TMP-2: DXP/VELA Airdrop Reallocation

Summary

This Treasury Management Proposal provides an alternative to the prior plan of distributing 50% of the DAO’s DXP/VELA token allocation to sJADE holders. The authors are collectively suggesting that the entire seed allocation of DXP/VELA tokens should instead remain in the DAO’s Investment Treasury.

Abstract

The DAO Investment Treasury provided $100K USD in seed funding to Dex Pools in return for 400,000 DXP/VELA tokens (0.25 cents per token). The terms of the token acquisition included a 3 month vesting cliff followed by 12 months of linear vesting, which began on April 1st 2022.

Initially, 50% of the allocation (200,000 tokens) were marked for distribution to sJADE holders who were staking JADE during the entire month of February 2022. In total, there were 35,469 unique wallets eligible for the airdrop, with a wide range of token balances per wallet.

Assuming that each holder receives an equivalent airdrop, this would represent 5.63 tokens per wallet address, which at current market value ($5.39/token), would translate to $30 per holder. Although the airdrop was intended to be allocated in proportion to each user's sJADE balance (to prevent gaming the airdrop), these numbers are quite low on a per wallet basis.

TMP #2 proposes that rather than airdropping a comparatively small amount of DXP/VELA to 35,469 holders, the collective DAO would benefit most from simply holding onto the entire allocation. At current prices, this would represent a ~$1M USD boost to the Investment Treasury which places us closer to profits and raises to the floor price. This also reduces the PVP nature of profit taking, which would ultimately benefit those who sell their DXP/VELA airdrop first, rather than those who do not.

Lastly, holding the entire allocation would enable the community to discuss a more long term profit taking strategy that would provide maximum benefit to JADE’s floor price, while also mitigating sell pressure on the DXP/VELA token as we approach the launch of Vela Exchange. This includes the possibility of staking on the platform or selling via concentrated LP positions to avoid adversely affecting price action.

As a decentralized investment collective, Jade Protocol DAO seeks to flip the crypto funding narrative on its head to deliver value for both the DAO and the projects that we have provided seed funding for. This proposal is in line with that ethos, and we believe it brings value to both DAO members, the Vela Exchange team and the growing Vela Exchange community.

Motivation

This proposal aligns the DAO’s seed investment strategy with our community’s long term investment horizon while also bringing increased value to the DAO treasury.

Next Steps

• If the proposal passes, then the total VELA allocation will remain in the investment treasury.

• If this proposal does not pass, then our developers will need to repurpose the airdrop contracts to handle the VELA airdrop.

Voting

• Snapshot voting will commence with a 24 hour warmup period and last for 3 days.

If you agree with this proposal, a [FOR] vote would confirm the following:

• The DAO’s entire DXP/VELA token allocation will be kept in the investment treasury.

If you disagree with this proposal, an [AGAINST] vote would result in:

• 200,000 DXP/VELA tokens (50% of the DAO’s allocation) will be airdropped to all addresses that staked Jade during the entire month of February 2022.
• All users who were staking Jade (regardless of whether they are active or not) will be eligible to claim the airdrop for 30 days.
• After 30 days have passed, any VELA remaining in the airdrop contract will be clawed back to the Jade Investment Treasury.

An [ABSTAIN] vote means that you are neither FOR nor AGAINST the proposal.

• If this proposal does not garner at least 51% support FOR or AGAINST the proposal, then it will go back to governance discussion.