Forum Link: https://forum.inverse.finance/t/q1-2024-inv-mint-proposal/369

Summary

Mint 75,000 INV tokens to the Inverse Finance DAO treasury to support ongoing DAO operations: xINV staking rewards, DOLA liquidity incentivization, INV liquidity incentivization, bonding, OTC swaps, and potential exploration of new liquidity mechanisms.

Background

Since INV+'s inception in January 2022, INV's tokenomics have been inflationary, with regular DAO proposals for minting. A core tenet of INV+ is safeguarding INV stakers from inflation through the dilution protection program. This program prioritizes allocating a larger share of Treasury INV to stakers over other uses like liquidity incentives and bonds, thereby protecting stakers from dilution at the expense of non-staked INV holders.

Recent developments have further enhanced our strategic approach:

• The DAO continues its accumulation and now holds a diverse portfolio of emission-controlling tokens, including VELO, AERO, THE, RAM, sdCRV, sdBAL, AURA, and LIQ. These tokens enable us to direct rewards to DOLA pools, reducing our reliance on INV emissions.
• The (very) recent introduction of yield-bearing stablecoin sDOLA (staked DOLA) marks a significant advancement in improving the cost-effectiveness of DOLA. We aim to integrate sDOLA across various protocols, including as collateral in lending markets and in decentralized AMM liquidity pools, among other applications.
• The implementation of the xy=k dbr auction system is a strategic move to reduce bad debt. This system facilitates the purchase of DBR using DOLA, directly contributing to the reduction of DOLA bad debt on Frontier and enhancing DBR liquidity in the market. Consequently, this initiative also aims to reduce dependence on INV incentivization by improving DOLA unit economics.

In the long term, these strategies aim for zero INV emissions needed to support DOLA.

Overview

This proposal aims to mint 75,000 INV for sustaining DAO operations over the next quarter. The proposed amount considers the current rate of INV inflation and the strategic need to bolster our Treasury reserves for both existing commitments and potential new initiatives. The allocation is as follows:

• xINV Staking Rewards: Allocate a significant portion of the minted INV to reward xINV holders, adhering to our dilution protection program. The allocation will be adjusted biweekly to reflect changes in INV expenditure.
• DOLA Liquidity Incentivization: Continue incentivizing liquidity providers in DOLA pools on decentralized exchanges, using a portion of the minted INV. This aligns with our strategy to maintain and enhance DOLA's market presence and stability.
• INV Liquidity Incentivization: Use a portion of the minted INV to incentivize liquidity in INV pools, mirroring the approach taken with DOLA.
• OTC Swaps: Allocate INV for OTC swaps to attract and engage new INV holders, enhancing our community and investor base.
• Bonding: Depending on market conditions, a portion of the minted INV might be used to support our bonding program, crucial for covering operational expenses and managing bad debt.
• Continued Exploration of New Liquidity Mechanisms: Allocate resources to investigate and potentially implement new liquidity strategies, such as TWAP sells or other innovative methods, to optimize our financial operations.

Proposed INV Supply Change

On-Chain Actions

• Mint 75,000 INV to the Inverse Finance DAO Treasury.
• Grant 40,000 INV allowance to the xINV contract for dilution protection xINV rewards.