Proposal to close the GHST Bonding Curve and allocate Curve’s collateral


AavegotchiDAO was summoned as a 100% on-chain DAO in September 2020 via the deployment of the GHST Bonding Curve. This proposal is based on a diligent risk assessment of the Curve and concludes that there is a strong case for closing the GHST Bonding Curve and depegging GHST from DAI token

When Stablecoins aren’t Stable

“The Curve is forever” is a shorthand way of expressing how reliable GHST’s tokenomics have been up to this point. However, starting in 2022 turbulence in the macro crypto space has been growing, and our beloved bonding curve is potentially at risk of contagion.

While MakerDAO, the issuers of DAI, have delivered a stable stablecoin til this point (DAI has never had a significant depeg from the USD) there is no guarantee that such success will continue indefinitely. Recent red flags include an inability for MakerDAO to remove the GUSD vault (a stablecoin issued by the recently bankrupt Genesis), the “Endgame” plan to depeg DAI from USD, growing exposure to real-world-assets (RWA) fraught with counterparty risk, and a general overexposure to (and vulnerability of) the USDC stablecoin in the MakerDAO asset pool.

Even if one concludes that DAI’s risk is only low to moderate, we must soberly assess whether such risk tolerance is acceptable to our DAO. Today, I put forth that not only is any risk from DAI’s depeg unacceptable, but such risk is also entirely avoidable. AavegotchiDAO has matured to such an extent that it is increasingly apparent the GHST Bonding Curve has already outlived its initial purpose.

The Maturation of AavegotchiDAO

Operating as a continuous DAICO, The Curve provided a trustless way for AavegotchiDAO to bootstrap development funding and provide initial liquidity for the GHST/DAI pair. With nearly 20M DAI in the curve, there is sufficient funding to continue development and enable deep liquidity. We believe that the DAO has matured to a point where it can manage its own liquidity provision and funding, via such vehicles as the AavegotchiDAO Foundation and other elected task forces.

This can securely be done because AavegotchiDAO has proven itself trustworthy over a significant period of time. Evidence for such can be seen across a variety of metrics including a massive migration of GHST to Polygon Network, reliably high engagement on Snapshot, the organic formation of numerous task forces, and the passage of over 50 Aavegotchi Improvement Proposals (AGIPs) including the recent vote to form the AavegotchiDAO Foundation.

It is along this backdrop that I propose a vision for a post-curve GHST.


This proposal is for us to close the GHST Bonding Curve in a controlled, methodical way by following these steps:

  1. Pass an AGIP on Snapshot confirming AavegotchiDAO’s intention and terms.
  2. Migrate the required 8% of total GHST supply back to Ethereum so we can reach quorum in our Curve’s on-chain voting system (long established on Aragon contracts).
  3. Complete the Aragon-based vote. It is at this point the Curve will immediately close and any DAI collateral shall be transferred to all multisig wallets in accordance with the original Snapshot’s terms.*
  4. The Curve is dead, long live the GHST!
  • The AavegotchiDAO Foundation and Multisig must be setup before step 3 can happen.

Allocation of the Curve’s DAI

Turning off the Curve is an opportunity to secure significant funding for our ecosystem while dramatically simplifying GHST tokenomics.

So far, the DAI in the Curve’s contracts has only served one purpose: to provide liquidity for the creation and destruction of GHST tokens. After the Curve’s closure, whatever DAI remains in that contract will be freed to go to work on behalf of the Aavegotchi protocol.

There are three distinct wallets that make sense to manage a portion of this DAI:

  1. AavegotchiDAO Liquidity Provisions (20%)

20% of the Curve’s collateral should immediately be directed to a DAO managed multisig specifically tasked with deepening liquidity on an agreed upon platform to help prevent extreme volatility in the moments following the closure of the Curve. There needs to be one or more places for people to enter and exit GHST with healthy liquidity.

AavegotchiDAO will have to decide which platforms make the most sense to deploy on. I suggest that we consider creating a task force empowered to manage this liquidity while the decision of where to initially direct that liquidity could be signaled by the greater DAO at the same time. Examples include decentralized platforms like Quickswap and Uniswap but there is a case for traditional CEXs as well. In either case, Pixelcraft Studios can help to introduce AavegotchiDAO Foundation to trusted market makers or decision makers at the platforms being considered.

  1. AavegotchiDAO Foundation (40%)

The 9 members recently elected to sit on the AavegotchiDAO Foundation host the most obvious multisig wallet to receive and secure DAI on behalf of our DAO’s treasury.

Whether all the DAI stays there or transfers to other asset management specific wallets could be worked out in this forum or saved for separate votes. Still, a brief example may be decentralizing some of this 40% into other task forces or even yet-to be-created specific use case multisigs (long term holdings). Regardless of what wallets are responsible for securing the bags, risk diversification out of DAI exclusively makes a lot of sense given the backdrop of stable coin storm clouds and a fast moving regulatory environment.

  1. Pixelcraft Studios (40%)

Home of the Summoners of AavegotchiDAO, Pixelcraft Studios prides itself on being frugal and good stewards of the funds entrusted to it by the community.

Our vision for 2023 and beyond is clear – to make Aavegotchi a well-known brand in the NFT gaming industry, and beyond that, an IP recognized around the world.

We have always been quite conservative with our marketing budget, preferring less “sale” and more “ship”. But with big product launches coming this year, we believe it’s time to turn up the volume on marketing and ensure that Aavegotchi is part of the larger conversation. A portion of the curve funds will be used for this purpose.

Besides increasing our marketing spending, we will also double down on pursuing the best talent we can find in a very competitive hiring environment.

Finally, a portion of the funds will be diversified into fiat or gold to prepare for what we call the “crypto apocalypse scenario”, where multiple stablecoins depeg, Ethereum and Bitcoin sink to new depths, and the larger cryptosphere goes into a deep winter. No matter what happens in crypto, we want to ensure that the Aavegotchi IP stays alive.


If this proposal is found to have support, then it is logical that we proceed as quickly as reasonably possible to close the Curve.

That is why I suggest we designate February 2023 as “GHST Independence Month” and immediately begin the task of removing GHST’s reliance on the Curve. The process is actually quite straightforward.

Week 1
After a full week of discussion, I will publish a SigProp based on the feedback received in this forum. As usual, Pixelcraft Studios will refrain from voting in any Snapshot votes.

Week 2
Assuming the SigProp passes, we shall upgrade to CoreProp and proceed accordingly.

Week 3
This is the heavy lift, token holders will need to rally at least 8% of GHST back to Ethereum in order to vote on Aragon. Because the CoreProp would have passed, Pixelcraft Studios is able to contribute to this cause with the GHST on our balance sheet.

Week 4
The Aragon vote is passed, closing the curve. Pixelcraft Studios has already invested our solidity team’s resources into simulating the process to confirm how this process is to play out. Once the Curve closes, the funds will need to be directed in accordance with the term’s agreed upon in the CoreProp. The 20% Liquidity Provision would need to be the most time sensitive and need to be managed swiftly.

Close the Curve, Open the Chain

The closure of the GHST Bonding Curve marks the beginning of a new chapter for GHST token and our Aavegotchi protocol. With GHST’s utility soon expanding to secure its own supernet blockchain, I can think of no better time to take this bold step.

GHST will continue to serve as our governance token, ensuring Gotchichain validators will be aligned for the long term as AavegotchiDAO stakeholders. We should welcome this opportunity for new strategic partners to join us in what I metaphorically call GHST 2.0.

GHST has always served a dual mandate as an “eco-governance” token; our governance token but also a default currency for all things Aavegotchi. While that may continue to make sense for teams who prefer to accrue governance power, it makes less sense to continue to enforce this arrangement as a rule.

In August 2022, Moon kicked off the first formal discussion on turning off the GHST Bonding Curve (Turning off the GHST Bonding Curve). In it, Moon took time to highlight a potential flaw with GHST as a currency, in that its exclusive use adds friction to adoption of Aavegotchi games. In the initial post Moon states,

“[because of GHST prereq, people]… will never enter the broader Aavegotchi ecosystem either - no Gotchis, no Wearables, no Land, nothing. This means that the Curve doesn’t just decrease potential demand for GHST as a token, but the broader ecosystem as a whole. Very few people are willing to dive deeper into the Gotchiverse if GHST is unworthy of an investment anyways, the attention span of the average market participant is lower than that of a TikToker…”

Since GHST and the bonding curve were originally designed to underpin the ecosystem and maintain stability, turning off the Curve could lead to volatility in the valuation of Aavegotchi protocol assets. This is a challenge we should consider carefully.

It’s worth noting that a more volatile GHST token awaits us in the post-Curve world. It’s also established that GHST as a currency doesn’t always serve Aavegotchi adoption or Pixelcraft Studios’ operating costs. So this is a great time to revisit past and future utilities of GHST. I see:

  • Governance token (YES, stronger than ever)
  • Ecosystem token: (would likely be reduced if Curve is turned off)
  • Cryptocurrency (limited, case by case)
  • Gas token (soon with Gotchichain’s launch!)
  • Game token (can certainly be a great incentive, such as the recent Gotchiboard competition)


After two plus years of maturation, AavegotchiDAO is entirely capable of standing on its own with the GHST Bonding Curve having served its purpose well. Indeed, the argument that Aavegotchi’s success should not be reliant on any protocol outside of the Polygon Network itself, holds more water with each passing success.

Therefore, I propose a vote to shut down the Curve, effectively decoupling GHST from DAI, fixing its supply, and making it a free-floating token all while transparently distributing the Curve’s DAI to a variety of predetermined multisig wallets with predetermined allocations.

Thank you for your consideration and feedback.


What happens to the GHST on AAVE after curve is turned off? More specific:

  1. Will GHST stay listed on AAVE?
  2. Will loan parameters be changed on GHST?
  3. If delisted, what happens if you have “borrow” position of GHST?

I’ll kick off the counter proposals: if we do close the curve, give PC an amount of Dai equal to 1 year their operating budget from current Dai tap, and they can apply for more for 2024. Remaining Dai to be send in equal proportions to the DAO wallets mentioned in the original post.

Alternative, PC gets the 40% they’re asking for, but gives the DAO foundation a minority share of PC equity (to be determined upon review of PC financials)


Circulating GHST are not directly affected by the closing of the Curve. Supply simply caps. Any issues with Aave or other listings would not directly happen from this smart contract action.

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Seems to me that a reasonable starting point for a PC slush fund for discretionary spending be capped at an amount derived specifically from their $GHST holdings, ~15% of circulating supply.

Funds requested in excess of that should require the same deliverable and personnel mapping as ongoing DAO initiatives and projects as PC is otherwise already being funded by ongoing protocol demand/activity. If PC as a separate body operating as part of the Aavegotchi ecosystem cannot come up with this it makes sense to continue with ongoing frameworks for value distribution with continuing to leverage the community as a whole for ongoing building efforts.


I am proponent to abandon the CURVE, however not everybody will like it. It is essential as leaving gold standard by USA. Our economy is backed by DAI (US dollars), and when curve is cancelled, it is no more. Nobody knows what will happen to our ecosystem, and Aavegotchi investors carry all the risks. We don’t know if bull is back.

At the same time, we have great opportunity here, once in a lifetime really and, I think there is better and fairer distribution model we can do. Please keep reading.

Who own DAI in Curve?

DAI on the curve belongs to GHST holders, and also to Aavegotchi asset holders, as they traded their bought GHST for assets. We put DAI to curve and received GHST that fuels our economy.

To give 40% of DAI to PC is handover and everybody is donating. PC should earn their income.

How to distribute DAI?

My proposal is to distribute (airdrop) DAI to all wallets based on voting rights ratio. DAO and PC will get a nice chunk of DAI, as they are both big holders of GHST and some assets.

Part of DAI should go for liquidity providing. I would suggest 25%.

So 75% would be airdrop and 25% goes to liquidity providing.

Aavegotchi Bull Run:

If this proposal is voted for, depending on snapshot date, frenzy in assets buying will occur (arbitraging assets). Also GHST price on CURVE would go much higher before it would be cancelled; we could even double the DAI on Curve before it is disabled. We basically would give option to get “discount” for everything aavegotchi, and so marketing should go through the roof. We could do snapshot in past, but I think marketing will love snapshot in the future.

At the same time, we would have lots of liquidity on our hands, and could buy assets from weak hands, buy GHST, or initiate Haunt 3 / Land sale 3 (that’s how PC should be getting that DAI, not 40% handover)

Also we should address

  • Do we Airdrop for liquidity providers for alchemica on quickswap – GHST part (not part of voting powers)
  • Assets / GHST on Ethereum – do we airdrop them?
  • GHST on CEXes / other chains – how do we handle that?
  • I guess gotchivault would airdrop their vGHST holders, so we don’t have to care about that
  • Ability to decline / postpone own airdrop (taxes or other reasons)
  • Player rewards pool would have GHST and DAI, PC or DAO should decide what to do with this DAI.

Reasons to do this distribution model

  • We address the risk that holder are carrying by giving them some DAI
  • Most fair distribution model
  • We can do massive marketing push (once in a lifetime). We could make web 3 explode.
  • We can initiate new asset GBM (maybe Haunt 3 or Land sale 3) as holder have liquidity on hands.
  • All this will start Bull Run in aavegtochi, and timing is crucial. Everybody in web 3 will hear about us after that, and so we should have some gameplay ready (February 2023 too soon I think)

How should DAO vote look like:

  1. First vote to leave the curve (Yes / No)

  2. If voted YES, Second vote on distribution model we want to do

  3. After distribution model is chosen, third vote on parameters (for this % to airdrop / % to liquidity / Snapshot date)


What if the foundation releases the DAI monthly to Pixelcraft Studios like what happens with the tap today? This keeps PC Studios accountable to the DAO.


I like your idea, but I have to disagree with this statement. By trading away your GHST, you also trade away your claim to the DAI…that claim will transfer to the new owner, just like the GHST. It does not matter what you get in return, whether it is a Gotchi, a wearable, or any other ERC. None of them have a claim on that DAI. It only belongs to GHST holders. If you want to distribute it based on snapshot VP, your proposal would need a majority and quorum based on GHST VP alone (excluding other VP for that decision). Because if the majority of GHST VP is against it, you’d basically be taking their tokens without their consent.


I also agree with the closure, but when the curve is closed, how much will the total amount of ghst remain and what is its economic model? Have you considered it?

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What are we swapping the DAI to? If the point of this is really to GTFO DAI, then that step is part of the maneuver.


I personally also think it is too early to turn off the bonding curve in February.

What is going to be happening from now to February that is going the increase the demand for GHST?

A few concerns I have with the additional volatility that will come because of this decision:

  1. This will hurt Aavegotchi NFT holders, they are going to need to either get more comfortable with the volatility or be forced to cash out if they are not happy with the extra risk
  2. There will be so much extra risk for LPing with GHST now. What is going to happen to the size of our liquidity pools?
  3. Will GHST be delisted from AAVE or have it’s risk parameters changed due to the increase in volatility?

The curve has to close right away, and February is a good time to close.
Pay more attention to asset owners instead of diluting old asset owners with new assets. An asset is a liability if it has no ability to increase in value. This liability is what we owe the DAO and the PC, and when the liability becomes unattractive to participants, everything will collapse.
The forge model is very good. If new assets are released, you can refer to the forge model.Players who want to get H3 can kill the equivalent H1H2 to get H3. And give DAO and PC suitable ghst minted H3.

For the allocation of funds on the curve, I think it is very reasonable to get 40% PC. It’s time to unite and believe in the PC. The treasury is not short of money, what is lacking is good asset targets.

Stop the endless infighting, stop the endless over-issuance of assets. Unite to let the world see the power of aavegotchi innovation.


I agree with jarrod, I think it’s too early to turn off the bonding curve. There isn’t a plan in place. As a member of the DTF, we really only handled 50,000 GHST. Technically speaking, we did handle six-figures worth of GHST. To go from 5 figures to 7 or 8 figures is too much to ask for from the DAO. I think the Forge itself will be a good indicator of DAO management. Closing the curve prior to seeing what the Forge team can do is a big mistake. I do have a lot of faith, this just seems like we’re skipping steps.


Would it be an option to continuously lower the reserve ratio of the curve in order to de-risk on DAI and increase GHST volatility step by step?

I think a central point to highlight again, is the „emergency aspect“ (I remember it as a central part of the discussion last summer).
I would think it makes sense to have everything figured out:
to proceed as if we are shutting down the curve as soon as possible.

The result should be „having a switch“:
a working mechanism that can be employed immediately, no matter if its because of an emergency, or free deliberation.

The broad consensus seems to be, that – at some point – the curve will be switched of.
So, no matter when this will be exactly, every thought about this matter should aim for the goal, that the switch will work.
Is it somehow possible to model a „switching off“?
Should a proposal for switching of the curve could entail also the rules and proceedings of an „emergency-vote“?

I would like to point out problem connecting to abandoning the curve and thats GHST stability and how our economy works.

GHST is main denominator of bazzar / asset prices. Because GHST relative low market cap, price of GHST could be easily manipulated up or down. There was also few GHST manipulations / recently, where GHST exploded from 1 USD to 1.90 USD in God candle and that was with curve on, Maxicrouton was liquidated on aave, he can tell a story.

Do we keep listings in volatile token nominations? I think we will have to price assets in different token. Is it ETH? Is it MATIC? or is it USDC?

Lets agree, for sake of argument, we abandon GHST as medium of exchange.

Besides GHST as GAS token, which is coming in summer (maybe), what is the reason / utility to have GHST than? Why do we need GHST? We have alchemica as gaming token, we could make KEK gas token on gotchi chain.

With this in mind, i do not understand how GHST is going to capture the value of aavegotchi, shouldnt the value be connected to assets? and yet people betting on GHST… All of the treasure is GHST, besides DAI on curve, and i dont think the token is needed after curve is cancelled.

What Am I missing?

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Your point on DTF and DAO inexperience handling large sums is one of the main reasons why only 40% is proposed for DAO treasury. You dont have to put those DAI to work right away, just keep them secure until the DAO has better funding infra.

At the same time, PC is able to take the other 40% and immediately put those funds to work on behalf of GHST holders. We will be providing a more detailed budget for how those 40% would be invested/spent to make Aavegotchi far more visible than previous years. Will share link here when details are ready.


In that case, I think it’s a good idea as long as the % usable in a given year is budgeted appropriately. If we’re limiting the PC tap, we should limit any DAO “tap” to be consistent.

The forge idea is great. But the vast majority of outsiders will not forge. Doesn’t do much to expand the community. The remove curve allows more people to see GHST and join the game. Rather than adding complexity to increase the threshold for participation.
What I mean is that the remove of the curve and the forge go synchronously. The expanded community will bring more good ideas like forge to DAO,

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Gm fren,

Why don’t use LUSD, future GHO or LLAMMA Curve or another sur-collateralized and decentralized stablecoin ?