BIP 103 - Continue Restitution

BIP | Badger Improvement Proposals
1

TLDR;
BIP 103, as proposed, would allocate 1m BADGER, $3.5m, to a continuation of the restitution program that would run for 12 months. This creates a $3m shortfall in DAO funding through 2025 and jeopardizes the eBTC product roadmap. To mitigate this impact, it has been proposed that 1m BADGER tokens are minted and allocated to the restitution program.

Treasury, Roadmap and Token Considerations
The DAO Treasury Council has managed the treasury to allow for execution of the eBTC roadmap while maintaining consistent token treasury controlled liquidity (TCL) through 2025.

If the BIP passes without the minting option, the ability of the DAO to complete the eBTC roadmap, maintain adequate BADGER market liquidity and/or adequately seed eBTC liquidity is compromised. This could negatively affect eBTC adoption and the BADGER token price…

Since BADGER token price appreciation is expected to be the primary method for hack victims to recover their lost funds, the restitution proposal may be counterproductive.

Background
In 2021 Badger suffered a hack. Users lost BADGER governance tokens and also tokens deposited in to the Badger protocol.

Three BIPs were passed related to restitution. They are referenced here:

BIP 78 and 79 are complete.

BIP 80 was resulted in the following Snapshot votes:

These BIPs have been completed and the analysis of their effectiveness is found here

BIP 103 Restitution Proposal
It has been proposed that:

  1. A new restitution program is created with 1m remBADGER
  2. remBADGER withdrawn prior to the expiration of the prior restitution program is not eligible for the new restitution program
  3. remBADGER on deposit at the end of the prior restitution program can be rolled forward into the new program
  4. 400k BADGER will vest linearly over the 12-month life of the new program and is withdrawable when vested
  5. 600k BADGER vests linearly over the final 3 months of the program and can be withdrawn when vested
  6. Early withdrawals are permitted, will no cease vesting and will not be able to be re-deposited

BIP 103 Minting Proposal
It has been proposed that 1m BADGER tokens are minted and allocated to the restitution program. This prevents a negative impact to DAO funding of ongoing operations. The minted BADGER remains locked in the restitution program and will create some forward pricing pressure.

Notes

  • The DAO holds 3.95m BADGER tokens
  • Completion of the original restitution program unlocked ~800k BADGER tokens. If this BIP does not pass, selling of these tokens may negatively affect the price of the tokens

Useful Links

Should The Restitution Program Be Extended?
  • Extend the Restitution Program With Minting
  • Extend the Restitution Program Without Minting
  • The 2m BADGER Already Distributed as Restitution Have Satisfied the DAOs Obligations
  • There’s a Better Way Demonstrated in the Comments

0 voters

2

It’s time to move this to Snapshot.

PO has suggested we proceed with snapshots as follows:

  • BIP 103(a): Fund restitution with 1 million newly minted BADGER
    – If approved, no further BIP is needed
    – If not approved, proceed with BIP 103(b)

  • BIP 103(b) - Fund Restitution from the Treasury
    – if approved, proceed with BIP 103(c)
    – If not approved, no further BIP is needed

  • BIP 103(c) - Mint 1 million BADGER to re-fill the treasury in support of the eBTC roadmap
    – If approved, no further BIP is needed
    – If not approved, proceed with BIP 103(d)

  • BIP 103(d) - Allow the Treasury Council to spend more than 10% of uncirculating supply without a BIP

2 Likes
3

Freddy this is only relative to allocating the newly printed $BADGER to the new restitution program correct? Not a blank check for treasury council to spend 10%+ of uncirculating supply however it wants with no authorizing BIP?

4

Since 1m BADGER were allocated to restitution, it is now more difficult for the Treasury to make meaningful investment decisions without a BIP. This would give the Treasury more flexibility.