Decentralised Treasury Management
A Truly Decentralised Treasury
Glue’s approach to treasury management leverages its ability to change code through runtime upgrades, allowing for a genuinely decentralised treasury. Unlike most projects that use a multi-signature approach where votes are merely advisory, Glue ensures that the unallocated tokens are held in an on chain address that no individual or entity controls or even owns. Funds can only be moved out of this address through governance votes by all Glue token holders.
Governance and Budget Proposals
Moving forward, the foundation will propose budgetary governance votes, typically major packages every six months, with some smaller urgent items addressed more frequently. This structured approach ensures that the most crucial function of governance is to decide which projects to fund. For example, a governance vote might include proposals such as:
Issuing 2,000,000 tokens to SnapShot Co, for developing a ZK Layer 2 solution.
Allocating 1,000,000 tokens to Ogle Co. as a security budget for tracking and mitigating potential exploits.
This semi-annual budgeting process ensures that if the foundation or any founder is not performing adequately, the network can effectively "fire" them by halting further operational funds. Since the entire treasury isn’t pre-allocated and permanently tied to the foundation or the founders, there is a continuous incentive for the foundation and board members to both communicate and perform well for token holders to secure renewed budget allocations.
Governance Through Budgeting
Governance through budgeting will be a core tool for Glue’s future growth. For example, a governance proposal could allocate 3,000,000 tokens to an entity to purchase a company with a significant number of credit card terminals. This acquisition could enable the Glue Network to implement a Point-of-Sale credit card solution, driving further adoption. However, such initiatives will only proceed if Glue token holders vote in favor. This model ensures that the foundation’s initial allocation is designed to deplete relatively quickly, making the foundation and founders accountable to token holders for their performance. By tying the renewal of operational funds to governance votes, Glue ensures that the foundation remains focused on delivering value to the network and its stakeholders.
A Multi-Entity Approach
Decentralising Operations and Control
One critical advantage of Glue’s governance and treasury management approach is that it facilitates a more decentralised, multi-entity structure. Most Layer 1 networks are operated by a single, centralised entity, often leading to issues of control and lack of accountability. Our goal is to avoid this centralisation and instead promote a diverse and decentralised operational framework.
Proposed Structure
The Glue foundation will initially serve as the primary entity, but as the network and its staff grow, multiple entities should emerge. These entities will be funded directly by the network through governance votes, ensuring that control remains with the token holders rather than being concentrated within the foundation. Future budget allocations to the Glue foundation should therefore be relatively minor.
Last updated