Set aside 100k GHST from the DAO treasury to fund Aavegotchi backed loans on PWN
Summary/Objective
To set aside 100k GHST from Aavegotchi’s DAO Treasury to fund Aavegotchi backed loans on PWN. Doing this would reduce sell pressure from holders and provide them an alternative avenue to access liquidity from their assets during this bear market. PWN has partnered with the Gotchi Vault to maintain full utility of the vault-deposited Aavegotchi used as collateral
Solution
About PWN: PWN is a hub for peer-to-peer (P2P) loans backed by digital assets. PWN users can use any ERC-20, ERC-721 & ERC-1155 as collateral, with no risks of liquidation until the loan expires. There are no liquidations based on price on PWN due to the contracts not having any external dependencies like on-chain oracles. The protocol’s goal is to not create another unhealthy debt system in DeFi, and instead create a ‘healthy’ debt ecosystem that will help the economy.
This offering would be available for all Gotchi Vault users (>2500 gotchis and >4500 land parcels) and the use case would be the following:
Gotchi Vault users will first need to mint a nun-fungible ‘receipt token’ (ERC 1155) which they can use on PWN as collateral. This token represents their Aavegotchi. Additionally, Gotchi Vault has created a restriction whereby the user will not be able to withdraw their Aavegotchi from the Vault if the ‘receipt token’ has been minted and is not in their wallet
Next, Aavegotchi users can request a loan using their ‘receipt token’ as collateral (on app.pwn.xyz) where they will be able to specify the maturity date and the loan amount requested
Aavegotchi DAO treasury will set up an automated collection offer with the following terms for any Aavegotchi that gets listed on PWN. Note: This will only apply to single asset Aavegotchi offers and not bundles or other assets from within the ecosystem (for now).
a. Loan To Value: 25% using 400 GHST as “floor price” of gotchi
b. Maturity Date: 90 days
c. Interest Rate: 4%
The Aavegotchi holder will immediately get a loan offer from the DAO treasury as soon as they list their ‘receipt token’ on PWN. Once the loan offer is accepted, the Aaavegotchi holder will:
a. Accept the offer and only then will have to pay for gas fees
b. Not be able to remove their asset from the Gotchi Vault
c. Be able to pay back the loan prior to the maturity date with no early payment fees
d. Still have their aavegotchis petted, rented out and able to collect RF rewards.
Next Steps
Agree on the terms for the loans. Please provide feedback on the following
Loan To Value: Gotchi asset price 400 GHST, LTV 25% - users could borrow 100 GHST against each vault-deposited gotchi.
Maturity Date: Suggesting 90 days
Interest Rate: Suggesting 4% APR
Financial Impact to Aavegotchi DAO holders:
Total Gotchis in gotchivault.com: 2473 (as of November 11 2022)
Assumptions:
Percentage of Aavegotchis that would take out a loan: 25%
LTV of 25% using 400 GHST as “floor price” of gotchi
Maturity Date: 90 days
Interest Rate: 4%
Outcomes:
DAO yield: maximum of 4,000 GHST/year if all 100,000 GHST is borrowed and interest paid.
In the event the user does not repay the loan according to agreed upon terms, the DAO would receive the Gotchi Vault receipt token and would have full rights to the asset.
If there is significant borrowing interest, the DAO could increase the GHST allocation and also consider loans against parcels as collateral.
Thanks for the feedback. We look forward to hearing from the community
With all due respect I think DAO should not get involved and should not involve its funds in it.
If my understanding is correct the ability to use pwn loans would be exclusive to gotchis stored in the Vault. As you said the vault manages 2500 gotchis over almost 20K supply. So that’s 12.5% supply
To me the Vault should seek funding by itself and / or incentivize users to deposit GHST on PWN.
If the feature was available for any gotchis, it would be a different matter
GM,
Agree with @fifoooo
The same thought for me. If the feature is available to any gotchis it’s OK for DAO to fund 100k.
If it’s exclusively for the vault, I disagree, it’s too restrictive.
The benefit to the DAO treasury doesn’t seem worthwhile. You’re saying the revenue would be up to 4,000 GHST a year? The treasury already has 4,985,654 GHST.
I don’t think it’s in the best interest of the DAO to operate as a loan provider. Would there be any legal implications or conflicts of interest?
The sole focus of treasury spending should be the advancement of the Aavegotchi protocol.
The synergy between Aavegotchi, Gotchi Vault, and PwnDAO already speaks for itself. There’s likely many people within our community who are interested in providing loans. We should avoid stepping on their toes allow the market do its’ thing.
The 100k GHST can be used for any gotchi. The vault gotchis simply retain full utility and playability where standard gotchis will not be playable. Every single gotchi will benefit. Orium or other services can build a similar receipt token and partner with PWN if maintaining full gotchi function is a priority. Look forward to a sig prop from the PWN team over the next week.
With a proposal this significant I think it’s crucial we get more community input, further discuss potential implications, & weigh the pros and cons before rushing to sigprop.
I would personally be voting yes, but I see fifooos point.
Gotchivault + PWN is good advertising for our protocol, increasing utility of Aavegotchi NFTs.
The floor price of gotchis also need a little help.
The thing I am missing, what would DAO do with pawned avegotchis if loan is not met? I guess V2 is coming, so these gotchis could be GBMed in auction.
I guess there would have to be smart contract that would auto loan…i cant imagine directors approving every loan… i guess they would still initiate GBM auction, but it shouldnt be many gotchis.
I like the idea, even if it’s restrictive only for the vault. I think the vault helped to increase the DeFi aspect of the GHST. And so helping to develop the gotchi vault with the DAO fund seems good to me, also 100k ghst is not so much compared to our treasury.
Ok all apologies for misunderstanding, I thought for real only gotchis from the Vault could be used as collateral in PWN. But it leaves the vault with a significant advantage and DAO basically financing an incentive to use the vault is not something i would personally vote for.
Also nothing forbids PWN Dao from buying some GHST or borrow some on AAVE to bootstrap liquidity themselves.
We have been discussing PWN for weeks on DAO calls and they have been a recurring guest at hangouts. 100k GHST is enough for 1000 unique lending agreements. I’ve discussed with numerous gotchi holders who are interested (far in excess of the 1000 this would provide). The general hostility is so ridiculous. The PWN team has been interested in making this prop on their own. The Orium and Vault teams have been working to make a better product market fit by ensuring a path towards gotchis maintaining their utility. So many people in the DAO want to complain about builders and operate under these assumptions of evil stakeholders’ ulterior motives. It’s frustrating for this narrative to be propagated by “mods”. Let’s see where the votes end up and if they reflect the conversation here.
Fwiw Orium is launching a petting partnership but I do not support the use of DAO funds for the PWN proposal. I would support a much smaller number than 100k as a proof of concept and we can revisit in a few months once we have more data. Would 20k be too small to start with @stedari ?
I am not a fan of the DAO liquidating Gotchigang members. It doesn’t feel right especially for the proposed yield.
I’d sooner advocate for the Vault to raise some funds for this endeavor first and then come back to the DAO once we know it is worthwhile. 100k GHST is a lot to ask for an unproven biz model and could be better used imo
Who here complained about the tech? It’s friggn awesome! Separating ownership / IOU from functionality is more than useful. The Vault guys saw the opportunity for a match made in heaven with PWN, and executed on it. It’s great work!
The concerns that were raised here are of a completely different nature:
Why use DAO funds instead of Vault funds?
Why look for funding at all, instead of letting the market (i.e. private users) offer what they are comfortable with on an individual basis, instead of a fixed 100 GHST per Gotchi loan.
DAO liquidating DAO members seems wrong.
Anecdotal evidence of demand is just that, anecdotal. The compromise that @nofuturistic suggested, to start off with 20k and show that there is actual demand for this proposed one-fits-all DAO loan, seems like a sensible solution.
Lionel Richie would say hello! is it me you’re looking for?
given that im part of the mod team and one of the few that still comments on dao related topics.
The Vault has no funds. There is no VC, it was a 100% fair VLT distribution. It would be inappropriate to leverage vGHST to fund loans.
I don’t suspect there is adequate market liquidity to reach a broad variety of users. DAO funding would allow access for the entire community, not just gotchis worth over $50k.
This aversion to DAO liquidating is so strange. First off, there are no liquidations. You either default on your loan agreement or you repay it according to the terms. It is very against the ethos of web3 to gatekeep access to permissionless finance.
I’m aware of multiple community members who would take the entire 20k GHST loan themselves. It’s not a good look to go through a whole DAO process for one whale to take all the DAO debt and not allow the same access to the broader community. 100k GHST almost surely isn’t enough and is a 50% reduction from the initially discussed amount.
Look, all I’m trying to say is give this time for more discussion, that’s all. One thing is PWN being available for conversation & being a great partner opening up this new lending avenue for users, another is opening up the DAO treasury to something that community members are signaling for more discussion around, instead of the response being “go ahead and push this to sigprop.”.
I can see the utility around having funds appropriated for this measure and understand the pros of everything being said. There are strong merits to the proposal, but it doesn’t mean we don’t need to have more discussion around a big appropriation of funds & more nuanced discussion around the topic.
One that I would like more clarity over that would help me understand everything:
If there are no liquidations as you mention, what prevents people from borrowing with no intention of repaying? I get that the asset would retain more value than the debt drawed, but what happens to the liquidated assets in case of failed repayment? Does the DAO intend to sell them on the market to recoup liquid value, or sit on the NFTs?
Please don’t see this as an attempt to disparage your prop, I just feel more time/discussion could be needed here.
First off, I would like to say that it looks like the GotchiVault team have integrated with PWN to build a really useful service for the community, so great work on that.
Who retains custody of the receipt token during the loan period? Is it the borrower or PWN?
How much in fees does PWN take for facilitating these loans?
Who is the team behind PWN? Are they doxxed? What is their background? Are there any security risks where PWN could take custody of these gotchis or the GHST if it was to be provided by the DAO?
I do have a concern with using the DAO funds to incentivize depositing Gotchis into the Gotchi Vault. Especially because of the amount of voting power the Gotchi Vault smart contracts have accrued.
hello! is it me you’re looking for?