Forum post: https://forum.inverse.finance/t/proposal-to-authorize-otc-dbr-sales-to-repay-dola-bad-debt/258/8

Summary

Sell DBR tokens to OTC buyers at discount with 100% of proceeds dedicated to reducing outstanding DOLA bad debt.

General Background

Current DOLA bad debt is approximately $9.42MM and since June 2022 we have repaid $1,372,115 including funds received from OTC sales with DWF Labs and other entities. DOLA bad debt has a direct impact on our ability to scale DOLA lending on FiRM and removing DOLA bad debt is a top priority for the DAO.

We are in discussions with users of FiRM and potentially others who may have interest in helping the DAO reduce its DOLA bad debt through OTC sales of DBR’s. While discussions are preliminary, the purpose of this proposal is to authorize the TWG to mint new DBR’s in order to transact without delay when opportunities arise.

Proposal

We propose enabling the TWG to sell DBR’s to whitelisted buyers at a 15% discount, with the selling price calculated by using the 30-day DBR TWAP price available on Coingecko and subtracting 15% from the TWAP price. We propose setting a minimum selling price of $0.05 regardless of TWAP price.

A minimum purchase of $100,000 per transaction is required to qualify for the discounted DBR sale and to make the opportunity maximally attractive, there is no vesting period for purchased DBR’s. The DAO will entrust signers on the TWG multisig to research interested counterparties to confirm their plans are aligned with the long term vision of FiRM.

The proposal therefore requests an initial authorization of 26,000,000 additional DBR’s for the TWG for this purpose, with an approximate value today of $2MM, with additional authorizations expected as this initial authorization is exhausted.

Additionally, OTC DBR sales conducted within this agreement will be included in future transparency page(s) on inverse.finance

Benefits for Inverse

Opportunity for material reductions in DOLA bad debt, resulting in greater FiRM lending capacity, greater rewards to INV stakers via DBR streaming, and improved DOLA peg defense Reduced upwards pressure on DBR price from whales acquiring DBR’s on DEX’s where liquidity may be thin Reduced DBR price volatility

On-Chain Actions

• Mint 26,000,000 DBR to Treasury
• Grant TWG allowance of 26,000,000 DBR