[TEMP CHECK] Financial Services Proposal: karpatkey & TokenLogic

[karpatkey_TokenLogic]

Thank you @lbsblockchain for your feedback.

@lbsblockchain

We recommend that @karpatkey_TokenLogic clearly outlines KPIs as part of an evolution of this proposal, which the DAO can then use to assess performance at the 180-day mark and after 1 year.

These are some of the Key Results included in the proposal as detailed above:

• Deliver an asset management architecture design that allows non-custodial allocation of assets, featuring preapproved role-based access control.
• Ensure a year’s worth of operational expenses is available in the DAO’s Mainnet funds.
• Diversify the assets within the Safety Module.

Additionally, we will monitor and report on several KPIs if this proposal advances, including:

• Capital allocation
• Treasury APY and Farming Results
• GHO markets, liquidity and price
  • Incentives and bribe efficiency
  • Utilization (GHO markets, liquidity, volume)
  • Protocol Revenue
• Safety Module
  • Incentives and bribe efficiency
  • GHO’s footprint in Safety Module vs on-chain market depth

We recognize that these KPIs are key for assessing the outcomes of our mandate. It’s important to acknowledge that they are subject to market conditions beyond our sphere of influence and control, such as fluctuating market rates and asset prices.

@lbsblockchain

At present, there is a lack of clarity on how the funds allocated to the GLC will be utilised, and the differences in strategy between both committees.

As outlined in the Specifications, our approach for the liquidity committee on GHO will focus on optimizing GHO’s utility and market depth to support healthy trading volumes using the DAO’s voting power (AURA and CRV) to create incentives, while reducing the reliance on direct rewards from AAVE or protocol surplus expenses. Similarly, for the Safety Module, our goal is to optimize APR and liquidity size, utilizing vlAURA to minimize current AAVE expenditures.
We believe achieving a stable peg for GHO hinges on competitive rates and enhanced token utility, as proven by the market’s positive response to recent increases in GHO’s borrowing rate and inclussion of incentivized GHO in the Safety Module. This approach diverges from the current GLC strategy, which primarily focused on tailored liquidity profiles and direct GHO rewards to attain these objectives.

@stableghost

I agree and I think it would be reasonable to see funding for the GLC tied to success in the goal as to keep incentives coherent.

Any Aave Liquidity Committee funding we may request will be exclusively dedicated to incentivizing on-chain liquidity, not for service compensation. As previously stated, rewards will undergo thorough assessment to ensure optimal allocation, prioritizing voting power rather than direct rewards.

@lbsblockchain

There are already disparate proposals, such as the one by ACI, to add other assets like stkGHO to the SM. This has been done without significant analysis and should be under the purview of the joint karpatkey-TokenLogic proposal. There is a real need to clearly separate scope and have a much more thorough analysis of how to diversify the SM including a very clear outlining of the risks per new asset added.

Every action taken by the TokenLogic and karpatkey partnership will be properly analyzed and communicated.