Orca Treasury Report #3

The latest updates on Orca’s Token Treasury, Fee Treasury, and the Climate Fund!

As Orca’s quest for full decentralization progresses, prioritization to ensure transparency and accountability to Orca’s podmates has been an integral and ongoing theme for the entire Orca community. To this end, this third Treasury Report (and subsequent reports) will cover updates on these three main topics:

1) Token Treasury

2) Fee Treasury and Climate Fund

3) Notable governance updates related to treasury

Token Treasury

Wallet: Token Treasury Wallet

Amount: 40,452,037.93 ORCA, as of May 17, 2023

Notes:

• Token allocation has remained mostly unchanged, with the exception of the 5% allocation for contributors (more on the contributor grant later). For context, refer to the graphic below detailing Orca’s approximate token distribution as of April 2023:

• The Token Treasury also funds Orca rewards, which have averaged approximately 3,000 ORCA per week across several concentrated liquidity pools for this calendar year. Emissions are currently on pace to constitute an inflation rate of roughly 0.5% this year.

Fee Treasury and Climate Fund

Wallets: Primary Fee Wallet, Secondary Fee Wallet

Amount: $3,637,898.57, as of May 17, 2023

Notes:

• In Q1 2023, Orca deprecated support for the non-concentrated liquidity (legacy) version of its smart contract and turned off protocol fees for all its pools. Approximately $9M worth of liquidity remains in pools on this deprecated legacy smart contract which are in withdrawal-only mode on orca.so.
• Orca is not currently charging a protocol fee on any liquidity pools. For more details about trading fees, please refer to Orca’s protocol guide docs.
• Late last year, an ORCA tokenholder governance proposal was passed to convert fees accrued to the protocol into USDC and SOL. These conversions were completed for the Primary Fee Wallet on January 5, 2023.
• Since then, the unconverted fees from legacy pools have accrued to the Secondary Fee Wallet, 20% of which belong to the Climate Fund (for more information on the climate fund, check out this link).
• In short, the Orca Fee Treasury holds ~$3.6M, which includes converted fees in the Primary Fee Wallet and 80% of the fees in Secondary Fee Wallet.

Climate Fund

Wallet: Climate Fund Wallet

Amount: $1,141,940.17, as of May 17, 2023

Notes:

• The ~$1.1M amount above represents the funds (which are held in USDC tokens) in the Climate Fund Wallet and the approximately $85k in funds in the Secondary Fee wallet as of May 17th, 2023.
• As part of the aforementioned conversion in January 2023, ~127K USDC tokens were transferred to the Climate Fund (txn 1, txn 2)
• An automated conversion process for the fees accrued to the Climate Fund has been implemented for some pools and is expected to fully ramp up within weeks.
• A community-led Climate Fund working group will also be putting forth a governance proposal regarding frameworks and plans to disburse funds for mission-aligned organizations.

Notable Updates

Last year, ORCA tokenholders formed and elected a Governance Council, allowing the protocol to be upgraded more quickly while still maintaining ultimate power with tokenholders. In Q1 2023, the Governance Council passed a governance proposal to allocate ORCA tokens to the contributor grant and a white hat bounty, the details of which are as follows:

Contributor Grant

• As summarized in forums, 5M ORCA tokens from the Orca Treasury were earmarked for “Contributor Growth Allocation,” which is held in a standalone wallet.
• The ORCA tokens in this Contributor Growth Allocation will be used to recruit and continually incentivize the best talent on Solana.
• Orca is very excited about this allocation, which will fuel new and exciting initiatives by its diverse independent community of contributors around the globe!

White Hat Bounty

• In November 2022, a White Hat hacker reported a critical bug in the spl-token-swap program used by multiple Solana protocols, including Orca for its now-deprecated legacy pools.
• No funds were lost from the protocol, and Orca was able to patch the exploit with the help of the White Hat and the Solana development team.
• In the interest of showing appreciation to the White Hat and fostering a supportive culture for builders in the Solana ecosystem, Orca’s Governance Council granted the approval of a one-time, special 100K USDC bounty reward for the White Hat.
• Going forward, Orca’s community will continue to be open to bug reports for the Whirlpools smart contract under the existing bug bounty program, and evaluate out-of-scope bug reports on a case-by-case basis.

Conclusion

2022 was a year of uncertainty for the crypto industry. A lot has happened in Q1 of 2023 as well. In these challenging times, Orca would like to reiterate that it is committed to life-long accountability, transparency and professionalism to the community in every single last one of its efforts.

The path towards full decentralization is not perfectly laid out for any protocol; it’s an effort that requires honest communities and builders to work together for the greater good. Orca will continue to be a pillar within the ecosystem that helps ensure that journey remains as ethical as possible.

To stay up to date with the latest developments concerning Orca’s Governance Council, be sure to utilize the forums and Discord as ongoing, regularly-updated resources.

Until Treasury Report #4! 🌊

Disclaimer: The content of this communication is not financial, legal, business, tax, accounting, or other advice and should not be relied on by any persons as such advice. This communication has not been provided in consideration of any recipient’s financial needs. We have not conducted any assessments in relation to these issues based on the personal circumstances of any recipients. Each person should consult its own advisors as to legal, business, tax, accounting, financial, and other related matters concerning these matters in light of such person’s particular circumstances. Before using the protocol, carefully review all relevant documentation and consider risks including total loss of funds.