Tldr, this proposal would lower SWPR liquidity discount multiplier to 10% and raise ENS’s to 50% for Treasury NAV calculations.
Last December, DXdao approved a new token model which ties the value of DXD to the value of DXdao’s treasury. Since then, 9,500 DXD has been acquired by DXdao through buyback purchases and member redemption balancers.
One of the issues identified in January’s DXD Monetary Policy Committee Meeting was the increase in treasury contributions from non-core assets. The Treasury NAV is calculated across all assets in DXdao’s treasury - with certain assets’ contribution discounted - but the buybacks and member balancer redemptions are only using stablecoins and ETH, so this naturally increases no-core assets’ contribution to NAV.
DXdao has 78m SWPR in its treasury and affiliated addresses. It currently has a liquidity discount multiplier of 25% because SWPR liquidity is low. A $250 purchase of SWPR token incurs 5% slippage.
ENS token, meanwhile, is using a 25% liquidity discount multiplier as it was originally awarded to DXdao to help govern ENS and was not intended to be a capital base.
This proposal authorizes the SWPR liquidity discount multiplier to be lowered to 10% and the ENS liquidity discount multiplier to be raised to 50% for all future Treasury NAV calculations.
Risks & other considerations
This will have a direct impact on the 70% of NAV price that DXdao supports through buybacks and member balancer redemptions. Even with the liquidity discount, the SWPR token is still susceptible to manipulation to inflate Treasury NAV given its low liquidity. Raising the ENS liquidity discount multiplier will make it more likely that some may need to be sold to balance the treasury.