, 20% to PoL Initiative
• 50/35/15: 50% of auction revenue allocated to active rewards, 35% to DAO Treasury, 15% to PoL Initiative
• 40/40/20: 40% of auction revenue allocated to active rewards, 40% to DAO Treasury, 20% to PoL Initiative
• No Change: The DAO does not commit to building PoL.

Rationale

In order for Botto DAO’s stakeholders to achieve the long-term vision of Botto to become a fully decentralized and autonomous artist on Ethereum, Botto will need to become more economically sustainable. Liquidity is a critical consideration in this regard. BOTTO will need deeper liquidity on-chain for stakeholders across the spectrum of potential participants, including whales, to more seamlessly enter and exit the protocol. By extension, more substantive POL would likely contribute to increased market confidence, as there is a need for BOTTO’s liquidity to not have to be reliant on its users.

Proposal Specifications

1. Botto DAO allocates 20% of the net sales revenue in ETH and deposit it into the Uniswap V2 liquidity pool on Ethereum mainnet with a corresponding amount of the treasury’s BOTTO to grow POL for the benefit of all Botto stakeholders.
2. POL contributions will be made in monthly lump sums.
3. In the event of a weekly auction not attracting a collector, the Treasury Working Group will use the average ETH allocation to POL over the last six months to determine the amount to be deposited into the liquidity pool to uphold BOTTO’s liquidity growth.
4. No deposit to POL will be made during the 13th week of each period when no works are being auctioned
5. This proposal will be committed for one year from its approval, or through the end of the final period in which the one year end date falls, whichever comes last. Thereafter, Botto DAO members may opt out of this proposal through another governance vote. Otherwise, the proposal’s terms will carry on as established herein, and POL contributions will then only end when the 500K BOTTO apportioned for it has been fully utilized.

Budget

• 500K BOTTO from the 4M BOTTO allocation of BIP-42 will be apportioned for this proposal.

Criteria of Success

• Consistent and steady growth of liquidity in the BOTTO + ETH Uniswap V2 pool on Ethereum mainnet.
• Amplification of Botto Project’s visibility from the weekly announcements on Botto’s communications/social media channels of the ETH revenue apportioned for POL, and the separate announcements of monthly POL contributions, further reinforcing Botto DAO’s pledge to sustaining BOTTO’s liquidity.
• Improved distribution of the BOTTO supply thanks to the ongoing allocation of the treasury’s BOTTO holdings towards POL and thus into circulation over time.
• Codifying the apportionment of a percentage of Botto DAO’s weekly net revenue towards POL, thus bolstering its skin in the game and enhancing collective trust in the community.

Please refer to the BIP-59 forum post for full details and discussion.