Abstract
This proposal seeks approval from the stake.link DAO to facilitate Over-The-Counter (OTC) sales of SDL tokens from the DAO treasury to interested buyers under two distinct tracks: Standard Track: 10% discount to prevailing market price with a 1-year LP commitment on the SDL/LINK pair on Base. Spot Support Track: Fixed price of $0.4X per SDL (no discount, no TWAP), immediate spot purchase of ~55,000 SDL, zero LP or time-lock requirements—pure treasury inflow to extend protocol runway without touching existing liquidity pools.
Both tracks provide the DAO with immediate USDC capital at favorable terms while accommodating different buyer intents: long-term liquidity providers and short-term runway supporters.
Rationale
The stake.link protocol leads in Chainlink liquid staking, but sustained growth requires both deep multi-chain liquidity and extended operational runway. Base remains a high-priority L2 for DeFi expansion. Large open-market buys currently face 20–30% slippage on Uniswap, harming buyers and pressuring price. OTC execution eliminates this. The Standard Track mirrors proven SLURPs (e.g., SLURP-27) by trading a modest discount for verifiable, long-term LP—directly boosting Base ecosystem depth. The new Spot Support Track addresses an unmet need: aligned buyers who wish to fund the protocol immediately without LP obligations or lockups. These buyers explicitly do not draw from existing pools, preserving current liquidity while injecting fresh capital for audits, hires, partnerships, or marketing. At $0.4X/SDL (~55,000 tokens = ~$27,500 USDC), this track offers a clean, slippage-free treasury top-up.
Specification Upon Snapshot approval: Standard Track (LP Commitment)
Quantity: Flexible, per buyer
Price: 10% discount to 7-day TWAP of SDL on Uniswap V3 at vote close, paid in USDC
Execution: Trustless swap via DAO multi-sig within 7 days
LP Requirement: Full proceeds deployed to SDL/LINK on Base, locked 1 year (on-chain verifiable)
Spot Support Track (No LP / No Lock)
Quantity: ~55,000 SDL (exact final amount adjustable ±5% by mutual agreement)
Price: Fixed $0.4X per SDL, paid in USDC
Execution: Immediate spot OTC transfer via DAO multi-sig within 48 hours of KYC clearance
LP Requirement: None — buyer may hold, stake, or sell freely
Explicit Condition: Tokens sourced directly from DAO treasury cold storage, not withdrawn from any existing liquidity pool
Shared Governance Safeguards
KYC/AML: All buyers (both tracks)
Transparency: On-chain proof of treasury source (Spot Track) and LP position (Standard Track)
Cap: Total sale across both tracks ≤ 300,000 SDL unless amended via follow-up SLURP
Proceeds: 100% USDC to DAO operational wallet
Conclusion
This dual-track SLURP maximizes flexibility: Standard Track locks in long-term Base liquidity.
Spot Support Track delivers instant, unconditional runway funding at a fair fixed price—without draining a single SDL from existing pools.
Together, they strengthen treasury resilience, reward aligned capital, and accelerate stake.link’s multi-chain dominance. Community input welcome—let’s build.
As discussed in the telegram group :
-How would it be benefitial or fair to existing SDL holders who took a leap of faith by stomaching the slippage for long term commitment ?
I could ask to be added to such a program but it looks like VC’s behaviour.
-Why selling 10 % under the market price ? if anything it should be a bit above market price.
-Spot support is horrendous : lower price, no lp, no lock, no alignment needed : they can dump straight away.
I don’t see the point of doing that when we witness defi partnerships and build programs finaly coming to fruition and we will be able to see the fight for stlink, and hence for SDL heating up.
From a pure market dynamics perspective, it’s not the availability of a marketplace that is driving buyers, it’s offer and demands. If demand is still not high enough at these low prices, considering the scope of Stake.link we have to increase it’s attractiveness, not the other way around.
And Stake.link attractiveness is growing by the day.
I’m in favor of this proposal. Considering the DAO no longer have any stablecoins for runway and have existing expenses to cover, this OTC could help alleviate that without selling SDL on the secondary market.
@Erazz, I believe you can participate in that if you want. I’m not sure what is “VC” about this - it is as transparent as it gets
OTC is helpful for both sides as the DAO gets a stables injection and the buyer is not eating slippage on large volumes.
For the spot buyers - might be worth getting some confirmations about their short to mid term intentions, even if it is non binding. I don’t see why would someone buy OTC only to dump it immediately (there isn’t even profit to be made that way with the current on chain liquidity). From my understanding the buyers are aligned long term if they’re anything like SCD.
Curious to hear other’s opinions, but I’m generally in favor.
@Erazz maybe I should have clarified, this SLURP was created with a few participants already in mind. They are all absolutely long term protocol aligned. Many of us (myself included) have been in since LPL or earlier and bought heavy throughout the past few years including when SDL was in the low teens. That’s not to say we can’t field more participants (we left some wiggle room on the cap just in case), but the initial cohort is definitely protocol aligned.
I personally have just seen far greater incentive to max lock my SDL than to ever LP. This OTC (for me) would be purchasing SDL at a discount to specifically earmark for LP. Don’t forget, we’ll be locking up the Link side of the pair as well. So I think the 10% discount is warranted keeping in mind we’re basically locking up $50k+ of liquidity for at least a year during fairly uncertain times.
We all know SDL the protocol is going to flourish and be successful. The token needs help with liquidity. The goal of this SLURP is to provide that at a time when it desperately needs it.
There should NOT be a discount on price. The “effective discount” that these buys would be getting is purchasing without slippage. That should be the only benefit for said buyers. But regardless, buying on the open market is the only fair way for all current, future, and past SDL holders.
Thank you for your feedback, but I personally do not think 10% is too much of a discount to ask for to LP for at least a year.
FWIW I will not be LPing otherwise. Liquidity will remain as it currently is and potential buyers with size will continue what they’ve been doing and that’s avoiding buying the SDL token.
And that’s exactly how it should be. The price will fall as far as needed until the yield from operations(yield on reSDL) is attractive enough for new buyers/lockers to step in. I’m fine with OTC USDC to SDL purchases at fair market value(eliminating slippage for both the treasury to raise funds and for new buyers alike), but not with a discount.
Short term band-aids to “entice” LPing is just a quick fix with no lasting organic demand. As soon as any incentive is gone, the LP is gone and liquidity is back to it’s market clearing level.
Would a change in timeline from 1 year to longer change your mind?
How else do you propose we increase liquidity? SDL currently incentivizes the LINK/SDL pool on Uni and yet still only a few people participate with pretty poor liquidity overall. Right now if someone wanted to buy 6 figures of SDL, its basically a nonstarter (fwiw its the same the other way ofc. If someone with a large SDL position wanted to exit, they basically can’t without nuking themselves to slippage).
Just to be explicitly clear, by asking for a 1 year lockup we’re asking these LPs to:
Forgo stLINK, stPOL and Build rewards for both their Link position and their SDL position
Potentially hold through a market-wide drawdown next year
LP on Base where we could see some traction or not at all, meaning trading fees would be few and far between
Honestly I originally wondered if 10% was even enough of a discount. There is pretty huge risk with this. At the end of it all, it’s very possible that I would have been far better off with reSDL or even just stLINK.
I was personally doing this for the good of the protocol to get some liquidity for the token that desperately needs it.
I’m struggling to understand why you don’t just take that deal or better yet ask for a better deal even so? If it is such a good deal in your eyes that it seems unfair, we would love for you to join us. I have a few IRL friends I have shown the OTC deal to and they’re interested in it. I will tell them to hold off for next year if you or anyone else participating in this forum wants in with size.
SDL price will struggle to sustain a higher plateau unless we increase liquidity over time. We will perpetually struggle until LINK iterates staking again and we don’t know when that will be. SDL team requires runway for continued dev ops. They have delivered results so far and are not taking VC money while IMO running quite lean. $550k for a year of operations is extremely +EV given the potential returns of SDL both in price appreciation and yield. Why is it that there’s more skepticism than enthusiasm. Do we not know what we hold?
I would much rather the entirety of this raise be supported by the most hardcore proponents of the DAO. We should all avail ourselves of it if we have the investable capital. This year is crucial for us to develop and cultivate multiple relationships with LST sponsors and new entrants to our DAO. If you want to take a passive role, that’s fine… it’s a DAO. But if you don’t like the deal the team has willingly presented to you (without any negotiation or revisions from the investors btw), then don’t invest. If you like it but feel butthurt because you don’t have the cash on hand to put some skin in the game I don’t know what to tell you other than stand aside and allow enthusiastic buyers to help protect your bags.
Given the mention that the DAO currently lacks stablecoins for runway, securing immediate funding without selling SDL on the open market (and eating 20%+ slippage) is the pragmatic move. We need to prioritize the protocol’s operational survival and liquidity depth over perfect optical “fairness.”
However, I have one specific suggestion regarding the Spot Support Track:
1. The Standard Track (10% Discount / 1-Year Lock):
I believe the pushback on the 10% discount is misplaced. In traditional markets and DeFi alike, a 1-year hard lock demands an “illiquidity premium.” Asking investors to lock capital for 12 months in a volatile crypto market is a significant ask; getting them to agree to that for only a 10% discount is actually a strong deal for the DAO. This track looks solid.
2. The Spot Support Track (No Lock):
While I understand the need for immediate liquidity and trust that the intended buyers are “aligned,” relying on a handshake agreement (“trust me, I won’t sell”) is not a robust governance practice. Even the most aligned actors can face external circumstances that force them to sell.
Suggestion:
Can we add a lightweight vesting schedule to the Spot Support Track? Even a 3-to-6-month linear vest (streamed via Sablier or a simple smart contract lock) would alleviate community concerns about an immediate dump, without being as restrictive as the 1-year LP commitment.
This would make the proposal much easier to support for those worried about short-term sell pressure.
Overall, this is a necessary step for the DAO, and I will vote YES, but I would feel much more comfortable seeing some on-chain assurances for the Spot allocation.
I’m not butthurt. I said i would take the deal. I’m just saying giving specific OTC deals to fund operations seems very short sighted and very specific individuals centred.
I’d rather see slurp-56 coming to fruition, wich seems to solve multiple problems at once without short term fixes.
Just a thought but instead of just this approach, how about making SDL available in other exchanges too? Currently it’s only available on Uniswap as far as I know. Thank you everyone for your hard work.
If we zoom out a bit, one thing that stands out is that this discussion is happening before we’ve even had an open conversation about the FY2026 budget. SLURP-42 was the FY2025 budget, and we’re now in late November without a shared view on runway, priorities, or how aggressive versus conservative we want to be next year. So it’s natural that evaluating an OTC proposal in isolation, without that wider context, creates uncertainty.
First of all credit where it’s due. Thank you to @smartcondrums and everyone involved for the foresight and for putting this SLURP forward. It’s clear a lot of thought has gone into anticipating future needs rather than reacting to them. And I can also see exactly where @Erazz and @Stackin troubles are coming from.. I’ve been there, and I genuinely appreciate the concerns they’re raising. There’s probably a lesson for all of us on the importance of having more open, earlier discussions around treasury planning before specific proposals land.
It’s also worth remembering that we’re all essentially on the same side. Most hold SDL/reSDL and are locked for years, and whatever decisions we make will impact our own positions directly. The disagreements here aren’t about the end goal, they’re about sequencing and timing.
From a data standpoint, the protocol is already generating real recurring revenue.
The treasury’s 9M reSDL currently earns about 30.14 stLINK and 24.58 stPOL per week. At today’s prices that’s around $375/week, roughly $19.5k/year.
The LINK SDL UniV3 DoL position from SLURP-51 has generated around 4.29 LINK and 127.8 SDL in fees so far. On a daily average basis that’s around $3.5 day, about $1.2k/year if similar conditions hold (hopefully 1k EOY!).
All of this is happening with only one fully mature LST (stLINK) and one newly onboarded LST (stPOL) just beginning to grow. and importantly, all of it is happening without a real growth budget deployed this year.
Looking back at FY2025, we clearly had a big win in onboarding stPOL. But we didn’t have enough runway to meaningfully invest in stPOL adoption. The product shipped, but the growth engine never had the fuel to turn it into meaningful TVL. That’s a partial success, and it teaches us something important.
Growth doesn’t scale linearly.
If we invest x1, maybe we onboard 1 LST.
If we invest x2, we might onboard 2 or 3 LSTs and give them the attention, integrations and strategy required for real traction.
And multiple LSTs don’t merely add they compound:
more inflows > more stLINK and stPOL yield > more treasury revenue > deeper DoL > more integrations > more inflows again
This is the flywheel we’re trying to build together.
So the challenge here isn’t that the OTC idea is inherently wrong (I think it makes 100% sense). It’s that we’re evaluating it before we’ve aligned on what the FY2026 budget should actually look like. Some people naturally lean toward caution (protect runway first). Others lean toward opportunity (invest early so compounding can happen cough Chainlink strategy cough). Both positions come from wanting SDL to succeed in the long run.
This is why the OTC evaluation should ideally sit inside, or at least be informed by, the broader 2026 budget planning. Once we agree on runway needs, how ambitious we want to be with new LSTs, and how much capital should be available for the DAO, liquidity alignment, or strategic planning, it becomes far easier to evaluate this deal in context.
Right now, even though there are fixed operating expenses that will need to be covered regardless, we’re essentially discussing a capital-allocation decision before we’ve aligned on the broader strategic plan. That sequencing is what’s creating most of the tension.
For perspective, the 300,000 SDL request is small relative to the DAO’s balance sheet. The treasury holds roughly 26.2M SDL (about $10.17M at current prices), so this allocation represents only about 1.1% of total SDL reserves, roughly $116k notional. Even accounting for market volatility, it remains well below 2% of treasury value.
Fwiw, I personally think an OTC deal makes sense and is directionally needed.. the exact structure and parameters are absolutely open for discussion, but the underlying intent is sound.
If we keep the conversation collaborative, acknowledge the valid concerns on all sides, and naturally weave this OTC conversation into the broader planning cycle that’s coming up, we reduce friction, learn from this moment, and give ourselves the best chance that any move strengthens, rather than limits, the flywheels we’re building together.
Ari, your analysis is 100% on point—I agree with everything you’ve outlined.
Thank you @smartcondrums for raising this proposal and addressing the liquidity challenges we’ve faced since LPL launched. It’s hard to have deep liquidity when your circulating supply is so low, this is not a bug, it’s by design.
My Experience as a Major LP
I’ve been working to solve our liquidity issues for quite some time. Until the August incident, I held 25% of the SDL/LINK liquidity on Uniswap (~$200K) and was prepared to double that position. Despite that setback, I remain committed to becoming SDL’s largest liquidity provider one day.
My position grew through consistent participation in every liquidity incentive program since inception, reinvesting all rewards. The strong APY (30%+) enabled my LP to grow massively over two years from an initial $40K investment. I’ve purchased more than $100K of $SDL throughout the years—steadily accumulating during price dips and absorbing significant price impact along the way. These transactions are verifiable on my hacked wallet hugooncrypto.eth.
Regarding the Proposed Discount
While I would personally benefit from this SLURP, I don’t support offering a discount. As mentioned, the token’s low supply and volatility represent a strategic opportunity, not a flaw—it’s by design.
I do support and would be interested in an OTC arrangement, but without the discount. Buyers already gain substantial value by avoiding slippage (your analysis showed 40% savings). That’s a significant advantage on its own. The proposed 10% discount could instead be redirected to enhance LP incentive programs, creating broader benefits for the ecosystem and LP stickiness.
Looking Forward
Our liquidity metrics are also tied to LINK’s price—we exceeded $1M in liquidity when LINK was above $20. The current 2% incentive may not adequately compensate LPs for daily impermanent loss risk and low volume. I believe we need to revisit our incentive structure to attract deeper, more sustainable liquidity.
Tokenized’s ideas in SLURP 50 provide an excellent foundation to build upon. I’m actively planning to restore my LP position and expand it further, and I’m eager to collaborate on developing programs that drive meaningful liquidity growth. Volume and trading fees is another interesting aspect for LPs that we shouldn’t neglect for our analysis.
As Ari mentioned, we should wait for the 2026 budget to come out and analyze the runway before taking any action.
If we keep the conversation collaborative, acknowledge the valid concerns on all sides, and naturally weave this OTC conversation into the broader planning cycle that’s coming up, we reduce friction, learn from this moment, and give ourselves the best chance that any move strengthens, rather than limits, the flywheels we’re building together.
Happy to discuss further and explore how we can strengthen SDL’s liquidity together.
Hi, it’s me again.. but now that the FY2026 budget has been shared and this SLURP has matured through discussion (and even an addendum, which surprised me a bit, given it hasn’t been voted on yet and is still malleable), I wanted to drop in with something that clicked for me yesterday.
Call it an “eureka moment” or just the benefit of sleeping on it: I realised there might be a way to preserve the spirit and goals of this proposal while making the whole process more inclusive, more capital-efficient, and eventually easier to scale for future treasury sales.
As I said earlier, the intent here is very clear and, in my view, directionally correct:
extend runway in the ~$250k–$300k range
build SDL/LINK liquidity on Base (so hopefully SDL will be available to Coinbase users)
I wanted to share a slightly different angle that tries to keep those same goals, but potentially unlocks more inclusivity and long-term efficiency for the DAO.
1. Quick thoughts on the current OTC structure
Both tracks make sense on paper: aligned buyers, no open-market slippage and a clear path to USDC runway and Base liquidity.
The addendum improves a few pain points by:
switching from a fixed SDL amount to a $350k USD cap across both tracks
explicitly targeting $250k–$300k in proceeds
adding an initial $50k per-address cap with a $20k minimum ticket
Shifting to a USD cap is a nice upgrade.. it removes some of the “what if price moves mid-process?” risk, and it’s exactly the kind of constraint that on-chain tools like CoW Swap/Milkman are designed to handle (more on that in a second).
Where I personally start to hesitate is around 2 things:
Discount as a structural cost: a 10% discount on a $350k cap is effectively ~$35k “spent” by the DAO to secure this round. That might be the right call, but it’s still a real opportunity cost.
Access and distribution: a $20k minimum and KYC requirement inevitably push this towards a small, relatively exclusive set of buyers. That can both concentrate governance risk and make some community members feel like they’re watching an insider round from the outside (note @Erazz, @Stackin, @Leonardo comments above).
I don’t see this as malicious (I understand most are long term SDL suporters).. it’s just the natural result of using a traditional OTC structure inside a DAO.
2. CoW Swap Execution (Plain English)
In the context of SLURP-54, where the DAO wants to sell a defined amount of SDL via OTC to buyers (with or without LP commitments), there are a few execution paths worth understanding:
a) Limit Order
The DAO signs an order that says:
“Sell X SDL at a minimum price of Y (e.g. based on recent average)”
This is enforced, the order won’t execute below that price. Once live, it becomes first-come, first-served: any buyer who meets the terms can fill the order fully or partially, instantly.
Pro: Simple to implement
Con: Allows a single buyer to take the full allocation
b) TWAP (Time-Weighted Average Price)
Instead of posting the entire SDL amount at once, the DAO defines an intent like:
“Sell X SDL over N days in small batches, targeting the average market price during that period.”
Structuring the sale execution in smaller chunks over time, for example, split across 7 days.
This reduces market impact and gives multiple buyers time to participate, avoiding a single buyer sweeping the entire deal.
Cons: Requires scheduled and fine tuned execution to allow larger buyers to opt-in.
c) Milkman (Oracle-Validated Execution)
Milkman is designed for situations where execution happens later (e.g., after a governance delay), so the DAO defines an intent like:
“Sell X SDL at the fair market price at execution time, as validated by an on-chain oracle.”
Instead of locking in a fixed price upfront, Milkman checks a trusted oracle (typically Chainlink) at the moment of execution.
The sale only proceeds if the observed oracle price is within an acceptable range, protecting the DAO from stale pricing, MEV, or manipulation.
Pros: Protects delayed executions from bad pricing. Useful for DAOs with automated, time-delayed governance
Cons: Requires a reliable SDL price oracle. Not necessary when the multisig can execute manually and time the sale
Note: Many top tier DeFi protocols, like AAVE, are using CowSwap to exectue DAO related trades. All the info here:
3. Unbundling: sell at spot, then decide how to “pay” for liquidity
Right now, SLURP-54 effectively bundles two things together:
Selling SDL to raise USDC
Paying for Base liquidity by giving buyers a 10% discount + asking them to LP for a year.
My intuition is that we might be better off unbundling those:
Step 1 – Sale:
Use Milkman (or even a simpler CoW limit/TWAP setup) to sell up to $350k of SDL at market price, no discount, with the same USD cap the addendum introduces.
Step 2 – Liquidity strategy:
Take the “discount delta” (roughly that 10% we weren’t giving away) and use it deliberately to:
bribe an SDL/LINK pool on Aerodrome for a few epochs to pull in LPs, and/or
start accumulating veAERO so the DAO owns long-term voting power over Base emissions.
In other words: instead of giving a 10% bonus to a small group of OTC buyers, we sell at spot and redeploy that 10% into incentives and governance assets that:
benefit anyone who LPs on Base (including people who would have subscribed to the OTC),
help decentralize SDL holder distribution, and
potentially fund multiple years of SDL/LINK emissions on Base rather than a single 12-month contractual commitment.
I also like that this path doesn’t fight the spirit of the proposal: the USD cap, the runway target, and the focus on Base liquidity all remain; we’re just changing how we get there.
4. What this means for SLURP-54 concretely
To keep things practical and respectful of everyone’s time:
If the DAO feels comfortable moving now:
One option would be to adapt SLURP-54 so the “Spot Support” component (or even the whole raise) is executed via Milkman rather than bespoke OTC agreements, still capped at $350k, but at real time market price and open to all. The Standard Track LP commitment could then be re-imagined as Aerodrome incentives/veAERO purchases funded from the saved discount, instead of as a legal lock-up.
If that feels too rushed:
I completely understand if governance bandwidth or technical comfort makes this hard to integrate into the current SLURP. In that case, I’d still love us to:
treat SLURP-54 as a one-off bridge to secure runway, and
explicitly plan the next SDL treasury sale as a Milkman-style, market-price sale + Aerodrome/veAERO liquidity program.
Either way, my aim here isn’t to block the OTC or to criticize those willing to step up with capital. It’s to see whether we can evolve this pattern into something that:
keeps the same runway goals,
gets us strong Base liquidity,
is capital-efficient for the DAO, and
feels inclusive to smaller community members rather than like a velvet-rope round.
5. Closing
Huge thanks again to everyone who’s been driving this forward.. it’s clear a lot of thought went into the tracks and the addendum. I’d love to hear from others (especially folks with deeper Aerodrome/ve(3,3) experience.. cough@SethVdLcough) on whether this “sell at spot + program the discount into Base” approach feels like an upgrade, or if there are risks I’m underweighting.
If we can get this right, my hope is that we not only solve this OTC, but also create a reusable template for future sales that brings more people in, strengthens Base, and scales with the protocol.
Thanks for that write-up. We can definetly take this into consideration for future OTCs (if we need them). There needs to be legal checks around the procedure which I will initiate but constituting an offering (in what form it may be) is generally subject to KYC / AML regulation.
For this OTC we should move forward with the cleared and working process.
Happy to discuss further and explore how we can strengthen SDL’s liquidity together.