Call to Prayer #22

Call to Prayer #22 occurred on Sunday July 24, 2022, at 6:00 pm EST.

For a tl;dr, you can check out this Twitter thread.  Subscribe to the new Codex newsletter to never miss a CTP summary!

The Chinese translation can be found here

What happens to those who missed their FAITH airdrop and would like to have claims reopened?

The team's had a bunch of discussions on this. But the conclusion is that the airdrop was open for quite a long time, and it feels unfair if we rewind and reopened FAITH. So if you missed the airdrop, we’re sorry, but we won’t be opening it back up.

What about those who mistakenly did not get their FAITH bonus when they deposited in the first month's vault lock?

There were two types of people who didn't get their bonus.

  1. Those that did stake into the vault on time but didn’t click the drop-down option for FAITH resulting in them locking their TEMPLE without redeeming their FAITH.
  2. The second type is people who tried to stake it in a vault in the last four hours, but it didn't work because we turned off the faith redemption four hours earlier than we should have.

In both these scenarios, we want to set it right. We never intended to make things tricky for Templars (unless it's a pussle). We should have automatically made it so that your faith gets burned if you lock your TEMPLE. We have now made these people whole.

What’s the temple roadmap now?

Representative Governance

The objective is to make it easier for people to get involved and to make the whole process more transparent. One part of this equation is the budget allocation for this purpose.

The principle for payment initially was people get paid retrospectively based on the impact of their work. As we move forward, we will break up the budget into clearly defined areas within which bounties are allocated to every project where they are needed.

Setting this budget will be a critical task in our work process. Some have proposed that we set up monthly budget planning sessions where all the MCs (project manager, usually an Initiate) and sponsors (project supervisor, usually a Master) from every enclave and project would get together to decide on budget allocation based on the relative impacts of ongoing projects.

More Pools for STAX

The objective for STAX is to continue the liquid staking model and then, as we move into phase two, begin taking fees and boosting the protocol with $STAX tokens.

There are a bunch of proposals for which new pools we would add. And this effort to decide on pools will need to continue as we keep hunting for the best yields which fit our Temple philosophy (between stables and high volatility assets)

Core Vaults Treasury Strategies

The objective is to continue maturing treasury investments. The Treasury chamber has a sophisticated method of introducing and progressing new investment strategies.

Currently, Bobruisk is the Treasury chamber MC, and we have a process where people can put forward proposals in the form of TSPs. Then a discussion happens among the members of logic about its merits. If the idea is good and lots of people come on board, then a decision will be made to move forward (check in with the logic chamber for the ongoing discussions).

Our current strategy of playing the gauge and the bribing games works quite well. There are multiple ongoing proposals, the latest of which involves getting a gauge on Balancer. Many of these strategies, especially those that involve getting bribes from gauges, are not accessible to the average user and thus make our products more attractive.

Longer Term Vaults

We do want to incentivize and reward long-term holders who choose to lock their TEMPLE for a longer period. Some have requested 3-month and 6-month locks with boosted yield. The team currently has an active debate about how long the vaults should be for.

TEMPLE Auctions

Another idea we want to explore is utilizing the FRAX in our treasury to launch an auction to buy some of the TEMPLE off the market. Work in progress.

Turning LP with price exposure into a stablecoin LP

The objective is to mitigate the price risk on an LP token, which we offer via STAX. If we implement this, we could enable users to stake into an LP with no price risk. Work in progress. Details soon.

What about leverage?

So there are multiple sources from which we can get leverage.

  1. TEMPLE holders get leverage from the ratio of the TEMPLE tokens in vaults to the total assets that are being farmed.
  2. Direct leverage via partnerships (we had some lined up, but they have run into difficulties, and the proposals are on hold). We will set up a bounty for anyone in the community to help secure partnership deals to allow us to borrow $10M or more at a low-interest rate.
  3. By not topping up the vaults staking contract immediately at the end of every vault cycle (and only topping up as needed when users leave the vaults), we can allow the stablecoins to continue to farm. This is a form of leverage against ourselves
  4. Leverage into our LP fund (details cannot be released yet, but the idea is to introduce some leverage into our pools and use that to claim a higher proportion of rewards when we bribe)

What do you tell people who are considering buying Temple today at 70c vs. farming frax/usdc in convex themselves?

So far, on the conversations that I've had, I have felt that people see the TEMPLE product as attractive. The bigger problem is we don't have a lot of market awareness right now on the vault product. So we want to push marketing hard now. We want the broader market to understand that TEMPLE is positioned as a slightly higher risk than simple, stable farming but with downside protection and high APY.

Wen temple burns to get IV to 65c?

We’ve already burned most of the TEMPLE which was supposed to be burned. Any that was scheduled to be burned absolutely will be. We will 100% not be putting any of it back into circulation.

IV will never go down because of TEMPLE supply being minted. We’ve made this clear early on with our first medium articles.

Some have suggested that we shouldn’t be so rigid with TEMPLE IV and perhaps even engage in a more high-risk investment strategy to boost yield, but we have no plans to do that now.

Last week in response to a question from @yieldchad regarding paying salaries in Frax rather than Temple, it was replied as an “Interesting question that we can explore.”. Could we please ask for an update on this since the last CTP?

There have been some team chats about this and what we always try to consider when making decisions like this is will it drive an increase in APY for our users? One way to think about it is farming power versus the number of TEMPLE staked in the vaults. We also need to ensure that IV doesn’t go down if we pay in FRAX, which means we would need to burn TEMPLE from the DAO pool. We would probably have to burn more TEMPLE than if we used the pool directly for payments.

Paying out in FRAX is essentially the same, as it relates to IV, as paying in TEMPLE and then having people then sell their TEMPLE into defend for FRAX on the AMM.

Paying the team in FRAX might, on the other hand, increase the farming power (leverage) per TEMPLE token until we see any major price action. If we pay the team in FRAX and burn the TEMPLE tokens into defend, it will reduce ttheDAO’s runway because, essentially, you have to use more TEMPLE tokens to pay out the same amount.

It will also depend on the price of TEMPLE at the time the payments are made. If the price is closer to book value, it may not make any difference. If the price gets high, it will probably be better to pay out in TEMPLE from all perspectives.

Next time we have a major round of team payments, we will look at this issue more closely.

Can we get more hints/updates on the plans to increase Temple price/purge the “lobbyooors”?

We’re not trying to purge the “lobyooors”. In the last Call to Prayer, we tried to differentiate between production conversation versus unproductive conversation. Now we have the #lobbying channel in discord, and it’s great that any lobbying activity can now be directed there. This way, lobbying activity can take place without dominating the whole community vibe in #general.

Closing Thoughts from ButlerJi

So what’s the next step in the Temple? We need to attack this from two sides. There’s the product side, where we’re looking into getting leverage through borrowing against TEMPLE IV as a priority. We want to get more yield than just the safest stable farm. We will take on a bit more risk but not go all-in on a single strategy.

The DAO game has also really allowed us to capture ideas from the community and get the right people on their way to rising through the ranks.

Our long-term goal is to reduce the marginal cost of implementing strategies. That is the next big phase. From day one, we built the framework to make it easy to automate investment strategies not just on L1 but across multiple chains.

At the moment, we have our 3-step flywheel process, which is semi-automated. This is that we invest our stables, collect voting bribes and yield, sell some to get stables again, and repeat. Our goal is to make processes like this fully automated. Of course, there may still be some human involvement in fine-tweaking the strategy. For example, if we feel particularly bullish about CRV and don’t want to sell it right away, we can adjust accordingly.

The contract team will start building the infrastructure to get these strategies from ideation to testing, validation, and automation. Once we get there, it will give flexibility and speed that you really would have a hard time finding anywhere else in DeFi.