Temp Check 🔥 - Should Radicle use Enzyme as the DeFi OS to execute its treasury management strategy?

👩‍⚖️ Governance
3

Hi @Moss, @noturhandle from Butter here. We’re a DAO Finance project building backtesting and simulation tools to aid treasury governance.

I’m commenting on this proposal to provide some thoughts and feedback before it goes to a vote.

I think most DAOs, including Radicle, are in desperate need of a tool like Enzyme. DeFi offers a lot of potential for DAOs in terms of financing, instruments for risk management, and investment opportunities but without controls and safety rails to navigate the market, DAOs dare not venture far beyond Gnosis Safe and Uniswap. Enzyme appears to provide a controlled environment and a safe, easy-to-use interface for DAOs to access DeFi while solving the problems you describe:

  1. Fast, trustless delegation
  2. Enforcing risk policies

However, from my perspective, Radicle DAO has a number of prerequisites to establish before it can decide who to delegate to, what risk management policies to adopt, and how to enforce them, namely:

  1. Who defines the goals of the treasury and the strategy to achieve that goal?
  2. What is the treasury management strategy?

If Radicle agreed to this proposal today and deployed Enzyme tomorrow, what treasury management strategy would be executed? And, more importantly, by who?

Enzyme solves the How problem but the Who and What questions must be answered first. The above proposal alludes to this:

  • The management delegation could be optionally delegated to Avantgarde but it may well be assigned to one (or more) members of the newly formed Strategic Working Group.

  • The Radicle DAO could easily assign / revoke multiple delegations (e.g. different members of the Working Group) all of which could have different levels of trading permissions (i.e. flexible level of granularity)

The Radicle Treasury Management Strategy Brainstorm on August 8 opened a dialogue about the strategy, but was expectantly inconclusive.

As a result, I believe this proposal in its current form is premature but could be voted on after/with the following changes:

  1. Enzyme include an explicit proposal for Avantgarde to manage some portion of the treasury with a view to expanding the relationship over time
  2. Avantgarde include an explicit proposal to form part of the treasury working group
  3. Radicle submit a new proposal to tokenholders to establish a treasury working group or lead that can then engage Enzyme/Avantgarde on this proposal
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