## Vote Type Token holder DAO on-chain 7-day vote period **DAO-elected Sponsors** @Eastban, @JohnPackel, @mcitizen42 # tl;dr Claim ~10.5 tBTC from Bridge Redemption Fees and transfer to the Threshold Committee multisig. # Background ## tBTC Bridge Redemption Fees Threshold DAO is accruing tBTC redemption fees as a bank balance in favor of its [Governor Bravo Timelock Controller address](https://etherscan.io/address/0x87f005317692d05baa4193ab0c961c69e175f45f) as can be seen on the [Bank Contract (balanceOf)](https://etherscan.io/address/0x65Fbae61ad2C8836fFbFB502A0dA41b0789D9Fc6#readContract). In order to use these assets these fees should be claimed as tBTC ERC20 and transferred to the Committee multisig wallet, as was already performed successfully back in July 2024 under [TIP-82](https://forum.threshold.network/t/tip-082-ttg-betastaker-reimbursement-and-tbtc-redemption-fees-mint-and-transfer/883) and February under [TIP-99](https://forum.threshold.network/t/tip-099-claim-tbtc-from-bridge-redemption-fees-and-transfer-to-the-treasury-guild/1017/4) # Proposal This proposal includes the transactions necessary to claim the tBTC obtained as redemption fees and transfer them to the Committee multisig. Transactions to be included in this Governor Bravo governance process: 1. Execute the authorization to use the bank balance: increaseBalanceAllowance method (this function: https://etherscan.io/address/0x65Fbae61ad2C8836fFbFB502A0dA41b0789D9Fc6#writeContract#F6) 2. Execute the Mint: TBTCVault.mint from the GB address (this function: https://etherscan.io/address/0x9C070027cdC9dc8F82416B2e5314E11DFb4FE3CD#writeContract#F11). 3. Execute the Transfer from Governor Bravo to the Committee multisig: TBTC.transfer (this function: https://etherscan.io/address/0x18084fbA666a33d37592fA2633fD49a74DD93a88#writeContract#F10). ## Steps involved in the Governor Bravo governance process 1 - Initiate the vote by: Proposing these 3 transactions through the Threshold Network TokenholderGovernor contract. (0xd101f2B25bCBF992BdF55dB67c104FE7646F5447) 2 - After vote finalized: Queue claim operation in the GB Timelock contract 3 - Execute claim after 48h delay. ## Timing A Threshold Committee member will queue this transaction and post a link to voting via Tally. When the 7-day vote concludes, we will queue for execution after the 48-hour delay.

**Vote type:** Token holder DAO snapshot, single-choice voting (yes/no/abstain) **DAO-elected representative sponsors:** [@JohnPackel](https://forum.threshold.network/u/johnpackel) [@Eastban](https://forum.threshold.network/u/eastban) **Timeline:** 7-day discussion period followed by 7-day Snapshot vote **tl/dr** * Following tokenholder approval to create Threshold Labs per [TIP-98](https://forum.threshold.network/t/tip-098-the-future-of-threshold/1012?u=johnpackel) and [TIP-100](https://forum.threshold.network/t/tip-100-the-future-of-threshold-continued/1033?u=johnpackel), tLabs submits a year-1 budget request for $2,850,000 * This number reflects at-cost projections with zero profit margin added * Proposed milestones by which to measure tLabs success include doubling revenue to 50 tBTC and increasing TVL by 60%, to 7,500 BTC * tLabs has commenced operations based on $250k fronted by the former Treasury committee, which will be deducted from the total * The former Treasury committee created an expense payment plan based on estimated tLabs budget; Threshold Committee will update it to reflect the actual **Purpose** The stated purpose of creating tLabs was outlined in TIP-100 as addressing core challenges facing Threshold and tBTC: 1) growth coordination challenges and unclear market position, 2) stalled tBTC product and technical development and 3) limited tokenomic model. Threshold became “default alive” (the protocol and network can operate sustainably and profitably) thanks to significant cost reductions from eliminating emissions ([modified TIP-92](https://snapshot.box/#/s:threshold.eth/proposal/0xd334afe182b0aa6aee48c4df3668ad5fe68c2983ed3f914bf2477ab3d937ca82)), discontinuing investment in thUSD and putting it in maintenance mode ([TIP-102](https://snapshot.box/#/s:threshold.eth/proposal/0xabe62139271fd42a537dfcbce602b3adbdd4cf02b7cbd3342f56f801863e0cd3)) and reducing by $1.1million/year the cost of Threshold DAO committees and roles via restructuring in anticipation of tLabs executing on tBTC development and growth ([TIP-103](https://snapshot.box/#/s:threshold.eth/proposal/0x0c83560eb8275ae7b5dd645ef73f4824561b7c9699ead00ea11fe78e33f1f885)). The 3 challenges are being addressed by the newly formed tLabs team, and in a section below milestones are proposed for outlining the efforts planned and underway, as well as measuring success. **Budget request** In order to achieve these goals, tLabs submits a 12-month budget request of $2.85 million. While competitive and other considerations prevent the detailing of planned expenditures, we can share that staff employees make up 66% of the total and include Technology, Product, Business development, Ecosystem growth, Marketing and Operations. The planned budget category totals are: * Paid employees: $1.88M (66%) * PR, marketing & growth: $570k (20%) * Outsourcing, audits, miscellaneous: $300k (11%) * Legal: $100k (3%) Note that MacLane waived all compensation as CEO, and as also stated in the discussion on TIP-98, “There will not be a tLabs treasury and annual budget requests will be at-cost without a profit margin baked in.” **Milestones** TIP-98 approved that “tLabs lead protocol, product, business development and marketing functions for tBTC”, stating that high-level goals would include increased tBTC TVL and bridge velocity, upgraded tBTC core technology, and developed tBTC product and usability. tLabs proposes the following milestones to measure success in year one: * **Double revenue to 50 tBTC** * **60% increase in TVL, to 7,500 BTC** Threshold revenue (which is currently from redemption fees only) was ~17 tBTC in 2024 and is currently on track for ~25 tBTC in 2025. Doubling it to 50 tBTC will cover ~80% of Threshold expenses at a tBTC price of $100k (it’s $104,255 at time of writing) – a very large step toward profitability (inclusive of tLabs’ budget request). tBTC’s[ TVL hit a peak of 5,274 last November](https://dune.com/threshold/tbtc), dropped to 4,190 in March and has averaged ~4,700 over the last 7 months (in part owing to velocity of redemptions; we hit 20,000 minted a few weeks ago and are now approaching 21,000, while redemptions total more than 16,000). Increasing TVL 60% from current to 7,500 BTC should accelerate our momentum, draw increased attention and support the growth narratives tLabs is driving in the market (note the[ recent media coverage](https://decrypt.co/315301/threshold-network-restructures-for-profitability-launches-strategic-reinvestment-via-t-token-buyback) and market sentiment following a first press release a few weeks ago). Rather than offer more tactical milestones based on the growth, tech and product workstreams underway, tLabs believes that these two milestones put the emphasis on the growth Threshold needs to unlock even larger opportunities – and which tokenholders emphasized repeatedly during the discussions leading to the formation of Threshold Labs and the DAO restructuring. **Logistics** Based on passage of TIPs 98 and 100 (which included an expected budget range of $2M to $3M), tLabs commenced operations and the former Treasury committee fronted a payment of $250k. This amount will be deducted from the total (budget begins April 1, 2025 and runs through March 2026). Any unused budget will be returned at the end of a year, or rolled over to a future budget. Upon Snapshot approval of this TIP, the Threshold Committee will update the expense payment plan created by East and the former Treasury committee (see overview in the Expense Planning section of [TIP-103](https://forum.threshold.network/t/tip-103-restructuring-of-threshold-dao-committees-and-roles/1066?u=johnpackel)) to reflect the actual amount, then provide 3 months of average expenses in an initial transfer, followed by a monthly transfer to tLabs. Members of the tLabs team are available for a community call to share high-level strategy and initiatives designed to achieve the milestones above. While tLabs will remain in close contact with the Threshold Committee and DAO contractors on at least a weekly basis, the team also proposes a quarterly community call to share updates and progress toward milestones. Also upon approval, tLabs and Threshold Foundation will formalize the relationship in an agreement reflecting this budget total, milestones and cadence for updates. https://dune.com/threshold/tbtc https://decrypt.co/315301/threshold-network-restructures-for-profitability-launches-strategic-reinvestment-via-t-token-buyback https://snapshot.box/#/s:threshold.eth/proposal/0xd334afe182b0aa6aee48c4df3668ad5fe68c2983ed3f914bf2477ab3d937ca82 https://forum.threshold.network/t/tip-098-the-future-of-threshold/1012?u=johnpackel https://forum.threshold.network/t/tip-100-the-future-of-threshold-continued/1033?u=johnpackel https://snapshot.box/#/s:threshold.eth/proposal/0xabe62139271fd42a537dfcbce602b3adbdd4cf02b7cbd3342f56f801863e0cd3 https://snapshot.box/#/s:threshold.eth/proposal/0x0c83560eb8275ae7b5dd645ef73f4824561b7c9699ead00ea11fe78e33f1f885

## Summary As Threshold DAO continues its strategic focus on tBTC growth ([TIP-100](https://forum.threshold.network/t/tip-100-the-future-of-threshold-continued/1033/35)), with recommendations outlined following forum discussions the DAO will also take necessary steps to transition thUSD into Autonomous Maintenance Mode. This means removing direct DAO funding, ending active development and ceasing thUSD’s role in DAO financial planning, while ensuring the protocol remains fully operational for users. Under this new model, thUSD will remain functional, allowing users to open and close troves, while maintaining limited liquidity support in the 3CRV pool. The system will also transition to a single-collateral model, supporting only tBTC, which strengthens protocol security and aligns thUSD with Threshold’s core mission. This transition ensures that thUSD remains a decentralized, censorship-resistant stablecoin, while the DAO removes financial and operational overhead. Any future governance decisions related to thUSD will continue to follow the standard forum discussion, Snapshot vote and on-chain governance process but due to the lack of direct DAO resources or active focus, changes may take longer to execute. ## Why This Transition Benefits the DAO and the Community thUSD has been a unique, decentralized stablecoin, offering: * 0% Interest Borrowing – Unlike USDT, USDC, or DAI, thUSD provides fee-free borrowing, making it a capital-efficient option for users. * Censorship Resistance – Centralized stablecoins face increasing regulatory scrutiny, while thUSD remains non-custodial and resistant to blacklisting or freezing. * tBTC-Backed Stability – With tBTC as the sole collateral, thUSD will be fully aligned with Threshold’s mission of integrating decentralized Bitcoin into DeFi. * Minimal DAO Financial Burden – This transition removes ongoing costs, ensuring sustainability while keeping thUSD accessible. * Sustainable Market Presence – The DAO will leave some liquidity in the 3CRV pool, allowing for organic growth and potential future use cases. ## Key Aspects of Autonomous Maintenance Mode ### 1. thUSD Remains Operational Without Direct DAO Involvement * Users can continue borrowing, redeeming, and closing troves. * Liquidity incentives will cease and no new DAO funding will be allocated to thUSD. * No structured DeFi integrations will be pursued. ### 2. Transition to a Single-Collateral Model (tBTC Only) * ETH will no longer be accepted as collateral, reducing risk and simplifying protocol mechanics. * The system will focus solely on tBTC, ensuring better security and stronger alignment with Threshold’s vision. * A formal governance on-chain execution will be required to enact this transition. ### 3. DAO-Owned Liquidity in the 3CRV Pool * The DAO will leave ~$200K of POL in the 3CRV pool to support market depth. * The tBTC/thUSD pool will no longer be maintained, eliminating low-utilization liquidity. ### 4. Future Governance Flexibility * Any further modifications to thUSD will follow the current governance process, requiring: * A forum proposal to outline any suggested changes. * A Snapshot vote to gauge DAO consensus. * An on-chain governance vote for final implementation. * However, due to this proposal's implementation and the lack of dedicated DAO resources, governance actions related to thUSD may take longer to execute. 5. thUSD Bug bounty - Cantina Bounty Coverage Continue Cantina’s Bug Bounty coverage for the thUSD protocol to proactively identify and address any new or evolving threats with minimal overhead. * Proactive Protection: Swiftly detect and resolve vulnerabilities to safeguard TVL and maintain trust. * Cost-Efficient: Pay only for validated findings, reducing unnecessary expenses and time commitments. ## Restructured Plan – DAO Holdings & Liquidity Allocations Under the Autonomous Maintenance Mode, the DAO currently plans to retain the following allocations, subject to change based on Treasury Committee’s expense management planning: The Protocol-Owned Liquidity (POL) in the 3CRV pool will be maintained to some extent to support liquidity. Within the DAO Vault, a certain quantity of tBTC will be retained as collateral, while a designated amount of ETH currently held in the vault is planned to be retrieved. This ensures that some liquidity remains, while the DAO retains assets in the treasury to be redeployed as needed in the future. ## Final Considerations & Next Steps This decision represents a sustainable and cost-effective approach to ensuring thUSD remains operational while eliminating unnecessary financial burdens on the DAO. * thUSD will remain available for borrowing and redemption. * tBTC will become the sole collateral, strengthening alignment with Threshold’s mission. * Use Cantina bounty coverage to maintain robust security coverage. * DAO financial support will be removed, but some liquidity will remain to sustain market depth. * Future changes to thUSD will require formal governance proposals through the existing on-chain process, which may take longer due to the lack of active DAO resources focused on thUSD. This transition balances sustainability, decentralization and financial efficiency, ensuring that thUSD continues to exist while no longer being a direct financial responsibility for the DAO.