Greetings from TempleDAO. We are believers in Aragon’s mission and are excited to witness these invigorating community discussions around how to create sustainable value for token holders and Aragon partners.
We note that buybacks have been proposed in this discussion as a way to reduce the imbalance between returning value to token holders in the present while building for the future. We also acknowledge the legal uncertainty around buyback implementation as a way to return value.
TempleDAO experienced a similar schism last year over the best way to grow and manage our community Treasury. Arising as a technical response to these passionate debates, Temple developed a novel liquidity management contract that could prove useful to Aragon under the current circumstances–RAMOS (Randomized Automated Market Operations Service).
What is RAMOS?
RAMOS is a set of on-chain contracts that provides liquidity and price stability within a normal 50:50 pool on a DEX such as Balancer through automated market operations (AMO). In short, RAMOS will single-side withdraw the base token (potentially ANT in this case) when the token price in the pool falls below a target price threshold to restore the price back to the nominal range. The second token can be DAI, WETH, or whatever the DAO decides should be paired with ANT. The operating parameters of RAMOS can be changed through a governance vote. Alternatively, the parameters can be immutable. The RAMOS contract calls are automated via OZ Defender or another automation framework.
Why is RAMOS better?
By using RAMOS, the Aragon Treasury can ensure that there are no idle funds sitting in a redemption or bonding contract. Funds deployed to RAMOS are always collecting swap fees as well as farming gauge rewards where applicable.
RAMOS is fully-audited, highly scalable, and robust. It has managed a 8-figure TEMPLE::DAI liquidity pool on Balancer for almost half a year without any issues. It has robust randomization features that mitigates arb attacks from bots in the same pool. The price target can be set and applied stochastically with a single RebalanceUp operation.
How does RAMOS Return Value to ANT Holders?
RAMOS does not directly buy back ANT tokens from holders. It is a Balancer LP farmer like any other except that it follows certain liquidity provision guidelines set in advance by the DAO. There is no central authority that decides how much TVL RAMOS should control at any given time, nor the timing or frequency at which transactions will occur. RAMOS operates and maintains ANT liquidity continuously in a way that is flexible enough for no-touch day-to-day operations for an extended period from days to years, yet amenable to updates to any of its operating parameters with no need to redeploy.
RAMOS is a novel liquidity provisioning tool that can accommodate any price floor target and market liquidity depth policies without direct buybacks. It does not suffer from the adverse impact of arbitrage and idle funds. We believe that RAMOS can help Aragon find and reach an equilibrium with its token holders like it did for the Temple community, and we stand ready to help with implementation.