Summary
While performing discovery in connection with the Treasure Chain, Treasure’s core developers discovered a means by which the vesting tokens allocated to long departed contributors can be clawed back. This proposal seeks to authorize the DAO multisig to initiate a clawback of all unclaimed and unvested MAGIC tokens for past contributors. These funds will be reallocated to two primary purposes: (i) revocable allocations for contributors granted significantly smaller rewards after joining after the original team allocation had been fully allocated in 2021, (ii) supporting MAGIC liquidity and partner token launches in the lead up to the Treasure Chain.
This proposal will also authorize an upgrade of the original L1 MAGIC contract to remove the adminTransfer() and adminMint() function at the time of execution.
Rationale
The L1 implementation of the MAGIC token includes an adminTransfer() function that would enable the admin (the DAO multisig - 0xEc834bD1F492a8Bd5aa71023550C44D4fB14632A) to recover funds from the original vesting smart contracts. These functions have not been utilized throughout the life of MAGIC and all token operations that have been concluded (including prior reconciliations conducted on October 2, 2023 and August 25, 2022) have been with the DAO’s prior approval and notice.
This proposal would authorize a clawback specifically for past contributors who departed well ahead of their tokens fully unlocking and will not impact any current core contributors. This clawback would result in a recouping of 6,706,713 tokens (1.93% of the total MAGIC supply).
The vast majority of the recipients of the original team allocation are no longer present at Treasure. Some individuals receive outsized rewards despite only contributing to the project for a brief period of time when the project was in its infancy (with the largest holder departing ~5 months into the start of Treasure). The MAGIC vesting smart contract was developed by a former developer who made these smart contracts irrevocable and immutable which was a non-standard implementation for token grants allocated towards contributors. This meant that tokens would be unlocked and emitted regardless of a contributor’s motivation, work, and impact made on Treasure and could not be clawed back without use of this adminTransfer() function.
Current contributors believe that directing this MAGIC towards forward-facing opportunity and initiatives for Treasure would be more positive than continuing to reward past employees who left before having fully vested and who have not contributed materially to Treasure’s growth and development. As many community members have noted, these vesting rewards tend to be sold by these wallets as soon as the tokens have been claimed.
It would be much better to put funds towards supporting actual contributors who have been working to make a difference in Treasure rather than continue enabling former contributors to claim unjustified rewards and create a drag on the DAO treasury’s primary holding. It is also important to continue deepening ecosystem liquidity and ensuring favorable token launches of our partners.
This proposal cannot clawback rewards from these contributors that have already been claimed. Instead, this proposal is limited in scope to retrieving the unclaimed token rewards from these vesting addresses. Current contributors, minus the original team, receive vested MAGIC rewards with a condition for clawback upon their departure as is standard in the market. This proposal will ensure that this condition becomes uniform across all Treasure contributors, past and present.
Without doxxing contributors by name for privacy and safety reasons, we wanted to pinpoint the affected wallets and their yet-to-be-claimed and vested rewards at the time of this proposal:
| Address | Unclaimed | Vested |
|---|---|---|
| 0x98b40A1F51623E76842170cb7356c620a4D5ABD3 | 2,341,374 | 2,291,522 |
| 0x52f733cdF640b0f0C775DA40D16A00261DD9F10C | 251,927 | 153,395 |
| 0xf611D1851DDA4C7Ac40abE2Dd6C12A931a5b3a2A | 1,305,565 | 1,288,283 |
| 0x9d8C5291508A5EacE7bf48222CD2B32bb75e5916 | 170,667 | 170,439 |
| 0x6bcf027DEcAaE13e0f507E8Eab1860AA6f3Ad85D | 709,548 | 677,053 |
| 0x7Bc3136da3C2A9fB25278D1425885B54434C423A | 360,391 | 338,527 |
| 0x5967fe60Ea096658F5B116c6375356f173C95A32 | 745,050 | 338,527 |
| 0xd32C8fcE63c7e940Dfaeb6356Eb8b5279C6f26c9 | 822,190 | 677,053 |
| Total | 6,706,713 (1.93%) | 5,934,799 (1.71%) |
*It is likely that this amount will decrease in the lead up to the potential ratification of this proposal as vested rewards are claimed.
Implementation
If this proposal passes, the DAO multisig will initiate the clawback for the unclaimed rewards belonging to the vesting wallets outlined above and upgrade the contract to retire the adminTransfer() and adminMint() functions. We are recommending that the clawback be initiated as soon as possible to prevent any more rewards from being wastefully emitted.
Owner keys for L1 MAGIC are proposed to continue to be maintained and managed by the DAO L1 multisig with any and all future actions implemented through governance.
Next Steps
Given the nature of this proposal, we will move directly to Snapshot for formal voting and parallel discussions with the community. The polling process begins now and will end on April 28, 2024 at 1:38pm UTC.