Safety Module Funding Sources

Possible SM funding sources:

  • Staking Rewards
  • DAO Treasury
  • Fees
  • …?

What are the pros & cons of using any or all of the above? How the SM is funded is likely the first priority in terms of critical DAO-driven decisions about the design of the SM.


I think DAO treasury is fine to use for a period of time. However in the long run probably not. We want it to be self sustaining from the fees generated by the protocol.


We could also consider a way in which the DAO does not finance the staking rewards itself but only compensates the stakers after an event of damage. So the SM could initially finance itself, even if the rewards are relatively small, but the stakers don’t take such a big risk on themselves (maybe like 50% compensation of the loss from the Dao in the event of damage) to get started.