Part of the reason why ve systems disallow contracts from locking by default is because it is trivial to make that locked position liquid by reassigning the owner of the contract. This functionally means that anyone locking from a contract/safe would be at an advantage to those who lock through an EOA if we tolerated free transfer of contract locked veBAL ownership freely.
Recently there have been talks about Tribe selling their veBAL position OTC to interested parties by transferring ownership of a contract that would give ownership of said veBAL position. While I fully sympathize with their desire to sell their veBAL, I personally believe we should not set the precedent of allowing DAO’s to freely transfer their locked positions.
What we can do on our side is call denyListAddress on the SmartWalletChecker contract which will disable the ability to relock any more veBAL from that contract. This forces the position to gracefully expire and unlock, meaning it would need to fully expire for anyone to max lock it again. In the meantime, they can still direct emissions, collect veBAL rewards, and boost LP positions. This is, in my opinion, a good middle ground.
In summary:
If someone locks veBAL and they can transfer ownership freely, did they really lock veBAL?
I would like to hear other opinions on this topic. This discussion is not meant to single anyone out but rather provide us an opportunity to set precedence over how contract locked veBAL positions can be transferred.
Specification
The DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) will call denyListAddress on the SmartWalletChecker Contract at 0x7869296Efd0a76872fEE62A058C8fBca5c1c826C with the contractAddress parameter being TribeDAO’s address 0xc4EAc760C2C631eE0b064E39888b89158ff808B2.
Looking at Tribe’s proposal, we can see there is history there that shows the relationship with Balancer, specially for the tokenswap and the BAL from liquidity mining. So if the proposal (and voters) took the relationship into account, it would be unlogical to have it bought OTC by a third-party.
Far from the case-specifics and building an overall framework, this precedent would also tackle the case for any governance proposal to revisit previous decisions, which is also being discussed elsewhere.
I prefer that they aren’t able to transfer ownership since that is a key part of the veBal design. Transferrable ownership in this case will initiate a slippery slope, and people will ask for the same in the future.
However, I do think there can be extreme cases where it should probably be allowed. Generally, DAOs shouldn’t be allowed to sell their position, but in certain cases, it might be acceptable to let them reassign ownership.
If graceful unlocks are going to become part of the veBAL system I can think of at least one additional scenario that warrants the same consideration.
Example:
The moment the framework to the veBAL system is materially changed locked tokens in wallets should be given an opportunity to gracefully unlock and exit if they see fit. Users are making investments in the veBAL ecosystem by committing capital. Imo, changing functionality of the core operating structures of the system is altering the base concept the user invested in.
I’m of the opinion that graceful unlocks should only be allowed in cases were a project is unwinding and has a multisig with locked veBAL.
If this needs to be brought in I feel that we shouldn’t make the change at all. This would create endless discussions around what is material vs. not.
Apologies, I must have misunderstood. Thought this was about letting Tribe transfer their veBAL locked tokens. Graceful unlock as their veBAL expires naturally makes sense.
I request that this be put to vote under the following specifications:
The DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) will call denyListAddress on the SmartWalletChecker Contract at 0x7869296Efd0a76872fEE62A058C8fBca5c1c826C with the contractAddress parameter being TribeDAO’s address 0xc4EAc760C2C631eE0b064E39888b89158ff808B2.
Thanks for writing this up @Mike_B - While I understand your perspective around the intents and purposes of veBAL I see no reason why TRIBE should be kept from selling their veBAL, especially considering their previous close relationship to Balancer (as mentioned above). This issue is entirely different from a vested token situation (in which case the vest should run it’s course), I think assuming the previous strong relationship TRIBE should be allowed to sell to a equally as interested party and transfer ownership.
The counterpoint to this is always - If we allow it here how do we set the precedent going forward and to me it makes sense to keep it loose. If a protocol goes under, especially a friendly one, we should allow a one time swap if they are selling to an equally friendly/vested protocol.
Why lose a strong voting ally because we want to set unnecessarily inflexible rules?
They are allowed to sell it, it just can’t be relocked. They can even use the on chain functionality of that veBAL position while it unlocks. I believe it’s imperative for a voting-escrow system to enforce illiquidity of locked positions, otherwise those (DAOs) who are in the privileged position of having a contract approved by governance to lock can then freely transfer ownership of that veBAL at will. If an entity can freely liquidate their veBAL position, did they really even lock it?
I understand your original point, my opposition is what’s the point of drawing the line here if the veBAL is transfered from one vested/friendly party to another? (especially when every vebal voter counts) Then we’re just showing an unsupportive and unnecessarily restrictive attitude towards our allies/partners.
Also if all future contracts (outside liquid wrappers) are set to not allow relocking, what incentive is there for a DAO or other entity to hold vebal over one of its derivatives?
