Thank you for your thoughtful feedback. We appreciate your contribution to the discussion and hope to see more thoughts and participation as a delegate.
You raised a number of valid questions and we’ll try to address as many as we can, as well as cover a few broader points.
As a matter of principle we believe it’s essential for the governance token of a protocol to have some connection and utility tied to the value creation mechanism of the protocol.
There are many examples of successful DeFi protocols where the governance token is essentially just a meme coin with the name of the protocol. We’ve seen these types of governance tokens underperform and generally result in low community engagement.
The purpose of this proposal so to introduce the first basic mechanism to create a connection between the performance of the protocol and the governance token. It will not be the only mechanism and the increase from 5% of revenue to 50% will happen slowly over time (and may never reach 50%, as that’s just a cap.)
A few specific points you raise:
- DAO treasury composition
We agree, and we intend to diversify the treasury. This proposal is not a mechanism to diversify DAO treasury holdings. There will be future initiatives aimed at that. - Token float inflation in the coming months
Again, we agree that the coming unlocks will need to be addressed. This proposal won’t do much to manage the impact of unlocks. We will use other mechanisms to manage them such as coordinating OTC purchases with buyers who will re-lock the tokens and have a higher cost-basis. We will discuss our strategy more in the coming weeks. - Attracting LPs for ETHFI
Our view is that protocol owned liquidity is a more effective method than direct LP incentives. - Curve vs. other DEXs
The benefit of Curve is that it can be a passive LP strategy. Other protocols like Uniswap v3 and Maverick require active LP management. That being said over time we plan to utilize multiple DEXs. This is just a starting point. - Governance
It’s a fair point that this governance process was a bit rushed. This initial proposal was mentioned at TGE, but you are correct that we could have done a better job communicating the thought process and analysis that led to this proposal. We’ll aim to do better.
Once again thank you for your thoughts and contribution. We hope to see you provide more feedback regarding the coming proposals and our journey towards decentralization.