**TIP 48: Liquidity Bootstrappening Part 3: Threshold DAO x Wormhole** **Vote Type:** Token Holder DAO Snapshot **Overview:** Wormhole is excited to submit a proposal to the Threshold DAO to help *bridge* tBTC beyond Ethereum and significantly deepen tBTC liquidity across all chains. For Wormhole, tBTC offers a compelling potential cross-chain canonical BTC for the network across both EVM and non-EVM chains. The goal of this proposal is to facilitate tBTC growth into one of the top BTCs used in on-chain DeFi by engaging one or more experienced liquidity providers and providing an incentive to mint large volumes of tBTC in exchange for the option to purchase T from the Threshold DAO treasury, with a tertiary benefit of solidifying the Threshold DAO treasury via significant exercise proceeds. tBTC per chain launch details are outside the scope of this proposal and details are thus omitted. **Milestones and Deadlines:** - Upon successful proposal execution, 1,000 tBTC will be minted; 200 within ~10 days and 800 once redemptions are live. - For every additional 5,000 tBTC minted net of redemptions, an option is exercisable for 1% of the current T supply of 10,515,000,000, for a total of up to 5% of the total T supply. - If all minting milestones are satisfied, a total of at least 26,000 tBTC will be minted net of redemptions. - If all options are exercised, Threshold DAO would receive exercise proceeds in excess of $20 million. **Who is Involved?** Threshold DAO, Wormhole, Aligned liquidity provider(s) **Detailed Summary** This partnership proposal comes at an opportune time given the momentum towards expansion of tBTC outside of Ethereum described in this [document](https://github.com/keep-network/tbtc-v2/blob/09868226243320784734da592f8c490d156b9ed2/docs/rfc/rfc-8.adoc). Threshold DAO will leverage Wormhole’s security and messaging layer to mint tBTC natively on EVM chains where available. This lightweight, pragmatic strategy should allow for fast expansion to critical networks when there is opportunity. ***High Level Partnership Tenets*** 1. Threshold Network will leverage the Wormhole Token Bridge to mint tBTC on EVM chains where available.. 1. In this model, Threshold gateway contracts on L2s will trust the following messages to mint tBTC: 1. The native L2 bridges to that ecosystem (ie the Optimism Bridge, Polygon Bridge, etc); and 2. Wormhole Token Bridge to wrap wormhole tBTC representation into a Threshold canonical tBTC in accordance with: [https://github.com/keep-network/tbtc-v2/blob/fddc6305e9aff74a19b3a775174aadb6ff1ebbc2/docs/rfc/rfc-8.adoc#supporting-cross-ecosystem-bridges](https://github.com/keep-network/tbtc-v2/blob/fddc6305e9aff74a19b3a775174aadb6ff1ebbc2/docs/rfc/rfc-8.adoc#supporting-cross-ecosystem-bridges) 2. Where there are no native contracts available (e.g. non-EVM chains), tBTC will be wrapped by Wormhole’s asset wrapping layer. 1. Chains like Solana, Aptos, Sui, Cosmos etc 2. Wormhole’s asset layer currently secures hundreds of millions of dollars in TVL and has the added benefit of a fungible standard that can be moved across-chains in a path independent fashion (ie when tBTC is bridged between chains with Wormhole, you don’t get a double wrapped version that is incompatible with the canonical version on the chain) 3. Threshold DAO will engage one or more experienced liquidity providers to seed tBTC liquidity in important ecosystems where tBTC has an opportunity for growth. 1. In order to align with the Threshold Network, liquidity providers will have to mint and hold 1000 or more tBTC in order to qualify under this category (each additional LP will be required to mint and hold more than the previous) ***Liquidity Providers*** To implement the proposal, Threshold DAO will engage one or more experienced liquidity providers (including an initial liquidity provider identified by Threshold DAO) who will be incentivized by earning stake in the Threshold network via options to purchase T tokens which become exercisable after minting tBTC at an agreed schedule based on milestones (outlined below). In general, liquidity provider(s) will be eligible to unlock options for T, up to a maximum of 5% of the T supply, as follows: after an initial mint of 1,000 tBTC, each additional 5,000 minted tBTC will unlock an option for 1% of the T supply. The options will have a strike price around or above the current spot price of T (3.6c today), with the higher strike prices applying to the higher milestones of minted tBTC. If earned and exercised, the T delivered upon exercise of any option will be subject to a vesting schedule such that: 50% of T will be fully vested at delivery, and remaining 50% will vest in equal installments over a 3-month period at 30, 60, & 90 days. Qualified liquidity providers will have a waived mint/redeem fee on tBTC for the first 21 months, rebated in Threshold T token. After the 21 month period is over, the mint/redeem fee rebate will be revisited. With this structure, T will not be granted or loaned to liquidity providers; rather, liquidity providers will unlock the ability to exercise options for T as an incentive for minting tBTC and will help diversify the treasury of the Threshold DAO. The minting of tBTC and the exercise by a liquidity provider of options for T will be publicly displayed and monitored. This proposal is beneficial for Threshold DAO because: 1. the community will not be required to risk any of its treasury without demonstrated performance 2. it may put tBTC into one of the top spots of BTC in DeFi 3. treasury diversification via aggregate proceeds received by the DAO ***Liquidity Fragmentation and Security Considerations*** tBTC, powered by Wormhole’s security and scale across 20+ EVM and non-EVM networks, can drastically expand its reach and deepen its liquidity as the preferred, decentralized, BTC that can gain adoption throughout EVM, non-EVM chains, and on CEXs. tBTC can leverage the scale of Wormhole to grow quickly and strategically while not compromising on its strategy to mint native tBTC on L2 and sidechains. Part of the growth strategy will center around which chains to focus tBTC’s growth Leveraging cross-chain bridges like Wormhole and resulting considerations around liquidity fragmentation are addressed [here.](https://github.com/keep-network/tbtc-v2/blob/09868226243320784734da592f8c490d156b9ed2/docs/rfc/rfc-8.adoc#34-supporting-cross-ecosystem-bridges) Wormhole’s token wrapping standard (today commonly referred to as xAssets) should work well within the framework favored by the community. **Ongoing Bridge Risk Analysis Framework** tBTC’s novel asset bridging mechanism allows “native” interoperability on chains with their own bridges, like Arbitrum, Optimism, and Polygon. Multiple bridges can be whitelisted on each chain, allowing tBTC users to stick with a familiar bridge. For this reason, partnering with Wormhole will make tBTC even easier to use, allowing for faster bridging on L2s without fragmenting liquidity. The downside of this approach is increased risk. Each new bridge that’s whitelisted is another mechanism that could be hacked, hurting all tBTC holders outside of L1. For this reason, Threshold governance needs to be conservative whitelisting new bridges. We propose that during the partnership term, tBTC minter contracts on L2s natively supported by Threshold will only whitelist the native L2 bridges and Wormhole. During this term, a prerequisite for other non-native bridges being whitelisted is that they must be credibly expected to bring at least 5x Wormhole’s initial liquidity provision of 1,000 BTC in deposits (i.e. minimum 5,000 BTC), helping ensure any new bridges have skin in the game and appropriate security controls in place. **Tx Details (If required):** There are no immediate transactions required to support this proposal. Any release of funds as per milestones outlined in the proposal will be conducted through following Threshold DAO Governor Bravo proposals.

**TIP 47: Liquidity Bootstrappening Part 2 - PCV (Governor Bravo)** **Proposal Type:** Token Holder DAO Governor Bravo **Overview:** This proposal is a multi-phased proposal intended to deploy a DAO-owned strategic plan to deepen tBTC liquidity and develop essential Threshold BTC-based Protocol Owned Liquidity. It builds a DeFi revenue flywheel owned by the Threshold DAO and managed by the Threshold Treasury Guild (TTG) through four phases. This proposal was originally authored by Matt. This version of TIP 47 is the result of multiple working sessions and iterations with the TTG. A previous version of the proposal successfully passed a Threshold DAO temp check period. Execution of this proposal will be done by the TTG. To aid that execution, intentional flexibility is included throughout the proposal across details like bond discounts, vest periods and thresholds for continuing to the next phase. This will allow the TTG to iterate and change tactics based on real feedback from deployed bond markets. For reference, the guild is in contact with Bond Protocol who has suggested optimal parameters for deploying these markets and will advise on proper steps. **Milestones and Deadlines:** * Threshold DAO Temperature Check ✅ * Amended proposal submitted to Threshold DAO ✅ * Governor Bravo proposal kick off * Dates for each bond phase are intentionally left open to provide execution flexibility for the TTG **Who Is Involved?:** Threshold Token Holder DAO, Threshold Treasury Guild **Detailed Summary:** *Phase I* The first phase is a test of the bonding mechanism, and our ability to get the word out. We do a public campaign to retire v1, in coordination with Curve and maybe Convex: and offer all LPs a deal to sell their position for T. Initially we use Bond Protocol, the latest iteration of Olympus Pro, to avoid writing our own smart contracts. General bond details (space for TTG execution flexibility): * Bonds are for T * Bonds are bought for[ Curve tBTC v1](https://curve.fi/#/ethereum/pools/tbtc/deposit) LP tokens *Phase II* In the second phase, the DAO goes hard, converting as much Curve BTC LP tokens as quickly as it can to Curve tBTC v2. The focus should be on “dead” pools with little trading volume, whose LPs are likely open to switching pools (lazy mercenaries). In this phase, LPs are offered both Curve tBTC v2 LP tokens and T for their other LP tokens.. Because T isn’t used primarily to reward LPs, there’s less pressure than in Phase I — instead, the DAO is spending down its diversified treasury for growth, periodically unwrapping the BTC variants it receives. If the TTG engages with renBTC, there is an option for the DAO to campaign around “Retiring renBTC”, ideally in coordination with Curve and Badger. “Have renBTC LP tokens? The Threshold DAO will buy them off you!”. General bond details (space for TTG execution flexibility): * T * Bonds are bought for * [Curve wibBTC](https://curve.fi/#/ethereum/pools/factory-v2-60/deposit) * [Curve renBTC](https://curve.fi/#/ethereum/pools/ren/deposit) * [Curve sBTC](https://curve.fi/#/ethereum/pools/sbtc/deposit) * Curve tBTC v2 * Bonds are bought for * [Curve wibBTC](https://curve.fi/#/ethereum/pools/factory-v2-60/deposit) * [Curve renBTC](https://curve.fi/#/ethereum/pools/ren/deposit) * [Curve sBTC](https://curve.fi/#/ethereum/pools/sbtc/deposit) *Phase III* At this point, the DAO will have a large Curve tBTC v2 position. The DAO will incentivize votes on the Curve tBTC v2 gauge, further strengthening growth and bringing more immediate value back to the DAO. The TTG will have discretion in determining the incentive schedule based on a budget proposed later in this document. This is a great time for a Yearn Curve tBTC v2 factory vault. *Phase IV* In the final and optional phase, we deploy an ongoing bonding strategy. This exact venue for these bonds is out of scope of this proposal and will be discussed later. General bond details (space for TTG execution flexibility) * The bond is for T. If possible, new stakers should be able to skip any vesting period * enabling a constant discount on T. * Bonds are bought for * [Curve HBTC](https://curve.fi/#/ethereum/pools/hbtc/deposit) * Make sure we have a way to unmint HBTC consistently * Low discount, this is about getting people to switch. * Curve tBTC v2 * This is our ongoing long-term PCV incentive *Cost and other parameters* Without testing the market, it’s difficult to know the cost of liquidity over time, or how sticky the liquidity will be. Thus, this proposal sets aside a high-level budget, managed and reported on monthly by the Treasury Guild. These numbers represent a spend approval and not a spend mandate. * 10M T for use on vote incentives via platforms like Votium * 40M T for directly purchasing BBTC-denominated PCV The TG can then start low, and increase or decrease investment where appropriate.

**Vote type:** Token holder DAO Snapshot with a 5-day vote period **DAO-elected representative sponsors:** John Packel, Ashley (@MrsNuBooty), Benjamin (@ZeroInFo56), Nico (@nico186), @beemeeupnow **tl/dr:** Based on 15 months of iterations and lengthy discussion among the Marketing Guild Committee, we propose to separate the guild's oversight and execution functions, reducing the former to a more manageable scope and outsourcing the latter (i.e., no longer attempting to rely on the committee itself to execute on our OKRs). **Overview:** Threshold’s Marketing Guild has tried a number of approaches over the last 15 months to execute on marketing activities while also providing oversight over funding provided by the DAO (note that the sponsors of this proposal include 3 who have been on the guild’s elected committee since inception). The current Marketing Guild Committee (MGC) has **concluded that we need to separate the oversight and execution roles, making the former more conducive to the bandwidth most members have, while continuing to improve on the latter** by prioritizing, commissioning and compensating contributors based on value and impact, rather than fixed monthly compensation. The *Proposed solution* section under *Detailed Summary* below details how this will work, while ***********Background*********** provides token holders with context leading to this recommendation. In terms of budget impact, these changes would: - reduce our current committee compensation cost from $210,000/year to $42,000/year ($2,500/month x 7, as Ryan has waived compensation since inception) - recommend a line item of $127,500 annually for a new 30-hour/week role designed to provide a lot of what Ashley has been contributing without compensation for a year, as well as contributions from the temporary “extra hours” the committee has contracted with John for (~20 hours/week from November - February), which will be discontinued; a separate proposal fleshing out this role will be posted to the Forum shortly - provide a net savings of $40,500 annually, assuming the new role is approved and continues for a full 50 weeks (it will be designed to cover most of the work execution Ashley has been providing without compensation beyond her committee pay) **Timeline:** - 5 days for comment / discussion on this proposal - token holder DAO Snapshot with a 5-day vote period **Who Is Involved:** Threshold Marketing Guild, Threshold community and Threshold work token holders **Detailed Summary** *Background* Threshold’s Marketing Guild Committee was founded on March 1, 2022 via ratification of [Bootstrap Threshold DAO Guilds](https://snapshot.org/#/threshold.eth/proposal/0x171976a8fc20da0ac7970d1bf8a5025cae95886d3762ade77cf013ca8854304d), which outlined the structure for all guilds and set compensation for guild committee members at $2,500/mo. for 8 hours/week of contribution on average (also see [GP-008 Founding of the Threshold Marketing Guild Committee](https://forum.threshold.network/t/gp-008-founding-of-the-threshold-marketing-guild-committee/237) for detail). The design was that, “each guild will have a discretionary budget to fund community proposals and give contributors outside of the committees a chance to participate and earn. This is particularly relevant to the Marketing Guild where the intention from the committee members is to create a proposal process and a job board where community members can take bounties for completing specific marketing-related tasks.” During the first 6 months of 2022 the Marketing Guild accomplished a lot, as detailed in our H1 Retrospective [report here]((https://www.notion.so/Threshold-Marketing-Guild-Retrospective-Report-2b5d25cbe5c94fac91883ca21b746dfc)), including creating explainer videos, the *Threshold Time* email newsletter, Marketing Guild [Notion sites](https://www.notion.so/Marketing-Guild-9803f6d29d09481da9a99264ec625aab), and the debut of the *[One Fern Between Two Keys](https://www.youtube.com/watch?v=10-VTatrfkg&t=1s)* series. Challenges we noted in the report included, “bandwidth of committee members relative to the ambitious goals… need committee and others to all contribute asynchronously, as well as in team meetings…. Several committee members are spending far more time than anticipated when the compensation was set, and this presents a risk to be addressed.” In an effort to address these challenges, and noting that marketing needs would increase substantially in the lead-up to the tBTC v2 launch, in October [John made a Forum proposal for a temporary full-time role](https://forum.threshold.network/t/proposal-for-temporary-threshold-dao-communications-role/439) where he would 1) execute on guild Objectives and Key Results (OKRs), 2) align committee member efforts with those OKRs and those of the Keep and NuCypher contributor teams and 3) support contributors with what they need in order to deliver results. While the Forum comments and conversations about the proposal showed significant support for such a role, there were also concerns over the cost of a full-time role and whether the guild structure could be improved. The MGC acted on that feedback by approving funding for up to 22 extra hours/week for John, as well as adopting his [recommendation in December to test sprint planning](https://docs.google.com/presentation/d/1EOMotyMRWfq-ut9UhwuvwqJFOEGgBXIC4yRj_CnUm4M/edit?usp=sharing) as a way to ensure focus on the highest priorities, provide clarity on each committee members’ tasks, track progress and address roadblocks. (Note: John invoiced an average of 19.8 hours/week through February 12th; hours worked past that date have not yet been approved by the committee.) What the sprint planning and review process in January and February (see [here](https://www.notion.so/Sprints-Weekly-Task-a017a8d5e93a48c7b4d961ca97af251a)) showed was that Ashley and John were completing the vast majority of the tasks (in addition to planning the sprints, preparing for team meetings to review them and following up with committee members) while other committee members had challenges with bandwidth. This continued in the lead-up to ETH Denver, where we needed to devote several weekly committee meetings almost entirely to event planning and yet there still was not enough contribution to avoid last-minute rushes the week of the event. Our H2 Retrospective (see [here](https://www.notion.so/H2-Marketing-Guild-Retrospective-report-b31191091f404df6b743817cda3b23e4)) details significant accomplishments relative to OKRs (which are: 1 - Support the tBTCv2, thUSD, and other launches, 2 - Create content that educates on Threshold’s benefits, 3 - Amplify Threshold community growth, 4 - Develop and maintain Marketing Guild Infrastructure). But it also notes continued challenges: “one committee member resigning for personal reasons, another being asked to leave because they were not contributing or even attending the weekly meeting, several experiencing changes in their day jobs that significantly impacted their available time and flexibility for MG meetings and work streams” and explains that too much of the output continues to depend on John’s temporary extra hours and on Ashley taking on even more uncompensated work than she had previously. *Proposed solution* In the March 22nd MGC meeting John and Ashley cited the December recommendation and subsequent challenges in outlining the need to **restructure the committee by separating its oversight and execution functions** (see [pp. 7-11 in this deck](https://docs.google.com/presentation/d/19JeqSkQb4x8OQ5VtZZ4-FqyDovHmfVWoA9S5rTV44Oo/edit?usp=sharing)), elaborated on it the following week (see pp. 4-7) and then in the April 3 meeting fleshed out the basis of this proposal (see pp. 1-3). **FUNCTION 1: Allocation & oversight of budget** While we considered an alternate approach of potentially dissolving the Marketing Guild Committee and moving the oversight function to the Treasury Guild Committee, this proposal’s sponsors believe that would not be a practical solution and would also violate the founding structural principle of “delegating more granular working group decision making and capital deployment to committee members, allowing the Threshold DAO to operate more effectively in a way that ultimately adds more value to the network”. Also, since token holders voted 7 weeks ago to select 4 committee members we believe it’s best to retain the current committee in a scaled down oversight function that fits the bandwidth most members have (expectation being ~6 hours/month), while also including accountability enforcement. We propose the following structure: **Decision scope** 1. Voting on quarterly Marketing Guild budget request, plus allocations greater than $10k - as signers on the multi-sig 2. Expected number of votes per month: 1 - 3 **Cadence** 1. One 2-hour meeting per month, with actionable agenda aligned 3 days prior 2. One week in advance, Chair provides background material for discussion topics **Meeting format** 1. Q&A on decision/discussion topics, meeting materials 2. Hold vote & record; Coordination role will action any topic not able to be voted on 3. Align on next steps **Accountability** 1. Each person’s ongoing committee membership is contingent on them participating fully 2. Secretary records attendance, votes & minutes in Notion within 24 hours of meeting; Chair confirms committee member participation monthly 3. Adopt a “commitments” document modeled on the MG Committee’s [current one](https://www.notion.so/Commitments-made-by-Marketing-Guild-Committee-members-9f2e1ab86d414db6b981409639a08728) - required meeting attendance, input, votes, etc. 4. Each member performs a role on the committee, contributing to one of these 4 functions: Chair, Secretary, Coordination, Accounting **Compensation**: reduced to $500/mo. from current $2,500/mo. **FUNCTION 2: Execution on Guild OKRs** Rather than task the same group of people to both provide Threshold DAO with oversight over budget as well as execute on the guild’s OKRs, we propose an approach that borrows from Gnosis [Safe DAO’s “Outcomes Based Resource Allocation](https://forum.gnosis-safe.io/t/discussion-safe-dao-resource-allocation-model-obra/1001)” (thanks to Jake Lynch for sharing). These principles will drive how we go about getting guild work done: 1. **Prioritize & assign work based on expected impact in driving Threshold’s mission** We are here to make an impact and are accountable to token holders and our DAO colleagues, so all activities need to support OKRs and have clear benefits or measurable outcomes. We will resume sprint planning, but on a bi-weekly cadence and ending each sprint with a retrospective that informs the next sprint plan. 2. **Source multiple types of contributor to make the MG more productive & resilient** Existing committee members who are willing and able to commit to projects with clear outcomes and accountability are encouraged to make project proposals. We will also solicit proposals from marketing/communications professionals - and develop a process that delivers the best impact/price with the least amount of overhead/administration. 3. **Compensate contributors based on achieving projects’ results** We will develop rubrics/scorecards that evaluate work output compared to what was commissioned and measure the impact wherever possible. Larger projects will have retrospectives for improving our process. In order to achieve the above we need a highly trusted and capable person to manage this process, as well as to execute on the aspects of the MG’s critical core work streams (Social media, Content creation and Event marketing) that are most efficiently delivered “in house” and/or can’t wait for another contributor to be sourced, commissioned and evaluated. To that end, several of the sponsors will post a separate proposal to the Forum in the next few days recommending that Threshold DAO contract with Ashley (MrsNu) for a 6-month renewable period working 30 hours/week. Ashley is a Threshold “OG” community member (going back to NuCypher), she is a positive and helpful voice everywhere Threshold is being promoted and discussed (Twitter, Discord, Notion, YouTube, emerging Web3 platforms, etc.), and she has proven her value by contributing more to the Marketing Guild’s output over 15 months than anyone else. Thank you to @ben, @Carusosa, @sap, @derek, @Eastban, @Vict0r and Will for providing helpful feedback on our draft proposal, as well as Luna for ongoing support for all guilds.