Important! This is a Gate 1 proposal, meaning that we intend to gauge the community’s sentiment over this idea. If the vote passes, and the idea is accepted, we will start the proposal refinement stage where the execution planning will be developed, staged, and formalized into a PIP vote.

Summary

The following proposal has been created in order to gauge community sentiment on the DAO’s future direction, below summarized in 3 key changes:

• Discontinue Pies (indexes) and disregard them from the active product offering

• Promote revenue-generating operations to the main product offering

• Rebrand PieDAO to Auxo

Throughout this proposal, we will be introducing a more efficient tokenomics model with upgraded governance capabilities, efficiency-driven upgrades to the DAO token-staking system with optional liquid staking, new DAO services (Bonding/Lending), and upgrades on the Governance and Treasury Management operations.

This proposal is a consolidation of the following posts, please familiarize with them and their comments for a deeper understanding:

• Time to say Good Pie
• The Rise of Auxo

Authors

Alexintosh, Gabo_o

Passing Threshold

• 5% or more of veDOUGH supply must participate (20,003,959.48 * 0.05 = 1,000,197.97)

• 60% or more of participating tokens must vote FOR

Motivation & Scope

Motivation

The Governance Mining initiative, the program that introduced farming with treasury assets and revenue distribution to active voters, has yielded good results in boosting governance participation to an average of +50% of token holders. After 12 months, several rough edges have been identified with this current version which prevents the system to scale.

Probably the most important is that, as for now, the treasury principal increases exclusively through the compounding of 25% of the distributed rewards, we need mechanics to support treasury principal expansion and scalability in a way that is non-dilutive vs Treasury Net Asset Value. We need to provide optionality for those who value being liquid while creating greater value for stakers under locks.

Moreover, improvements are required to make operations of treasury management sufficiently trustless, empowering token holders to be in control while allowing a degree of flexibility for operators to act without having to go through the governance process for every single action.

The changes proposed below are inspired by the idea to embrace what works and make it scale, making liquidity provision the main activity of the DAO and protocol development centered around that very need.

The re-branding to AUXO is here described as the celebration of this choice and to signal a net cut from previous operations.

Scope

About Auxo

AuxoDAO is a network of dedicated community members running STAT for farming operations.

AuxoDAO will issue an ERC20 token: AUXO. The AUXO token represents a share of the fund and has an intrinsic floor value grounded in its wholly owned treasury capital, which is carefully preserved & grown.

AuxoDAO uses its protocol-owned treasury assets to farm multi-chain with the goal to provide liquidity and expand its principal while generating yield on behalf of its token holders. The Treasury returns the value it generates to holders, who actively participate in governance, through its core passive-income product: veAUXO.

The AUXO token has a strictly controlled policy of expansion based on the Net Asset Value of the treasury. The DAO optimizes protocol-owned liquidity where AUXO-denominated pairs are directly owned and managed by the DAO instead of relying on rented liquidity and incentives.

There will be no liquidity incentives in AUXO, therefore eliminating sell pressure for the token. The protocol implements policies to automatically buyback tokens from the market in conditions when they trade below NAV value.

AuxoDAO will introduce $KARMA, a token rewarding holders’ and stakers’ loyalty which utility will be connected to the governance of the KARMA-owned treasury with additional features of engagement, promotion, and rewards within the ecosystem.

AuxoDAO is fundamentally different from PieDAO because veAUXO holders administer DAO-owned funds with the mandate of generating yield, compared to creating and managing tokenized funds that use yield strategies for others.

STAT Framework

STAT is a framework to deploy Sufficiently Trustless Active Treasuries, it allows communities to allocate capital and generate yield on multiple chains on behalf of its token holders without relying on a small set of signers to not collude.

The STAT is composed of several modules implementing mechanics that allow to expand, manage and redeem a productive treasury, handle reward distribution, and having capital-efficient access to capital via fixed-rate loans.

High-level list of modules

For the sake of the length of this proposal we added a link to each point detailed description available in the Forum:

• Staking & Liquid Staking
• Rewards distribution
• Treasury
• Bonding
• Lending

The Role of Governance

In AuxoDAO governance is designed around the resilience of operation and keeps the system trustless and decentralized. veAUXO holders serve different roles including but not limited to:

• Notarization & Transparency: Community voting is used as a subjective oracle to insure full transparency about how strategies are performing, together with information about how they’re set up, operated, and composed.

• Authorization and Access Control: veAUXO holders control the authorization layer of the Treasury by whitelisting contract addresses and contract signatures. This system allows only authorized transactions are executed by Treasury operators.

• Election of Treasury Operators: veAUXO holders can add and remove Treasury Operators at any time, decreasing operational risks and expanding governance capabilities.

• Election of xAUXO Representative: veAUXO Holders can elect the representative which is going to vote on behalf of xAUXO holders.

• Issuing Liquidity Events: veAUXO holders have veto power to authorize or block new liquidity events.

The Farming Operation

The farming operation will be focused on expanding liquidity provisioning to multiple chains in order to capitalize on the best opportunities evaluated through a detailed and coherent risk framework. This framework advocates providing guidance for a proper assessment of such opportunities and delivering transparency for AUXO holders.

Benefits & Risks

Benefits

• Non-dilutive and scalable treasury expansion tokenomics
• No rented liquidity and incentives
• Enabled on-chain governance
• Liquid staking option with delegation capabilities
• Lending as a new service offering
• Bonding as tool to efficiently expand treasury capital

Risks

• Dormant veDough holders missing the migration window
• Sell pressure on the Dough token until the migration date, from holders choosing not to migrate.
• Delay in the migration due to contract-audit completion dependencies

Next Steps

If the voting result is in favor of the migration, the core contributors team will deliver the following items

• Migration road map
• New website
• Deploy and Audit contracts
• Definition of the migration mechanics
• Define a new governance model
• Define Treasury Operators’ and Governance Representatives’ election dynamics
• Define Bonding and Lending mechanics

Closing notes

Auxo is designed in continuity with the operations which had best served veDOUGH holders in the last year and build on that by creating ways to grow the available principal and expanding operations on different chains. Auxo takes all the expertise accumulated in building tokenized funds with underlying productivity to deliver a protocol that is tailored around the DAO needs for trustless treasury farming. The introduction of the lending component increases significantly the ability of the treasury to operate and provides a venue for users looking to earn yield in a set-and-forget way which is equivalent, if not better, than a vault offering.

We believe this is the right direction to take. Minding the PieDAO’s lessons learned we can build a reliable and self-sustainable model that has the potential to maximize our holder’s return. This should be our priority, and we believe the changes above will take us there.

We ask for your input to speak up and let us know whether you:

• Support the migration (FOR)
• Do not support the migration (AGAINST)
• Need more information (Detail More)