GodHand February 9, 2022, 5:48pm #1
To my fellow peers,
I would like to make a proposal that will benefit the entire coreDEX ecosystem.
We should simplify Delta rLP and merge it with coreDAO. It has always been one in the same, but now it’ll become official. To do that we’ll want to bring some reserve funds over, so the coreDAO holders aren’t diluted. A smaller piece of a bigger pie is still the same amount of carbs. coreDEX is a platform for trading coins and derivatives. Coins is the Core part and derivatives is the Delta part. coreDAO manages the coreDEX and our ecosystem of products. We would have to sort out some things, like keeping all things stable and keeping everything fair for everyone involved.
There is a strong reason to believe we will issue more coreDAO as a one-time event before activating the dao. Nothing is for certain yet. Its less of a risk to issue more because it’s backed 1:1 with DAI in cLend. It will not have the same inflation problem with issuing tokens like in other ecosystems. There will be no more coreDAO after initial mint, which ends once the DAO activates. This has not happened yet. What we’ve minted right now is an exchange for Core LP. The reason we believe to mint more is for:
- existing team to have positions - as a direct payment
- Delta and/or rLP holders/farmers
Thank you for taking the time to read. Comments and suggestions are appreciated.
Wrath February 9, 2022, 7:32pm #2
GodHand February 9, 2022, 7:44pm #3
Can you elaborate on the dao plans any further?
We’re going to simplify delta and merge it with coreDAO. it always was kinda one in the same, but now it’ll be more official. To do that we’ll want to bring some reserve funds over, so the coreDAO folks aren’t diluted. A smaller piece of a bigger pie is still the same amount of carbs.
Merge as in we become part of the same dao?
Yes, one dao. It was always meant to be one thing really. coreDEX is a platform for trading shitcoins and derivatives. shitcoins is the Core part, derivatives is the Delta part. coreDAO just manages the coreDEX and our ecosystem of products. We have to sort out some things, like keeping all things stable and keeping everything fair for everyone involved.
The conversion rate is interesting. So will we make the total coreDAO supply larger? How will that work?
There is a strong reason to believe we will issue more coreDAO as a one-time event before activating the dao. Nothing is for certain yet. Its less of a risk to issue more if we know it’s backed 1:1 with DAI in cLend. Doesn’t have the same inflation problem with issuing tokens in other ecosystems. There will be no more coreDAO after initial mint, which ends when DAO activates, which has not happened yet. What we’ve minted right now is in exchange for Core LP. There’s good reason to believe we will mint more for:
- existing team to have positions - as a direct payment
- Delta and/or rLP holders/farmers
SMK February 11, 2022, 6:20am #4
Regarding the mint of new coreDAO for existing team i dont really understand why the recent payments for over 2.5m have been made in usdc or dai and leaving devs with zero exposure to coreDAO.
Buying coreDAO at, near or even under its floor value and beeing used for the payment (at least partially) would imo have been the most logically move.
Providing voting rights for the team members and rewarding them in this way for their good and hard work so far on one side but also expressing their conviction in the success of the project itself on other side.
Jad_the_Chad February 11, 2022, 2:30pm #5
Why would you say the devs have 0 exposure to coreDAO? They manage the ecosystem + they have a dev fund from core n delta n LSW. Fingers in all pies as far as i can tell. Which is good.
x3devships February 11, 2022, 3:15pm #6
We do not have any coreDAO. We just didn’t mint any for the team, and there is insufficient liquidity to buy them. So, instead minting more coreDAO and adding some of the team share DAI to the backing would be the alternative way (which is exactly what is stated above)
GodHand February 11, 2022, 10:11pm #7
After speaking to a few people, a major threat to the viability of the protocol could be through governance if a merge is not done. It’s really hard to imagine having two DAOs governing and not having their own best interests at heart.
I do not pretend to have the highest iq, any experience in DAOs, or even being involved in such a complex ecosystem such as coreDEX. I personally have no issues taking a loss in the transition of a merge because I see this through a long-term outlook. Any loss would be a temporary one. We have to come together so we all can grow. What better way then becoming a unified DAO? This hasn’t even truly started yet. Just the foundations are being laid down and it’s critical that we lay a foundation that can sustain the tests of time.
Jad_the_Chad February 12, 2022, 5:11am #8
Ok that makes more sense now, that I re-read it. I don’t think I considered what @GodHand had said, was from the devs. Idk is godhand a dev?
I was thinking the devs would initially come up with most of the proposals as they know the system best. Is that the case?
Whats the initial & future intent/plan/goal for the coreDAO? community involvement, resourcing skills sets, accellerating growth, all the above? For the love of god, what do you want from us?
Will the devs mint/add liquidity at the same rate as the rLP transfer? What sort of percentage are the devs looking at minting for themselves?
GodHand February 12, 2022, 5:25am #9
Sorry about the confusion. First and foremost I’m not a dev, just an investor of the protocol. I created this post that was a summary of a telegram conversation X3 had with the Delta community. I then thought it would be kind of a rough draft proposal type of thing.
dudeman February 12, 2022, 7:08am #10
One issue that needs to be worked out is the ratio of CoreDAO mint and distribution in relation to contribution to the treasury. It is generally agreed that the LGE funds and liquidity after converted from BTC and ETH total between 54 and 55 million DAI. This excludes current liquidity. The total CoreDAO minted for LP vouchers is 27 million. This can be calculated by adding the total supply of the voucher contracts and multiplying those by the fixed awards per LP in the smart contract:
I believe the same ratio (1 CoreDAO for every 2 DAI to the treasury) should be used to calculate DELTA rLP to CoreDAO conversion, which is difficult to do right now since there is still quite a bit of eth liquidity in the DELTA pool, which should probably be trimmed like CORE’s liquidity was. A floor price needs to be determined for DELTA (formerly 1 DAI?), and a burn similar to CORE to maintain that floor price while maintaining a healthy ratio of treasury funds and funds available for cloans. This might extend the option of loans with DELTA as collateral similar to CORE, but I guess that could be determined later.
Secondly, there was roughly 2.5 million DAI and USDC transferred out of the CoreDAO treasury during the funding of cloans, and the purpose of these transfers hasn’t been disclosed to my knowledge. I’m sure there’s a reasonable explanation, but it would be nice to get clarification on this since the general understanding was that the 7% FoT from Core, the dev funds built into Delta as well as the funds taken from LGE3 were how devs were being paid, and I don’t believe these funds were going to the treasury, but I could be wrong. I’m not one to say the additional $2.5M is excessive for the development done to date or maybe it’s for future development/marketing/auditing, but it would be great in my opinion if all of these funds could be consolidated into a single CoreDAO fund with the corresponding DAI being returned to the treasury using the 2:1 ratio mentioned above. This may require converting dev-allocated funds in ETH, USDC, and other assets to DAI. If payment to Arcadia or others that require other forms of compensation, the dev-allocated CoreDAO could be market sold or borrowed against if liquidity is lacking.
Disclosure: I’m not a dev. I’m just an investor who loves this ecosystem and community and recognizes the ninja skills these devs have. This is my opinion supported by facts. Feel free to chime in if you agree, disagree, or would like additional details or supporting information.
GodHand February 12, 2022, 7:43am #11
Thank you for contributing and sharing your concerns within the forum. This is a healthy way to establish transparency and open dialogue with each other from the community.
Sirius February 12, 2022, 1:33pm #12
For devs to own coredao, instead of minting, I would like to propose the following solution:
Create a smart contract which allows anyone to swap coredao into DAI. The smart contract is configured with the initial buy price and max buy price. With every block passes, the buy price increase until it reaches the max buy price. It can be 4 weeks before it reaches the max buy price.
Source of DAI:
Devs contributes devs fund into the contract, DAO co contribute some fund from treasury for every dollar devs contributes.
This solution has following benefits:
- solve the problem that the market is not deep enough for devs to do a large amount of market buy
- price discovery for coredao. It is interesting to see at what price people is willing to sell the coredao in large amount
- boost market confident and remove paper hand in the eco system
- No dilution of coredao, it is all driven by market. fair to everyone
- This should also increase coredao price in the secondary market, which benefits everyone in the eco system
- If the coredao price increases, more rlp holders are going to support the merge.
0xzert February 13, 2022, 12:39am #13
Why a merge?
I must admit I had my issues regarding the merge of the two DAOs. I was expecting as stated by the devs two different DAOs, but, this is an iterative process. So I did some digging on why organizations merge in the academic literature. Here are the main reasons according to Vazirani (2015):
- Inefficient Management
- Agency Problems
- Tax Considerations
- Market Expansion
- Purchase of Assets below their replacement costs
In the case of core and delta, seems to be mainly for (2) synergy and (4) agency problems. Synergy as the scope is to become a set of products based on locked liquidity, so expanding from loans (core) to futures (delta). Agency problem may raise as core management team (DAO) is different than delta one; in time, this may lead to challenging problems. Furthermore, the dev teams may be even be different.
Summing up, a merge is the best approach to minimize risks.
What is the status of the Core and Delta?
Core has a MVP of lending and fee on transfer. There were iteration of products with the arbitrage product that the different LP1, LP2 and LP3 were used.
In contrast, delta has no MVP yet as the main dev time was allocated to finalize the lending side of Core.
So, core is easier to value, while delta is more difficult as it involves a degree of speculation to value it.
How to value the different DAOs?
I have did some digging in the academic literature. There are five basic formulas according to Smucker (2000):
- Book Value → This would be the liquidity in the DAOs
- Straight Capitalization → This is not suitable bc it is designed for ones that does not require capital. Core and delta value proposition is locked liquidity (i.e., capital)
- Modified Capitalization, Capitalize Excess Earnings → it cannot be applied as it asumes the devs to be on the project forever
- Modified Capitalization, Life of Goodwill → Same as prior but it assume the devs involved with a limited time
- Discounted Future Earnings → You project a growth to value it based on speculation
In the case of core and delta, we can:
- Book of value. Use the locked liquidity of core and delta to distribute the coreDAO.
- Modified Capitalization, Life of Goodwill. Use the stable issuance to estimate the value of delta, while considering the devs to be involved in the delta’s project for a year
- Discounted Future Earnings. Include the expected growth of both products.
Finally, I see a fourth option which is to agree on the merge based on the revenue that options generates compared to loans
What are my thoughts?
I think we should merge as soon as possible to minimize frictions. I see that merging based on liquidity provided is unfair for the delta rlp holders as delta has no MVP product yet. I would use the estimation from the devs in the apr for the merge valuations as they are the ones with the most knowledge.
What about the dev allocation to coreDAO?
The rate of conversion should be the same as the ones of delta rlp based on the mint price at the time of LSW. The main reason is the funds were raised during LSW and they should have the same terms as delta rlp
- Smucker, D. K. (2020). Common Business Valuation Methods and Related Topics. Journal of Financial Service Professionals , 74 (5).
- Vazirani, N. (2015). A Literature Review on Mergers and Acquisitions Waves and Theories. SIES Journal of Management , 11 (1).
I’m hold coreDAO, core, and rlp in a similar ratio
RomanAround February 13, 2022, 3:06pm #14
is there a summery of how the distributions will work…
Currently: rLP gets delta and WETH from forfeitures … and CoreDAO holders get the 1% FOT and 5% Delta forfeitures. in market bought core.
two vastly different rewards systems.
and Delta without a revenue system in full operation.
in the end someone is getting diluted. depending on your bias.
I hold coreDAO, core, and rlp in a not so similar ratios
DadJokes February 13, 2022, 5:19pm #15
Ideation I’ve had about the DAO and Delta.
While the DAO formation window is open should we let people burn CORE or Delta to create coreDAO?
In a simplified Delta vault we still have to account for all the folks that burned delta. I don’t know what becomes of boosting but it would be fair to see burned delta farm at a grater rate than unburned. I even think a system where burning is the ONLY way to stake could be viable.
Rlp that converts to coreDAO could be given burned delta credit. This keeps delta investors aligned into their investment while still being part of the larger DAO.
The remaining thing to address would be the WETH rewards and in the name of simplicity if those should continue. Perhaps not all kinds of Delta staking would earn it? Maybe burned Delta earns it where staked does not. Does the ratio change between the new coreDAO (which would own the liquidity) and the Delta token stakers? Do we just add WETH rewards directly to coreDAO staking, or even direct Delta rewards?
Lots to think about, I hope this inspires more thought and discussion.
GodHand February 13, 2022, 9:26pm #16
Burned Delta as the only way to stake is an interesting concept. You would really have to incentivize a person to warrant such a decision.
rLPs that converts to coreDAO instead of burnt Delta credit why not receive vesting Delta that requires the one year wait for 100%? It would still achieve the same desired result. Remember rLPs could be un-staked and sold at any time. I would hate to feel like we trapped the investor. This would give investors the choice to wait it out or exit on their own free will with or without (forfeitures).
So, with the WETH I like the idea that only Delta that is burned can earn it would be a very attractive reason to do so.
Great ideas and suggestions.
Jad_the_Chad February 14, 2022, 10:06am #17
I like the premise of reducing supply to increase value, however Devs have mentioned converting rLP at a fair rate, that adds an appropriate amount of DAI to the main bucket… something about 2 cakes 1 frosting, idk…How would Delta contribute to the bucket of DAI?
The Delta wallet had/has DAI backing that originated from selling the ETH from the rLP LSW. If that was removed, I imagine the remaining backing would be quite small. It will be interesting to see what devs do with the stable yield. If they transfer the stable yield to coreDAO staked in the DFV it will open up the option to all coreDAO holders. If the leave it, then it delays the merge. If they cancel it, then it reduces speculative value of the network. I wonder if its possible and economical to restrict the DFV to coreDAO that converts from rLP only.
i.e: Wallet A - Converts 100rLP, therefore the DFV will accept a stake of 100x ConversionRate
coreDAO from that Wallet.
After 1 year the DFV accepts all coreDAO.
The burning of CORE to make DAO wouldn’t make much sense at these market prices. The floor of CORE is 5500, therefore in this hypothetical exchange you would get less then 5500 coreDAO for that CORE. A better play then this^ would be to take a loan on your CORE for coreDAO. You are reducing CORE & coreDAO available to the market.
x3devships February 21, 2022, 3:51pm #19
Are you for real? We’re discussing things with you, and I’m being criticized for “thinking publicly”? Is being opaque preferred? We have had a hard time adding even liquidity because there is no team share of coreDAO yet. What is your suggestion? Also is this forum not a decent exchange in a shitpost free environment? Is this response of yours deliberately posted to derail this otherwise healthy discussion? Literally every point you’re trying to make is just a demonstration of unhelpful discussion. It seems almost a deliberately poor communication. Honestly, what is wrong with you?
moo February 24, 2022, 6:39pm #20
I’m admittedly a small investor and relatively low iq, and I am a little reticent to suggest something that makes the system more convoluted… but i see a ‘movement’ happening in other protocols towards separating their 1 token system into two token (1 yield token, and 1 governance token like redacted is moving towards).
I wonder if some exploration of this concept might be the solution for rlp. It could be bonded over 6-12 month for 1 Xrlp (representing yield as staked rlp) and 1 Ycoredao (representing goverance value/votes but NOT the ability to stake for yield in core system). Obviously this is a half baked idea as I’ve described it here, but there are alot of smart ovens in this forum that could maybe take it from parbaked to ready to eat.
RomanAround February 25, 2022, 5:09pm #21