DM-001: Use of Treasury Returns

DAO Modification
1

DM-001: Use of Treasury Returns

Contributors

@longnostradamus & @mitchperion

Introduction

Perion is in an excellent position.

Two very promising next-generation blockchain-enabled gaming applications are being executed on, the treasury generates significant yield on a monthly basis, and from 2021 - 2022 the DAO made investments into what are now some of the most promising Web3 games.

With this in mind we believe now is the right time to define what this means for the DAO and PERC token holders. We want to resolve this question within this proposal.

Background

  1. XP.GG and Fanplay are both live in Alpha with the Fanplay PERC integration scheduled for Q1/24, and XP to have PERC and blockchain mechanics integrated by Q2 at the latest.

  2. Fanplay is expected to generate significant revenue.

  3. Perion has made investments into many gaming projects, some of which are now the largest in the Web3 gaming sector - Exits with capital growth appear to be a very likely outcome.

  4. The treasury generates between 10-25% annualised yield on it’s Stablecoin yield bucket on a monthly basis.

While point 1 presents a clear benefit to the DAO members, it is not yet clear what point 2, 3, and 4 mean for DAO members.

To resolve this question Perion needs a clear model for what happens when any form of realised return brings inflows to the DAO treasury. As of today, all funds flow into the treasury is utilised by the DAO to fund ongoing operations including product builds, marketing etc. While this represents a quality use of funds to further the Perion DAOs mission, there are potential areas or buckets that said funds could be put towards pushing the Perion ecosystem to the size and scale it has the potential to achieve.

Proposal

We are proposing a phased approach to how the Perion treasury segments realised returns to grow the organisation. The proposal outlines the key challenges the DAO faces and attempts to resolve them.

Phase 1: Increase liquidity

Perion needs greater liquidity to attract more DAO members and achieve scale

  • 60% of DAO of realised returns the treasury accrues will be reserved by the treasury to fund ongoing operations (to be used as per current operating procedures)

  • 40% of DAO of realised returns the treasury accrues will be used to purchase PERC and ETH at market, the PERC/ETH will be added to the the Sushi LP pool and staked on the Perion staking platform

Notes:

  • As of today the treasury holds ~50% of all staked LP tokens on the staking.perion.gg Sushi LP pool. This decision to stake was made to mitigate the impact one holder who was accruing a large amount of the LP staking rewards and dumping them on market (see this thread for details. The treasury should continue to stake Sushi LP on staking.perion.gg as a preventative measure, however all PERC staking rewards the treasury generates shall be burned to promote fairness to all PERC holders.

Phase 2: Fund community vote pools

Perion is continually growing its incredible network of contributors, while solving for liquidity is a primary focus now, in future there should be scope to let contributors decide how the DAO uses funds the treasury accrues.

  • x% of realised returns the treasury accrues will be reserved by the treasury to fund ongoing operations (to be used as per current operating procedures)
  • x% of realised returns the treasury accrues will be allocated to a community voting pool, for the PERC holder to ultimately decide how they are utilised. Examples would be sending to 0x00…, funding new community initiatives, adding LP etc.

Notes:

  • In order to execute swiftly, the vote for this proposal will cover execution of Phase 1 only, with the details of Phase 2 serving as a reference point for establishing a future proposal at a point in time where it is relevant to move forward. This is owing to the fact Phase 2 would require the Perion Foundation to:
    • Fund the build of a new governance process that allows the community to propose and vote on how funds are utilised
    • Fund the build a smart contract that executes transactions as per the community vote.

Reporting requirements & Guardrails:

  • Realised returns and liquidity activity to be documented in monthly treasury updates

Summary

With this proposal we hope to continue the growth of the DAO, scaling it to its full potential.

Voting timeline

  • 16th Jan ‘24: Feedback and amendments
  • 19th Jan ‘24: Stage 1 vote
  • 22nd Jan ‘24: Stage 2 vote

Notes:

  • As the proposal has been extensively discussed by DAO members in Discord the feedback stage has been shortened
  • For details on consensus mechanisms and voting see the Perion documentation
  • Timeline assumes passing of all vote phases, which is not guaranteed.

Conflicts of interest

No conflicts are present at this time.

Licence

Copyright and related rights waived via Creative Commons [CC0]

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