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Pipeline auto-fixer: removed [[ ]] brackets from links that don't resolve to existing claims in the knowledge base.
116 lines
7 KiB
Markdown
116 lines
7 KiB
Markdown
---
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type: decision
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entity_type: decision_market
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name: "MetaDAO: Increase META Liquidity via Dutch Auction?"
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domain: internet-finance
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status: passed
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parent_entity: "[[metadao]]"
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platform: metadao
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proposer: "Durden"
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proposal_url: "https://v1.metadao.fi/metadao/trade/3Ky7bPfSBNhYqVe3yCXajTrKYVxsM3CVBMbhQsHqrNqJ"
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proposal_date: 2024-02-26
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resolution_date: 2024-03-02
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category: treasury
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summary: "Proposal 10 — Sell 1,000 META via manual Dutch auction on OpenBook. First tranche 50% above spot, lowered 5% daily. USDC paired with META for Meteora LP. Total 3,005.45 META transferred to 3/5 multisig. Sealed-bid auction for multisig member compensation."
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key_metrics:
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proposal_number: 10
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proposal_account: "3Ky7bPfSBNhYqVe3yCXajTrKYVxsM3CVBMbhQsHqrNqJ"
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autocrat_version: "0.1"
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meta_sold: "1,000 META"
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total_meta_transferred: "3,005.45 META"
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tags: [metadao, dutch-auction, liquidity, openbook, meteora, passed]
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tracked_by: rio
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created: 2026-03-11
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last_updated: 2026-03-24
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---
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# MetaDAO: Increase META Liquidity via Dutch Auction?
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## Summary & Connections
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**Proposal 10 — manual Dutch auction to bootstrap protocol-owned liquidity.** Sell 1,000 META via OpenBook with descending asks (start 50% above spot, lower 5% daily until filled). Pair acquired USDC with META for Meteora LP. Move all protocol liquidity from 4% to 1% fee pool. 3/5 multisig execution. Multisig members selected via sealed-bid auction (lowest asks win).
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**Outcome:** Passed (2024-03-02).
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**Connections:**
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- The sealed-bid auction for multisig compensation is remarkable mechanism design: 10 candidates, sealed bids, lowest 4 selected. Ben H and Nico bid 0 META, joebuild bid 0.2, Dodecahedr0x bid 0.25. This is the Vickrey auction makes honesty the dominant strategy by paying winners the second-highest bid rather than their own applied informally to governance roles.
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- The Dutch auction mechanism (descending price until filled) is the precursor to the more sophisticated Dutch-auction dynamic bonding curves discussed in dutch-auction dynamic bonding curves solve the token launch pricing problem by combining descending price discovery with ascending supply curves
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- "There is currently strong demand for META, with an oversubscribed raise, proposals from notable parties attempting to purchase META at below market price, and a well-known figure DCAing into META" — context: this is during the Feb-Mar 2024 period when Ben Hawkins and Pantera were also trying to buy META
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- Moving all liquidity to the 1% fee pool after the auction addresses the [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]] — protocol-owned liquidity reduces the friction
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---
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## Full Proposal Text
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### Responsible Parties
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Durden, Ben H, Nico, joebuild, and Dodecahedr0x.
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### Overview
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Sell META via a Dutch auction executed manually through OpenBook, and pair the acquired USDC with META to provide liquidity on Meteora.
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### Background
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Given the currently low volume and high volatility of META, there is little incentive to provide liquidity (low fees, high risk of impermanent loss). Yet there seems to be near-universal agreement in the Meta DAO Discord that greater liquidity would be highly beneficial to the project.
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While the DAO has plenty of META, to provide liquidity it needs USDC to pair with its META. This USDC can be acquired by selling META.
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There is currently strong demand for META, with an oversubscribed raise (proposal 3), proposals from notable parties attempting to purchase META at below market price, and a well-known figure DCAing into META. There is thus no need to sell META for USDC at below market prices; we only need to sell META at a price that would be better than if they were to buy through the market.
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This proposal seeks to manually perform a Dutch auction using OpenBook. This serves a few purposes: price discovery through a market that is open to all, low smart contract risk (relative to using a custom Dutch auction program), simplicity (which will result in wider participation), and ease of execution (just place asks on OpenBook).
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### Implementation
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Meta DAO will sell a total of 1,000 META.
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The META will be sold in tranches of 100 META by placing asks above the spot price. The first tranche will be placed 50% above the spot price. Every 24 hours, if the ask is more than 6% above the spot price, it will be lowered by 5%.
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Whenever an ask is filled, a new ask worth 100 META will be placed 10% above the spot price. In addition, USDC from the filled asks will be paired with META and added to the 4% fee pool.
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The multisig currently holding the liquidity in the 4% fee pool will send their LP tokens to this proposal's multisig. After the 1,000 META has all been sold, all of Meta DAO's liquidity will be moved to the 1% fee pool. The LP tokens will be sent to the treasury to be held as permanent liquidity until Meta DAO decides otherwise.
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All operations will be executed through a 3/5 Squads multisig.
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Multisig address: `LMRVapqnn1LEwKaD8PzYEs4i37whTgeVS41qKqyn1wi`
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Multisig members:
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- Durden: `91NjPFfJxQw2FRJvyuQUQsdh9mBGPeGPuNavt7nMLTQj`
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- Ben H: `Hu8qped4Cj7gQ3ChfZvZYrtgy2Ntr6YzfN7vwMZ2SWii`
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- Nico: `6kDGqrP4Wwqe5KBa9zTrgUFykVsv4YhZPDEX22kUsDMP`
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- joebuild: `XXXvLz1B89UtcTsg2hT3cL9qUJi5PqEEBTHg57MfNkZ`
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- Dodecahedr0x: `UuGEwN9aeh676ufphbavfssWVxH7BJCqacq1RYhco8e`
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### Compensation
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I am requesting a payment of 5 META to cover the cost of creating the market for this proposal and for the effort of crafting this proposal and carrying it out to completion.
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For the compensation of the multisig members other than myself, I performed a sealed-bid auction via Discord DMs for the amount of META that each of the 10 candidates would require to become a member. Those who were willing to join for the least amount of META were selected.
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The candidates with the lowest asks and their requested amounts were as follows:
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- Ben H – 0 META
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- Nico – 0 META
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- joebuild – 0.2 META
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- Dodecahedr0x – 0.25 META
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All compensatory payments will be made by the multisig to each individual upon the completion of the proposal.
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### Total Required META
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META to be sold: 1,000
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META for liquidity: 2,000
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META for compensation: 5.45
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**Total: 3,005.45**
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### Result
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This proposal will significantly increase Meta DAO's protocol-owned liquidity as well as move its existing liquidity to a more efficient fee tier, addressing recent complaints and concerns regarding META's liquidity.
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---
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## Raw Data
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- Proposal account: `3Ky7bPfSBNhYqVe3yCXajTrKYVxsM3CVBMbhQsHqrNqJ`
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- Proposal number: 10
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- DAO account: `7J5yieabpMoiN3LrdfJnRjQiXHgi7f47UuMnyMyR78yy`
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- Proposer: (Durden)
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- Autocrat version: 0.1
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- Completed: 2024-03-02
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## Relationship to KB
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- [[metadao]] — parent entity, liquidity bootstrapping
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- [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]] — addresses liquidity friction
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- dutch-auction dynamic bonding curves solve the token launch pricing problem by combining descending price discovery with ascending supply curves — early manual implementation of Dutch auction concept
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