Hi @AvsA - thank you for the thoughtful questions! We’re re-sharing and answering them here so community members can refer to our updated proposal more easily.
- what are the contracts that govern the vaults and what audits and track record they have?
We won’t use any external vaults to manage the endowment! ENS’s treasury will have full custody of the assets at all times. ENS’s governance system is based on OpenZeppelin Governor, which is in use by many DAOs and has had a stellar track record when it comes to security.
- who has the control of funds going into and out of a fund? Can the DAO request an immediate withdrawal at anytime?
There is no separate vault or fund associated with our proposal; everything will remain in the ENS treasury. For example, if we publish a proposal recommending the DAO use ETH to purchase stETH, that stETH will still be custodied within the ENS treasury, controlled by OpenZeppelin Governor. The DAO has full access to these positions through governance just like any other asset in the treasury. (We’ve explained a treasury allocation via proposal payload with Aave below as an example.)
- who controls the trades on a fund? Who has access to them and what on chain limits they have?
Llama will periodically propose treasury actions to the DAO. All of these actions must be approved by the DAO in order to take place. In that regard, the DAO itself will control the trades on the endowment. Where relevant, we’ll combine multiple strategies into a single proposal in order to minimize governance overhead.
We think this structure makes the most sense for ENS as it’s the most secure and trustless. Our proposals will be to deploy the endowment to simple, trusted assets like stETH or deposits on Aave/Compound. These strategies won’t require frequent rebalancing or trading, meaning it’s not necessary to set up external vaults with special trading permissions.
Regarding your last 3 questions - there is actually no on-chain fund or external interface. We will make use of ENS’s existing governance infrastructure which will limit both smart contract risk as well as social risk (i.e. the endowment manager will not be able to take any action unless first approved by the DAO).
Llama has a lot of experience doing this type of work with Aave. As an example, we recently proposed a token swap between Aave DAO and Balancer. No funds were transferred to a multisig or EOA, and the DAO has retained full custody over funds at all times, as shown in the proposal below. The steps to accomplish this treasury action are as follows, and similar steps will be taken to deploy ENS’s treasury:
- Llama writes and deploys the smart contracts to take a treasury action. For example, here are our contracts for the token swap in which Aave acquired 200k BAL: [1, 2]
- Llama creates an on-chain governance proposal.
- The DAO votes to approve the proposal.
- Treasury actions are executed permissionlessly.
Happy to answer any other questions!