AIP #55 - Make a strategic treasury investment into Kodiak Finance

Governance Proposals Voted Proposals
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AIP #55 - Make a strategic treasury investment into Kodiak Finance

tl;dr: In preparation for Abracadabra’s expansion to Berachain, make a strategic investment into Kodiak Finance from the DAO treasury to strengthen our positioning in the Berachain ecosystem.

The Proposal

The current proposal is to invest $400K in USDT from the Abracadabra Money DAO treasury into Kodiak Finance.

Kodiak is Berachain’s native liquidity hub for launching, trading, and liquidity provisioning of ANY asset.

The initial core products of Kodiak include:

1. Panda Factory: A no-code token deployer platform for permissionless launching and managing of tokens.

2. Kodiak DEX: DEX consisting of full-range and concentrated liquidity AMMs.

3. Islands: Automated Liquidity Manager with automated liquidity management strategies orchestrating consistent liquidity within optimal price ranges, enticing lasting deposits from the average user.

4. Sweetened Islands: Integrated incentive layer tapping into Berachain’s unique Proof-of-Liquidity mechanism.

5. Kodiak Validator: furthering Kodiak’s Proof-of-Liquidity positioning and branding within the Berachain ecosystem, while helping secure the network and push BGT emissions to Kodiak liquidity pools.

Kodiak stands poised to emerge as the premier community DEX on Berachain, akin to Aerodrome on Base and Camelot on Arbitrum. It enjoys exclusive backing from the Berachain Foundation’s Build-a-Bera accelerator and boasts the largest and most engaged community within the Berachain ecosystem. Berachain itself is among the most highly anticipated L1 launches, characterized by a cult-like community following, top-tier supporters, and a novel Proof-of-Liquidity system.

As one of the most promising protocols on Berachain, strategically investing in Kodiak offers Abracadabra Money DAO significant exposure to Berachain’s ecosystem and a pivotal role within it. The ongoing discussions between Kodiak and Abracadabra regarding product integrations, such as cauldrons for Kodiak LP tokens and MIM + Spell liquidity pools, underscore our commitment to deepening synergies between our protocols.

Similarly to what happened on Arbitrum, having a deep partnership with the go-to DEX solution on Berachain will benefit MIM liquidity, as well as allow the DAO to fully benefit from the commitment towards a single DEX on a brand new ecosystem. The xKDK token will also help diversify the Asset held by the treasury.

This investment will strengthen alignment between our platforms, facilitating a seamless launch on Berachain and fostering ongoing collaboration and innovation.

The details of the investment proposal are as follows:

1. Investment Amount: $400k USDT

2. Valuation: $69m FDV

3. Vesting: 2-year linear vesting in xKDK (similar to Camelot’s xGRAIL)

Note: more information on the revenue share model of xKDK can be found here.

Next Steps and Voting

The following proposal shall remain as an AIP for the next 5 days to allow the community to discuss and give feedback on. It will then be moved to snapshot voting, with a 72 hours voting period.

Voting has been created and can be found here.

Vote passed.

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The following proposal is highly supported by core contributors of the DAO, and the resuolts of months long talks.

Firstly, The Kodiak Finance team proved to be extremely skilled and prepared, spotting synergies between the two protocols that go behind the usual AMM-Leverage Engine integrations. Cauldrons using Kodiak Finance LPs are already being prepared to be launched on bArtio Testnet, making them the first time that concentrated LP tokens have been listed on Abracadabra.

Secondly, aligning Abracadabra with Kodiak on Berachain allows the DAO to find a strong partner to grow largely MIM liquidity on, and benefitting from it directly thanks to this strategic deployment of funds. It is pivotal that if SPELL emissions are emitted heavily on a new chain, the DAO can benefit in as many ways as possible from them.

Thirdly, Kodiak has proved to be one of the project that receive the most support from Berachain itself, making them one of the strategically best positioned AMM to success heavily on Berachain. Another point to this is the fact that Kodiak is one of the few projects incubated by Build-a-Bera.

Lastly, I would like to say that Kodiak is still looking for an stableswap solution, which allows us to potentially collaborate more thanks to MIMswap. The extreme efficiency that MIMswap possess can be used synergistically with Kodiak making sure that users can enjoy Stableswap LPing at its best also on Berachain.

The commitment from the DAO reflects months of healthy treasury revenues that can now be deployed to strengthen DAO partnerships and connections. The vesting schedule seems aligned with other DAO earnings, and the way tokens are distributed is already familiar thanks to our xGRAIL earnings.

Overall, strongly supporting this proposal from the @Kodiak-Finance team.

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Thanks for sharing this RFC. I think the interest in the Berachain is going to be significant given the community they have built prior to launch. Even artio and now bartio testnets are actively used by many in the community. Given this interest, I think an investment in a DEX which was part of Build-a-Bera would be very beneficial. It would align the DAO closely with one of the key players in the ecosystem, allow Abracadabra to expand liquidity on the chain rapidly and further cooperation on potential new cauldrons. With this, I’m in favor of this proposal.

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Vote created processing it now on snapshot here.