The Previous proposal #694 “Sail With the Whale” requested deployment of 5 mil OSMO to seed 2 LST pools on White Whale DEX deployed on Osmosis chain. On top of the deployment of WW DEX onto Osmosis, other obligations from the Whale side included integration of OSMO LST’s into Migaloo ecosystem projects as well as further SC deployments and liquidity pools on Osmosis, as is consistent with the “Sail With The Whale” program.
Based on community feedback, we have given the first edition of the proposal a restructuring. The new version lowers the total ask from 5 mil to 3.5 mil Osmo, allows more flexibility for the deployed liquidity, decentralizes control of said liquidity, creates an exciting new DeFi product on Osmosis, and has a kill switch which can clawback the liquidity if necessary.
Revised terms :
Creation of a new DAO on Osmosis DAO DAO called SAIL DAO.
A. SAIL DAO will issue a total supply of 1,000,000,000 SAIL
tokens (updated)
a. OSMO CP will be given authorization to veto all votes by the DAO and authorization to clawback the liquidity at any time (updated)
b. 400,000,000 will be airdropped to OSMO stakers who vote on this prop
i. Airdrop to be distributed proportionally based on OSMO voting
amount i.e. 1 OSMO voted = x $SAIL, 50 OSMO voted = 50x $SAIL
ii. All voters will receive the airdrop, regardless of how they vote
b. 100,000,000 will be airdropped to the WHALE community (WHALE native stakers, LST holders, details tbd, subject to Sail DAO gov vote)
c. 500,000,000 will be retained in the DAO treasury
d. Total supply is capped, no new $SAIL tokens can be minted
OSMO CP will fund SAIL DAO treasury with 3.5 million OSMO
A. The Osmo will be sent directly from CP to the SAIL DAO treasury, liquidity will be
deployed from the SAIL DAO treasury through onchain governance, (an ops multi-sig wallet may be required to facilitate lp position deployment so as not to lose on slippage due to length of voting period. Said multi-sig would only handle 1 lp position at a time, then once liquidity is deployed into the pool at the proper ratio, all LP tokens and excess tokens to be sent back to the Sail DAO treasury)
Migaloo Foundation will execute an OTC deal with SAIL DAO – 10 mil WHALE for
100,000,000 SAIL tokens (leaving 400,000,000 SAIL remaining in the Sail DAO treasury)
White Whale DEX will deploy SC’s on Osmosis (.1% taker fee shared with OSMO stakers)
SAIL DAO will deploy and manage liquidity on White Whale DEX via decentralized
governance.
A. SAIL DAO will take the following Initial LP positions
a. 1.25 mil OSMO into each ampOSMO-OSMO and bOSMO-OSMO pools
b. WHALE-OSMO pool (5 mil WHALE paired against OSMO at market spot ratio)
c. After adequate price discovery (one month after token launch), a prop to
inject liquidity into a SAIL-OSMO or SAIL-WHALE pool can be proposed to the
SAIL DAO
B. WHALE ecosystem projects, or any project that wishes, can propose an OTC deal
and/or liquidity deployment with SAIL DAO, all decisions by $SAIL holders through
on-chain voting
C. Osmo CP can veto any prop or clawback
Treasury through a gov prop if necessary (kill switch)
Benefits:
More capital efficient – The original prop seeded 2 LST pools, while LST’s having deep liquidity is important, they are some of the least efficient pools out there, not always having high volume. By deploying liquidity in a wider variety of pools, this new structure will generate significantly more volume and fees for both OSMO and WHALE stakers, even with a lower ask, translating to more potential upside and incentive alignment for all parties.
Everyone has skin – In this structure both Osmosis and Whale communities will now have skin in the DAO. Ecosystem projects also will be required to allocate tokens for OTC deals with the DAO in order to qualify for liquidity.
Exciting new DeFi Experiment – While Liquidity DAO’s are becoming popular (i.e. MANTA DAO, etc…) this is a first for Osmosis governance, if successful it can be a very exciting and fruitful venture for both the Osmosis and Whale communities
VE tokenomic flywheel - the DAO introduces it’s own version of ve tokenomics, where users are able to direct OSMO liquidity by market buying $SAIL
Acquisition of Ecosystem – Effectively this prop aggregates the Migaloo ecosystem and establishes Osmosis as the default landing zone for liquidity and deployments outside of Migaloo itself, it also integrates the enthusiastic Whale community.
Risks:
OSMO exposure – By LP’ing some of the new and upcoming ecosystem projects launching on Migaloo, OSMO will have exposure to these volatile assets, which works both ways. This risk is limited by diversification and splitting/limiting OSMO liquidity between the newer assets, all of which decided at the discretion of the DAO
51% attack – attacker could market buy a sufficient amount of $SAIL to sway a malicious prop and divert funds. This risk is mitigated by the kill switch mechanism of the OSMO CP. The voting period for SAIL will be longer than the voting period for OSMO governance, so if a malicious prop is introduced, the OSMO community will have sufficient time to introduce a prop to vote it down.
Gaming Liquidity direction – a malicious actor could once again accumulate $SAIL and attempt to direct liquidity for personal gain. Again mitigated by kill switch.
Summary:
This proposal can be looked at a lot of different ways: It’s a liquidity injection, it’s an M&A deal, it’s a new project/DAO launch on Osmosis, it’s an airdrop, it’s a DeFi experiment. SAIL DAO could be a meaningful step forward in Osmosis quest to expand from an appchain to an Empire. We look forward to discussion and feedback.
One of the standout features of this proposal lies in its flexibility and commitment to community empowerment. By trimming the initial ask from 5 million to a more nimble 3.5 million Osmo, the proposal showcases a keen responsiveness to the diverse voices within the community. The birth of SAIL DAO takes this commitment a step further, ushering in an era of decentralized decision-making where every community member has a stake and a voice.
But this proposal isn’t satisfied with merely conforming to expectations—it’s a game-changer in the world of decentralized finance. SAIL DAO isn’t just a decentralized autonomous organization; it’s a thrilling DeFi experiment that injects a dose of excitement into Osmosis governance. The introduction of SAIL tokens adds a layer of dynamism, allowing the community not just to participate in governance but actively shape the trajectory of the platform.
Community engagement takes center stage with the proposal’s ingenious reward system. Picture this: a rain of 500 million SAIL tokens cascading down on OSMO stakers, creating a celebration of participation and governance. It’s not just about voting; it’s about rewarding the community for their active involvement.
An exciting OTC deal between Migaloo Foundation and SAIL DAO, coupled with White Whale DEX’s deployment of smart contracts on Osmosis, positions Osmosis as the epicenter of strategic crypto moves. It’s not just expansion; it’s a bold declaration of Osmosis as the default landing zone for liquidity and deployments.
Efficiency takes a front seat in this proposal, discarding the conventional two-pool strategy for a more dynamic approach. The injection of liquidity spans a wider variety of pools, creating a ripple effect of higher volume and fees for both OSMO and WHALE stakers. It’s not just about asking for less; it’s about making every staker a winner in the game.
Risk management is approached with flair, acknowledging potential pitfalls and conquering them with a robust strategy. The inclusion of a kill switch and the strategic holding of 1 billion dormant SAIL tokens in the Osmosis CP wallet showcase a proactive stance towards risk mitigation.
In essence, “Sail With the Whale” transcends the realm of a conventional proposal. It’s an epic narrative of adaptation, innovation, and community celebration—a showstopper in the decentralized finance space that invites everyone to buckle up for a DeFi adventure like never before. Get ready to sail into a new era with Osmosis!
The previous prop didn’t go through because the Osmosis community raised concerns and provided feedback which wasn’t then factored in, to revise the prop.
This version takes into account the feedback that was provided by the community… and so I’m strongly in support of this prop!
The cryptoverse is looking to the Cosmos to show an interchain path forward.
This proposal sees two different blockchains that some could view as competitors come together for the betterment of both ecosystem.
Leadership in both chains understand there is a win/win solution in working together as a rising tide lifts all boats.
The concerns of Osmosis community have been factored into this proposal, and the fortunes of both are rising again, let’s seize this opportunity to move forward in a new direction together!
First of all, thanks for taking the disappointment of the failed previous proposal so well. Incorporating a lot of the feedback and coming back with a renewed approach to make it more accessible, kudos!
I was first a bit sceptical on the introduction of SAIL when I saw it in the announcement at first. However, reading this it actually makes sense. The concept sounds cool, although I am not entirely sure how we can use CP funds to vote in a DAO? Does anyone has ever tried it to know for sure it works as intended? Seeing some confirmation on that field would make it a lot stronger imo
Also, the exposure from Migaloo DAO on SAIL will be relatively small, right? Just 5% of the total supply will be accessed by Migaloo itself?
How will that voting look like (just curious)? We know out of experience that when large amounts vote early on it has an effect on how the rest of the votes are cast. So some kind of gentlemens agreement that voting does not happen on the first or the last day (also a bad habit we have seen happening sadly) would also be good imo. I don’t want to go as far as hard-coding it, but sometimes a word is enough. In the end we are all here to make it successful and some level of trust is required for that as well.
Can you also elaborate a bit more on the part regarding the ecosystem projects who can do OTC deals with SAIL? That means they can acquire SAIL in exchange for their own asset? Or that new assets from the Whale ecosystem are “automatically” added to the set of pools included in this program?
Thanks for revising the previously failed proposal and including most of the community feedback into this new prop. It is much clearer written this time, easier to understand for retail users and the OSMO ask is much more reasonable this time.
Except of the issue on how to use Osmosis’ CP funds to vote on Sail Dao proposals respectively activate the kill switch as mentioned by @LeonoorsCryptoman I’m in full support of this revised prop.
Thanks for keeping an open mind. My reading of the proposal suggests the following responses.
“How can we use CP funds to vote in a Dao”. The Osmosis community controls 50% + 1$Sail and therefore has veto power. If a governance attack occurs on Sail, then a prop is proposed on Osmosis governance to vote the Osmosis community shares against the governance attack on Sail. The open time for Sail governance proposals will be several weeks longer than the Osmosis community, so the Osmosis community can respond. Similarly, if Osmosis community members don’t like a proposal on Sail (creating a LP with a dodgy token), a prop can be raised in Osmosis to vote to kill the Sail proposal. For most proposals, this will not be necessary and Sail governance can occur without Osmosis vetos.
paraphrase: “Gentleman’s agreement for WW Foundation not to vote shares early or late”. Seems like a reasonable ask that WW team could and should agree to.
“OTC deals with Sail”. All deals require Sail community approval: “all decisions by $SAIL holders through on-chain voting”. Any project including Whale Ecosystem projects may request OTC deal or liquidity injections, subject to the above mentioned Sail community governance.
IMO, this provides a flexible structure for Osmosis to experiment in Defi.
Hey ser, thanks for the response, let me address your q’s one at a time:
First, as far as the execution of voting from the CP, while this is not my area of expertise I can say that it is possible. my understanding is a smart contract execute message can be included into a gov prop that will then vote with the SAIL tokens automatically upon the passing of the prop. So for example, let’s say a malicious prop was introduced on SAIL, The OSMO community can introduce a proposal to “vote no on SAIL prop” with the execute message in the prop, which will execute once the prop passes.
In regardless to Migaloo Foundation Exposure of SAIL, yes by design the Migaloo Foundation will hold 5% of supply, and really 10% of the active supply if we assume the tokens in the OSMO CP are dormant unless there’s an emergency. So here’s the idea, while OSMO CP has veto power, the Migaloo Foundation will likely be the biggest single voter and thus have significant operational power. This is because the Migaloo Foundation will play an active role in onboarding new projects, facilitating OTC deals, etc… so it makes sense for them to have a strong vote, but by design there is a system of checks and balances as they can be overridden by the remaining SAIL holders or the OSMO CP if necessary.
In regards to who can do OTC deals with SAIL, the answer is any project can. The only listings that are included in this prop initially are the ampOSMO-OSMO, bOSMO-OSMO and WHALE-OSMO pools as stated in the prop. After that, no other project is automatically included. So that means each new project will have to broker it’s own deal with the SAIL DAO for liquidity on Osmosis, which will ultimately be decided by SAIL holders. They can be creative in what they propose i.e. airdrop to SAIL holders, etc… Applicants don’t even have to be projects building on Migaloo, it can be anyone, for example, LION DAO could propose and OTC deal and liquidity injection with SAIL DAO. The Migaloo Foundation will help incubate and negotiate the deals, especially at first, but as time goes on the hope would be that SAIL DAO members take on more active roles and it becomes more autonomous.
I think it’s fair for Migaloo Foundation to publicly commit to a ‘gentlemen’s agreement’ not to vote too early or too late. In most cases it will be clear from the start as to which way the Foundation is voting and they will likely announce whether or not they are in support of a deal, but there could be edge cases where a vote is uncertain, in any case the Migaloo Foundation will commit to not voting too early or late, or using any other tactics to manipulate the vote.
If it became the case where the Migaloo Foundation breaks good faith and becomes a malicious actor, the OSMO CP could use their veto tokens and vote to revoke all the liquidity from the DAO back to the OSMO CP.
Regarding the voting, I understand the way it works, but I am curious whether someone ever tested the principle. I would hate to find out later that the process works on paper but not in practice.
A spend of 3,5 million OSMO is a bit too much to play around with hahaha
(side note: I am in favour of this proposal, I just want to make sure that we can live up to the expectations as listed in the proposal draft)
I really like the spin that you guys put on this. It’s not what I expected but I think the outcome here will be pretty awesome and bring something unique to Osmosis (On top of the other interesting apps that will be integrated as part of this proposal).
Thank you for taking the community’s feedback into account and reducing the size of the OSMO spend + adding in some additional safeguards.
One main question:
Where will this DAO be hosted? Will it be on DAODAO, Enterprise, or will you guys be rolling a custom contract for this? It doesn’t matter to me either way for my vote, but the reason I ask is because I believe for DAODAO in particular, tokens need to be staked before a governance proposal starts or it won’t be eligible to vote on that proposal. If the community pool tokens aren’t staked at the time the proposal starts, they can’t vote to veto or stave off any governance attack on the DAO as intended.
That being the case, I agree with @LeonoorsCryptoman that we should be sure that the tokens will serve their intended purpose in the community pool. Maybe they’ll be staked somehow and sent to the community pool as staked tokens? Or a software upgrade can fork the tokens into the community pool? I don’t believe that the community pool has the ability to execute a contract staking transaction but I could be wrong.
I’m cautiously supportive of this proposal but it would be really helpful to get some clarity on this part of things before proceeding, just to be safe.
Maybe the killswitch can be tested on testnet first?
Hey @RoboMcGobo thanks for the positive feedback, as to your question, we plan on deploying the SAIL DAO via DAO DAO and we are co-ordinating with the team there to ensure smooth execution of the roll out. Since Osmosis just upgraded their governance module, you can stake tokens in a DAO on behalf of the CP, so that’s not a problem.
However, there’s more, with the newest release of DAO DAO that happened just today (v2.4.0) there is a veto function built-in. So we could just configure the Osmosis CP as the veteor, this would have the same effect as our kill switch , giving them ultimate veto power over the DAO, without overcomplicating the tokenomics. I’ll discuss with Osmo and Migaloo team first but I may update the prop to use the veto function instead of the 51% tokens in the CP, it seems to me to be a simpler solution. In any case, it is all very doable and has the same effect. I hope I answered your question.
Great addition by the DAO DAO folks. Thanks for walking me through this. Seems like both solutions would work fine, so whatever you all think is best will work for me.
Prop has been updated based on the latest upgrade of DAO DAO v2.4.0 released yesterday. OSMO CP can now be named as vetoer of SAIL DAO and be given clawback authz. This has the same effect of the tokenomics based ‘kill switch’ we included in the original version of the SAIL DAO prop i.e. giving the CP 50%+1 of supply, but these new features simplify the tokenomics of the DAO and the execution process. We are working closely with the DAO DAO team to ensure smooth deployment of the DAO and it’s mechanisms.
Very clean solution. I really like the “vetoer” rights.
That also make it unneeded to create more coins than needed. Now we can just stick to the required $SAIL needed as airdrop, not more than that.
As outlined in the prop, Sail DAO has 2 mechanisms that protect the Osmo community:
Veto power - Osmo gov module has been named vetoer of the DAO and can override any proposal it wished. The voting period for SAIL DAO is 7 days with an additional 1 day veto lock, ‘veto before passing’ has been enabled so the Osmo community only must initiate a prop to veto within 3 days of a malicious or unfavorable prop going live in order to have enough time to veto. Even if there is a chance they might want to veto the prop, Osmo community can initiate a veto prop within the 3 days and it goes to a vote, it doesn’t necessarily mean they will veto.
Clawback authorization - per the first prop of the DAO, the OSMO gov module (CP) has been granted authz to deposit from the Sail DAO treasury into the OSMO CP (only). This is the only function the CP can initiate, however it effectively equates to godmode over the DAO as it can revoke all liquidity from the DAO treasury.
Further, 10 million WHALE is being sent to the DAO treasury from the Migaloo Foundation Treasury for 100,000,000 SAIL tokens per the prop. Upon passing of the Sail DAO proposal and funding from the OSMO CP, the airdrop prop will be initiated on Sail DAO to drop 50% of supply (500 mil SAIL tokens) to all voters of the prop, regardless of how they vote.
Will leave this up for a few days before going on chain to give opportunity for everyone to inspect the DAO and ask any questions they might have.
Thank you for bringing this proposal to the chain in a revised format, this is a much cleared and frankly cooler rendition!
Some questions/comments
Will we see Ginkou/Racoon/NFT marketplace still launch on osmosis or join this proposal?
I would encourage you to also airdrop to the WHALE stakers on migaloo as that community will be important to create success for SAIL.
Have you thought about just using WHALE as the governance token for the SAIL DAO? Would be a lot more interesting for the Migaloo community and ensure better growth/alignment between the sail/whale projects.
Hello ser, these are some good questions, I’ll answer 1 by 1
Yes the launching and integration of Migaloo protocols and products on Osmosis is implied as a result of this deal. However we do not want to bog down this proposal with too many elements as it is complex already. This prop is focused on liquidity, which is essential for all these projects. Once the DAO is established, these projects will be able to broker their own deals with Sail DAO for liquidity and could include specifics of their deployment/integration into Osmosis as a part of the deal or requirement for said liquidity.
-Airdrop to WHALE stakers is a good idea to be honest. It is a tangible benefit to the WHALE community that will get them fired up and engaged in Sail DAO politics. Currently, 50% of Sail DAO is earmarked for the Osmo voters of this prop, so 500,000,000 SAIL tokens. They should be getting the lion’s share of the drop as they are providing the lion’s share of liquidity, I would be willing to carve out say 100,000,000 of these and drop them to WHALE stakers if the OSMO doesn’t have an issue with this.
-imo it doesn’t make sense to use WHALE as the gov token as that gives entire control of the DAO to the WHALE community. Since the Osmo community is providing the liquidity, they should have a strong say in how it is deployed, so the distribution is more aligned by creating the SAIL token.
