PGM-41: Reimburse 20 ETH of the 110 ETH loan to Mithras Labs

Paladin Governance Management (PGM) PGM - Approved
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Summary: Sell part of our strategic assets in order to fund development of tokenomics and cross chain expansion of Quest via Mithras Labs for Q4-2023 by progressively paying back part of the ETH loan contracted in 2022.

Context:
Mithras Labs has been developing the Paladin Ecosystem (Paladin Lending, Boost / Pledge / Quest v1/v2 and Warlord) for close to 30 months and has supported the growth of the DAO namely by lending it 110 ETH in order to hold more liquidity.

As the protocol grows, and as Mithras Labs gets to the end of its raised funds, it is necessary that the DAO progressively is able to finance its development, namely by funding its main service provider: Mithras Labs.

Rationale:
This proposal is part of this transition, as Mithras will be claiming back part of its loan, when possible in order to fund operations. For this quarter we are asking the DAO to provide back 20ETH.

In order to process these amounts, the DAO will likely need to liquidate some unlocked strategic assets or remove part of its PoL. We are advising for the former as 40,000$ of CVX are currently sitting unlocked on the Locked Community MS.

More generally, this proposal is in line with what the DAO’s priority should be: financing its development, not farming assets (over 75% of the DAO revenue has been recycled into strategic assets over the past 12 months), the latter only being a means to an end.

These requested funds will be used for development costs (ie: dev wage). As a measure transparency, here is Mithras’ current level of expenses:

You can confirm that these expenses for 9 people are in line with a European tech company and far below the absurdity of a crypto project. As we grow closer to needing a full cover of our expenses by Paladin if we want to keep working full time on its development, we remain committed to keep reducing our burn will the market stays in lull.

Means:
20 ETH

Voting options:
Path A / Path B /… / Against / Abstain

Path A: Sell 29,000$ of CVX + 4000$ of USDC

Path B: Removed 58,000$ of PoL + 4000 USDC

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For context: PGM-6 : Transferability Event Strategy (Formerly PGP-6) - #26 by Figue

  • For
  • Against
  • Abstain
0 voters
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Im definitely pro returning the funds as you’ve requested (and selling the CVX vs removing the POL is fine, though I’m not against either choice really)

Just curious where the remaining ~€12k from your budget will come from?

Thanks for all your work!

1 Like
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Mithras raised slightly over 2.5M$ in 2021, which it still hasn’t burned entirely

1 Like
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Totally up for this proposal. Keeping Mithras Labs open must be one of the top priority for Paladin DAO so it is normal to reimburse the loan.

1 Like
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For … Path A (sell the assets).
I appreciate the transparency, but at the end of the day, it’s a loan. Mithras Labs should be able to request the repayment, regardless of what they will use the money for, no?

2 Likes
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Recalling the loan shouldn’t need to be done bia governance but the problem is the treasury doesnt have 20 eth available so we need a proposal to decide on how to source it.

1 Like
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Understood, so the focus of the proposal is how to source the amount (option A, option B or an alternative). It sounds like voting against this proposal shouldn’t really be an option.

2 Likes
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Gm, thanks for this clear proposal !

For additional context, it’s worth reminding that this uncollateralized loan was contracted without repayment deadlines, nor interests. This is why until now, the DAO prioritized the Mimo loan repayment which has a 1 year deadline, is over collateralized & costs 15% APR.

The Tokenmonics being voted on requires liquidity for projects/individuals interested to buy & lock some PAL, so removing POL now might add complexity there & reduce the DAO earnings.

Moreover, the CVX were never used to vote on PAL-ETH gauge,but instead, to earn bribes. Despite the recent proposal to deposit these on Warlord, I agree that selling CVX holdings seems the best option to source 20 ETH from the treasury right now.

All the protocol revenues & part of the farmed assets are converted to stables which help support the runaway, but as most is used to repay the current loans, remaining amounts are too low to sustain the full development.

For this reason, the main goals of increasing the strategic assets holdings were always to reduce the expenses in PAL for Quests & associated selling pressure (which we recently managed to do by voting with the vlAURA & should be able to do the same on Bunni with vlLIQ holdings) and improve the revenues with POL strategies optimization.

However these strategies (same as the protocol revenues) are indeed means to an end being the development & self sustained DAO treasury.

Mithras Labs has done a massive amount of work & supported the treasury strategy in the early days with an uncollateralized loan. Moreover, the $33K request is very reasonable considering the monthly expenses outlined in this post. Finally, this will also reduce the overall DAO liabilities.

I support this proposal, and more specifically Option A to get 20 ETH because CVX are unlocked & USDC can be used too (as $6K are available on the collateral multisig, which should cover the Mimo loan interests for a few months)

1 Like
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What is your plan to fund Mithras Labs in 2024? Are you going to ask for around 20 ETH each quarter? Are you planning to raise funds a second time?

2 Likes
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That’s a good question. Nothing can be for certain considering the current market.

The main value being from Paladin being dirrcted to the DAO, fundraising, if ever, is likelier via the DAO than the our DevCo.

We are exploring other plans, but the ideal plan would be to be fully funded by Paladin. This is only possible if we grow back to spring volumes.

2 Likes
12

Thank you this proposal ! I fnd it difficult to sell strategic assets almost at the bottom vs ETH but I guess there is no other solution.

Just one question from my side: Could the DAO collateralize its CVX to borrow ETH using a Money Market like SILO + use some of the 12 ETH in the collateral msig (0x8b) to pay Mithras ?

Not really sure if this can be done as I don’t have the full history about MIMO loan. If not I guess the best way is to go for path A !

2 Likes
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Proposal published on snapshot.

Quorum PGM-41: 663 868 votes

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