SDIP #8: Enable Stake DAO to build a position in the Lobis DAO
Summary
We are seeking approval from the community to enable Stake DAO to start building a position in the Lobis DAO, by minting/buying and staking LOBI tokens and supporting Lobis in being whitelisted on other protocols.
Motivation & Specification
One year ago, Curve revolutionized DeFi with their veCRV tokenomics, which enabled a fast and efficient decentralization of Curve, allowing users to lock their tokens long-term and benefit from CRV’s inflation.
Stake DAO has been among the first protocols to understand the Curve DAO value proposition and started building strategies that lock CRV to enable their users to benefit from boosted returns without individually locking CRV.
Since then the situation has changed, and a hostile protocol versus protocol situation has created threats of centralization for Curve. While the new Stake DAO architecture will increase the attractivity of locking CRV with Stake DAO, we still need to support any initiative to further decentralize the Curve ecosystem.
Lobis aims to solve the centralization issues Curve is experiencing by creating a reserve of governance tokens from protocols which use Curve-like tokenomics by offering bonds, in collaboration with Olympus DAO.
This basket of governance tokens will be managed by the Lobis community, which will ultimately decide how to allocate the votes between whitelisted protocols (i.e. in the context of CRV, between Yearn, Convex, and Stake DAO).
Being among the first to use the protocol, and being an early supporter of Lobis should allow Stake DAO to gain goodwill and influence in the Lobis (and Olympus) community and governance engine, and eventually benefit from future votes allocation.
Stake DAO would undertake the following strategic actions to sit at the Lobis governance table:
- Stake DAO to use part of its existing CRV treasury to mint LOBI through bonding.
- Stake DAO will stake the acquired LOBI to benefit from the competitive staking rewards.
- Stake DAO could potentially market buy LOBI with part of its reserves.
- Stake DAO will support Lobis by voting on the current Frax whitelisting proposals
For
- Stake DAO will gain goodwill and influence in Lobis’ community and participate in Lobis’ governance decisions.
- Stake DAO will keep its governance power over Curve and Frax as Lobis aims to allow voting on underlying protocols’ governance/gauge decisions.
- Stake DAO will benefit from being close to the Lobis community by attracting new users to the platform.
- Stake DAO will help Curve in this war against centralization, for the good of the whole ecosystem.
- Having Lobis’ support in the design of Stake DAO’s new architecture to create a long term partnership.
Against
- Opportunity cost to use the CRV in the treasury for the bonding mechanism and not for other purposes.
- Risk of not being awarded any CRV for locking on Stake DAO.
Given the timeline of Frax’s governance vote, this will exceptionally be an accelerated procedure: 24h debate + 24h voting.