Transmuting $BANK into a Store of Value


On May 4, the Bankless DAO launched $BANK, a token designed to help facilitate coordination within the DAO and support its activities. At launch, $BANK was explicitly described as a “valueless token that simply represents participation in the bankless community.”

In the weeks post-launch the community has begun to think more expansively about $BANK, by asking the question: Is $BANK money? As outlined by @frogmonkee in his post, “Is $BANK Money?”:

  • Community members have begun to utilize $BANK as a medium of exchange by using it to fund bounties, making plans for the asset to be used to pay individuals and teams for providing services to the DAO, and sending $BANK tips to other community members
  • Because $BANK is being used to pay community members and other commerce-related activities it is becoming a unit of account
  • However, $BANK is not yet a store of value because there is no “value” associated with the asset (for example holders cannot earn revenues from DAO activities by holding or staking $BANK).

Clearly $BANK is taking a central role in the Bankless DAO community. But because it is not a store of value it cannot be reliably utilized as an asset that will be readily accepted by external partners, community members and others as a means of payment, or for commerce.

Today, after consultation with community members in the #tokenomics Discord channel, I’m presenting the “Transmuting $BANK into a Store of Value” initiative.

The purpose of this effort is to rapidly achieve community consensus on a model that will help $BANK be viewed/used as a store of value — and increase in value over time. This will help the DAO gain the significant economic power required to achieve its mission.

There are two questions associated with this initiative that the community should consider:

  1. Should a percentage of revenue generated by the DAO (when the DAO begins generating revenue, no matter how small) be utilized to increase the inherent value of the $BANK token?

  2. If the answer to question 1 is “yes”, what should be the strategy? (See below for two options).

Two Tokenomics Models: Staking or Buy, Burn and Hold

During initial discussions in the #tokenomics Discord channel, community members have been focused on two potential models for injecting additional value into the $BANK token (table below, click to enlarge).

Key Issues Raised in Conversations to Date

There has already been robust discussion on the #tokenomics Discord channel about this topic. Questions and conversations have been centered around the following topics. I present commonly discussed questions/issues and provide my responses below.

1. Is it too early to begin thinking about diverting a portion of the DAO’s Treasury toward increasing $BANK’s value given that the DAO has no significant revenues?

My Response: It’s never too early to make a decision about whether to utilize a portion of the DAO’s Treasury to support/boost $BANK’s inherent value. Doing so will ensure that conversations moving forward about DAO revenue utilization and allocation account for the fact that the community wants to utilize some of the DAO’s resources to support $BANK’s inherent value proposition and bolster its market valuation.

2. Do we need to have the DAO’s governance structure figured out before we make a decision about utilizing the DAO’s resources in this way?

My Response: Governance discussions are focused on how to support/reward/encourage DAO activities. Many of these proposals align around rewarding contributors or providing teams with $BANK. Ensuring that $BANK’s value is supported and bolstered by the DAO will make the token more valuable for contributors and participants and help the DAO achieve/support its mission.

3. Does it have to be staking OR Buy, Burn and Hold? What about both?

My Response: Yes, this is something I think the DAO should consider. @Eagle argued for this strategy in the Discord. I think his points are valid.

4. Governance tokens such as UNI appreciate in value and token holders do not receive earnings and tokens are not burned/bought. Why would investors/speculators/members not purchase $BANK for the opportunity to control an organization that could one day have billions in its Treasury? Also, people purchase non dividend-paying stocks of high-performing companies? Why wouldn’t they do the same with $BANK?

My Response: This is a good question. However, I would argue that buyers of tokens such as UNI and Compound are anticipating that one day there could be a distribution of rewards from the protocol to holders, or a buy and burn mechanic could be implemented. Crypto is most successful when economic incentives are aligned. Meaning protocols harness individuals’ needs and wants (generally the potential of direct economic benefit, e.g., receiving mined tokens, earning token rewards, yield, etc.) to drive collective behavior. Best to accept and harness rather than deny this reality.

Also, putting a plan in place early to deliver value/bolster the value of the $BANK token provides this unique DAO with a powerful means of driving its mission as it gains significant economic power becasue it made a clear commitment to enhancing and boosting the token’s value, which will drive others to utilize the token as a store of value.

This post can be viewed as a further refinement of the conversation here, led by @Icedcool (Profile - Icedcool - Bankless DAO) (Tokenomics of Bankless DAO), where a consensus is building that $BANK is a financial asset and a governance token.

Polls and Next Steps

To gather a signal on how the community feels about the potential strategy of explicitly bolstering and boosting the value of $BANK utilizing the DAO’s revenues, I have put together two polls (below).

Once we have a sense of how the community would like to proceed, and if community sentiment favors leveraging a portion of the DAO’s revenues in this way, I will put together a proposal on this subject that will then be utilized to inform Snapshot vote on this issue. I look forward to the conversation.

Utilize the DAO’s Revenues to Bolster the Value of $BANK?
  • Yes, Utilize a Percentage of the DAO’s Revenues to Bolster the Value of $BANK
  • No, Do Not Utilize a Percentage of the DAO’s Revenues to Bolster the Value of $BANK

0 voters

The below poll is for individuals who voted “yes” above.

How Should the DAO’s Revenue Be Used to Bolster $BANK’s Value?
  • Use a Portion of the DAO’s Revenues to Buy and Burn $BANK (A Portion of Purchased $BANK Would be Retained by the DAO)
  • Create a Rewards Program Where $BANK Stakers Receive Token Rewards from DAO Revenue
  • I Support Both Strategies
  • I Support a Different Strategy (Please Describe in the Comments)

0 voters

1 Like

A few questions about the staking method.

You say BANK holders but by extension the treasury too, is this correct?

Then staking earnings by the treasury should stay in the treasury and used to fund the guilds and projects?

So the other BANK holders that stake then they benefit directly by their own earnings only?

The idea is that a percentage of on-chain revenue coming into the DAO treasury would be utilized for either providing token rewards or for buying back $BANK from the open market.

For example, in the recent MetaFactory sale, the DAO earned ~$50,000?

In this instance, we could divert 20% of revenues from that activity for either staking rewards or buy and burn. If they were delivered as staking rewards $10,000 of $ROBOT would be converted to DAI/ETH and delivered to stakers.

Guilds and projects would be funded with $BANK from the Treasury.


Then the 80% of revenue stays in the treasury?

To be honest I like the whole thing. But let’s hear everyone’s opinions.


The percentage used for staking/buy/hold would be determined by governance. But I anticipate a good amount would stay in the Treasury


Check my post here. I am feeling uneasy about the direct tie from revenue to BANK.


Thanks for chiming in.

I’m explcitly on the side of creating inherent value for $BANK outside of it being viewed as a “membership” or “social token,” which while an admirable goal, will not provide the level of economic firepower I believe the DAO needs to excel at its mission.

I’ll leave the SWAG Network market valuation chart here to illustrate just how much the market values “social” tokens (i.e., not very much):


Swagg token was just an example. They only have 135 holders. As far as I can tell, SWAGG never got the momentum to get off the ground.

will not provide the level of economic firepower I believe the DAO needs to excel at its mission.

What type of economic firepower does BANK need to have? I don’t view BANK as a security. We can still tie it to value, but through subsidies (early access, discounted rates). That’s also a good way to bring BANK back into the treasury instead of directly buying it from the market (Yearn’s BABY model).


Economic firepower = higher $BANK valuation, which enables the DAO to fund more initiatives, diversify the Treasury to bolster its economic position, etc.

So, in my mind a token that whose value is bolstered by a direct, measurable metric: i.e., the DAO has XX in the Treasury and a portion of those funds are being used to deliver value that drives the valuation of the $BANK token. Doing so will enable people to look objectively and understand that the DAO’s growing revenue is reflected in how it is driving the value of the $BANK token.

Creating a “social or membership token” is not valued by the market in the same way.

My personal preference is for the buy back, burn and hold model, which based on the votes we have so far, people seem to be in support of.

I find the buy and bank strategy to be more appealing. It seems that this strategy would yield the most fruit when the DAO is active, it seems it would drive more engagement as it balances reward of the individual and the group.

So my behavior is like this… Work for the DAO to earn bank, invariably I’m earning bank on projects that generate revenue, therefore the value of bank horas up with revenue I was paid in bank to create?!

That is some virtuous economics right there!

1 Like

Really hard for me to vote on this one.
I know both strategies would accrue value for BANK in theory, therefore making the DAO have more value to invest/grant through its BANK treasury. But at the same time I don’t like the idea of the DAO’s earned money going away in dividends or buybacks. It sounds like a waste in a way?
Especially at that point in time when on the one hand we have no idea what those on chain cash flows will be, how regular they will be, and on the other we have no idea how much funds and what type of funds we will need for ambitious projects from the guilds, short and mid term. Maybe it’s an egg and chicken problem I’m describing, but in a startup (which is what I say we are at this stage) you don’t start taking dividends or paying founders before a looong time, not to mention buybacks which in my mind are just an economic abberation that happens when organizations don’t have anything ambitious anymore to bring to the world.
The UNI token situation is really appealing: the community knows they can switch on revenues for the token holders when they collectively decide for it, but so far they don’t seem to see the point, which could be a reason why the protocol is so successful and attracts LPs like no other. And this success drives the value of the token, making it possible to launch grant programs using the UNI token as money. So maybe we could just make it clear that at some point there could be some direct revenue/treasury allocation for the BANK token, but that for the DAO to be successful, the funds we have must be used (spent/invested) by the DAO and not spent on buybacks or given as dividends. Give the option but not activating it. While at the same time finding other ways to make it valuable as well (a more social side, give more perks than just membership, explore new territory as we are an off-chain DAO)


Some thoughts, hopefully decently articulated:

1:The incentive stack (who is getting paid)
Buy and burn Pays LPs but nobody else (denominated in Eth)
Staking (in the current form) Pays some holders, and not others. (denominated in token x)
Staking (as added below) Pays those willing to fund the treasury with skin in the game. (denominated in bank. Utilizes our most abundant resource at this time as working capital)

2:The implementation of multiple strategies:
The main pro: we get multiple benefits
The main con: we have more maintenance overhead
Ultimately, I’d like to see all 3 methods implemented to one degree or another, and it becomes a question of which comes first. Liquidity is what the Dao needs right now to function at peak efficiency, and so I’d like to see that prioritized first. Staking is likely going to require more development, and should probably be done next. The easiest of the two staking mechanisms should go up first IMO, which is probably the Eth denominated return.

If all 3 methods are implemented, then the weight of rewards can potentially be continuously governed, allowing the Dao to respond to it’s current fiscal situation rapidly.

I would like to see a strategy implemented as follows:
Assets: Non Eth & Non Bank treasury holdings.
New revenue: Income to the treasury during a calendar month
Accrued Revenue: Eth remaining in the treasury after a calendar month has ended and conversions have taken place

Assets can be converted when needed into New revenue, allowing the treasury to diversify exposure with minimal downward pressure on value of partner/held tokens

Staking $bank - 25% of new revenue is converted monthly to Eth and is released over the course of the month proportionally to Bank Stakers

Buy, Burn and Hold- For every 10 Eth the treasury accrues, 1 Eth is used to Buy and burn, and 1 Eth is used for Buy and hold. ( I would personally rather see this rolled into buyback and market make instead, mainly because I want to encourage wider Dao membership, and with a min threshold of 35k burning tokens would limit members increasingly over time)

Buyback and Market make- For every 10 Eth the treasury accrues, 3 Eth is supplied with Bank from the treasury as liquidity. (This earns fees, deepens token liquidity, creates a holder of last resort, and creates a deep treasury presence in case of black swan events as an emergency resource)

Staking Yield- 1 Mil bank per month is set aside for distribution to yield stakers.
We create a staking interface that allows people to get into a particular yield farm smoothly, but instead of being paid fully in the Yield token, 50% goes to the treasury, and 50% they keep. In return they receive a portion of the 1Mil Bank rewards.
(This one is going to be the hardest to implement, but will potentially be the most lucrative for on chain revenue the Dao has seen. I also really simplified the explanation and arbitrarily chose the split to illustrate the versatility of the mechanism)


Thanks. As I outlined above, my feeling is that answering the basic question of whether revenue from the DAO should be utilized to drive $BANK’s value is not something that needs to wait.

Also, the amount of revenue dedicated toward staking/buyback/burn, etc. would not be 100% of the DAO’s revenues. As @AboveAverageJoe outlined above, the mechanism would be that only a portion of the revenue would be dedicated for the purpose of driving $BANK’s value and liquidity (which I agree with him on).


I like all of these options.

I think giving this a few more days to gather votes and input is a good idea. It looks like the majority of voters are in favor of some type of $BANK value support/accrual scheme. The devil will be in the details.

What I’d like to propose as a next step (once we receive more input and votes) is to create a formal proposal (to be used for a Snapshot vote) with one question:

-Should a percentage of the DAO’s revenues be allocated toward driving/supporting the value/liquidity of $BANK? If so, we would do one or more of the following:

  1. Implement a staking program for $BANK holders to receive a share of DAO revenue

  2. Implement a buy-back/hold/market make strategy

If “yes” then a squad with in the DAO would be approved to determine the specifics of the revenue allocation scheme in terms of developing smart contracts, etc. and reporting back to the community on the decided-upon strategy and programmatic approach, with a deadline for developing the needed technical infrastructure.


For me the Assets should be all assets in the treasury regardless of the denomination. Also all new revenue is part of the assets.
Accrued revenue in my opinion is any sales made in the period but haven’t been paid into the treasury. For example, imagine the Metafactory drop has taken place in May but you actually receive the money in June. You accrue for this in May. I mean this is good for tax purposes or forecats… but probably not that important right now.
Maybe what you call Accrued revenue we can call it consolidated revenue??

Just some thoughts.


If we’re going to tie any revenue streams to $BANK, I like what @fifilechien said:

So maybe we could just make it clear that at some point there could be some direct revenue/treasury allocation for the BANK token, but that for the DAO to be successful, the funds we have must be used (spent/invested) by the DAO and not spent on buybacks or given as dividends. Give the option but not activating it.

In that this would be a switch we can turn on at some point.

But still, on a whole, I prefer the use of BANK as a community social token. I think I’m okay with the buy back and market make method.


The main reason I made the distinction is the way that the contracts would interact would be simplest to implement this way. In my mind it’s only a technical distinction, not a material one.

I don’t mind the terms changing, I just wanted to make sure that people understood what I meant when using those terms.


I see Buyback and MM as investment into liquidity which has a tertiary value accrual effect.
Limited in utility later on, but early it has a lot of power to bring to the table. For one, The Dao isn’t going to be as put off by Impermanent loss because that isn’t the objective of the funds.

I see Staking yield as a powerful early bootstrapping and partnership mechanism that rewards making sure the greatest immediate Dao need is met: early solvency.
(by limiting what’s put into this method we can reach an equilibrium with the desired income of the Dao until bootstrapping is complete.

Staking Bank and Buy, burn, hold feel like inferior models to me, and I’d easily let them go to keep the other two.

I love the idea of making Staking bank a switch that can be flipped down the road though.

1 Like

I’m torn on this. I think there is room to explore exactly what “value” means in the context of Bankless and of cultural DAOs in general. I’m not sure I want speculators interested in $BANK.

Uniswap is automated and runs off commissions. It has more-or-less predictable revenues and a lot of cash flow, so UNI is easier to value and is better suited to be an investment, or a trade. Bankless can’t be held to the same model, because it will have different revenue sources, they are liable to be irregular, and they aren’t automated. Bankless could have some passive cashflows if it held copyright materials earning royalties, but mainly I see revenue coming from active business ventures (e.g. merch sales) and the fruits of the labor of DAO members.

The value accrued to Bankless won’t ever be the same as with Uniswap, but will be more intangible by its very nature–knowledge and advice, recommendations, strategies, culture, etc. That feels a little weird to be the subject of financial speculation.

All that said, there is a steady cash flow from subscribers, and we all like to get treated to a first-mover advantage, so part of me would love the idea of the DAO helping my $BANK appreciate a little more over time.

1 Like

This isn’t accurate actually:

For example, the DAO will likely receive income, in an automated fashion, from the BED Index.

Also, the Analysis team is working on some interesting products that would be payable in $BANK or other cryptocurriences.

So, it will be pretty easy over time to look at the different cash flows of the DAO and estimate what they might look like in a year or so.

As for speculators, people love to hate them. But, I argue that they play an important role in crypto economics and help to bolster the valuation of tokens. What will happen is that speculators will look at the DAO’s cash flows and see how much value is being diverted to support $BANK’s valuation and liquidity and make a determination as to whether they will invest.

Once they invest, then $BANK’s valuation will rise, and the DAO will become even more able to pursue its mission (it will have more financial resources, and attract talent, etc. over time). Economic power = impact. We shouldn’t be afraid to increase and harness the DAO’s economic power for the DAO’s objectives.

As I said above: