BUILD Economic Proposal BEP-21

TL;DR:

- The DAO treasury and governance structure will be restructured from the existing Governor Bravo system to a hybrid system with core assets controlled by Governor Bravo with Gnosis Reality Module and operations assets controlled by a Gnosis Safe with Reality Module.

DAO Treasury & Governance Restructuring:

It is critical that we overhaul the existing governance structure (pursuant to item 2 of the recent roadmap) as there are aspects of the structure currently acting as an impediment to progress rather than facilitating progress. The existing DAO structure has the core treasury assets and the BUILD token minting controlled by a fork of Compound’s Governor Bravo module. This is considered the gold standard in terms of security and decentralization but is complex to operate and extremely expensive to use in practice. Additionally, there is a treasury Gnosis Safe multisig wallet controlled by core members from which operational expenses can be paid, and these expenses are legitimized by way of off-chain Snapshot votes, which by contrast are easy to spin up and are free. A diagram of the current DAO structure is shown below:

Existing BUILD DAO Treasury & Governance Structure
Proposed BUILD DAO Treasury & Governance Structure

Target Inflation Rate:

Until this point the BUILD DAO has taken an ad hoc approach to token inflation. The core team believe it would be advantageous to formally set a target inflation rate with the following aims:

BUILD DAO Fixed Inflation Models
BUILD DAO Tapering Inflation Model

BUILD DAO Treasury Allocation:

For a considerable proportion of 2021 the BUILD DAO has held an over-large proportion of its core assets in two Balancer pools. These have provided substantial liquidity to the market but have reduced the ability of the DAO to fund activities and forge meaningful partnerships. It is proposed that for 2022 the DAO reduces its contribution to these pools and instead looks to incentivize liquidity provision across a range of venues with the following aims:
- Incentivize Ecosystem liquidity provision

Next Steps:

The three key elements of BEP-21 will be put to a Snapshot vote at https://snapshot.org/#/build in the coming days to confirm informal consensus amongst the community. Subject to a successful Snapshot vote there will be a short delay as the revised Treasury & Governance model is implemented and then a subsequent series of formal votes on Governor Bravo to institute the revised policy on-chain. This series of votes will unfortunately be gas intensive so we will be offering a limited gas reimbursement programme to ensure the smooth on-chain implementation of consensus. Please keep an eye on our Discord Announcements channel and our Twitter account for more details.

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