IPR 3.1: Consolidating treasuries for sustainable growth

Governance
1

TLDR

The core contributors propose consolidating the Trading Treasury and Operations Treasury into a single treasury pool: The DAO Treasury. Historically, the DAO maintained two “Treasuries”, one focused on generating profits (e.g., trading and revenue-generating activities) and another devoted to covering operational expenses. By merging these into one combined balance, Reform can streamline funding and bookkeeping while maintaining clear, transparent quarterly reporting on revenue, costs, and overall treasury growth.

Moreover, as Reform focuses on three core revenue streams: (1) rebates, (2) designated market making, and (3) the Luigi_Bot, costs also continue to rise. A new buyback model is proposed to ensure the DAO grows sustainably: each quarter, 65% of positive net revenue will fund buybacks, while 35% will strengthen the DAO Treasury. This approach boosts RFRM token support while sustaining the treasury for continued development and operations.

Authors

Core Contributors

The Why of the Proposal

“Experimentation is the key to innovation, and innovation is the key to long-term profitability.” — Elon Musk

The very same goes for Reform. Initially a dual-treasury system was created to separate trading and operational funds. However, managing two wallets can obscure the true financial health of the DAO and introduce unnecessary complexity. With the proposed merger into a single treasury pool, every expense and revenue source is fully transparent and reported quarterly to the community.

Additionally, the current market environment underscores the importance of being efficient, both in how we allocate costs and how we calculate buybacks. By combining these treasuries into one pool and adjusting the buyback formula, we ensure the DAO can remain self-sustaining, keep growing its treasury, and meaningfully support the RFRM token.

The Longer Explanation of the Proposal

Reform DAO has three primary revenue drivers:

  1. Rebates — Fees earned through generating trading volume on centralized exchanges.
  2. Designated Market Making (DMM) — Earnings from providing liquidity and market structure to projects.
  3. Luigi_Bot — Telegram bot revenue, accruing from fees generated by users.

At the same time, operational costs, ranging from development to marketing, have increased as Reform continues to expand. Under the new proposal:

  1. Unified DAO Treasury:
    • The Trading Treasury and Operations Treasury are consolidated into one.
    • All revenues (rebates, DMM fees, Luigi_Bot proceeds) and costs (payroll, development, marketing, etc.) flow in and out of this unified treasury.
  2. Quarterly Reporting:
    • Every three months, Reform will publish a transparent report showing incoming revenue, outgoing expenses, and net revenue. Leading to quarterly buybacks. With this development monthly reports will be replaced by quarterly ones.
    • The report will also show how much of the net revenue goes toward buybacks versus expanding the DAO Treasury.
  3. New Buyback Model: The calculation ensures the DAO remains self-sustaining before funneling funds into buybacks. Specifically:

Net Revenue = Gross Revenue − Costs

  • 65% of net revenue funds RFRM buybacks.
  • 35% of net revenue remains in the DAO Treasury to grow it.

This approach balances the goal of supporting the token price with the need to fund ongoing and future DAO initiatives. By merging treasuries, the DAO will reduce redundant transfers and administration, making it simpler to track overall health. In turn, the quarterly breakdowns will make it easier for token holders to understand and evaluate both the project’s profitability and how surplus capital is used.

Budget

No additional budget is required for this proposal. All operations are already funded via the DAOʼs revenue streams and existing reserves.

Poll

Please cast your vote and provide feedback on whether you are “for” or “against” this proposal before it proceeds to vote.reformdao.com

  • For
  • Against
0 voters
2

I’m all for, except for changing monthly reports to quarterly. In this fast moving space I think having monthly reports is beneficial. I also don’t think the effort in producing them monthly vs quarterly should be that time consuming? Especially in the era of automations. Maybe a more brief monthly report?

Do the percentages in: IPR 2.2: Profit share Market Making projects, get revisited aswell now?

3

Thanks for the reply and good feedback!

We will implement brief updates per month based on revenue, and costs and market updates.

The percentages in IPR 2.2, do not change but only when it becomes Net Revenue so after deducting the DAO costs!

4

I thought Reform was all about transparency and now you want to extend the timespans between reporting to the community? Why do so many changes to the buyback program happen? Does it mean we don‘t see those weekly buybacks anymore instead one big chunk every quarter? Is the business not profitable enough to maintain the current buyback model?

5

Hey Wdzen,

Thanks for the feedback! Regarding my previous message, there will be smaller and medium-sized reports for revenue, trades, etc. However, the main challenge lies with the Retainer MM and Loan Option MM.

For the Retainer MM, payments are made quarterly, so updating revenue on a monthly basis might create the impression that there’s no income, whereas on a quarterly scale, the revenue appears more substantial.

As for the Loan Option MM, we can only account for revenue once it’s realized. Since prices fluctuate and this process can take several months, we decided to report it quarterly.

Regarding buybacks, we plan to use the quarterly revenue to set limits and TWAP, following the same settings as now, but updating them on a quarterly basis for the reasons mentioned above.

6

I agree that this will make the process more Lean & Mean, and yes Good Efficient innovation & development could/should raise the Earning power of Reform.

Most important is that this Fragile balance is the outcome; making this proposal asking for trust in the core contributors to spent their costs well.
Part of the reportation could/should also be; how have the specific development performed or performing (investments versus revenue)

I also think that this proposal asks for a larger potion to develop than the current revenue streams are generating, leaving less for buy backs in the Short term with the Intention to invest additional in developing higher income revenue streams and therefore generating future Higher buy backs than its current pace.

I support this proposal though its not a walk in the park.

Not in favor for quarterly reports. Monthly progress reports as to realized new mm deals as currently shared, as well as realized profits per stream Once realized, (yes understanding that DMM fees are done quarterly), the weekly x tweets of realized profits should stay as well to my humble opinion.

7

Thanks all for the feedback!

We will adjust the proposal to include monthly reports, they will be smaller but will update the costs / revenue.

The weekly track record will continue on the Reform DAO twitter page and will be shared every week, with a new section aimed at the revenue for Retainer MM.

Advancing towards vote proposal today!