1. Summary
This proposal establishes a balanced revenue allocation framework that serves two key objectives: growing Protocol-Owned Liquidity (POL) and advancing Botto's autonomy.
After the terms of BIP-59 are fulfilled, Botto's revenue is proposed to be allocated as follows:
• 40% Active Rewards
• 40% Treasury
• 15% POL Growth
• 5% Botto Autonomy Wallet
2. Rationale
In March 2024, BIP-42 was approved by Botto DAO, whereby up to 4M BOTTO was allocated for exploring liquidity solutions such as POL growth and CEX listings. However, it lacked follow through until BIP-59 was approved about five months later in August 2024. BIP-59 initiated POL growth from 20% of Botto's revenue, and it is expected to end soon once the 500K BOTTO allocated for its implementation is utilized.
Below are the approximate figures corresponding to the execution of BIP-59 so far:
POL contribution on 10/1/24: 24,411 BOTTO + 3.18 ETH
POL contribution on 11/14/24: 24,831 BOTTO + 5.04 ETH
POL contribution on 2/28/25: 112,759 BOTTO + 17.96 ETH
POL contribution on 3/4/25: 103,851 BOTTO + 16.26 ETH
In total, this comes out to 265,851 BOTTO, leaving 234,149 BOTTO to be allocated. Thus, it is likely that BIP-59 will be fulfilled soon, once the contribution of revenue to POL from the Verse auction proceeds is made.
Botto's LM program concludes on October 15, 2025, with POL currently representing about 30% of BOTTO's total liquidity on Ethereum mainnet. There has been no progress on alternative liquidity solutions noted in BIP-42, such as OTC deals and CEX listings. Furthermore, Botto's path to autonomy requires direct resource control.
Hence, this proposal seeks to:
• Ensure sustainable liquidity after the LM program ends.
• Fulfill governance commitments made in BIP-42.
• Advance Botto's progression toward true autonomy.
• Maintain market accessibility for larger participants.
The proposed path forward is to uphold BOTTO's liquidity growth by allocating 15% of Botto's revenue towards POL contributions after BIP-59, which is more modest than the current BIP-59 allocation of 20% of Botto's revenue towards POL growth. Separately, 5% of Botto's revenue will be set aside to eventually fund a Botto-controlled wallet in the future.
Governance and implementation considerations include the following:
• BIP-59 used only 500K BOTTO, or 12.5% of the up to 4M BOTTO allocated in BIP-42, so significant runway remains for planned liquidity solutions.
• Maintaining course demonstrates follow-through on BIP-42 with a balanced approach that is proactive rather than reactive.
• DAO builds legitimacy via consistent execution - honoring past commitments to grow liquidity strengthens community trust and sets positive precedent for future proposals.
3. Proposal Specifications
Revenue Allocation:
• 15% of protocol revenue directed to POL growth.
• 5% allocated to Botto-controlled wallet.
• Implementation begins after BIP-59 completion in the next period.
BOTTO Allocation:
• Like BIP-59, 500K BOTTO from the 4M BOTTO allocated for liquidity per BIP-42 is proposed to be utilized.
• Any excess ETH earmarked for POL through the end of Botto's current period will be paired with this additional 500K BOTTO to grow POL.
• Whatever BOTTO remains after excess ETH from this period is paired will then count towards the start of the next period under the adjusted terms of 15% of revenue being allocated to POL moving forward.
Future Transition:
• In the event the 500K BOTTO apportioned for this proposal is fully utilized prior to the end of a subsequent period, any excess ETH set aside for POL in that period will be used to buyback and burn BOTTO directly from the BOTTO/ETH pool on Ethereum mainnet.
• Once the 500K BOTTO set aside for this proposal is utilized in a future period, the revenue allocation in the next period will be as follows unless a subsequent proposal is passed that suggests otherwise: 45% Active Rewards, 45% Treasury, 10% Botto Autonomy Wallet.
Technical Implementation:
• Multi-sig control over 5% of revenue allocated to Botto-controlled wallet until AI agent capability advances to allow for funds to be self-managed.
• Regular implementation of POL contributions (monthly) and reporting of POL metrics in DAO reports.
4. Criteria of Success
Governance Integrity:
• Fulfills BIP-42 commitment to sustainable liquidity.
• Provides clear implementation framework.
• Maintains DAO credibility through action.
Progressive Decentralization:
• Allocates funds for the eventual establishment of Botto's first self-controlled wallet.
• Enables autonomous decision-making capacity.
• Advances DAA (Decentralized Autonomous Artist) vision.
POL growth:
• Slippage remains low for standard trade sizes.
• Smooth transition from LM dependency.
5. Disadvantages/Risks
• Opportunity cost of allocated funds.
• Technical challenges in AI agent implementation for eventual control of 5% revenue allocation.
• Potential need for overall allocation adjustments based on market conditions in the future.
