The scope of this proposal is to turn Wonderland into an organization that serves its token holders. This will be done by improving security, ensuring stability, and allowing flexibility, by creating a team of officers empowered to handle day-to-day operations with less friction.
The primary things this proposal does are:
- Streamline DAO governance processes to be more efficient.
- Empowers elected officers to make decisions within their departments.
- Establishes the Wonderland management budget.
This proposal takes into consideration legal advice and maintains stability and security. This proposal seeks to reduce governance inefficiencies that cost holders both in opportunities and profits. It will reduce attack vectors on governance that may occur, and empower an elected team to make decisions with reduced friction. It assures flexibility and responsiveness in a space where these traits are paramount.
Link to previous discussion
[DAO Discussion] Wonderland DAO Amendment
[RFC] Wonderland DAO Amendment
- Yes, Implement the new model
- No, make no change
The purpose of this proposal is not to abolish everything the DAO has created over the past year. In fact, the opposite is true. It is the result of a deep desire to protect what Wonderland has achieved and created that led to the formulation of this proposal.
Without question, our current system is flawed. Governance and the framework are composed of a number of small pieces that do not fit together and are, at a minimum, slow in response.
As there is much work to be done and the security and procedure of our existing governance and investment systems are compromised, Wonderland cannot afford to pause the DAO this way and engage in months-long discussions to address every miniscule detail. Instead, we can proceed with what is proposed here, being more knowledgeable this time around, and build on this revised structure.
Pointing out and discussing security flaws that may imminently cause a governance attack without addressing them in the same proposal is unwise. The elected team would be remiss if we delayed the protocol’s process as a precaution until the DAO reaches an agreement on all aspects of its management.
In addition to the existing team, the DAO is presented with the possibility to add a significant boost of insight and advice to ensure the protocol’s success by including one of Wonderland’s founders, Sifu, who has extensive experience with TradeFi, DeFi, hedge funds and professional contracts. Acquiring a team member with his advanced level of expertise is essential in ensuring the ongoing success of Wonderland.
High Level Overview
The following proposal was crafted after a series of in-depth discussions with legal firms around the world, which led to the realization that we have failed our holders by losing focus on the main objective of the protocol: profits for holders.
As a result of Wonderland’s abstract management, there is a high risk of malicious actors carrying out governance attacks in an effort to totalize the system. Protocol stability is negatively impacted directly by this, since these actors may accumulate voting power for a brief period of time and promote their own agendas in specific aspects of Wonderland’s day-to-day operations.
Moreover, Wonderland has been subjected to long, frequent, and inefficient governance procedures, which are susceptible to manipulation. Though the team has always focused on the community and how to serve it better, unintentionally it has resulted in a system that focuses and abides by the loudest people, not the clear majority of silent “stake and chill” token holders. A long and time-consuming governance system, that promotes mob participation rather than a power by shares or delegation in Wonderland, which is host to constant conflict and disagreement between people who, estimated on votes, collectively hold a very small percentage of the shares.
Furthermore, our Treasury cannot respond quickly to the fast changing market conditions, which is essential in this industry, thereby damaging its performance and putting investor value at risk. Some examples from the last quarter illustrate how Treasury delays lead to big financial losses.
UwU Lend, which was one of the most controversial proposals and had to be voted on three times, resulting in Wonderland losing an average of ~$4,000 per day for every day the proposal was delayed. The Treasury Council decided to lock UwU on 8th of November and the final approval arrived on 8th of December resulting in an approximate amount of $120,000 in damages. This directly affects the liquid backing as the yield is considered liquid for the redemption price. Aside from the daily damages, the exposure of this proposal was significant and led to a certain amount of frontrunning. The original proposal for the lock-in UwU LP was drafted with Wonderland at the time looking at around 300% APY returns on investment. However, once the TMP actually passed, a month later, Wonderland was looking at around 150% APY return on investment prior to the lock.
As part of Interport seed phase presale investment, Wonderland intended to invest $1,500,000 for 7,500,000 ITP at $0.2 per token. Upon approval of the proposal, Interport’s presale had already concluded and the price had changed to $0.3 per token. Ultimately, Wonderland acquired 5,000,000 ITP, resulting in an overall loss of 2,500,000 ITP, or $2,800,000 at the current valuation.
The Swapfish investment was among the TOs’ alpha findings. However, yields dropped by over 75% during the delay. Both the alpha and Wonderland’s intention to join were announced to anyone interested. This gave to others several days of yield that should have benefitted Wonderland’s holders.
Several other positions were canceled or modified as the TMP caused frontrunning and valuable time was lost. Some strategies were never proposed, as they cannot efficiently be implemented with these processes.
Wonderland’s Treasury has been threatened by lengthy procedures and frontrunning opportunities that the protocol provides by informing the public space in advance of Wonderland’s investments. This tactic would be considered outrageous and unacceptable by any experienced investor. It is common for frontrunners to pay for access to such information, whereas Wonderland leaks it for free via the TMP system, confusing strategic information censorship with transparency.
It is prudent to establish a successful corporate management structure for Wonderland in order to ensure long-term stability, security, and flexibility. It will help the protocol to reach its full potential and maximize profit for holders. Corporate management structures have been developed through decades of experience and billions of dollars of investment, and have been found to be an optimal structure by regulatory agencies and think tanks around the world.
For the protocol to be successful, secure, and stable, it is essential to have a strong leadership team with decision-making authority. In the midst of a bear market where opportunities are limited, now is the time to take action and evolve to prevent further losses caused by our systematically flawed structure and establish a proven working system to achieve the wants of the vast majority: security, efficiency, stability, performance, and profit.
Fortunately, this year, a number of individuals from the community emerged to lead the internal process and maintain the protocol’s integrity and vision.
It is imperative to give the team the opportunity to continue with greater efficiency what they have been doing for the past year, despite their limited access. A better management system is one that aligns with real-world trends and lessons learned, rather than reinventing the wheel. The DAO should be responsible for setting the general direction of the organization, while management should be responsible for its day-to-day operations.
Low Level Details
A six-department structure was designed based on Wonderland’s current operations to avoid the danger of testing an unfamiliar system which could lead to negative results.
The voice of Wonderland. Communications, social media, monthly Medium articles and community platforms are the scope of this department and serves as a meeting point between the various departments and the community at large.
The Compliance Department should provide advice and assistance to all managerial posts with regard to compliance with all relevant laws, regulation, and DAO rules.
Oversee all Treasury-related activities. Responsible for the preparation of quarterly performance reports for the holders, oversight of the Treasury operations and its budget, community proposals, risk management, and approval of strategies.
Ensure that the information is accurate, the structure is appropriate, the internal organization is effective, and that legal advice is followed in cooperation with the Compliance Department. In addition to ensuring Wonderland’s internal operations are efficient, the Operations Department will provide the rest of the departments with solutions to increase day-to-day efficiency. The Operations Department also serves as the Protocol’s information bank.
Ensure that the protocol’s technical components meet industry standards. Assurance that all technical operations are functional and properly managed. Ensure that technological resources are geared towards technological advancement and all technical improvements and suggestions are implemented in a timely manner.
Advise all departments in order to ensure that the vision for the Protocol’s growth is implemented and provide knowledge and guidance on delicate decisions. Analyzing and providing insight into the potential risks associated with the protocol’s financial investments to help avoid making decisions that might have unintended consequences. Whenever necessary, assisting with the negotiations with third party protocols.
The DAO serves as the organization’s board of directors and elects officers to handle all aspects of the organization’s management. Token holders are provided with close communication daily through Wonderland’s social platforms and discord channels, or they can opt to follow the quarterly treasury summary and market outlook and regular news articles instead. Establishing this structure will be beneficial for future restrictions and regulations as it closely resembles existing real-world corporate structures.
In order for the Protocol to fulfill its strategic mission, the Team is responsible to collectively establish and publish the operational system that demonstrates how specific activities will be handled. In order to ensure frictionless workflows, secure procedures, and adhere to legal advice to prepare for any upcoming regulations, the team will implement an internal system of operations that is as close to actual fund guidelines as possible. The revised management structure explicitly sets all internal rules.
The Officers will be responsible for managing the day to day operations of the protocol. Formerly voted WIPs shall be considered as operational guidelines.
Removal of an Officer
By the Team
Any team member may propose the removal of another team member by internal vote with a valid reason. Majority vote is required.
By the DAO
A No-Confidence Vote (NCV) can be proposed by a DAO member as a DAO Discussion [DD], with solid reasoning, to replace any member of the team. The DAO may initiate the forum-based removal process as follows: The NCV must be posted and remain open in the Wonderland Forum for three days before voting. At the conclusion of the discussion period, a four-day Snapshot vote will be conducted requiring 75% of voters in agreement on the final decision of removing the team member. In order to prevent exploitation of the system, team members are granted immunity for three months after their election as well as two weeks of immunity after an unsuccessful NCV. During this time, only an unanimous vote of the team can remove another member.
Addition of an Officer
In the event of a team member being ousted, unable to fulfill the duties of the position for a prolonged period of time, or resigning prior to official elections, the team will vote for an interim replacement and an open letter will be posted in the forum. The team holds the responsibility to conduct due diligence for each application and to approve the candidacy.
In accordance with industry standards, legal advice, and community feedback, a 2&10 system is suggested. The management fee will be 2% per year, and the performance fee is 10% per year of profits only, with a high watermark, defined as the price difference of wMEMO between the conclusion of each quarter and the highest liquid redemption price of wMEMO since the passing of this proposal. This budget is dedicated to cover all operational costs for running the organization.
Operational costs include but are not limited to team member salaries, legal expenses, marketing, payments for required personnel within departments, technological maintenance, enhancements and security, and any other expenses required for protocol management. An expense report will be published on a quarterly basis to provide transparency on how the management fee has been utilized.
Term of Office
As per community suggestion, and Officers’ agreement, the members of the management team will remain in their positions until they resign, the team votes them out, or the DAO replaces them via an NCV.
A new subcategory, Wonderland Management Proposal (WMP) will be created, replacing the RFC and WIP sections. The DAO Discussion section (DD) may be used by any member of the DAO who wishes to post an official proposal for review by the management team. The management team as whole or any member of the management separately can edit, refine, and promote the proposal to WMP, if the proposal is deemed as beneficial for the DAO and enough participation is reached. The management team may use a direct WMP to obtain DAO approval for potentially contentious or highly important decisions. It should be noted, however, that while this will be the case for any major changes, this option is not mandatory for management and operational changes. The time frame for the discussion phase for each WMP prior to posting a Snapshot vote will be determined dynamically by the management team based on the state of emergency, the complexity, and the feedback received.
The elected Officers will constitute the Wonderland Management Team if passed. All responsibilities and authorities for the management of the protocol will be transferred to them. It is expected that decisions made using the old governance system will be followed, less strictly, at the discretion of the management team in order to ensure a rapid improvement in the protocol’s operations until revised amendments are voted through via WMP.
The goal is to implement a system that is as close to real fund guidelines as possible. This will ensure a frictionless workflow and a fast but efficient decision-making process. Implementing a proven system will not only enhance the team’s ability to comply with regulatory requirements, but will allow them to formulate legally and statutorily acceptable guidelines as well.