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**TIP 47: Liquidity Bootstrappening and Growth Part 2 - PCV** **Proposal Type:** Token Holder DAO Governor Bravo **Overview:** This 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. *Important Note:* This version of TIP 47 is the result of multiple working sessions and iterations with the TTG. The Threshold DAO onchain proposal flow process requires a successful temp check snapshot before queing into Governor Bravo. The governance plan is to conduct the Threshold DAO temperature check to gauge the spirit of this proposal while the TTG conducts the final diligence and parameter determination required to execute the proposal. If the temp check passes, this proposal will be amended to include final details before moving onto Governor Bravo vote if it successfully passes the temp check stage. To improve readability any such detail will be identified by a ✏️. **Milestones and Deadlines:** * Threshold DAO Temperature Check * 04/07/23 * Amended proposal submitted to Threshold DAO * Week of 04/10/23 * Governor Bravo proposal kick off * Week of 04/07/23 * 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. ✏️Bond details: * 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. We can do a public campaign around “Retiring renBTC”, ideally in coordination with Curve and Badger. “Have renBTC LP tokens? The Threshold DAO will buy them off you!”. ✏️Bond details: * 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 brining 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. ✏️Bond details: * 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. * ✏️ 10M T for use on vote incentives via platforms like Votium * ✏️ 40M T for directly purchasing BTC-denominated PCV The TG can then start low, and increase or decrease investment where appropriate. **TX Details:** **Additional Information:**

**Vote Type:** Token holder DAO Governor Bravo Proposal **DAO Elected Representative Sponsor:** Will **Overview:** tBTC has successfully launched, but with limited utility, adoption at scale is currently bottlenecked. We need to establish tBTC use cases beyond the core BTC to ETH bridge. To do that, a solid liquidity foundation anchored around tBTC TVL and volume on DeFi needs to be built. This is a proposal for the Threshold DAO to engage with a Sense Capital to deliver market making services to bootstrap liquidity for tBTC across the DeFi ecosystem. Further details including services rendered and benefits to the DAO are included in the Detailed Summary section of this proposal. **Milestones and Deadlines:** * Commencement: Focus liquidity deployment, inventory rebalance and tweak and deploy smart contract based trading and concentrated liquidity management. * Ramp up (month 1): Increase volume and liquidity via V3 LP strategy and Dex arbitrage on mainnet, expand to additional L2s like Polygon and Optimism. * Growth (month 6 - 12): Grow volume with refined strategy. **Who Is Involved:** Sense Capital, Threshold Token Holder DAO, Threshold Treasury Guild **Detailed Summary:** This proposal calls for a 50m T loan to be given to Sense Capital from the Threshold DAO to be paid back in a basket of ETH based crypto assets potentially including stables and ETH. In addition to market making services Sense Capital will provide monthly reports on progress to the Threshold Treasury Guild. Other than executing the loan and monitoring performance of the engagement this proposal requires no further action on behalf of the Threshold DAO. **Who Is Sense Capital?** Bespoke trading firm based in Hong Kong/Australia, Market Making, Liquidity management on CEX/DEX since 2019. Focus on 3 apex assets like Bitcoin, ETH and Stablecoins. Advocate and early user of MakerDAO/Uniswap with strong Defi trading capabilities including automated Uniswap V3 liquidity management, cross DEX/CEX arbitrage based on our Defi orderflow and MEV data research. **Market Making Goals:** Make tBTC a dominant, trusted, distributed Bitcoin Representation on Defi, accessible / redeemable to Real BTC: * Bootstrap: Liquidity with Organic Defi Flywheel * Scale: AUM with large pockets with Unique value prop for each segment (exchange, mm, traders, miners) * Expand: Build out channels and rails (wallet, exchange, dapp, payment processors) **Key objectives** * Boost Defi trading volume on DEXes like Uniswap and Curve with concentrated liquidity deployment and MEV Arbitrage engine. * Increase sustainable yield generated for LP to incentivise liquidity growth in liquidity pools. * Improve user experience of liquidity to offer better depth and execution price on Dex liquidity pools. **Why this deal?** * Partnering with a DeFi focused market maker like Sense helps us lay the groundwork to attract tBTC DeFi Liquidity. * 50M T loan is a small price for this level of sophistication and in the trenches work is required to bootstrap tBTC. For comparison other firms asked for 200-300m T loan and only want to work on market making for T and on CeFi. * Sense is sensitive to T liquidity supply/demand market dynamics and has already laid out a calculated approach to minimize the supply impact when swapping T for ETH/BTC/stables (per the proposal). Post engagement, Sense Cap is flexible to pay back the loan back to the DAO in ETH/BTC/stables and/or T to aid in treasury diversification efforts. Tx Details (If required): Additional Info (Optional): T inventory would transfer over 3 stages. |Stages||T Inventory|Objectives| | --- | --- | --- | --- | |1|Commencement|10M|Rebalance T inventory, setup mainnet and arbitrum trading, data collection.| |2|Ramp up After 1-month from commencement.|15M|Increase volume and liquidity via V3 LP strategy and Dex arbitrage on mainnet, expand to additional L2s like Polygon and Optimism| |3|Growth After 6-month from commencement or KPI trigger|25M|Grow volume with refined strategy. KPI Trigger - Total Defi TVL exceeds 2000 tBTC - Daily trade volume exceeds $1M USD for 3 days (less TVL but higher yield and velocity) - DEX TVL increased $10M USD (excluding current Uniswap/Curve TVL)| Request Mint fee rebate in T token during stage 1, 2 to lower the cost of operation, a list of mint transaction id would be provided at the end of stage 2 for reimbursement. Example: Initial use of T token inventory at commencement. Passively rebalance 50% of first trench into Stable, ETH, Bitcoin over 2 weeks without price impact or supply shock. Current daily trading volume is $35M/day, passive rebalance would have negligible impact ($500/hour)

**Proposal** The Treasury Guild proposes that the number of Treasury Guild committee seats be changed from 9 to 7. **Background** The Treasury Guild was initially formed by the DAO with nine committee members. During the recent election, there were seven qualified nominees elected. The Treasury Guild feels that seven members is both a sufficient and more optimal number for operations. Rather than create a runoff election to fill the remaining two seats, the Treasury Guild proposes to modify the number of Treasury Guild committee seats from nine to seven. This proposal would reduce the number of signatories on the Threshold multisig from 9 to 7 and reduce the threshold required to sign as well from 5 to 4. **Timeline** **Aug. 24 to Aug. 30** - Discussion Period **Aug. 31 to Sep. 4** - Snapshot Voting Period (contingent on above) **Sep. 5** - Implement Changes (contingent on above)