Context
Recently some DAOs came to us to discuss DAO to DAO swaps.
There has been a proposal on FRAX governance to do a FXS-ANGLE swap.
We have also had StakeDAO that proposed SDT-ANGLE swap, as well as LOBIS which proposed LOBIS-ANGLE swap.
The ANGLE tokens we could use for these swaps could be taken from the DAO Treasury.
Rationale
Before engaging in any swap, let me share some thoughts on the rationale for doing some swaps.
First, I think DAO to DAO swaps are an interesting way to gain voting power and influence in different protocols.
For instance Frax has a agEUR/FRAX gauge incentivized with FXS. Owning some FXS could be a way for the DAO to push for more weights on the gauge and hence more FXS rewards for agEUR holders.
The same goes for LOBIS. The protocol controls some CRV, FXS, and TOKE. Owning LOBIS tokens could help Angle have a say in the governance of these protocols: to vote for instance in Curve gauges. They may also add ANGLE bonds which’ll be a super interesting use case for ANGLE holders.
Last for StakeDAO, the SDT token is probably going to gain some influence in this protocol: Stake DAO has been building on top of Angle Protocol, this is a way to make sure that interests are alined between protocols and that Stake will keep adding value to Angle. SDT is also a token that generates revenue which could be used for the protocol.
Safeguards
Before doing any swap, it’s going to be important to check that the sell pressure from the swap is going to be null: protocols should do this to gain voting power and not to sell at a later time. I believe we should make sure the ANGLE tokens that are given are going to be locked (when that’s available)
We need to make sure that the protocols we exchange ANGLE tokens with are going to keep acting for the good of Angle. Let’s say a protocol starts accumulating some voting power on Angle, we want to make sure they’ll not be pushing for gauges that have no interest for the protocol and that serve their needs.
The risk of vampire attack is also present and should be kept in mind: Angle should be a decentralized protocol and we want to make sure that ANGLE holders (and later veANGLE holders) remain the real governors of the protocol and not another protocol doing it for its own interest.
Conclusion
This is just a post to present the thoughts around DAO to DAO swaps. I hope community will have some thoughts to share there too.
As the veANGLE model goes live, many more people will start gaining interest in Angle and want to own ANGLE tokens.
Each DAO to DAO swap should obviously be well calibrated with a fair price for both DAOs (like using a VWAP for a long period). My take would be to start with small amounts, see how it goes, before continuing with bigger amounts. Several swaps with the same DAO could be envisioned.
Snapshot votes will be posted before each DAO to DAO swap and community will end up deciding!
