LTIP-16: Burn Treasury L2DAO tokens and Shift to an Investment Focus

Summary This proposal outlines a plan to burn the L2DAO tokens held in the DAO treasury and pivot Layer2DAO to operate primarily as an investment DAO. These changes aim to address inflation concerns, adapt to the current Layer 2 ecosystem, and drive value for L2DAO token holders.

Background Layer2DAO was established to support the growth of the Layer 2 ecosystem. As the space has evolved, the Growth Council has identified a need to adjust our approach to better capture value for our community. By burning our treasury tokens and shifting to an investment focus, we believe we can more effectively grow the treasury and drive value for L2DAO holders.

Proposal

1. Treasury Burn

• 90% of the L2DAO tokens currently held in the treasury will be burned, reducing the circulating supply
• The remaining 10% will be used to provide liquidity on key Layer 2 DEXs, with the LP tokens locked indefinitely or burned (specifics TBD)
• This burn will help alleviate inflation concerns and demonstrate our long-term commitment to the token's health
• Once the burn is completed, the DAO will market buy any L2DAO needed for operations

2. Investment Pivot

• Layer2DAO will shift its primary focus to operating as an investment DAO
• We will actively seek out high-potential opportunities across the Layer 2 ecosystem to grow the treasury
• Investments may include yield farming, providing liquidity, and participating in token sales
• This pivot will allow us to be more agile in capturing value and supporting a broader range of Layer 2 projects
• We will reduce our focus on building partnerships with and boosting promising L2 projects and networks

3. Updated Mission Statement Layer2DAO's mission will be updated to reflect this new focus: "Layer2DAO is dedicated to identifying and investing in the most promising Layer 2 projects and networks. Through strategic treasury management, we aim to drive value for our token holders and contribute to the long-term growth of the Layer 2 ecosystem."

4. Transition from Growth Council to Treasury Council Beginning in H2 2024 (July 1), the Growth Council of 7 members will be replaced by a Treasury Council of 3 members.

Implementation: If this proposal is approved, the treasury burn will be executed within 1 month. The transition to an investment focus will begin immediately, with the Treasury Council overseeing the deployment of treasury assets. Regular updates will be provided to the community on the progress of this transition and the performance of our investments.