Title: Mobilizing the Uniswap Treasury
Authors: @AbdullahUmar & @Doo
Summary:
The Uniswap DAO's treasury, containing assets worth nearly ~$6B, predominantly in $UNI tokens, faces challenges due to its single-asset composition and the lack of a plan for productive utilization. To address the treasury's volatility and underutilization, we propose forming the Uniswap Treasury Working Group (UTWG) to explore treasury management strategies aimed at achieving sustainability and growth for the DAO. This involves diversifying assets to stabilize the treasury and finding revenue-generating investments beyond the protocol's core operations. The UTWG will examine various treasury plans for Uniswap DAO based on 8 weeks of research and interviews with various entities and individuals familiar with treasury management and adjacent subject matters. A deliverable will correspondingly be released on the forum where we present at least two viable treasury management options for the DAO to begin pursuing. Both of these options will be presented as their individual RFC/RFP, ideally allowing various treasury managers to present their products and services to the DAO. The UTWG will help facilitate this process.
The proposal's ultimate goal is to ensure the DAO's long-term financial health and support the sustenance of Uniswap. However, there is one caveat–before implementing any of the proposed strategies, in other words, before moving any $UNI to and from the treasury, we must have clarity around the legal implications of administering this program. There has to be a way to pay taxes. We hope that a simultaneous discussion around, say, DUNA, or other legal frameworks, takes place. It seems unlikely that the DAO will be able to conduct treasury management if it doesn’t open itself up to adopting a legal architecture. Our hope is that while the Foundation and potentially another working group sort out the legal side, we are able to make some strides on treasury management research. Upon adoption of a legal entity, we can then hit the ground running by actually implementing the conclusions derived from the UTWG’s research.
Working Group Details
Based on the above reasoning, the UTWG will conduct 8 weeks worth of research into the types of treasury management initiatives that the DAO may reasonably pursue in the short-to-medium term. The group will note on the experience of treasury management practices of other DAOs, adopting practices that have historically worked well and conforming them to Uniswap’s current situation, along with the presentation of new models that we believe are potentially more effective. Considering treasury management has been a key aspect of many prominent DAOs like Maker and Aave to Lido and Gnosis, we believe that there are many case studies and frameworks that can be explored to ensure initial experiments will return positive results.
The UTWG will also try to collaborate with those working on various legal developments including the recent Wyoming Decentralized Unincorporated Nonprofit Association (DUNA) Act. This process may fall outside of the jurisdiction of the treasury committee and may require outsourcing entirely to another party. It’s vital that this treasury research is analyzed in the context of potential legal structures, and we won’t move forward with implementing our research unless there are proper legal frameworks in place. The Uniswap DAO has yet to formalize its opinions on how to set up legal entities, so this caveat may delay the implementation of the proposed treasury initiatives. The UTWG’s research may conclude that a legal working group should work in concert with the treasury group to effectively bring this program to fruition.
It’s also important to emphasize that the deliverables of the UTWG will aim to highlight potential treasury management options rather than pinpointing specific service providers. If the committee comes to the conclusion that an RFP process is the ideal manner by which treasury managers should be appointed, for example, then one of the UTWG deliverables will be a call to action for various service providers. After ample discussion in the forum, the most promising service providers will qualify for a vote of confidence from the DAO. The elected members will then collaborate with the UTWG to implement a proposed treasury management initiative–granted a legal framework is in place. At this point, the working group will act as the liaison between the DAO and the service providers, ensuring proper accountability and transparency for the sake of the DAO.
Note that it’s too early in the research process to conclude the exact operations of the treasury initiatives–the above paragraph simply outlines a potential order of operations, which is subject to change based on our research. Our goal is to simply present the DAO with an assortment of options, backed by interviews and research.
The Uniswap Treasury Working Group Members
The UTWG will be composed of four members. 2/4 members are listed below and are a part of working group zero (WG0). They will be helping administer and organize this proposal. The other two members will be elected via a Snapshot vote. Elected members, along with WG0, will be responsible for helping conduct research and aiding in proposing the final deliverables to the DAO.
StableLab
StableLab is a governance firm focused on professional delegation, DAO framework design, and product development. StableLab works with various projects, from the ones just starting their journey to decentralization to the most prominent DeFi protocols.
Arana Digital
AD is a professional governance group. The team is deeply steeped in the crypto space and has multiple years of participation in protocol governance. With delegation history for DEXs, money markets, L2s, liquid staking protocols, and stablecoins. AD brings a diversity of experience to DAOs–its members have consulted for companies like Immutable and dYdX, worked at crypto investment and trading firms, set up various validator nodes, and run educational events for university students.
Budget
The UTWG asks for a budget of 6,000 $UNI. The hourly rate will be the same as the Accountability Committee at $200 per hour. If this committee is formed, then the UTWG will form a 3/4 multisig to conduct payroll. Retroactive compensation will be distributed to WG0 based on their input hours by the start of the program (i.e. once the onchain vote passes).
Tentative Next Steps
March 19 - March 26: RFC
March 26 - March 30: A temperature check will go live to gauge the interest to launch the The Uniswap Treasury Working Group.
March 30 - April 6: If temp check to form UTWG passes, a 7-day period will take place for prospective candidates to apply to the working group on the forum
April 7 - April 11: A Snapshot election will take place, allowing the DAO to vote for the two remaining members of the UTWG out of the given applicant pool
April 12 - April 19: the onchain vote will be live, batching together the formation of the working group, its four members, and sending the budget to a multisig
If the onchain vote passes, then over the course of 8 weeks, the UTWG will examine various treasury initiatives for the Uniswap DAO and create at least two viable treasury management options, which will be put into their separate RFC/RFP processes.
The exact implementation of this program after step 6 is to be determined based on the working group’s research and adjacent legal developments.
*NOTE: steps 7-11 are subject to change based on legal developments–the goal of this group is to set up a formal process and provide the DAO with research on treasury management
