OTC settlement under DXD Token model

Under the passed proposal relating to the new DXD token model, a buy wall @ 70% of NAV has been authorized. Given the longer than anticipated timeline of scaled approvals for the new DXD token model ($250k chunks) discussed on today’s Governance call, it was suggested that larger DXD holders can come to some kind of OTC arrangement with the DAO while waiting for the implementation to scale up to full capacity. Otherwise, the proposal that has been passed to enact a wall for DXD, isn’t truly ‘real’. Totally understand the need to be careful with new contracts, though, so the following seems like the best path forward for larger holders in the meantime:

I’d like to propose that settlement is done via 1inch P2P/Airswap, via the DXdao multisig.

I’d also like to propose that we can closely approximate the result of the 3AC contract’s real-time NAV calculation by using a NAV calculation that assumes half of the DXD amount is sold (a midpoint, of sorts). For example, using the DXD Treasury Dashboard’s ‘Actual Dashboard’ tab, if a large DXD holder wanted to sell 2000 DXD, then we’d use the NAV calculation for if 1000 DXD had already been sold, for the entire 2000 DXD.

Over the weekend, I’ll be submitting a proposal on-chain for a transfer of assets to the DXdao multisig for the purpose of executing a trade as above. DXdao multisig signers will have authority to check that the calculations are correct before accepting the trade.


ETH: $1310
ENS: $12.30
SWPR: $0.0225
WBTC: $17225
DPI: $65.23
GNO: $89.53
staked ETH avg discount: 0.995 (rETH is 1.07, stETH 0.991, sETH 0.998, rETH2 0.999)

current state 70% of NAV: $587.30
after 50%, 2790.03 DXD, of order sold (midpoint as above): $603

$603 * 5580.06 = $3,364,776.18

Requesting funds to the DXdao multisig as mix of [1,650,000 DAI] (dxvote.eth) and 1,714,776.18 USDC in two separate proposals in order to execute the trade.

Happy to go over my treasury dashboard version, which is a copy of Chris’ version with updated data, for any of the multisig signers.

The new 70% of NAV after this trade would be ~$620, just by virtue of the trade occurring - an increase of 5.5% for remaining DXD holders.

Spoke to Dave who informed me that I’d submitted the proposals wrong, and the funds were requested to go from the DAO to the DAO.

Couple of changes to the new proposals:

Fixed the destination of the funds to the multisig
Updated prices & therefore NAV
Added +5% to the transfer amount to account for any potential change in prices of assets (and therefore NAV) between now and execution - anything remaining to of course be sent from the multisig back to the DAO treasury, but saves having to do another proposal if ETH rises between now and then.

New proposals:

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Caney Fork downstaked all four of these proposals. The first two because they would send funds to the avatar. The other two were downstaked because they fall out of the scope from the recently passed Approve New DXD Token Model proposal and set a bad precedent for DXD monetary policy.

In the proposal approving the new token model that passed last month, the DXD Monetary Policy Framework’s first bullet point was:

DXD Floor Price Guarantee - DXdao commits to buying any amount of DXD on the open market

This precludes OTC trades in the new token model.

While this trade might be “good” for DXdao from a financial perspective, it sets a bad precedent because the OTC trade system is not a scalable model. Soon after this proposal was pushed on-chain, DXD holders contacted me about how they could submit their own OTC trade and what are the requirements. When using funds to purchase DXD, DXdao should have clear standards that govern the trades, and most importantly, allow any and all DXD holders to participate without favor. Using open market operations ensures that there is no Cantillon effect on DXD purchases.

Additionally, this puts a lot of discretion on the multi-sig signers and out of the hands of DXdao governance. There is an extra 5% included in case of price fluctuations and NAV will need to be recalculated by the multisig. This would mean the trade could be placed at a different price than what’s listed in the proposal. For a proposal with such a large size of funds, there shouldn’t be any changes to the NAV calculation post-passage. As a multi-sig signer, I do not want to be tasked with this burden (operational or legal). In addition to these decisions being made outside of the expected governance processes, this proposal does not clearly state how the signers will calculate NAV, and more importantly; when? At proposal passing or when 3 signers are present and ready to execute? Looking at the current proposals, there is $75k in payments to pass in the next four days, plus the beginning of the 1H2023 budgets disbursement. Presumably this would be reflected in the OTC order placed by the multisig, but that discussion and execution would occur outside of DXdao governance.

These issues arise from the fact that it takes time for proposals to go through DXdao governance. This isn’t solved by using a multisig. It only obfuscates the execution. With past buyback orders, these issues weren’t solved, but they were addressed and transparent for everyone to see, because it relies on a smart contract to execute.

Lastly, Caney Fork is downstaking this proposal because of the significant change in the treasury makeup. This proposal is suggesting using $3.5m stablecoins. Currently DXdao has $10.1m in stablecoins and $18m in ETH. As discussed before the proposal passed, the new model will likely lead to a contraction of the overall treasury size. DXdao and DXD holders are willing to make this trade off because it returns value to existing DXD holders, but whether these purchases are funded through selling ETH for DXD or stablecoins has not been decided. So, these proposals would lead to a significant change in the makeup of DXdao’s treasury that I think should be discussed more, hence the downstake.

Caney Fork voted for the New DXD Token Model and is committed to implementing it. The approval proposal passed exactly one month ago today. And since then, DXdao has purchased ~250 DXD for about $144k. And right now, there are nine proposals live with almost $600k in DXD buy orders. Additionally, two proposals are live to increase DXD liquidity on Swapr mainnet by $200k. These are just the initial steps, and all of these numbers should continue to increase over the next week. There is a $500k “liquidity order”, which is basically a limit order, that will pass in 12 days, and the current plan is to do one of these every seven days (in addition to smaller, fill or kill orders). These are not new smart contracts, and I’m confident this can scale, while maintaining the trustless and permissionless ethos of DXdao.

Outside of these efforts, there are other options that would be better.

First, member balancer has been used for a number of times over the last two years, and is permissionless and trustless for DXdao governance. Any DXD holder can do this and REP holders serve as the price oracle.

Second, Mesa works completely fine. There is a trustless relayer (GP Relayer) that can be used for an oracle. I wish more time went into implementing these trades through Mesa than into the redemptor contract. If this is the preferred option and if DXgov/3ac cannot, I can investigate a solution.

Lastly, if none of these options are preferable, and if a multi-sig facilitation is the only way, I would suggest a proposal where the multisig would set a limit order for any DXD holder to be able to sell into. This means it needs to be clear in the proposal when, where and at what price the DXD buy order will be placed.

Do you know what, I’m just exhausted by all of this now and take this as guidance - I’ll member balance it now using the time of the transfer for prices to calculate NAV (which is only fair and logical; as soon as somebody, me, loses control of their assets and the ability to unilaterally cancel).

I will also request as USDC and ETH in approximate ratios of stablecoins:volatile assets in the treasury so that the makeup is not altered drastically.

I trust that is sufficient to address your concerns.

Just a small (slightly pendantic) side note, but budget disbursements shouldn’t impact NAV. You’d clarified that yourself in a previous discussion.

“One note as it applies to DXD & Treasury NAV. Assets in a guild will still count towards DXdao’s Treasury NAV.”


& using midpoint of 2,817.04 for 5,634.08 DXD sold = $607 per DXD

of which 0.3412154023 is stablecoins: $207.12
and the remainder as ETH: 0.3018E

therefore, total of 207.12 * 5,634.08 = 1,166,930.6496 USDC
and 0.3018 * 5,634.08 = 1,700.365344 ETH

DXD sent to DAO here:

Pre-Boosted Proposal here:

70% of NAV rises to $623 for remaining DXD holders after this purchase.

I support the OTC settlement proposal as it aligns with the commitment stated in the new DXD token model, which is to implement a “DXD Floor Price Guarantee priced at 70% of the current DXD-NAV Ratio (DXD’s circulating market cap to Treasury NAV)”. While I acknowledge there may be challenges in its implementation, OTC settlements are a viable form of implementation under the approved proposal framework.

I appreciate that @hughesconnor ugues has modified its original proposal to incorporate a combination of stablecoins and ETH as assets from the treasury for the purpose of this OTC settlement. This allows for a more proportionate use of the treasury assets, as using exclusively stablecoins would resolve in the treasury value being exposed to increased volatility due to the heavy proportion of ETH left (currently 63%).

I am disappointed with the current state of the floor price guarantee implementation and the responses provided by @Powers. The DAO has committed to implementing this guarantee at 70% of the current DXD-NAV ratio, but recent efforts have been backtracked and inadequate. A great solution was presented by 3AC, which was elegant and accurate, but has been discarded in favor of sub-optimal alternatives. Instead of addressing and resolving potential issues, recent discussions have focused on solutions that fall far short of the DAO’s commitment. This lack of efforts to find an adequate solution, which should be within the skillset of the DAO team, appears to be a failure of management and inability to tackle complex problems.

I’d like to see the DAO double down on its commitment of properly implementing the DXD floor price guarantee as a demonstration of its ability to tackle hard problems and execute efficiently.

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@ykplayer8 any context on why you’ve downstaked my proposal to claim funds due to me under a previously passed proposal?

Is it because you sold your DXD already much lower? Or some other reason? What do you suggest, or are you just going to downstake and leave me without $3.4M of DXD already sent to the DAO without any post explaining your thoughts?

Hi! You created 3 proposals in last 24 hours and request 7.8 m USD in total, heavy stake GEN on all proposals. Last proposal have stake more than 700k GEN. It is not ordinary case in history of DXdao governance. I believe that proposals like this should be voted in not rushed way with absolutely majority. I am disappointed in your movements, a few months ago it looks you are going to be involved in DXdao governace an accamulating DXD for future voting power. It is clear now that it is not your case. I am not going to outbid you GEN stake but I am doing what I am believe. For me not clear why you so rushing and cant use open market tools for off load your DXD.

What? If you follow this thread properly then it’s clear what’s happening. I’ll downstake the original proposals (2 of which are currently downstaked) if you like. But it’s abundantly clear what’s happening here. Further, the other proposals send funds to the multisig, not to me, if you take a look at them. Lastly, the 700k GEN stake is a direct result of your downstaking, so I don’t see how you can point to it as a reason for your action, when it happened afterwards…

You also sold all your DXD over the last few months, so please don’t lecture me about your disappointment. Lol.

The proposal has already passed to set the price floor, so whatever you think of it, it’s a passed proposal, and this is merely execution of that.

Edit: done. Everything downstaked except the Member Balancer.

Hey @0xSpicySoup

Just a small (slightly pendantic) side note, but budget disbursements shouldn’t impact NAV. You’d clarified that yourself in a previous discussion.

Yes. That is correct. I’m talking about when payments get sent to contributors and are outside guilds (and DXdao). So, the $75k is the current proposal withdrawals (for work in 2022), and when I say the “beginning of the 1H2023 disbursement” I mean the January payments to contributors that will start this week and come from the guilds/multisig. DXdao’s monthly burn is ~$155k.

To reiterate, all assets held in Guild or DXdao multi-sig still count towards treasury NAV.


I would like to use member balancer for my 2,100.68 DXD. I’d like to have confirmation that the right calculation I need to use is the one available in DXdao Treasury Dashboard - Asset Breakdown, where I should subtract the amount of DXD bought back from member balancer #1, as well as the ETH and USDC redeemed. Upon confirmation, I will proceed with the transfer of my DXD balance to the DAO and submit a proposal.

IMHO member balancer scheme cant be used for buyback DXD. You can track the history of member balancer and see that the premium for member balancer request is 1% compere to user costs and the user proposal should provide info about costs. It will not work in DXD buyback
example Alchemy | 3AC

I think you’re maliciously trying to provide really weak arguments to prevent the upholding of the new DXD token model, that I remind you was already passed on chain. Please familiarize yourself with it: Alchemy | 3AC

It specifies:

  • Execution of the price floor guarantee will occur on-chain through various trustless models. Previous DXD purchases were in smaller amounts, so executing on a larger scale will require more coordination.

Member Balancer is an example of one of those methods. It is trustless (for DXdao, anyway), and upholds the new DXD token model.

Your reference to the 1% premium is just irrelevant, no premium has been requested in the proposal. How is that a bad thing for DXdao?

DXD Floor Price Guarantee - DXdao commits to buying any amount of DXD on the open market

Member balancer is not correct tool for DXD buyback on open market. Who is maliciously trying to provide arguments?

You are.

You have been MIA for 6 months with 0 forum reading time, 0 governance calls attended, 0 DXD Working Group calls attended, selling your DXD throughout the entire time (and then have the gall to lecture me about doing the same), and suddenly come back to pick at (always changing) semantics because you’re salty. First it was the number of proposals and the GEN staking, now it’s something else.

This is an open market operation, in that, as above

What is your problem?

Not true. I am follow DXdao life from day 1. Wathcing recoded calls, reading forum and still holding DXD. Who are your to judge me?

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ok m8, sure thing.

Just not sure why you’re trying to stop the execution of an already approved proposal and go against the governance process. Weird.

Also, as for me judging you - who was the one that started that by being ‘disappointed’ about me selling, despite selling yourself first… if you’re upset about being judged, who are you to be judging?

I am sorry but I think you don’t understand what this is about. Did you read the approved new DXD token model? dxvote.eth

I would suggest you read this and ask questions if some points aren’t clear. Many here can provide information to help you understand it better if some aspects aren’t clear to you.