Refer to the linked tweet. SAIL DAO is essentially a 2 wallet multisig with a token at or going to zero.
Return the OSMO to the community pool.
Leave the bOSMO and ampOSMO deployed as they’re benefiting applications deployed on Osmosis.
Pull all other liquidity and return the OSMO to the community pool, along with the outstanding treasury that is owned by Osmosis.
End the nonsense.
Fully agreed. Get rid of these guys.
I dont agree with you!
I want to preface this by saying that I have nothing personal against the White Whale team. Building in this space is hard, and I know this team is not malicious and deeply care about their community. I do think that they are well-meaning actors that have just struggled with management of their treasury in various ways.
That said, I have to agree with this proposal. The SAIL DAO liquidity deployments have resulted in the injection of a lot of OSMO into circulation just by virtue of all of these pairings steadily trending toward 0 against OSMO. As an example, let’s look at the WHALE token itself.
The Sail DAO, as part of proposal A4, deployed 176k OSMO to be paired with 5m WHALE in a White Whale Dex pool. This was 6 months ago.
Since that time, WHALE has tanked in price against OSMO, resulting in OSMO being pulled from this pool and entering circulation (likely to be sold). The current OSMO in the pool stands at just 99k, marking a 76k OSMO loss for the community pool. This also assumes that no other parties have LPed in this pool, and I’m just not sure how to check that, so the loss could actually be larger than that.
Market conditions happen, and I get that. If that were all this was it’d be fine (even if not ideal). But the real reason that the WHALE token has been performing so poorly, especially lately, is because of mismanagement of funds by the Migaloo Foundation and its founders.
As detailed at great length by @Rarma , the migaloo foundation and one of its founders borrowed against WHALE on Kujira and were subsequently liquidated, leading to a liquidation cascade that tanked the price by 50% in one day.
For the full details, you can listen to the recorded space here: x.com
I have to point out that this is the 3rd time that the Migaloo Foundation has been responsible for the loss of WHALE tokens that have subsequently been dumped on the open market.
The first time, the Migaloo Foundation were tricked into giving over a bunch of WHALE to scammers posing as Kucoin listing agents:
The second time, the Foundation’s hot wallet was compromised, resulting in the loss of another 3m WHALE.
At this point, it’s pretty clear that the Osmosis community has handed control of a significant sum of community funds to actors that, while well meaning, are not equipped to safely manage them. It’s my belief that if we leave these funds where they are, they’ll slowly be bled out by either mismanagement, exploits, or just simply from counterparty liquidity that trends to 0.
As Rarma mentions, I think it makes sense to maintain the LST positions as they are for now. My one addition to this is that the positions should be returned to the community pool instead of remaining in the custody of the SAIL DAO. They can remain liquid staked.
But I do want to briefly touch on these positions, as I feel there’s a lot of uncertainty and potential danger surrounding these positions that could be mitigated by the LSPs moving forward.
As a caveat, and as I’m sure the replyguys will point out, I work for Stride, technically a competitor to these liquid staking protocols (though I don’t personally view ampOSMO or bOSMO as competitive products given they’re not marketed nor used in the same way that stOSMO is).
ampOSMO
As has been the case in the past, the ampOSMO / OSMO pool gets $0 in daily volume, and has done nearly every day since the product launched. The Eris team doesn’t market the product, and has made no attempts to actually build utility for the ampOSMO token.
The integration doesn’t really bring any value to Osmosis, but is not actively harmful either, so I don’t see a problem with keeping this position open.
However, Eris’s delegations are very concentrated. They only delegate to 5 validators, with the overwhelming majority of tokens delegated to the top two, and one of them is White Whale.
If either of these validators were to get slashed, the Osmosis community would lose a significant sum of its OSMO and the LST would lose value against OSMO, adding more OSMO to circulation. This is very easily fixable by simply spreading out delegations across more validators. I’d encourage Eris to do so to help keep the funds that they’ve been entrusted by the community safe.
bOSMO / OSMO
The Backbone Labs team are the team behind the Mad Scientists NFTs, which have been an objective success as they’re now the 3rd largest NFT on the Stargaze marketplace. They’ve brought real value to Osmosis and frankly have earned the liquidity the Osmosis community has given to them. I’ve really enjoyed watching the things this team has done and am excited to see what they do in the future.
My only note here is again with respect to delegations. bOSMO only delegates to 3 validators. One of which, again, is White Whale, and another, NFTswitch, is actually the Backbone Labs team themselves.
Again, very easily fixable by simply spreading out delegations. This is a bit of an unnecessary risk that puts a damper on an otherwise great and unique liquid staking protocol.
I’m also going to frontrun this argument I expect to see from the replyguys:
Backbone wouldn’t be here without White Whale and SAIL DAO, so if you like them, you need to keep the SAIL DAO in place.
While possibly true as to the first point, that’s not how this works at all. We shouldn’t have to accept these funds going to 0 to retain 1 of 5 partners that actually successfully performed under this agreement. Osmosis shouldn’t be made to suffer the incompetence of others to keep one builder around.
I’d hope that Backbone would decide to stick around even if SAIL DAO was dissolved, but with the SAIL DAO funds continuing to trend toward 0 via counterparty liquidity, something really needs to be done unless the community is willing to just write this 2m OSMO off to 0.
Dude @RoboMcGobo you are being paid $ 300k+ a year to attack and shit post about your competition and extract community pools. You are slandering.
Take a step back and excuse yourself from the discussion and come back when Stride has returned the funds from Osmosis, dYdX, Cosmos Hub and rest.
Back to topic. @Rarma I understand that the SAIL price action is not as anyone would like, but I don’t understand the focus on the price action. Governance tokens should not have any price associated. It is a multi-sig plain and simple and this was the decision by Osmosis governance.
I have recommended multiple times to the Migaloo Foundation, that they and Osmosis Foundation should return SAIL pro-rata to the claim amount, to make it truely a DAO. The main issue of centralization as far as I remember was the low claim rate of the SAIL airdrop, which led to an overallocation to these two entities.
I think that the core tasks of Sail “DAO” have been executed as defined in the initial creation proposal, I would just say that the initially decided allocation is not good, which is also your main argumentation for “cancelling SAIL DAO” as far as I can understand it?
So I am suggesting to fixing the issue instead of just cancelling it.
I’m advocating for keeping the ampOSMO and bOSMO pools (and actually all other LP positions at least initially), so not sure how anything i’m saying is anticompetitive.
I think you probably need to take a step back and realize this proposal isnt about eris. It’s about White Whale and concerns surrounding mismanagement of funding. Regardless of what happens with the Sail Dao, the ampOSMO position will be kept in place. That’s fine, as I mentioned the ampOSMO positions aren’t actively harming the community pool. Though i’d be interested to hear from you why only 5 validators (4 after the first Monday in August) have delegations and why the bulk of them are to White Whale.
This proposal is more about ensuring that the community pool doesn’t suffer further losses by being paired with tokens that cause liquidity to bleed out.
Since it seems the gloves are off with this one, let’s call this post what it is: a few individuals who have been trying to shut down Sail DAO from the beginning and are looking for any reason they can find to that end.
Sail Dao is doing exactly what it was created to do.
Here is a quick list of projects/contracts that have been onboarded onto Osmosis as a direct result of Sail DAO.
When markets improve, deal flow and price action will pick back up, in the meantime Sail DAO isn’t harming anyone.
There is no legitimate reason to invoke the kill switch on Sail DAO, 6 months after it’s inception, and with most Cosmos projects being down only for the past 4 months.
Sail DAO will continue to create activity, volume, and value for the Osmo community for as long as the Osmo Community welcomes us.
Also, has any thought at all been given to the logistics and ripple effects of shutting down SAIL DAO? What will you do with the Sail Community, or those who market bought SAIL in the past 6 months? What about the other assets in the Sail treasury? There’s ROAR, LAB, WHALE, etc… do all of these go to the Osmosis CP? or back to their original treasuries? Have you conisdered the efffects on communities that already made deals with Sail, like Lion DAO and Mad Scientists? Wouldn’t their liquidity effectively be rugged by your proposal?
I’m open to discuss ideas about tweaking the distribution, however that is a separate issue then what is being discussed here, and frankly we should discuss it on a different forum page after these guys drop their crusade.
The positions that don’t directly contain borrowed OSMO from prop 708 will remain in the Sail DAO treasury. This includes all WHALE, SAIL, and the LPs containing a WHALE / x pair (except for the WHALE / OSMO pair).
The positions paired with OSMO will be moved back to the community pool and sit there LPed as normal until governance instructs otherwise. We could do a number of things with these positions depending on what the LION DAO, SAIL DAO, or Mad Scientists teams want to do with the LPs.
For the WHALE / OSMO position, it should probably be unwound to prevent any further losses by the Osmosis community pool, but that would be up to governance to decide in a subsequent proposal.
The on-chain version of this proposal is up on the forums now. I want to reiterate that no positions are being unwound as part of this proposal. Liquidity will remain in the White Whale DEX unless governance says otherwise in a future proposal.
All this does is change the custodian of the positions from SAIL DAO to the Osmosis community pool.
I never thought I’d say this, but I agree entirely with @0xPhilipp on this matter.
The attacks on SAIL Dao are getting old and tiresome. SAIL Dao has delivered on all commitments to the OSMO community and has plans to bring in more projects. The OSMO held within the Dao is not staked or extracting value; it remains 100% safe within the Dao. If there are concerns regarding distribution, we can address them, but this is uncalled for.
If you want to ensure that the funds are being appropriately used, I encourage you to buy some SAIL, participate actively, and contribute to making it even better. This is a beautiful buying opportunity. 
Attempting to withdraw or undermine the Dao in this manner is akin to stealing from all those who have invested in SAIL. Such actions would harm investors, and I am 100% against anything that would hurt them.
We need to protect our investors and uphold the integrity of the SAIL Dao and the broader OSMO community.
-Respectfully-
I will be backing the positions of @0xPhilipp @Sebastian on this matter. To bypass all Sail stakers and investors by going directly to Osmosis governance seems to undermine their sovereignty and safety as investors.
Sail DAO has delivered on all of it’s objectives to date. To cancel or shutter it now because of price action and overall industry wide negative sentiment seems to be an uninformed kneejerk reaction. Instead we should seek ways to bolster participation in governance and find a way to drive up partnerships and liquidity requests. This may happen naturally as market sentiment inevitably improves. I’d be happy to discuss these types of avenues, but am absolutely against completely ousting Sail DAO.
I firmly stand with @Sebastian @0xPhilipp
I disagree with this!
Since the withdrawal of funds from SAIL DAO will negatively affect the trust of the community, especially those who supported the project.
I have tweeted my thoughts as is my custom
Overall I do not believe that mismanaging Foundation funds on another chain has anything to do with the situation here on osmosis. I would also like to see sail recognized as a community that really does deliver.
Now, let me make clear that I don’t have opposition to reforming SAIL, and if the proposal were differently worded, I might actually roll with it.
My specific concern is making governance on osmosis look like yet another community pool that really can’t be trusted to support developers over time.
Good point here. So the best way out might be to not cut the funds, but make sure reforms are being done on safeguarding the management of the DAO.
This discussion has brought another item to the day of light, namely the side-functions of members of programs run under the Osmosis flag, which should be without any attack vector at all and that is currently not the case. So we need to have a discussion on that topic as well.
