SLURP-27 One-time bulk sale of 1.25 million SDL tokens & related terms

Abstract

This proposal seeks to approve the bulk sale of 1.25 million SDL tokens from Stake.link’s treasury to protocol aligned investors Waxl.eth and Zedzies (or entities under their control) at a defined price of $250,000 USDC ($0.20/SDL), with an accompanying agreement by the buyers to make a minimum deposit of 100,000 LINK tokens into the Stake.Link priority pool. This Slurp will generate substantial deployable liquid capital.

Rationale

As the Chainlink network rapidly expands across both decentralized finance and the global capital markets, Stake.link is well positioned to further its dominance in the Chainlink liquid staking vertical. In order to rapidly scale to meet the needs of new users and market participants and to effectively navigate the future competitive LST landscape, the DAO is considering diversifying a portion of its holdings into readily deployable liquid assets such as USDC. However, due to the relatively illiquid nature of the SDL token, acquiring sufficient liquidity at scale presents certain challenges such as significant slippage and/or professional fees and could result in significant downward pressure on the token price.

This proposal offers an alternative: a one-time bulk sale of 1.25 million SDL tokens to long-time Chainlink/SDL-aligned investors. This approach benefits Stake.link in several ways:

Cost Efficiency: Given the current low liquidity and demand for the SDL token, a bulk OTC sale would avoid the substantial slippage costs associated with decentralized exchanges (over 60% on Uniswap as of this proposal).

Strategic Placement: The sale ensures that tokens are placed with dedicated supporters who understand the ecosystem’s value and are amenable to longer-term holding.

Protocol Alignment: Buyers would agree to deposit a minimum of 100,000 new LINK tokens (over $1.2 million USD) into the Stake.Link priority pool, demonstrating their alignment with the protocol.

Specification

If approved via community/council vote, 1.25 million SDL will be distributed from the DAO treasury multi-sig via a trustless swap protocol in amounts proportional to the USDC contributed by the respective entities or individuals ($250,000 total). Upon completion of the sale,100,000 LINK will be deposited into the priority pool by the buyers.

Conclusion

By diversifying a small portion of the treasury into readily deployable liquid assets, Stake.Link will be better positioned to accelerate development of the protocol, enabling it to more rapidly scale and to expand its market footprint in advance of the inevitable entry of additional competitors. Additionally, the liquidity can further support the expansion of Stake.link into the Metis L2 ecosystem as well as introduce greater agility to pursue other opportunities that may arise, thereby cementing Stake.link as the pre-eminent LST provider within the burgeoning Chainlink ecosystem and beyond.