Background
On August 2nd, @Luis made a proposal to raise a $50k bond to fund work on approved community proposals denominated in USDC. The proposal was approved and resulted in a successful bond issuance. The term of the bond was 90 days, and its maturity date is approaching in 15 days (on 07/12/2022). The bond was collateralised with 150 $NATION.
The bond was raised with a reasoning that the market conditions were not optimal for the DAO to sell $NATION, and that it was sensible that such sale of $NATION “should be postponed until a further price and liquidity increase.”.
I’d argue that the reasoning still holds true today, as, expectedly, the market conditions have not yet improved in such short term.
Proposal
I propose to raise another bond, to enable the DAO to refinance and repay the debt within the required timeframe, avoiding therefore the unfavourable sale of 150 $NATION (the collateral that would be kept by the lender in the case of failure to repay the loan).
New bond terms:
- Amount to raise: 52.2k USDC
- Maturity date: 90 days to 360 days (targeting the longest possible)
- Collateral: up to 390 $NATION allowance, to account for price fluctuations and allow for collateralisation of up to 300% (targeting the least amount of $NATION)
- Platform: PWN
To clarify, the Meta Guild would attempt to use the least amount of $NATION possible (up to the approved allowance) for the longest possible term (no less than 90 days, no more than 360 days), in order to ensure the bond offer is successful.
In PWN, once the offer to sell the bond is posted, buyers can publish their counter-offers stating their desired interest rate.
As previously, the Meta Guild multisig will be responsible for receiving the collateral, creating the offer in PWN and accepting the best counter-offer. The best counter-offer shall be the one with the lowest interest rate that can cover the desired amount, proposed during the first 3 days after the bond is posted.
After the USDC is received by the Meta Guild multisig, it will use the funds to pay back the outstanding debt.
Once the bond approaches maturity, another governance proposal will need to be made to decide if the market conditions are favourable to settle it through the sale of $NATION, or through raising another bond.
North Star Metrics
The refinancing is required for optimal treasury management, allowing the DAO to retain $NATION instead of selling at unfavourable rates, and therefore have more of the treasury available to fund the work towards having more active citizens & more value secured by the Nation3 jurisdiction.
This is the pull request on the governance repo with the actual proposal.