BasketDAO acquisition proposal

Summary

BasketDAO has been recently looking to discontinue its operations, so a potential opportunity emerged for PieDAO to onboard the BasketDAO current Community, while transitioning the Liquidity of their products.

Background

Back in November, 0xMaki introduced the PieDAO team to the BasketDAO core team members, which were looking to wind-down their operations following the exploit incident suffered in October 2021.

The opportunity to synergically transition the BaskDAO community and TVL to PieDAO was undoubtedly of interest, so some discussion was started to better assess the potential and work on a draft proposal to BasketDAO that, if preliminarily accepted, could have been then discussed and voted on by the PieDAO community.

These the macro topics under discussion:

  1. Migration to PieDAO of the residual* TVL in their $BDI DeFi Index (~$2.6M)
  2. Migration to PieDAO of the residual* TVL in their $BMI DeFi Index (~$0.4M)
  3. Onboarding to PieDAO of the current BasketDAO community (~1k $BASK holders)

*TVL residual after the last social burning event performed on Nov 29th, 2021

Proposal

A proposal was preliminarily discussed and accepted on Dec 15th.

We’d therefore now want to move on and share this joint proposal put together by the PieDAO core team together with 0xMaki and the BasketDAO core team, so that it can be discussed with the entire PieDAO community, to ultimately solidify or not the PieDAO acquisition intent through a governance vote.

Below the details of the proposal.

1. PieDAO to offer BASK holders a conversion through a KPI option

→ Option Nominal max payout = current BASK Circulating Market Cap [$]
→ Converting to veDOUGH (PieDAO gov token - 6month staked)
→ Option conversion: in 12 months

2. KPI measured

→ Proportional to BDI + BMI Liquidity stickiness
→ Min 50% of BDI + BMI migrated liquidity should be sticky for Option to convert
→ Liquidity tracked as “units” of migrated liquidity

3. Procedure

→ BDI & BMI keys to be handed over to PieDAO, so that liquidity could be eventually migrated over to PieDAO products
→ BasketDAO domain + socials’ accounts to be handed over to PieDAO as well
→ BASK holders snapshotted, for future option distribution

9 Likes

Brilliant idea. One of the main advantages that PieDAO has over other projects is that by being involved in indexes, there are opportunities to capitalise on across the board. I think it’s great that the core team have been working to help to salvage the BasketDAO community, and everyone ought to benefit from this.

2 Likes

Does BasketDAO have a treasury with any funds besides $BASK?

As I don’t know much about this, might be a simple question. Once PieDao receives the keys (if progressed), how easy is that to integrate without creating attack vectors?

1 Like

I don’t think so. Pretty sure this is their treasury wallet https://etherscan.io/address/0x7301c46be73bb04847576b6af107172bf5e8388e and apart from governance tokens, there is just dust

3 Likes

I agree this may be a good opportunity to grow our base. I wonder if their values align with ours? I take it that ultimately all TVL from BasketDAO will end up converted to PieDAO products. Did they have some interest in issuing insurance tokens through Metis? Is that part of the negotiation?

An acquisition sounds great! Sounds like positive marketing to me.

I support converting to veDOUGH so they can join the community as governance voters :sunglasses:

1 Like

I’m on with this, hope the acquisition brings new talent as well to our community and their lessons learned

A few questions though:

Sorry for the dumb question, but are these outlines available options or steps that will take place (all)

Can this be further explained pls?

These are all required points of the conversion.

As you can see from the graph above, it’s proposed that the BDI + BMI liquidity will be measured at the time of conversion of the option to assess its stickiness (aka. how much liquidity would still be there…). A minimum of 50% of the above liquidity would be required to still be there for the option to convert.

1 Like

I love this! I really liked their stablecoin product but had to pay a shit ton to get out of it again once their “oven” broke.

In terms of talent there is not much to be gained right? Their entire core team has moved on?

Maybe instead of giving KPI options to BASK holders we could give KPI options to holders of their products instead? Imo those are the people who should be rewarded for moving their liquidity over as its more of a liquidity merger.

4 Likes

I just saw this thread and I’m leaning towards Mick’s idea. It seems better to offer KPI options to users who still hold basketdao indexes. Just a quick look at the basketdao governance coin shows that its basically worthless.

According to coingecko its market cap is only $177,000. But the TVL of their index products is worth millions.

Yep, it’s a good idea! So long as it doesn’t tie up too much time, I would support this.

They used all of their treasury funds as compensation for the exploit…

I agree with Mick. We should give KPI options to the BDI and BMI holders. There are more BASK holders than BDI and BMI holders combined, so some BASK holders would be incentivized via KPI options to migrate liquidity that they don’t even own and, on the other hand, some BASK holders would get rewarded without contributing any TVL if the KPI targets are met.

I think it may be better that we provide KPI options (or even just DOUGH or veDOUGH) to those that choose to migrate in proportion to their contributions at a rate that is considered fair (TBD).

Thoughts?

1 Like

Thanks guys, I and the BasketDAO team are fully on board with this proposal.

We feel that the synergies and similarities across our products are obvious, and both communities can benefit from shared feels and lower slippage from the pooled liquidity.

In response to some of the previous commentators, I believe that community BASK holders (excluding dev and treasury holders) do deserve some compensation. Additionally, because BASK was almost entirely distributed to community holders of BasketDAO products, the overlap between the holders of indices and the holders of BASK should be fairly large

4 Likes

if data are correct … it´s a great proposal … and it opens a door to reply this model with others protocolos … it´s a good way to growth

2 Likes

I wanted to share a technical perspective on the proposal.

Handing over the keys to PieDAO feels suboptimal since it would force us to maintain a codebase where we have little familiarity with, instead I suggest a Migrator Contract is implemented and used as the source of truth for the oracle to understand how much liquidity “stuck around” by checking the balances in the contract. It might not be ideal to ask holders to leave their tokens there for months but it’s hard to find alternatives that make sense.

Let’s say we snapshot the addresses who migrated, how do we know the coins they have at the expiry time are the same and they were not simply bought again from the market? It would require complex chain analysis to be performed over 12 months period of time which is out of scope for the proposal.

Another point to address, right now the KPI only describes the scenario where the migration does happen before expiration, what happens if it does not happen? I think the scenario should be taken into consideration since it’s unclear who’s responsible for implementing it.

Shall that be the case there are two possible outcomes:
a) KPI expires to zero.
b) KPI is still valid but the Migrator returns the number of units in BDI instead of migrated units.

What should it be?

Some wording is also worth exploring more before voting, for instance, it’s written:

The statement is confusing, it would be better to say converting to DOUGH subsequently staked for 6months. Considering the ratio of DOUGH / veDOUGH changes according to the staking period it would be good to have clarity.

What price of USD/DOUGH would be used? It should be the spot price at the moment of expiry I assume but from where? Coingecko? What happens if for whatever reason is not there in 12m or it becomes an unreliable price feed?

“Current” is open to interpretation, better define a fixed timestamp.

I’m assuming it’s 12 months from the moment of minting.

That’s it for now, will ponder more on potential technical implications

2 Likes

Following up to this initial proposal by introducing some additional elements on the process envisioned, so that it can be discussed more in depth with the entire PieDAO community, to be eventually voted on.

Opportunity

Below the macro topics under discussion (*all figures as of April 25th 2022):

  1. Migration to PieDAO of the residual TVL in $BDI, BasketDAO’s DeFi Index (~$1.76M)
  2. Residual TVL in $BMI - BasketDAO Money Market Index (~$0.3M) → CURRENTLY OUT OF SCOPE, not having a target product ready for migration of this TVL
  3. Onboarding to PieDAO of the BasketDAO community

Proposal

  1. PieDAO to offer BDI holders a conversion through KPI option tokens, powered by UMA
    → The Option Nominal max payout corresponds to the current BASK Circulating Market Cap as of April 25th 2022 [ → $91,222]
    → Option will convert to DOUGH: The Option Nominal max payout defined above will be converted to DOUGH, according to its 30days avg price as of April 25th 2022 [ → $0.2153, resulting in an equivalent max payout of 423,674 DOUGH]. The resulting DOUGH at KPI conversion will be then staked to veDOUGH with a time-lock of 6 months.
    → The KPI Options will convert 12 months after distribution.

  2. KPI measured (chart below)
    → Proportional to stickiness of BDI Liquidity migrated
    → Min 50% of migrated liquidity should be sticky at conversion for KPI Option to convert to a non-zero value
    → Liquidity will be tracked as resulting “DEFI++” units after migration, corresponding to the BDI liquidity deposited by holders in the migration contract

Procedure

→ A migration contract was jointly developed by the BasketDAO and PieDAO core teams. The migration contract will be thoroughly tested and validated by May 7th 2022
→ BDI holders will be offered the chance to deposit their $BDI in the migration contract, starting from May 7th for a period of 3 weeks.
→ BDI holders having deposited in the contract will be snapshotted, for distribution of KPI option tokens pro-rata to the amount of BDI deposited.
NOTE: A minimum of 50% of current BDI tokens should be deposited in the migration contract by the end of the 3 weeks for the KPI Option distribution to take place [BDI deposited >= 4372 tokens]
→ At closure of the BDI deposit, should the 50% threshold be met, the BDI deposited will be migrated to the new “DEFI++” index by PieDAO (a rebranding of the index is in the air :shushing_face:, more details soon!).
→ BDI token holders having deposited their tokens will receive a NAV-equivalent amount of DEFI++ tokens (NAV values for both BDI & DEFI++ to be computed at migration).
→ BMI keys to be handed over to PieDAO, so that its liquidity could potentially be migrated over to PieDAO products in the next future, should a target product be ready for migration of this TVL
→ Furthermore, BasketDAO domain + social accounts to be handed over to PieDAO

2 Likes

Should PieDAO move on with this acquisition proposal?

  • YES
  • NO
  • More info needed

0 voters

2 Likes

Just DAO it :v:

3 Likes