Companion proposal: Draft: Reprice .tez to USD targets, with an optional rate-triggered reset — the two are intended to be voted in the same cycle.
1. Summary
This proposal asks the DAO to co-fund Tezos Domains operations for the remainder of the 2026/27 budget year, alongside Tezos Foundation grant funding that is already in place and applied.
Two authorizations are requested:
| Action | Amount | |
|---|---|---|
| A | Transfer XTZ from the DAO treasury to the operational multisig for the community programs | 16,800 XTZ |
| B | Authorize conversion of treasury XTZ to USDT, drawn as needed, to co-fund core operations | up to 150,000 XTZ |
Both draw on the main treasury (KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk). Authorization B is a ceiling, not a disbursement: funds are drawn as operations require, and the authorization lapses on 30 June 2027.
Tezos Domains operations are funded from three sources this year, and this proposal is the second of them. The Foundation grant covers the first part of the budget year; this authorization co-funds the next stretch; and a further Foundation grant, already anticipated on both sides, completes the period to 30 June 2027. The companion repricing proposal is the structural piece — it moves the protocol’s running costs onto protocol income so that each subsequent funding round is smaller than the last.
Why the DAO is being asked, and not only the Foundation. The Tezos Foundation has supported Tezos Domains since 2021 and continues to support it. The direction of that cooperation is clear: the protocol is expected to meet a growing share of its own costs over time, and continuing the relationship means moving in that direction. This proposal and its companion on repricing are how the DAO does that — one by co-funding operations from its own treasury, the other by putting the protocol’s running costs onto protocol income. Both strengthen the position from which the project asks for anything further.
2. Why this is needed now
2.1 The community multisig needs replenishing
The operational multisig KT1CQR2Xa3ZdwzzxTV8skcdQRJbkJTj1tS8A (TzSafe, L1) pays the community programs: community manager 1,500 XTZ, moderator 250 XTZ, Stewards of Governance 300 XTZ, TezWatch 50 XTZ — 2,100 XTZ per month, paid on that schedule without interruption since June 2025.
| Balance, 31 August 2026 | 5,310 XTZ |
| Monthly outflow | 2,100 XTZ |
| Covered by the current balance | ~2.5 months, to mid-November 2026 |
The multisig was last topped up on 6 August 2025 with 28,798.5 XTZ. That top-up did not come from the DAO treasury — it corresponds to the 28,800 XTZ component of the 2025/26 Tezos Foundation grant, which was passed straight through to community payments. The 2026 grant is USD-only and contains no XTZ component, so there is no equivalent inflow this year. The DAO treasury has not funded the multisig since January 2025 (20,000 XTZ).
This sets the timetable for part A of this proposal: governance should conclude and the transfer land in the first week of November 2026, ahead of that month’s payment run — payments go out around the 10th of each month — so the schedule continues without a gap.
2.2 What the authorization is for
Operating Tezos Domains costs money in four places, all but one of them billed in US dollars:
- Engineering — maintenance, protocol-upgrade compatibility, incident response, and a one-time migration to the reduced infrastructure setup
- Infrastructure and third-party services
- Entity and administrative costs, billed annually in November
- Community programs, paid in XTZ — 25,200 XTZ over the year
Grant funding already in place carries operations into October 2026. From that point the budget year has to be met from two sources: treasury XTZ converted to stables, which is what this proposal authorizes, and a further Tezos Foundation grant, subject to the Foundation’s approval, which is expected to cover the balance.
§4 sets out the authorization, and §7 the risks.
Costs were cut before this proposal was written. Infrastructure spending for 2026/27 is 48% lower than 2025/26, and the server footprint — by far the largest line — is down about 64%, from roughly twenty dedicated machines to a minimal production setup. The saving is real rather than reclassified: every other infrastructure line is essentially unchanged, and the whole reduction comes from machines that are no longer run.
That was achieved by ending operation of our own Tezos RPC nodes (Foundation-provided endpoints are used instead), retiring the testnet and Etherlink environments, and consolidating what remains. The wider scope is reduced on the same basis: no formal service-level agreement, production on a minimal rather than fully redundant setup, and hourly maintenance in place of full-time staffing. The DAO is being asked to co-fund a budget that has already absorbed those reductions, not one that could still be trimmed.
2.3 Protocol income does not cover it
Verified on-chain, trailing 12 months (1 September 2025 – 31 August 2026), inflows to KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk:
| Source | XTZ | ≈ USD @ $0.2213 |
|---|---|---|
| TLD registrar (domain fees) | 42,133 | $9,324 |
| Baking rewards | 3,477 | $769 |
| Total | 45,610 | $10,093 |
Income is earned and held in XTZ; the dollar column is a valuation at the 90-day average rate, not an amount received. On that basis protocol income meets roughly one seventh of what it costs to run the service over a year — and that includes baking rewards; domain fees on their own are nearer one eighth. Because the costs are billed in dollars, that share moves with the exchange rate: at $0.15/XTZ it would be about a tenth, at $0.40 about a quarter, with nothing about the business changing.
The shortfall is not a matter of one line item being too large: it would remain a shortfall of the same order whatever single category were removed from the budget. It is a shortfall of income.
This is the structural problem behind both proposals. Domain fees do not cover the infrastructure the domains run on. The companion repricing proposal is what changes that; this one covers the period until it does.
3. Treasury position
On-chain, 31 August 2026:
| Account | Address | XTZ | ≈ USD @ $0.2213 |
|---|---|---|---|
| Main treasury | KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk |
149,504 | $33,085 |
| Operational multisig | KT1CQR2Xa3ZdwzzxTV8skcdQRJbkJTj1tS8A |
5,310 | $1,175 |
| Total | 154,815 | $34,261 |
For context on the scale of the decline: the same treasury held roughly 995,000 XTZ (~$738,000) in late 2023. What has fallen is both the balance and, far more, the exchange rate — XTZ has gone from ~$0.74 to ~$0.22. USD figures throughout use the 90-day average, $0.2213, the same basis as the companion repricing proposal.
4. What is being authorized
A. Operational multisig top-up — 16,800 XTZ
Transfer 16,800 XTZ from KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk to KT1CQR2Xa3ZdwzzxTV8skcdQRJbkJTj1tS8A.
16,800 XTZ = 8 monthly payments at the current 2,100 XTZ/month budget, November 2026 to June 2027 — the remainder of the budget year, which runs July to June. The current balance covers the September and October payments and leaves roughly 1,100 XTZ as a buffer. The programs and their amounts are unchanged by this proposal; any change to them is a separate matter, and the following year’s programs belong to the following year’s budget.
To be executed immediately on resolution, so the payment schedule is never interrupted.
B. Conversion authorization for core operations — up to 150,000 XTZ
Authorize the treasury signers to transfer up to 150,000 XTZ in total from the treasury to the operating account of the Tezos Domains Foundation — the entity that pays the service’s invoices, not to be confused with the Tezos Foundation — to be converted to USD stablecoins and spent on the budget in §2.2. Transfers are made in whatever amounts and at whatever times the signers judge appropriate, up to the ceiling. The authorization expires 30 June 2027; anything unused stays in the treasury.
Each transfer is an ordinary treasury multisig operation and is visible on-chain. The authorization is a ceiling, not a spending target; whatever is not needed is not drawn.
This is the route the DAO has used before. P-005 and P-018 funded operations by converting treasury XTZ to USDT (P-018 for $69,721), and P-019 already lets the treasurer move up to 10% of the treasury a month into stablecoins, held at the same account, as risk management. What P-019 does not do is authorize spending those stablecoins on operations, and its ceiling of half the treasury is below what this year needs. This proposal supplies both.
5. What this covers
At the 90-day average rate of $0.2213/XTZ, the full 150,000 XTZ authorization is worth approximately $33,200.
That covers a substantial majority of what remains in the budget year after the grant funding already in place. The balance is expected from a further Tezos Foundation grant, subject to the Foundation’s approval, which will be requested once this vote and the first measured effects of repricing are known. The Foundation has supported Tezos Domains continuously since 2021, including for the current budget year, and has been consistent that it intends the service to keep running; this proposal is one part of a funding plan rather than the whole of it.
Why 150,000 XTZ and not some other number. The ceiling is set by what the treasury can supply over the period rather than by a target to be spent: it is roughly the balance available once the community programs in part A are funded and expected protocol income is taken into account. Because only what operations require is drawn, an over-generous ceiling costs the DAO nothing — unused headroom simply stays in the treasury and the authorization lapses on 30 June 2027.
Sensitivity: the value of the authorization moves with the XTZ price, because conversion happens at prevailing rates. At $0.25 it is worth ~$37,500; at $0.17, ~$25,500. That is the main reason it is written as a ceiling drawn on demand rather than a fixed sum.
6. Alternatives considered
Leave the whole budget to the Foundation. The DAO would contribute nothing and rely entirely on grant funding. Rejected because it is the opposite of the direction the project has committed to: the expectation is that the protocol carries a growing share of its own running costs. A DAO that co-funds its own operations is in a materially stronger position than one that does not.
Reduce the community programs instead. Worth stating why this does not solve the problem: the programs are under 8% of what it costs to run the service, and the budget was already reduced from 28,800 to 25,200 XTZ a year. Because they are paid in XTZ, their real cost has fallen by roughly two thirds since 2024 without any decision being taken. Even removing them altogether would change cost coverage by about one percentage point — the shortfall is on the income side, which is what the companion repricing proposal addresses. If the DAO wishes to revisit the programs on their own merits, that deserves its own proposal rather than being folded into a funding vote.
Convert everything now, in one transaction. Simpler, and removes the risk that XTZ falls further before later draws. Rejected in favour of drawing as needed because the treasury has already converted at successively worse rates for two years, and because a single lump sum removes the DAO’s ability to stop if circumstances change.
7. Risks
| Risk | Assessment |
|---|---|
| XTZ falls further before the authorization is drawn | Direct and material. Each 10% fall costs ~$3,300 of the authorization. Mitigated partly by drawing on demand, and partly by P-019, under which the treasurer can already move up to 10% of the treasury a month into stablecoins while this vote runs; the real mitigation is the repricing proposal, which reduces how much has to be converted at all. |
| Selling near the lows | Acknowledged. The treasury was worth ~$738,000 in late 2023. Converting now locks that in. The response is to convert the minimum needed, on demand, rather than to try to time the market. |
| The authorization is drawn in full and leaves little treasury reserve | Possible, which is why this is a ceiling rather than a schedule: unused headroom stays in the treasury. It is also the strongest argument for passing the repricing proposal in the same cycle, since protocol income reduces how much has to be drawn at all. |
| Funding for the 2027/28 year is not yet secured | Normal at this point in the cycle — the current year’s funding was likewise agreed in stages. The work that improves the position is the repricing proposal, which grows protocol income, and the milestone reporting under the existing grant, which is on schedule. |
| Community programs are funded in full while core operations are co-funded | A deliberate choice, set out in §6 so the DAO can vote on it knowingly rather than have it decided by default. |
8. Implementation
Both authorizations execute through the treasury multisig KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk (create_proposal → sign_proposal → resolve_proposal).
- A is a single
transferoperation: 16,800 XTZ →KT1CQR2Xa3ZdwzzxTV8skcdQRJbkJTj1tS8A. Executed immediately on resolution. - B is executed as one or more
transferoperations to the Foundation’s operating account, at the signers’ discretion within the ceiling. No contract change is required.
Timeline. Discussion and vote through October 2026; resolution and execution of A in the first week of November 2026, before the November community payments.
9. Vote
- For — approve A (16,800 XTZ multisig top-up) and B (up to 150,000 XTZ conversion authorization, drawn as needed, sunset 30 June 2027).
- Against — approve neither.
- Abstain
Appendix — sources
All on-chain figures were read from the TzKT API on 31 August 2026 and can be reproduced:
- Treasury balance:
https://api.tzkt.io/v1/accounts/KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk(balance in mutez) - Multisig balance:
https://api.tzkt.io/v1/accounts/KT1CQR2Xa3ZdwzzxTV8skcdQRJbkJTj1tS8A - Treasury inflows by source:
https://api.tzkt.io/v1/operations/transactions?target=KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk×tamp.ge=2025-09-01 - Multisig flows (community payments, top-up history):
https://api.tzkt.io/v1/accounts/KT1CQR2Xa3ZdwzzxTV8skcdQRJbkJTj1tS8A/operations - XTZ/USD:
https://api.tzkt.io/v1/statistics/daily?quote=usd. USD conversions use the 90-day average, $0.2213; the 30-day average was $0.2104 and spot $0.2348.
Budget figures are from the operational budget prepared for the 2026/27 period and from the grant proposal accepted for it.
The identification of the 6 August 2025 top-up with the Foundation grant’s XTZ component is an inference from the amount (28,798.5 XTZ against a granted 28,800 XTZ), the date, and the routing through a single-purpose pass-through account (tz1ZULrNdhqdiXZ3EyYNVBdBYcPfMWtGCY4A, created 29 July 2025, emptied 6 August 2025).