[VIP #3] Migration of VDO and One-Time Inflation of Total Supply by 16.9420%

Overview

To ensure ValiDAO is well-positioned to incentivize stake for chain launches over the upcoming year while maintaining a sufficient reserve of VDO for future needs, we propose a one-time inflation of the VDO token supply by 16.9420%. This inflation will require a token migration and will bring our total treasury holdings to ~29%, aligning more closely with industry norms for treasury allocations of projects in their early growth phases. The inflation and migration will be executed simultaneously, shortly after March 1st 2025, which coincides with the unlocking of approximately half of our Uniswap V2 liquidity.

Rationale

Currently, ~12.4% of the VDO supply is held by the treasury and available to ValiDAO for incentivization and compensation. This limitation caps our ability to incentivize staking on our validators while still maintaining sufficient reserves for future needs and act strategically during both bear and bull market cycles. By increasing the supply, we aim to:

• Enable Staking Incentives: With the inflation, we can allocate VDO to incentivize staking on existing and upcoming chains
• Retain VDO for the Future: This increase allows us to retain VDO for future use, whether for compensating and incentivizing contributors, strategically raising cash from aligned investors, or responding to any other future growth opportunities. Our treasury will be better positioned to support these needs.

This inflation will be a one-time event. The specific allocation of the newly minted tokens will be determined by the ValiDAO council as needs and opportunities arise, but the goal is to use them in a way that supports our growth yet maintains the long-term sustainability of the DAO, and this proposal passing shall be considered a commitment to undergoing a token migration and thus allow us to operate under the assumption of the supply held by the ValiDAO treasury being close to 29%.

Timing of Inflation and Migration

The token migration will occur at some point not long after, but not before, March 1st 2025