CIP-62: Core Treasury team mandate and funding

Governance Closed Proposals
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Thanks for your comments @BovineManure and @dung.

This proposal was created to consolidate several mandates of the Core Treasury team, which karpatkey is part of. It was sent to Snapshot following CoWDAO guidelines, after a 7-day discussion period.

Core Treasury team role in Listings

CIP-47 defines well what was the part of the Core Treasury team in that initiative, and the current CIP only asks for the consolidation of all mandates under this new one.

Tokens under management and karpatkey’s fees:

First of all, we would like to clarify that karpatkey does not have these assets under management—this is not an allocation to karpatkey. karpatkey operates as a non-custodial treasury manager, ensuring that the DAO retains full control over its treasury and DAO-owned wallets.

That being said, while karpatkey has contributed to CoW DAO’s success through various initiatives and collaborations that have had a demonstrable positive impact (more in a section below) — karpatkey completely agrees that CoW stands as a highly successful product in its own right. karpatkey is genuinely happy for the entire community and for the core team’s dedication and hard work in building and evolving the product.

karpatkey operates with full transparency. Reports are published on a monthly basis and are always available on the website, where anyone can review the latest updates on the DAO’s treasury. Additionally, karpatkey is continuously enhancing its services by improving risk management, asset allocation frameworks, and security measures to maintain its position as the leading on-chain treasury asset manager in crypto.

Importantly, karpatkey is not increasing any fees at this stage. In fact, karpatkey voluntarily did not charge fees for the second half of last year to support the DAO’s financial position. The goal remains to allocate significant resources toward ensuring the long-term success of the protocol, all while balancing its role as a business.

In short:

  • karpatkey does not charge AUM or management fees on COW tokens unless an actual treasury management action is performed.
  • Fees are only applied if karpatkey actively execute transactions, structure deals, or integrate COW tokens into treasury strategies like protocol-owned liquidity.
  • If COW tokens simply remain in the DAO’s treasury wallet and no action is taken, there are no fees charged.

This is clearly outlined in the mandate, and this approach ensures that the DAO is only charged for actual work performed, rather than passive asset holdings.

Core Treasury team strategy regarding token allocations:

To address the questions regarding the 42 million COW allocation, this amount represents the expected budget for product development over the next few years. This estimate was provided by the core team and reflects the actual projected costs associated with developing CoW DAO’s products, factoring in multiple financial projections that were included in the proposal.

Now, are those 42 million COW tokens being dumped? Absolutely not. The very reason this proposal is live to ensure that these funds are deployed in the most efficient and market-friendly way possible, minimizing any adverse price impact.

Our approach as the Core Treasury team will likely involve a combination of open market strategies, including TWAP execution and more discretionary, strategic sales/allocations. TWAP execution is always a valid option for treasury diversification, but it is not always the most efficient strategy since it inherently involves selling through open markets, which can introduce higher slippage and price impact than other execution methods. One of our primary strategies might be to facilitate OTC deals and strategic partnerships, allowing us to sell COW tokens without impacting the market price. This ensures that token buyers engage directly through OTC channels, rather than through the open market, which could otherwise cause unnecessary price volatility.

Throughout this process, we will maintain full transparency. Whenever community involvement is necessary, we will engage with governance accordingly. However, it’s also important to recognize that OTC deals and strategic treasury operations often involve market-sensitive information. In those cases, we will act in the best interest of the DAO, ensuring that execution is handled responsibly and strategically.

If at any point, our execution strategy conflicts with the ongoing buyback program, we will explicitly inform the community. If needed, we will pause the buybacks, propose a revised mandate, and allow the community to vote on the direction before making any adjustments.

The reasoning behind requesting the full allocation now rather than distributing it over time is simple: efficient treasury planning requires proactive, not reactive, execution.

  • By securing these tokens now, we can carefully structure the execution plan and implement it gradually over the four-year period.
  • Treasury management is about long-term sustainability, and waiting until later to request funding introduces unnecessary risk. If the DAO were to request these funds incrementally, there is no guarantee that future COW token prices will be as favorable as they are today.
  • Similar to how companies and institutions plan budgets in advance, we are ensuring that CoW DAO has a clear roadmap and financial stability to avoid emergency funding situations later on.

We strongly believe that the best time to build a sustainable treasury is always now.

Karpatkey proposals/contributions to CoW DAO

Below is a chronological list of proposals and updates put forward by karpatkey through the CoW DAO governance process and contributions to the CoW in general.

Karpatkey has been actively involved in governance, regularly sharing our views and suggestions on forum proposals. Below is a chronological list of our responses and perspectives on various topics discussed in the forum.

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