SubDAO Creation

Idea Discussion
1

Creating SubDAOs will support Liqwid Growth by expanding the community’s voice (everyone who holds LQ is the community). A SubDao is essentially a working group hyper-focused on a particular subject matter. They will research and propose the best options for the DAO to consider bringing up for on-chain votes.

If the community votes in favor of forming a new subDAO, the members who run that subDAO would receive a budget (paid in LQ from the DAO treasury) for their work, and the community will periodically vote on the validity of their work/if the subDAOs budget should be renewed.

Recent Catalyst Fund11 used a SubDAO. see proposal 47 Liqwid App and Discord
for more information.

This idea discussion is to brainstorm what SubDAOs might be needed and who might support the work in them.

The following are current ones that have been discussed in Forum and Discard. More should/could be added to the idea discussion. The list below is not exhaustive.

  • SubDao: Marketing and bringing the users from other chains and partnerships with Cardano protocols.
  • SubDao: Development of strategies to increase revenue to LQ holders.
  • SubDao: LQ Emissions and Liquidity reviews market data bi-weekly (interest accrued, interest repaid, utilization, TVL) and manages the protocol-owned on-chain liquidity of the LQ token.
  • SubDao: Risk Focused: make future recommendations on market and risk param updates
  • SubDao: Catalyst Fund reviews catalyst proposals to present to the Liqwid community to vote on.

Developing a framework of how SubDaos should operate. Concepts to explore, but not limited to, this list. How to join a SubDao(two pizza team, term limits), expected time commitment per month, budget and tracking, reporting to community cadence, mission statement, accountability/transparency to the community, SubDao leadership/governance structure, goal setting/measurement, KPIs, OKRs, roadmaps of features that need to occur before and/or after.

Many great examples have already been shared in the Forum and Discord. Let’s start linking and compiling them here.

Do you support the concept of SubDAOs to be explored?

  • Yes
  • No
  • Abstain- need more information
0 voters

Would you want to participate in a SubDao?

  • Yes
  • No
  • Maybe- need more information
0 voters
4 Likes
2

I was just reading some of the talk about this on discord. Just a quick question though. What is the benefit of a sub dao? Why couldn’t the same thing be done from the dao as it currently stands?

2 Likes
3

Hi Jim,

Great question; I am adding an edit to capture what I believe is the general concept. See below

The SubDao wouldn’t circumnavigate the current DAO as we know it but rather curate ideas from the community with members who are most passionate about a particular area of Liqwid’s protocol or ecosystem. The SubDao could then present their research as a Temperature Check, a Proposal in the Forum, or another format that the community deems preferred.

Honestly, your question presents the best gateway to start the discussion. Does the community want SubDaos, and if so, what framework should a SubDao follow, and what tasks would they perform?

3 Likes
4

Cheers mate,
I think its a great idea, it would certainly help to organise some structure around important discussions. So yes, I’m all for it.
It may help also with people who are passionate about different disscussions not feeling like they aren’t being heard, if topics and ideas are thrashed out in smaller sub groups prior to being presented to the larger DAO?

5 Likes
5

voted yes to both, volunteered for the catalyst proposal review which occurred prior to the mainnet vote for LQ holders and think this is a good step for Liqwid.

im also happy to participate in future SubDAO’s where I feel I can contribute

5 Likes
6

Hey Jim,

Another way of looking at SubDAOs is how legislatures around the world divide work between their members by creating committees on narrower topics who draft legislation before referring it to the larger body to vote on as a whole. SubDAOs are like those committees, where the DAO would be the whole congress, parliament, etc.

1 Like
7

I agree sub committees are a great way to hash out ideas before moving to voting.

8

Hi @ConkeyKong, could we change the “Liqwid Rewards” SubDAO to “LQ Emissions and Liquidity”.

It will still reviews market data bi-weekly (interest accrued, interest repaid, utilization, TVL) but also review and manage protocol owned on-chain liquidity of the LQ token.

I am in the process of writing a proposal for the creation of this LQ Emissions and Liquidity SubDAO and think it makes sense to align what I’m writing as a follow up to this initial proposal for the creation of various SubDAO’s.

2 Likes
9

Thanks mate. Yes I totally understand sub committees. I have served senior board positions many times in the past. I probably didn’t put enough thought into it before I spoke, haha.
But thanks you explained that well and upon reflection it makes perfect sense that we would have some kind of order to the development of the DAO.
I’m fascinated with governance and better, fairer government. It was one of the primary reasons I bought into Cardano in the first place. That and banking. Thats where my interest in Liqwid Finance came about.
I’m not so good at the nitty gritty of things, coding and devops hurt my brain. But I do have a intrest in the big picture. The application of this protocol in the real world at scale can not be understated. I see potential to provide self custodial business banking that could change the world. Sorry I’m rambling.
I will conclude by saying I’m keen to particpate in the development of the DAO, I might not be able to contribute to some of the more technical discussions but happy to put my hand up in other areas of thought if its helpful in any way.

10

SubDAOs can be thought of as tactical, scope-specific entities that work under the guise of the larger DAO. They will usually have a budget, a set of directives, and can be folded by the DAO if they aren’t doing what they should be. Another problem it helps solve is that usually the larger DAO has too many people to try and get a majority agreement on actions to take and considerations to include in their work. Lastly, depending on the type of work the subDAO is intended to do it could be targeting specialists as members for a given work area.

1 Like
11

@DC1 bumping this to get a feel from the team about forming a subDAO team for risk management. I know a subDAO team wouldn’t prevent what happened to Lenfi/Butane, but the mitigations put in place like the caps/floors on the oracles are required until a better oracle solution in Cardano comes to fruition. I think the major topic to have active discussions would be around parameters over the long haul. Given the recent proposal, metrics and measurements of the success of emissions reductions for LQ staking should be tracked to help understand is it getting the expected behaviors from users on the protocol.

Curious to hear what others think would be the main topics would be beyond:

  1. Oracle/Price control mitigations
  2. Emissions
  3. LP Incentives across DEXs
12

Yes to both, will help with Catalyst SubDAO and anywhere else I can. We definitely need a greater degree of organization for these and a better medium for interaction.

13

Hey @uscmigs I think yes we are certainly open to this. In many ways @FlorianVolery has assumed the role of lead risk analyst for the Liqwid DAO so I would definitely like to hear his feedback on what the formation of this subDAO should resemble.

14

Throwing my name in the ring :smirk:

15

@DC1 @uscmigs @ConkeyKong @itzDanny
Here are my summarized views on a Subdao regarding market risks and other topics:

Formation and Purpose:

As ConkeyKong mentioned, a “SubDAO is essentially a working group hyper-focused on a particular subject matter. They will research and propose the best options for the DAO to consider bringing up for on-chain votes.” Members of the SubDAO should be rational, seek the long-term interests of Liqwid, and provide added value and expertise.

Risk Framework Monitoring:

The primary task is to develop tools for risk management, detecting and preventing associated risks. Currently, all the data and models have already been provided in this forum, with the goal of removing any human intervention since most of the analysis is data-driven (e.g., max. LTV, liquidation threshold, etc.). Regarding risk appetite, Liqwid has been quite conservative, given that the Cardano ecosystem is growing and liquidity is “small” for the associated market.

Oracle/Price Control Mitigations:

The importance of oracle/price control mitigations has already been explained and why they should be implemented. This topic is crucial for Liqwid and is the focus of the entire core team.

Currently, I do not see the need to create a SubDAO for this. Anyone can come forward with detailed suggestions or proposals for different models, and I am always open to hearing other thoughts and discussing them. However, creating a SubDAO for formality’s sake without any real objectives and added value does not make sense. All the research work has already been done by myself (combining experiences from DeFi and TradFi), and I am still waiting for any counter-proposals.

General Thoughts on any SubDAO:

Except for the one related to Catalyst, which requires time and effort, with tasks that can be easily split between volunteers, I do not see the point of creating more SubDAOs today regarding these topics (Marketing, LQ Emissions and Liquidity, Development of Strategies).

Indeed, as long as Liqwid is not self-sufficient or is not covering the costs for the team or developing the ecosystem, implementing other things at the moment will just slow down the governance and leadership of the Core Team.

One important thing that has not yet been fully understood by many is that the Core Team has delivered tremendous work so far, from its founding in 2020-2021 to the delivery of a protocol in 2023. Our product remains unmatched, and I do not see real competition or challengers.

This achievement has been accomplished with minimal spending, and the Core Team needs to be rewarded for it. The initial funding was intended to ship version 1 of the protocol, which has exceeded expectations and has been utilized up to this point.The future budget also needs to be covered to keep developing Liqwid. People are missing the elephant in the room, and as I mentioned in previous posts, the reduction of LQ inflation was preparatory work for what is coming next.

As information, here is a market comparison of what it takes to launch a lending/borrowing protocol or similar. (Obviously every ecosystem/protocol has a different story, but it is a good indication to know where the benchmark is).

image
image3798×829 148 KB

1 Like
16

Thank you for sharing this tokenomics comparison of the market this is great to objectively measure how the Liqwid funding data compares to other lending/CDP protocols on Cadano and Ethereum.

I am interested to hear the community’s thoughts on this tokenomics analysis, no takes so far let’s see.

One point on the subDAO creation, I agree the DAO may not be mature enough to take on multiple subDAOs at once (especially ones with less well-defined work/expected work delivery). I agree Catalyst subDAO is a solid start and we should aim to improve its operation and use it as a form of an initial focus group (e.g. similar to the Catalyst fund0 focus group). I do think there are other subDAOs that can be formed, example Indigo recently launched a working group focused on community content creation. Similar to our Catalst subDAO I feel this could subDAO team can establish clear work expectations and operate in a sufficient way that generates value for the Liqwid ecosystem.

2 Likes
17

I think the SubDao idea is the right way to go. I would definitely be interested in participating in two of the current categories. That would be Marketing & Catalyst Fund.

1 Like