Now begins (hopefully) the last round of governance votes, determining the exact mechanics of how the bonds will work. These are not set in stone, let me know your thoughts on them.
Reimbursement - Payment Denomination
Determining the goal raise of the bonds (the lost amount of ETH or the lost amount of ETH denominated in Dai)
The bonds can target either:
With a 2600 ETH target, it will provide a much more difficult goal for the DAO and potentially one where the DAO is unable to pay. However, it gets everyone back the currency that they deposited in. We cannot project the price of ETH so the impact on the bond and on the project is really unknown.
With an $11m Dai target, it will provide a meaningful target, though it will not be providing people the same currency that they deposited in.
It will be important to hear everyone’s thoughts because it can be a potentially large delta (in either direction) for both of the options
Reimbursement - Payment Intervals
Determining when governance will convene to vote on the current treasury plans and how to allocate capital
Since these bonds are zero-coupon bonds, the only thing that matters is that the debt is paid off at the maturity date. This proposal aims to determine a repeated basis for when governance will set aside capital for these bonds. Is this something we want to handle on a weekly basis? quarterly basis? yearly basis?
It is important to get everyone on the same page. Additionally, by having a clear path towards bond repayment, it makes buyers more comfortable with buying the bonds.
Every 2 years
Reimbursement - Multi-bond structure
Determining if we want to create multiple bonds to make it easy for the protocol to pay off the vast majority of people.
I propose creating a smaller bond that will be distributed to everyone.
The protocol can determine a minimum amount to pay out to everyone, ideally a number that will reimburse (whole) the vast majority of owners. This small bond can be done on a much smaller time scale, like 3 months.
For this proposal, there will need to be follow up proposals surrounding:
Minimum amount for the smaller bonds
Maturity length for the smaller bonds
Make everyone whole a lot faster
Consider multi-bond structure
Keep going with one bond
Reimbursement - Maturity date
Determining when we’d want these bonds to expire/mature.
For context, the protocol is currently earning ~$2m per year and that is largely off of ALCX. While we hope this increases, we need to keep this in mind for the vote. However, on the other hand, we don’t want this debt to dwindle over us for the rest of our time here. Realistically and hopefully, the RGT could be used as a backstop to prevent the debt from defaulting (something a later governance proposal can solidify, it is indeed in the best interest of the protocol).
I will add, that the protocol is more likely to default the sooner the maturity date is.
Finding consensus on when people think these bonds should be paid back