Treasury DOUGH burning

The following proposal expands on the treasury Dough burning ritual, providing time periods for the burning, burning magnitudes, and methodology.

Authors

Gabo_o, Bennet

Motivation

As already introduced in ‘The rise of Auxo’, prior to migration, all DAO owned Dough are planned to be burned in four discrete events. These are tokens that were allocated to the DAO Treasury in order to foster the ecosystem development, incentivising initiatives (liquidity pools, staking, bounties, etc), and potentially also tokens the DAO will be buying back during the buy back program. As the protocol will be migrating to a purely non-dilutive yield generating operation, and incentive programs have been officially faced off, DOUGH tokens currently sitting in the treasury now cease to serve their initial purpose, and as a result are eligible to be burned.

Scope

The burning process is proposed to start around mid December and will unfold over four different events. Each event will take place one month after the previous one and will burn 10% more tokens compared to the previous round. The burning timeline below displays both burning period and magnitude. This process will anyhow terminate in synch with the planned migration to AUXO.

https://forum.piedao.org/uploads/default/optimized/2X/6/6e58a61999261b85bf4b45be4651e55f5c65c23c_2_690x391.png

Benefits and risks

Benefits

The main benefits of this burning proposal will be:

  • (1) the reduction in supply

  • (2) the reduction in FDV (fully diluted valuation).

In particular, by reducing FDV, the DAO would also increase the MCAP/FDV ratio, which gives a sense of how much of the supply is circulating compared to the total supply.

Risks

A “side-risk” of this would be a possible appreciation of DOUGH price over time.

Next steps

Shall the proposal pass, the treasury will:

  1. Schedule the burning events, and communicate their dates.
  2. Begin burning its DOUGH as per the timeline above by sending the DOUGH to be burnt to the 0x000000000000000000000000000000000000dEaD address.
  3. Inform in the monthly Treasury Report the amount of burnt Dough

Closing notes

We would like to gauge community sentiment around the scope of this proposal, before formalising it into a snapshot vote (casting it is fully dependent on the Auxo Migration vote to pass). Please let us know in the poll below if you support it, or not, or even if you need more information or further discussion.

  • FOR: I support burning Dough as scheduled

  • AGAINST: I do not support burning Dough

  • NEED MORE INFO: This require’s further discussion

  • FOR
  • AGAINST
  • NEED MORE INFO

0 voters

2 Likes

Thanks folks for putting this together. This is a key activity towards the migration, looking forward to see how the poll ends

1 Like

Is there a particular reason to spread the burns out?

Since this Dough was there " to foster the ecosystem development…" and isn’t serving some other purpose, what’s the benefit in doing the burn in rounds?

Sorry if it’s obvious to everyone else but it isn’t obvious to me.

2 Likes

I agree with silent here. I can see no reason not to burn all at once if the decision is final anyway.

Amplification of the message of Auxo by using burning as a marketing event.
Might not work but no harm in trying.

1 Like

With respect, I don’t believe burning the token (whose value has collapsed) is a great basis for a marketing event. It looks like celebrating capitulation.

If you all insist on this course, can you at least budge up the gaps between burns? CT moves very fast as you know, and 4 months is a long time to be holding anyone’s attention over token burns for a token most have probably forgotten about.

Since I assume the final burn is timed to coincide with something important to Auxo’s launch, how about you start the burns later than indicated, with a much faster cadence?

Or just do it all at once. :person_shrugging:

1 Like

What’s the advantage of burning all at once instead?

Completing the task simply, with the minimum amount of administrative overhead. If you feel there is a legitimate marketing message to be made, make it once with the most optimal timing.

Administrative overhead is negligible as it’s just a tx.

Can you elaborate on how do you envision a single marketing message with the most optimal timing?

In my experience attention on CT and defi is very low and the day you are going to announce something eventually something else comes out which is to a larger degree catastrophic so you blew your chance. Spreading statistically increase the chance that the message reaches more people and makes it more likely that the message won’t be overshadowed by the drama-of-the-day.

1 Like

A snapshot vote is up Snapshot

2 Likes