Hi all. I am wearing my Treasurer cap right now. We have some friction related to the way that SourceCred currently receives our Dai funding from Protocol Labs. To be clear, this does not mean our funding is in jeopardy, nor does it imply any real changes to our current state of people requesting the amount they want and receiving it within the week.
The friction is that the amount of treasury liquidity is capped at the amount of Grain that SourceCred has gotten from its own protocol. Currently, Grain redemptions work as follows:
- A contributor sells Grain to the SourceCred treasury, in exchange for DAI
- The SourceCred treasury sells Grain to a sponsor (usually Protocol Labs), in exchange for DAI
The result is that the SC treasury is continually facilitating liquidity in Grain, by matching the sellers (contributors) to the buy (Protocol Labs).
And that’s the issue–the amount you’re able to redeem is limited by the total amount of Grain/DAI that the SourceCred treasury has. For example, if SourceCred has only 40,000 Grain+DAI, and two contributors each want to sell 25,000 worth of Grain, then SourceCred can’t process both transactions at once. Instead, we need to redeem one contributor, then sell the Grain to Protocol Labs, and then redeem the second contributor. PL Grain sales take a few days, so this means that we aren’t able to promptly provide liquidity to contributors.
December saw a lot of high-value Grain redemptions (Hooray for all of you cashing out!). This wasn’t an issue for all of you that redeemed your Grain, but it’s become clear that we need to maintain higher amounts of Dai on-hand in order to be certain that you can withdraw an arbitrary amount of your Dai at a moment’s notice.
@decentralion has floated what seems like a pretty easy fix to this technical problem. We mint Grain from thin air for the SourceCred treasury. We make SourceCred’s Grain account have a bigger number.
This will allow us to request much larger amounts of Dai from Protocol Labs, and keep a much larger buffer of, say, 100,000 Dai on-hand for everyone’s Grain redemptions. Given that we will be minting Grain out of thin air, @decentralion has created this PR to stop giving SourceCred a portion of its own Cred. Any feedback is encouraged. Can anyone think of any problems with this?
Rather than go off of SourceCred’s existing Grain account this time, @decentralion has already requested 200,000 Dai from PL last week. We could always return this if any serious concerns are raised, otherwise, the plan is to make 200,000 Grain appear in SourceCred’s account in order to transfer it to PL upon receipt of our 200,000 Dai.
Again, any and all feedback is encouraged