[Grants/ Liquidity Council Application] - Nixo

Genesis User Onboarding Proposal

Fees for BSN - Activate Fees for LST Optimizer Product

# Allocate 1,500,000 BSN to Warden Quest to seed liquidity in BSN/wETH Bunni pool
# **Temperature Check**
This proposal was posted as [a Temperature Check](https://gov.blockswap.network/t/temp-check-allocate-bsn-to-warden-quest-to-seed-liquidity-in-bsn-weth-bunni-pool/398) in the Blockswap DAO forums and has recieved positive feedback on Discord.

# **Summary**

This proposal outlines a plan for allocating a competitive amount of BSN incentives to a Warden Quest in order to seed and grow BSN/WETH liquidity on Bunni. This can be done without trusting a 3rd party to deposit the BSN tokens into the Warden Quest by using Tally’s on-chain execution following a successful vote.

This proposal was inspired by previous conversations:

* [[Temperature Check] Allocate BSN incentives to attract and bootstrap liquidity on Bunni for a BSN/frxETH pool ](https://gov.blockswap.network/t/temperature-check-allocate-bsn-incentives-to-attract-and-bootstrap-liquidity-on-bunni-for-a-bsn-frxeth-pool/363)
* [Allocate BSN Incentives to seed initial liquidity on Bunni for BSN/ETH Pair ](https://gov.blockswap.network/t/allocate-bsn-incentives-to-seed-initial-liquidity-on-bunni-for-bsn-eth-pair/320)

# **Background**

Bunni.pro is a liquidity engine for Uniswap V3 where projects incentivize veLIT holders to vote on their gauges and direct native oLIT emissions to the LP token holders. Bunni is built on top of Uniswap v3, so the liquidity deposited on the platform is deposited to Univ3 on the backend. Deposited capital would be very efficient because Univ3 incorporates concentrated liquidity.

Bunni is relatively new and there isn’t much competition to bribe veLIT holders, so even lower value bribes will make Blockswap competitive and attract votes from veLIT holders, making BSN/WETH gauge a lucrative option to provide liquidity for.

The BSN/WETH gauge has been added to Bunni and a [Snapshot vote ](https://snapshot.org/#/timelessfi.eth/proposal/0x29b8b8a0f427ef831ae057947bd65959f3c6f39ef483e9de54d7b59ea8e63c51) to enable oLIT emissions on the gauge has passed.

Warden is a bribe marketplace made by Paladin to incentivize votes on Bunni gauges. The Paladin team has whitelisted BSN as a rewards token on veLIT Warden Quests.

# **Motivation**

Bunni.pro offers a solution for attracting liquidity for both BSN and dETH tokens that is efficient for DAOs and LPs. They also are planning cross chain gauges and collateralization partnerships for their LP tokens, opening the door for future growth.

# **Implementation**

The following steps must be taken for the Warden Quest to successfully grow liquidity in the BSN/wETH pool:

* Blockswap DAO votes on Tally to bribe veLIT holders via a Warden Quest
* Tally vote execution runs on-chain commands to approve the Warden QuestBoard contract to spend a number of the DAO’s BSN tokens, then call createQuest() on the QuestBoard.
* veLIT holders direct emissions to BSN/WETH gauge and collect BSN rewards on Warden.
* Liquidity providers deposit into the BSN/WETH pool and collect oLIT rewards on Bunni

# **Tally vote**

Using Tally’s on-chain execution, the Quest on Warden can be created and funded without trusting any 3rd party wallet with the BSN tokens. This Tally vote uses the following execution logic:

* 1: Approve veLIT QuestBoard contract to spend 1,560,000 BSN of the DAO’s tokens
* 2: Call the veLIT QuestBoard createQuest() function

# **1. approve()**

The ERC-20 approve() function is defined as:

```
approve(address spender, uint256 amount)

```

Input parameters for Tally vote:

* *spender:* veLIT QuestBoard contract (**0x602E94D90F34126f31444D001732a1974378D9FC**)
* *amount:* 1,500,000 with 18 decimals of precision (**1560000000000000000000000**)

# **2. createQuest()**

Warden’s createQuest() function is defined as:

```
createQuest(address gauge, address rewardToken, uint48 duration, uint256 objective, uint256 rewardPerVote, uint256 totalRewardsAmount, uint256 feeAmount)

```

Input parameters for Tally vote:

* *gauge:* address of the BSN/WETH gauge (**0x3f28ca531cb4767eebfd8974a7a782058c53af6a**)
* *rewardToken:* address of the BSN token (**0x534D1F5E617e0f72A6b06a04Aa599839AF776A5e**)
* *duration:* number of weeks the bribe should be offered (**10**)
* *objective:* the amount of veLIT votes per week to bribe (150,000 with 18 decimals of precision: **150000000000000000000000**)
* *rewardPerVote* amount of BSN rewarded per veLIT voted on the BSN/WETH gauge (1 with 18 decimals of precision: **1000000000000000000**)
* *totalRewardsAmount:* 1,500,000 (with 18 decimals of precision: **1500000000000000000000000**)
* *feeAmount:* must equal (totalRewardsAmount * platformFee) / 10000 (60,000 with 18 decimals of precision: **60000000000000000000000**)

# **Limitations**

The current platform fee on Warden’s veLIT QuestBoard is 400 basis points. This platform fee can be updated by the contract owner, and is necessary to calculate the feeAmount input parameter passed to createQuest()

```
feeAmount = totalRewardsAmount * platformFee / 10000

```

If a feeAmount is passed to createQuest() that does not satisfy the above criteria, then execution of the transaction is reverted. Since Tally cannot read or store returned function results, the feeAmount input parameter will become:

```
feeAmount = totalRewardsAmount * 400 / 10000

```

If the veLIT QuestBoard platformFee is updated between the creation and execution of the Tally vote, then execution will be reverted.

# **Contracts**

* Warden veLIT QuestBoard: 0x602E94D90F34126f31444D001732a1974378D9FC
* BSN/WETH Bunni Gauge: 0x3f28ca531cb4767eebfd8974a7a782058c53af6a
* BSN/WETH Bunni Pool: 0x25A73a5D7CE4feAC297fA433dAfb49E3DE869a95
* BSN Token: 0x534D1F5E617e0f72A6b06a04Aa599839AF776A5e
* BSN/WETH Uniswap v3 Pool: 0x2c32ebdc2ed3c790758fb4c09a64439237445e8a

# **Conclusion**

The BSN/WETH Uniswap V3 pool has only $11.27K in liquidity according to GeckoTerminal. Bribing veLIT holders to direct oLIT emissions to the BSN/WETH gauge will help to seed and grow liquidity that BSN desperately needs by rewarding liquidity providers with oLIT tokens. 150,000 BSN tokens per week would place BSN/WETH among the best paying gauges at [https://bunni.pro/velit ](https://bunni.pro/velit) for veLIT holders to vote on.

The DAO should allocate 1,500,000 BSN tokens to incentivize veLIT holders over 10 weeks to direct oLIT emissions to the BSN/WETH gauge. The community has expressed a positive outlook on the Temperature Check, and no objections have been raised. At the end of this trial period, pending success of attracting sufficient liquidity, the DAO can choose to extend the incentives program to foster healthy liquidity for the BSN/WETH pair.

# Allocate 1,500,000 BSN to Warden Quest to seed liquidity in BSN/wETH Bunni pool

# Efficient Frontier - BSN Market Making on Uniswap
# Efficient Frontier - BSN Market Making on Uniswap
**Authors**: Andrew Tu, Tim Freed, Zach Reingold, Raz Peleg

## Proposal Summary
Efficient Frontier is publishing this proposal to seek the Blockswap community’s approval for a market-making agreement. The proposal would entail the following:

- Authorize Efficient Frontier as an official Blockswap market maker.
- Transfer 25,000,000 BSN ($500,000 worth of BSN based on a BSN price of $0.02) to the Blockswap Liquidity Council. The Liquidity Council will sell 5,000,000 BSN ($100,000 worth of BSN) to ETH.
- The Liquidity Council will then transfer the BSN and ETH to Efficient Frontier as a loan for market-making services.
- Efficient Frontier will commit to providing liquidity in the Uniswap V3 pool.
- Efficient Frontier will either return the loaned amount at the end of the market-making period or purchase the tokens for pre-determined strike prices (detailed below).

## About Efficient Frontier
Efficient Frontier is a cryptocurrency algorithmic trading and market-making firm. We spun out of a traditional finance high-frequency trading firm in 2017 and have since grown to become one of the leading market makers in the cryptocurrency ecosystem. Our team is composed of traditional finance quants and traders, as well as experienced crypto-natives, all of whom share a passion for making cryptocurrency markets transparent and fair. As a designated market maker, we are proud to provide the highest standard of service and ethics in the industry.

## Services
**DeFi**: Efficient Frontier will provide liquidity to the Uniswap v3 pool for 18 months so that traders and users can also trade BSN on-chain with minimal slippage.

### Commercial Terms
#### Loan Terms
- Loan Terms: 20,000,000 BSN + $100,000 worth of ETH
- Explanation: EF will take out a loan from the Liquidity Council in BSN and ETH, which is ultimately only returned in BSN. If only part of the option is exercised, then the remaining loan shall be returned to the DAO.

#### Option Terms
- Option Terms: 18 Month Option
- Size: 25,000,000 BSN
- Strike and Explanation: Option to purchase BSN. At the end of the 18 month period, Efficient Frontier can exercise the option. The strike price is set at the price of the Uniswap v3 pool at the time of LPing into the pool.

### Additional Terms
- Service: DeFi Liquidity Provision
- Cost: Included with Option
- Explanation: Liquidity providing and rebalancing on Uniswap V3 pool. Efficient Frontier will initially seed an asymmetric pool with BSN on the sell-side. We will seek to rebalance this pool over time so that the pool is ultimately symmetric.
- Service: Onboarding, Strategic Advisory and Customer Success
- Cost: Included with Option
- Explanation: Includes Dedicated Account Manager, Telegram Support, 24/7 Monitoring, Reporting.

## Objective
To provide healthy liquidity for the BSN ecosystem on decentralized exchanges.

## Benefits
Liquidity is very important for traders and users to be able to properly buy and sell the BSN token. Our goal here is to make markets and provide liquidity to the Blockswap ecosystem so that people can easily and efficiently enter and exit their trades.

## Covered Exchanges and Pairs
**DeFi**: Efficient Frontier will create 1 pool on Uniswap v3. Additional pairs will be considered according to market conditions.

## Voting Options
- **Voting Yes**: Voting YES for this proposal would indicate that the above terms for market making SHOULD be approved and that BSN tokens should be lent to the Liquidity Council, who will then lend the tokens to Efficient Frontier. The wallet address of Efficient Frontier to receive the tokens is:
0xB9424Fa9Bc8c5524c38558146A1b864EA21124b0.
After receiving the BSN from the DAO, the Liquidity Council will sell 5,000,000 BSN ($100K based on a BSN price of $0.02) into ETH, which will be lent to Efficient Frontier as part of the loan. At the end of 18 months, Efficient Frontier shall have the option either to (i) return the loan in BSN or (ii) purchase the loan in whole or in part at the strike price. If the option is not exercised (and the Efficient Frontier chooses to return the loan), the BSN lent shall be returned to the Liquidity Council.
- **Voting No**: Voting NO would indicate that the above terms for market making SHOULD NOT be approved and that there should be no lending of BSN tokens to Efficient Frontier for market making.

## Conclusion
Market making is a key function to building efficient markets. Efficient Frontier proposes to provide liquidity for BSN on DeFi with a loan and option model, where we take a loan in the BSN token and receive an option to purchase this loan after the term ends. We look forward to answering any questions here and working together with the Blockswap DAO to provide liquidity to the BSN ecosystem.

## Efficient Frontier Warrants
- **Authority and Competence**: Efficient Frontier has the full right, power, and capacity to perform its obligations and provide the services under the offer and it shall exercise a degree of competence and professionalism which would reasonably be expected from a skilled and experienced provider engaged in the same type of business as Efficient Frontier.
- **No conflict**: Performing the market making services shall, under the offer, not breach any regulatory or contractual requirement governing Efficient Frontier is subject to.
- **No actions**: To Efficient Frontier’s knowledge, there is no action or threatened action against Efficient Frontier which would substantially impair its right to perform the market making services or adversely affect its financial condition.
- **Indemnification**: Efficient Frontier shall defend and hold harmless the DAO and DAO members from and against all third-party claims or actions, costs and expenses arising from or in connection with (a) any claims by third parties resulting from or in connection with the provision by Efficient Frontier of the market making Services, or (c) any breach by Efficient Frontier or its agents or sub-contractors of applicable laws or regulations. The indemnification shall be subject to the following conditions: (i) the party seeking indemnification shall notify Efficient Frontier in writing of the applicable claim, promptly after becoming aware of the claim, and (ii) the party seeking indemnification shall provide Efficient Frontier with the right to exclusively conduct the defense of such claim, and shall assist with such defense as may be reasonably requested by Efficient Frontier. In the event that any DAO members seek indemnification, they must appoint one representative with the full authority to represent them vis-à-vis Efficient Frontier with respect to such matter, and Efficient Frontier will be required to interact only with such representative.
- **Compliance**: Efficient Frontier shall have sole responsibility for complying with all legislative and regulatory requirements relating to the market making services and has the means, resources, and know-how to satisfy such requirements.


# Efficient Frontier - BSN Market Making on Uniswap

# Implement oSnap for Optimistic Governance
**Temperature Check**

This proposal was posted as [a Temperature Check](https://gov.blockswap.network/t/temperature-check-implementing-osnap-for-optimistic-governance-for-blockswap/478) in the Blockswap DAO forums and has received feedback on Discord.

**Summary:**

This proposal suggests integrating oSnap ([oSnap | Secured by UMA](https://uma.xyz/osnap)), an optimistic governance tool developed by UMA ([https://uma.xyz/ 1](https://uma.xyz/)), into the Blockswap DAO governance system. Integrating UMA’s oSnap module aims to decentralize and automate the onchain execution of governance decisions. oSnap streamlines onchain voting outcomes and allows DAO members to propose and execute Snapshot vote results, validated by UMA’s oracle.

**Motivation:**

The motivation for this proposal is to enhance Blockswap’s governance system by making it more efficient, secure, and decentralized.

Implementing oSnap will reduce reliance on multi-signature wallets, thereby promoting more direct community control. This approach aligns with the DAO’s guiding value of decentralization by reducing the need for intermediaries and giving more power to the token holders. Moreover, oSnap’s dispute mechanism provides an extra layer of security, ensuring that the outcomes of governance votes accurately reflect what was approved on Snapshot. Finally, the integration of oSnap is free and easy, making it a practical choice for enhancing Blockswap’s governance.

**Specification & Implementation:**

UMA’s oSnap is a tool for making onchain transactions based on offchain voting decisions. After the integration of oSnap, the flow works like this:

* A Snapshot proposal can include a transaction payload that is executable if the proposal is approved by the DAO.
* After a vote is completed, a bot verifies the Snapshot proposal (vote passed, meets minimum quorum/voting period, accurate voting strategy). For Snapshot proposals that pass the verification process, the bot posts a bond and proposes the transactions to be executed, which starts the challenge period (2 or 3 days).
* If no dispute arises about the proposal’s accuracy during the challenge period, the transactions are automatically executed by the bot.
* In case of a dispute, the proposal is not executed and needs to be re-proposed. UMA token holders will determine who was correct in the dispute, with the correct party rewarded from the opposing party’s bond.

Additional features of the bot that automates proposing and executing transactions are:

* Disputing proposals that do not meet the validation criteria.
* Paying the gas for the full transaction flow which saves DAO gas costs and avoids the DAO/community needing to post a bond for the duration of the challenge period.

The oSnap integration process is straightforward. We created a video to demonstrate how oSnap could be integrated in less than 1 minute (<https://www.youtube.com/watch?v=F7HcuI-oYsY>). The steps to integrate oSnap are:

* Deploy an oSnap module through the Zodiac app.
* Add oSnap to the Blockswap Snapshot space through the SafeSnap plug-in.

**Overall Cost:**

There are no fees associated with the implementation of oSnap. There are also no fees to use UMA’s oracle to verify oSnap requests. Therefore, the overall cost of implementation is zero. In fact, the DAO actually saves money since bots cover the gas cost of executing proposals onchain.

**Monitoring:**

In terms of the verification process, the UMA team has focused a lot of resources on providing robust monitoring:

* An automated proposal bot has been implemented that uses strict parameters to verify Snapshot proposals. The bot automates:
  * For Snapshot proposals that have passed verification, the bot automates the onchain proposal and execution steps to save DAOs gas costs and avoid the DAO needing to post a bond for the challenge period.
  * Disputing proposals that do not meet the validation criteria.
* Proposals go to the same closely monitored oracle system as Polymarket, Sherlock, Cozy, Across, and other oracle requests. Your DAO proposals will populate in UMA’s oracle dapp (<https://oracle.uma.xyz/>) making it easy for people to identify and dispute bad proposals. In practice, questionable Polymarket proposals tend to be disputed within 30 minutes, and those proposals are harder to evaluate than oSnap proposals.
* Your proposals will also be pulled into bot monitoring systems that members of our competitive disputer network have set up, and you can use our open source code to set up Slack, Discord, and PagerDuty alerts. Our internal monitoring utilizes Slack and PagerDuty notifications when transactions are proposed, executed, and disputed. Risk Labs is also notified when there are any admin changes to the oSnap module (rules, collateral, owner, etc.).
* When transactions are proposed, a Discord ticket is automatically created where a verification program made up of UMA community members completes a multi-step verification process that consists of:
  * Verifying the Snapshot proposal passed and follows the oSnap rules
  * The proposed transaction payload matches the Snapshot transaction payload included in the proposal
  * The intent of the transactions matches what is proposed (not interacting with a malicious contract, transaction payload values match the proposal, etc).

**Current Integrations:**

* Since its launch earlier this year, oSnap has been adopted by CoW DAO, Across, Connext, BarnBridge, ShapeShift, Layer2DAO, Buffer, Flashstake, +DAO, and several others to control their on-chain treasuries, securing roughly $90 million in value. oSnap is also being used by Lossless Protocol to secure their next generation of wrapped tokens.

**Proposal Execution:**

No transactions are included in this proposal because oSnap needs to be added by the Safe. Since transactions included in Tally are executed by the Governor contract, the Tenderly simulation and transactions below demonstrate the transactions that will be executed by the Safe if the proposal passes:

Tenderly Simulation: <https://dashboard.tenderly.co/public/safe/safe-apps/simulator/012b8fb1-5658-46be-800e-fcd8304b744b>

`{`

`  "version": "1.0",`

`  "chainId": "1",`

`  "createdAt": 1698069085372,`

`  "meta": {`

`    "name": "Transactions Batch",`

`    "description": "",`

`    "txBuilderVersion": "1.16.3",`

`    "createdFromSafeAddress": "0x7E00D2b15ADA3D10201fCcaf2914c4433b53Be59",`

`    "createdFromOwnerAddress": "",`

`    "checksum": "0xf1752f0096283c2ac0746d08e1c29b117c44344f8837171527ba7c5caaad57db"`

`  },`

`  "transactions": [`

`    {`

`      "to": "0x000000000000aDdB49795b0f9bA5BC298cDda236",`

`      "value": "0",`

`      "data": null,`

`      "contractMethod": {`

`        "inputs": [`

`          {`

`            "name": "masterCopy",`

`            "type": "address",`

`            "internalType": "address"`

`          },`

`          {`

`            "name": "initializer",`

`            "type": "bytes",`

`            "internalType": "bytes"`

`          },`

`          {`

`            "name": "saltNonce",`

`            "type": "uint256",`

`            "internalType": "uint256"`

`          }`

`        ],`

`        "name": "deployModule",`

`        "payable": false`

`      },`

`      "contractInputsValues": {`

`        "masterCopy": "0x28CeBFE94a03DbCA9d17143e9d2Bd1155DC26D5d",`

`        "initializer": "0xa4f9edbf000000000000000000000000000000000000000000000000000000000000002000000000000000000000000000000000000000000000000000000000000004600000000000000000000000007e00d2b15ada3d10201fccaf2914c4433b53be59000000000000000000000000c02aaa39b223fe8d0a0e5c4f27ead9083c756cc20000000000000000000000000000000000000000000000001bc16d674ec8000000000000000000000000000000000000000000000000000000000000000000c04153534552545f54525554480000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000002a300000000000000000000000000000000000000000000000000000000000000037d492061737365727420746861742074686973207472616e73616374696f6e2070726f706f73616c2069732076616c6964206163636f7264696e6720746f2074686520666f6c6c6f77696e672072756c65733a2050726f706f73616c7320617070726f766564206f6e20536e617073686f742c2061732076657269666965642061742068747470733a2f2f736e617073686f742e6f72672f232f626c6f636b7377617064616f2e6574682c206172652076616c6964206173206c6f6e672061732074686572652069732061206d696e696d756d2071756f72756d206f66203230303030303020616e642061206d696e696d756d20766f74696e6720706572696f64206f6620373220686f75727320616e6420697420646f6573206e6f742061707065617220746861742074686520536e617073686f7420766f74696e672073797374656d206973206265696e67206578706c6f69746564206f72206973206f746865727769736520756e617661696c61626c652e205468652071756f72756d20616e6420766f74696e6720706572696f6420617265206d696e696d756d20726571756972656d656e747320666f7220612070726f706f73616c20746f2062652076616c69642e2051756f72756d20616e6420766f74696e6720706572696f642076616c7565732073657420666f7220612073706563696669632070726f706f73616c20696e20536e617073686f742073686f756c642062652075736564206966207468657920617265206d6f726520737472696374207468616e207468652072756c657320706172616d657465722e20546865206578706c616e6174696f6e20696e636c75646564207769746820746865206f6e2d636861696e2070726f706f73616c206d7573742062652074686520756e697175652049504653206964656e74696669657220666f722074686520737065636966696320536e617073686f742070726f706f73616c20746861742077617320617070726f766564206f72206120756e69717565206964656e74696669657220666f7220612070726f706f73616c20696e20616e20616c7465726e617469766520766f74696e672073797374656d20617070726f7665642062792044414f20736f6369616c20636f6e73656e73757320696620536e617073686f74206973206265696e67206578706c6f69746564206f72206973206f746865727769736520756e617661696c61626c652e000000",`

`        "saltNonce": "1698068842438"`

`      }`

`    },`

`    {`

`      "to": "0x7E00D2b15ADA3D10201fCcaf2914c4433b53Be59",`

`      "value": "0",`

`      "data": null,`

`      "contractMethod": {`

`        "inputs": [`

`          {`

`            "internalType": "address",`

`            "name": "module",`

`            "type": "address"`

`          }`

`        ],`

`        "name": "enableModule",`

`        "payable": false`

`      },`

`      "contractInputsValues": {`

`        "module": "0xBf766E4eaD3F880B1D0db82967eE88bA7c49302e"`

`      }`

`    }`

`  ]`

`}`

# Implement oSnap for Optimistic Governance

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