VIP18 - veDAO Dissolution

Title: veDAO Dissolution

Author: Core

Created: 5/24/2022

Simple Summary

The Core Team recommends that veDAO be dissolved in anticipation of full distribution of USDC + WEVE per VIP-17 as part of the Velodrome Launch. The remaining illiquid DAO assets not distributed will in the best case remain under the custody of the veDAO team to support the Velodrome Launch and at worst be written off.

Motivation & Rationale

VIP-17, which proposes a redemption mechanism to return value to WeVE holders in preparation of the Velodrome launch, effectively completes the founding purpose of veDAO, which was to accumulate voteshare on Solidly. Having made plans to liquidate virtually all assets and written off the DAO’s remaining illiquid Solidly-pegged voteshare, the veDAO team believe that it is time to close operations as a DAO, as we must lock the redemption to prepare it for the Velodrome launch.

Specifications + Implementation

Under VIP-18:

veDAO will be dissolved as a DAO effective upon passage of the proposal. All remaining assets will be under the custody of the existing veDAO team and will be executed following the below plans. No further governance actions will be taken.

The following steps implemented by VIP-17 will continue to be followed:

• Burning all unallocated treasury WeVE, increasing treasury per WeVE and VELO airdrop per WeVE by approximately 15–20%
• Distributing the full value of the veDAO treasury USDC ($1.1M+) to WeVE holders

Specifically, as of our most recent estimate, the total amount of unallocated $WeVE that we will burn from treasury is: 59,636,324.70

After that burn, the total $WeVE eligible for redemption will come to 375,112,539.91

That means that anyone who possesses that $WeVE during the redemption period will be eligible to exchange for a proportional amount of $VELO + $USDC.

There will be a one-month redemption window, after which all unclaimed VELO and USDC will go to the Velodrome treasury, where it can be used for the improvement of the protocol.

Total $USDC: 1,119,816.43

Total $VELO: 108,000,000

Per WEVE, this comes out to:

VELO/WEVE: .287

USDC/WEVE: .003

Because the team have not found a buyer for the remaining illiquid assets under multisig, Velodrome VIP-18 will amend VIP-17, which states:

• Seeking buyers for locked Solidly positions, including membership benefits of Solidex + 0xDAO (valued at $150k) and distributing to WeVE holders

to the following:

• Seeking buyers for locked Solidly positions, including membership benefits of Solidex + 0xDAO (now valued at less than $150k) and committing proceeds to the Velodrome treasury

Voting “Yes” allows the Team to proceed with the DAO’s dissolution and redemption for WeVE holders

Voting “No” rejects the plan