Polygon implementation; gas and bridging mandate (GBM); enabling future multichain utility of BANK

Title: Polygon implemention; gas and bridging mandate (GBM); enabling future multichain utility of BANK
Author(s): Bananachain#6171, EthHunterᵍᵐ :black_flag:#4200
Status: Forum
Date created: 05/22/2022
Date posted: 06/16/2022

TL;DR

Subject to stipulations listed below:

Gas:

  • Clarifying the mandate under which BanklessDAO (henceforth referred to as “bDAO”) treasury and guilds can source MATIC to use as gas to enable BANK transactions on Polygon once fully implemented.

  • Clarifying the mandate under which bDAO treasury and guilds can source other network gas tokens to enable BANK transactions in the event that, following a successful bDAO wide poll, further chains and networks are added.

  • The mandate covers the transaction gas needs of bDAO, to be calculated by epoch, with the possibility for and at the discretion of the treasury, to exceed this required amount per epoch by up to 50% in USD terms, to take advantage of favourable buyer market conditions serving prospective gas needs for up to two epochs.

Bridging:

  • Giving bDAO treasury and guilds the mandate to bridge BANK across networks in order to make up for a BANK shortfall in another network.

  • Giving bDAO treasury and guilds the mandate to obtain gas using surplus gas or BANK holdings across networks.

Background

bDAO is a decentralized community dedicated to stewarding the Bankless movement through media, culture, and education. Since launch, bDAO has become a flourishing community with 15,000 Discord members and 4,525 token holders, catalyzing a number of promising initiatives ranging from content generation (the Rug, Decentralized Law, State of the DAOs), education (Bankless Academy), consulting (Bankless Consulting), engineering and development work (Degen, Bounty Board), community NFT and merch sales, and new financial products such as BED and GMI in collaboration with IndexCoop. Its native token is BANK.

The BANK token has been operating on ETH mainnet since its inception. Given the high liquidity, security, stability and decentralisation benefits of ETH mainnet, this will continue to be the case. However, high gas prices, an end of the gas subsidy agreement with parcel.money in June 2022, the desire to increase tradability of BANK as well as making it more accessible to its members make it necessary to explore additional options.

To this end, bDAO treasury established the L2 working group to prepare and enable migration of BANK tokens to different networks, in line with the long term plan for BANK to be multichain.

On February 2022 a bDAO successfully voted on a treasury proposal making Polygon the first network to migrate to.This process serves as a role model for other future networks to be adopted, following a bDAO wide poll.

The migration to Polygon will affect the payment streams of bDAO treasury as well as those of the individual guilds and applications.

Given that the Polygon infrastructure will be set up across bDAO, the respective wallets will require gas in MATIC, the Polygon native token, to execute transactions.

The aim is for treasury to source the necessary MATIC centrally for it to be distributed to the entitled wallets, thereby taking advantage of sources within bDAO and externally.

Budgetary Specifications

The treasury will source gas tokens in two steps:

  • Initial phase: at the discretion of the treasury up to 500 USD worth of BANK tokens will be exchanged for MATIC, and other tokens for gas purposes in future, as required.

  • Following phases: regular purchase of MATIC, and other tokens for gas purposes in future, based on feedback from guilds and other entities referencing past utility and estimating future demand.

  • Calculation basis for the MATIC swap and other future gas tokens:

    • Initial purchase: the equivalent of up to 500 USD worth, at the discretion of the treasury. E.g. at current market prices (22 Mai 2022): 1/500 USD = 45,56/22782,16 BANK = 1,50/750 MATIC). Based on an estimated average gas fee per transaction of approximately 0,002 Matic.

    • Further purchases: Subject to feedback from the guilds and bDAO treasury based on utility. In future, budget requests from guilds and other entities will specify their BANK demands in ETH and Polygon, together with the respective gas needs in ETH and MATIC estimated to be necessary to conduct transactions, based on the amounts required in the previous epoch.

    • Upon approval, bDAO treasury will be able to opportunistically take advantage of volatile market conditions when sourcing tokens for gas, thus ensuring cost efficiency and speed.

Stipulations

Gas:

  1. This mandate covers the sourcing of gas tokens, currently MATIC for Polygon, but includes other future gas tokens following a bDAO poll on implementing further networks in future, which are needed to enable transactions by bDAO on these respective networks.

  2. The treasury receives a mandate to centrally source such tokens be it from third party sources or platforms or from amongst bDAO guilds as it sees fit, taking advantage of market conditions, within the mandate specified.

  3. The amount of gas sourced by the treasury is limited to: in the initial phase the equivalent of up to 500 USD/network at the discretion of the treasury; in the following phases an amount subject to the feedback from guilds and other entities in their budget proposals, based on their past utility and estimated future demand.

  4. The treasury, at its own discretion, may obtain 50% per network in excess of the requested amount of gas tokens to take advantage of favourable market conditions at the time to make provisions for upcoming gas needs by bDAO. This 50% discretionary purchase may accumulate, but may not exceed two epochs worth of gas tokens based on the 30-day average value based on the latest epoch request in USD.

  5. While this mandate empowers treasury to source gas centrally for transaction purposes, this mandate does not rule out that treasury may by way of trading, swapping or bridging reduce an excess gas token holding in one network in order to replenish/increase gas token holdings in favour of another network which bDAO has voted to implement in a bDAO wide poll.

Bridging etc.:

BANK for BANK

  1. Before individual guilds conduct bridging BANK themselves, they need to contact bDAO treasury via a gas request form (by utilising/modifying the gas reimbursement procedure and form) to ascertain whether treasury cannot facilitate a swap of BANK from one network to another.

  2. E.g. guild A needs BANK on Polygon, but only has BANK on ETH left. Following an understanding with bDAO treasury, the guild will forward an agreed amount of BANK on ETH to the treasury and would receive the equivalent amount of BANK on Polygon in return.

  3. Only if bDAO treasury is not able to facilitate the request within one week upon submitting the request form can the individual guilds resort to bridging themselves.

BANK for gas:

  1. Before individual guilds who have depleted their gas holdings may use an excess of their BANK holding to trade, swap or bridge these for gas, they need to contact bDAO treasury via a gas request form (by utilising/modifying the gas reimbursement procedure and form) to ascertain whether treasury: can provide additional gas; or: facilitate an exchange of BANK for gas.

  2. An excess of a guilds BANK holding can only be such BANK which has not been used as earmarked by the budget request and is not anticipated to be used as such during the ongoing epoch, outlined by the guild in the gas reimbursement form to the treasury.

  3. If the conditions are met and treasury cannot oblige within one week the guild may, at its own discretion, trade, swap or bridge BANK in order to exchange a BANK surplus for a gas shortfall.

Gas token surplus:

  1. In case a guild has accumulated a surplus of any gas token from its ongoing activity it should offer this to the treasury first in exchange for BANK, other future tokens for gas purposes, or any other token available in the treasury at the time of the request, as the parties agree.

The mandate in this proposal is subject to any existing budgetary obligations and accounting requirements, in particular regarding any inter guild exchanges, with or without facilitation by treasury.

The guilds are encouraged to set up implementing and organisational guidelines within their guild.

Where practicable and feasible, steps will be undertaken to adapt current and establish future bDAO services and functions for a multichain environment accordingly.

Discord Poll

Treasury Guild member temp check poll

Forum Poll

I support and approve the above proposal
  • Yes
  • No

0 voters

3 Likes

This is one of out best options, so cool that we are trying to get more scalable :smiley:

3 Likes

Thank you Bananachain and ETHHunter for putting this together in the name of the L2 migration WG. The first step towards making BANK multichain and thereby easily accessible & tradable for folks that are going to get onboarded in the future, who don’t have enough liquidity to compete with the L2 ecosystem for blockspace on ethereum!

3 Likes

Would not have been possible without you, cryptodad and all the other L2 WG members! bDAO strong! :mechanical_arm:

2 Likes

Parcel still sponsors gas for multisig transactions from mainnet gnosis safes for bDAO. The transactions need to be created within the parcel.money front-end.

I agree on the benefit of having gnosis on multiple chains, but the time pressure is not there.

It’s not clear what you mean here.

This just seems like it would introduce confusion. How much of a budget would be on each network? edit: +50% of previous amount requested.

==========================
It seems more feasible to deploy on Arbitrum or Optimism bc they still use native ETH for gas as opposed to introducing another token into treasuries. What is the utility of deploying on more networks? What can people do with their BANK on polygon that they can’t do on mainnet currently?

I’m not against more deployment but I think we need to be mindful of liquidity fragmentation that @Icedcool is always worried about. I just want to make sure there is utility on other networks before we go around spreading ourselves even thinner. The BANK liquidity is not deep, even on mainnet.

==================================
If we are to deploy to multichain, I’d prefer we use existing gnosis safes on mainnet to control the safes on other chains rather than creating entirely separate safes (maintains single set of guild/dao treasury signers). Tools like Zodiac and DAOHaus have built tools for xchain safe controls.

I like Zodiac UI and docs better than DAOHaus personally, would rather use that.

1 Like

I’m not opposed to migrating liquidity to Polygon as stated in the proposal. 500 usd is a low amount of MATIC to exchange for gas reimbursements. There are a few alternatives before swapping funds from the bDAO treasury.

  1. Fight Club has MATIC in its treasury from our bDAO red glove NFT sale. 10% of our NFT sales are to be paid out to the bDAO treasury and this can be done in MATIC.

  2. If bDAO is committed to migrating liquidity to Polygon, then perhaps there is a grant that we can apply for. Most L2s have ecosystem funds that are seeking to onboard communities.

2 Likes

Thank you for your valuable imput and for raising these interesting points.

At the time of writing the parcel deal was supposed to expire by the end of June. Thankfully, Parcel seems to have decided to extend this until the end of the year to my knowledge, which gives us additional breathing space as you rightly point out. Given the amount of time implementing a new network takes however, it actually highlights the need to find an alternative, in particular as the Parcel deal may well come to an end at some point soon.

The calculations from 22 Mai are referring to the single and the total unit cost: 1 USD buys 45,56 BANK buys 1.50 MATIC, or 500 USD buys 22.783,16 BANK buys 750 MATIC. Given the current market prices these figures are clearly obsolete but were only supposed to serve for illustration purposes anyway, given that the reference value is in USD. And since we have USDC in your treasury this would not affect our BANK holding either. We now just get more MATIC for our money.

Regarding confusion, the setup actually aims at preventing confusion as the guilds themselves can request and organise their payment streams as they wish, subject to the budget being approved. More choice invariably adds organistional complexity. However, if a guild does not see the need for another chain, they are not forced to use it and can go on as before. The budget amounts are not affected by this, as it will be the same budget but spread across different networks the ratios of which the guild can decide.

I agree there are many different other options one can consider and I invite you to make a case for any of the ones you mention in the working group. The choice for Polygon was made at the begining of the year, see the link in the above proposal, and is now gradually being implemented. But one main concern driving diversifying which was regularly mentioned throughout the different discussions we had are the high gas prices on mainnet, to which a decreasing value of BANK has added. Lower gas fees would enable smaller BANK holdings to engage in more investment and locking activities as offered on Balancer, which could reduce BANK selling pressure. Liquidity fragmentation is not realy an issue here as, apart from a few MATIC the liquidity of BANK remains unchanged, albeit on two networks.

I agree with you that using Gnosis safe is preferable and your suggestion regarding the different tools you mention is actually very helpful in this regard and will certainly be looked into. Thank you for that.

We are interested in making this a plearurable, bDAO wide experience, open to anybody interested in being involved. I very much appreciate your time going though the proposal and posting your thoughts here as it gave me the chance to address questions which others might have, too.

Thank you for the endorement and suggestion, Tesa. I believe treasury will be very interested in taking advantage of the different opportunities offered within bDAO itself, it having the potential of developing into its own market place.