TMP-3: Burning All JADE in Treasury and Redeem Contracts

Title: TMP-3: Burning All JADE in Treasury and Redeem Contracts Author: JulzCaliNT#5315 (@julz_caliNFT) Created: 03/01/2023

Summary

This Treasury Management Proposal suggests that the DAO burn all JADE tokens contained in the redeem contracts on BNB Chain and Avalanche, in addition to burning the 207,000 JADE in the DAO treasury (0x45ecfd1f5cf000a8320d8b88d53373bdf964f091).

Disclaimer

Jade Protocol is a decentralized autonomous organization, which means that all treasury management proposals are discussed with the community and voted on as a collective. No single member of the DAO shall be held responsible for the positive or negative outcomes of the TMP should it pass. This proposal put forth by the author(s) was synthesized in good faith as a result of due diligence and community discussion on Jade Protocol’s governance platform. There are no guarantees of financial gain and the DAO collectively assumes responsibility for both the positive and negative outcomes that may result from executing this proposal. This proposal does not constitute investment advice, but rather presents opportunities available to the DAO.

Should the community vote to pass this proposal, then the DAO and its contributors are authorized to carry out the suggestions set forth in this proposal. If the proposal represents an investment opportunity, the community accepts the risk that the DAO may lose the entirety of its deployed funds. If new information comes to light prior to the execution of this proposal (i.e. a change in the investment thesis) then the DAO reserves the right to not deploy funds even with the successful passing of this proposal, as it may pose an outsized risk to the DAO and its collective community.

There are risks associated with modifying token economics, moving funds across blockchains, yield farming, investing in seed stage projects or liquid tokens, including but not limited to: complete loss of funds, counterparty risk, de-peg risk, economic exploits, smart contract exploits and/or the risk of impermanent loss. Due diligence is meant to mitigate these risks, however the DAO must still acknowledge and accept that these risks exist.

Abstract

The DAO previously deployed upgradable redemption contracts on Avalanche and BNB Chain in order to allow users to redeem their JADE for stablecoins from the backing treasury without incurring slippage. These redeem contracts have now accumulated a significant amount of JADE, and in order to ensure that these tokens no longer re-enter the circulating supply, it is suggested to burn their current JADE balances.

This proposal also suggests burning the 207,000 JADE in the DAO treasury that was initially reserved for DAO to DAO swaps.

This further reduces the circulating supply of JADE and reduces the amount of stablecoins needed in the backing treasury to support the floor price. This strengthens the case for raising the floor price in the future using profits from the investment treasury, and also reduces attack surfaces that could potentially hurt the DAO and its token holders.

Motivation

Ultimately, the goal of this proposal is to protect the DAO’s token holders by upholding the promise to reduce the circulating supply of JADE and remove any potential attack vectors that could jeopardize the floor price.

Since the redeem contracts on Avalanche and BNB Chain were deployed, we have seen a significant amount of redemptions. These contracts now hold a combined ~640,000 JADE tokens and this represents over $8M USD in value. These tokens were redeemed with the intention of never re-entering the circulating supply, therefore it is important to permanently burn the tokens at this time.

Furthermore, given the programmed inflation from the Avalanche bonding event, it is now prudent to burn all other JADE tokens that are not required to sustain DAO operations. This includes the 207,000 JADE in the DAO treasury that were initially intended to be used for DAO to DAO swaps with other projects. Burning these JADE tokens enables the DAO to further reduce circulating supply and eventually raise the floor with less capital from profits that are derived from investments in our investment treasury.

Avalanche Burn Vault: https://snowtrace.io/token/0x80b010450fdaf6a3f8df033ee296e92751d603b3?a=0x9448e099761da0253ef2fa9296d2ba77d322e28c

BSC Burn Vault: https://bscscan.com/token/0x7ad7242a99f21aa543f9650a56d141c57e4f6081?a=0x9448e099761da0253ef2fa9296d2ba77d322e28c

DAO Treasury: https://bscscan.com/address/0x45ecfd1f5cf000a8320d8b88d53373bdf964f091

Next Steps

A high level summary of how the proposal will be implemented:

• The DAO will burn all JADE tokens currently inside the Avalanche and BNB Chain redeem contracts.
• The DAO will burn all JADE tokens currently inside the DAO Treasury wallet.

Voting

This is a DAO Proposal that was drafted by community member JulzCaliNT on March 1st, 2023. After 16 days of community discussion, the proposed edits were incorporated and consensus was reached. Another 7 days of soft voting demonstrated strong support of this proposal. This vote will now be subject to a 24 hour warmup period, followed by a 72 hour voting window.

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

• All JADE tokens in the redeem contracts and DAO treasury will be burned.

If you disagree with this proposal, a [NO] vote would result in:

• Continued operations as is, and no burning of any JADE tokens.

Copyright

Copyright and related rights waived via CC0.