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.
Voting period: 7 days
Categories:
Social Proposal
Request for Action
Constitution Amendment
Abstract
Authorize the keyholders to transfer up to 150,000 XTZ from the DAO treasury to the Tezos Domains Foundation’s operating account, to be converted to USD stablecoins and spent on the approved operating budget for the period from mid-October 2026 to 30 June 2027. The authorization is a ceiling drawn as needed, expires on 30 June 2027, and is reported at each half-year. It sits alongside the Tezos Foundation grant that funds operations to mid-October, and alongside the community programs, which continue to be funded from the operational multisig under the standing authority of P-009 and are not part of this vote.
Rationale
Protocol income covers about a seventh of what it costs to run Tezos Domains. The Tezos Foundation has funded the gap for five years and expects the project to carry a growing share of its own costs. This proposal is the DAO’s part of the current year’s funding: the grant covers the first months, the treasury co-funds the next stretch, and a further grant, subject to the Foundation’s approval, completes the year. The companion repricing proposal is the structural fix that makes each subsequent ask smaller. Details, figures and sources follow; the authorization itself is in the Specification.
Details
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.
| Amount | |
|---|---|
| Authorize transfer of treasury XTZ to the Foundation’s operating account, for conversion to USD stablecoins and spending on the approved budget, drawn as needed | up to 150,000 XTZ |
The authorization draws on the main treasury (KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk). It is a ceiling, not a disbursement: funds are drawn as operations require, and the authorization lapses on 30 June 2027.
The community programs are not part of this vote. They continue to be paid from the operational multisig, which the keyholders fund under P-009, the standing authority the DAO gave in February 2024 for top-ups of up to 25,000 XTZ every six months. The next top-up, 16,800 XTZ for November 2026 to June 2027, is being executed under that authority and is described in §2.1 so that the DAO sees the whole funding picture in one place.
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, funded under P-009
The operational multisig KT1CQR2Xa3ZdwzzxTV8skcdQRJbkJTj1tS8A (TzSafe) pays the community programs: community manager 1,500 XTZ, moderator 250 XTZ, TezWatch 50 XTZ (together the 1,800 XTZ CM budget), and the Steward of Governance 300 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 last funded the multisig in January 2025 (20,000 XTZ), under P-009.
P-009 (February 2024) authorizes the keyholders to fund this multisig with up to 25,000 XTZ every six months without a further vote, and asks that the community be notified when a transfer happens. Under that authority the keyholders will transfer 16,800 XTZ — eight monthly payments at the current 2,100 XTZ budget, November 2026 to June 2027 — in the first week of November 2026, ahead of that month’s payment run. This notice is the notification P-009 asks for. The programs and their amounts are unchanged; any change to them is a separate matter, and the following year’s programs belong to the following year’s budget.
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, funded under P-009 as above
The operating budget for 1 July 2026 – 30 June 2027, per the operational proposal accepted by the Tezos Foundation for the current grant:
| USD | |
|---|---|
| Full-year operating cost (engineering, infrastructure, entity and administration, contingency) | $67,177 |
| Covered by the Tezos Foundation grant, July to mid-October 2026 | $20,000 |
| Remaining to fund, mid-October 2026 to 30 June 2027 | $47,177 |
Community programs, 25,200 XTZ for the year, are additional and paid in XTZ under P-009.
The maintenance cap and essential work. The cap is 300 hours for the year, planned as 25 a month; it is a budget, not a limit on keeping the service running. Work that cannot wait — a technical problem that interrupts or threatens service operation, an infrastructure failure, a protocol upgrade deadline, or a governance proposal the project must bring — is done when it is needed, whatever the month’s count. A month that runs over is offset in the months that follow, where non-urgent work is held back so that the year stays within the 300 hours. Only if essential work pushes the year’s total above 300 hours are the extra hours billed, at the same rate, from the contingency line first and then within the ceiling of this authorization. Essential work is never deferred to stay under the cap; the cap governs everything else.
From mid-October 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. §5 sets out how far this authorization reaches.
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 is being 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 to 31 August, $0.2213, the same basis as the companion repricing proposal; XTZ has since traded higher, which the sensitivity in §5 covers.
4. What is being authorized
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 (tz1iVojPo5Vu7QQQ3QquqmB18mJBgFE1YeoQ, the account P-005, P-018 and P-019 use) — 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.
Reporting. The treasurer reports on this authorization at each half-year, matching the half-yearly funding cadence the DAO used in P-005 and P-018: a report for October to December 2026 by the end of January 2027, and one for January to June 2027 by the end of July 2027. Each states the XTZ transferred and the rate achieved, the stablecoins received, spending by budget category against §2.2, and hours billed against the monthly cap. During the reduced-scope maintenance period this half-yearly report stands in for the quarterly reporting of P-006. Unspent stablecoins at 30 June 2027 are reported and carried against the following year’s approved budget.
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, as a separate authorization; P-019 is unchanged.
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, against the $47,177 remaining in §2.2.
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 P-009 top-up for the community programs and expected protocol income are 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 $0.17 the full ceiling is worth ~$25,500; at $0.25, ~$37,500; at the $0.30–0.34 seen in September 2026, $45,000–51,000, which would cover the whole remainder and mean that less than the ceiling is drawn. 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 before the authorization is drawn | Direct and material. Each 10% fall costs ~$3,300 of the authorization at the August valuation. 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. Relationship to existing decisions
- P-009 (operational budget for the treasurer): unchanged. The 16,800 XTZ multisig top-up in §2.1 is executed under it, within its 25,000 XTZ per six months limit; this notice serves as the community notification P-009 asks for.
- P-019 (treasury management): unchanged. This is a separate authorization for approved operating costs, including the conversions needed to pay them. P-019’s 15–50% stablecoin allocation and 10% monthly conversion cap continue to govern general treasury management and are not extended or relaxed by this proposal.
- P-006 (executive roles): reporting on this authorization is half-yearly as set out in §4, in place of P-006’s quarterly cadence for the term of the authorization. In the reduced-scope setup all core-team work for the project, including the treasurer and executive functions P-006 lists, is carried out within the capped maintenance hours of the budget in §2.2.
- P-018 (2025 funding): its second installment, which the core team announced on 17 October 2025 it would not request, is superseded by this proposal and is not drawn.
- P-021 (pricing structure change #3): the cost reductions it attached — the end of market making and of the discretionary feature budget — stand. Nothing in this authorization funds either.
- P-005, P-018: precedent for funding operations by converting treasury XTZ to USDT.
9. Implementation
The authorization executes through the treasury multisig KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uk (create_proposal → sign_proposal → resolve_proposal), as one or more transfer operations 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. The P-009 top-up of the community multisig is executed by the keyholders in the first week of November 2026 regardless of this vote, before the November community payments. The first draw under this authorization follows the exhaustion of the grant, expected in the second half of October.
Specification
- Keyholders are authorized to transfer up to 150,000 XTZ in total from
KT1BzeXvLtPR83aj5FHemXmia6DmdXkeV3Uktotz1iVojPo5Vu7QQQ3QquqmB18mJBgFE1YeoQ(Tezos Domains Foundation operating account), in one or more transfers at their discretion, for conversion to USD stablecoins and spending on the operating budget in §2.2. - The authorization expires on 30 June 2027. Unused headroom remains in the treasury. The maintenance cap of 300 hours applies to the year as a whole: months over 25 hours are offset by later months, and only hours above 300 that were required for essential work (service-affecting technical problems, infrastructure, protocol upgrades, governance proposals the project must bring) are payable beyond it, at the same rate, from contingency first and then within the ceiling, as set out in §2.2.
- The treasurer reports at each half-year, first report by 31 January 2027, as set out in §4.
- Adds: this authorization. Replaces: the undrawn second installment of P-018; for the term of this authorization, P-006’s quarterly reporting cadence (half-yearly instead) and its provision that treasurer and executive functions are performed outside the funded hours (they are performed within the capped maintenance hours). Ends: nothing. P-009, P-019, P-021 and P-023 are unchanged.
Vote
- For — approve the authorization above.
- Against — do not approve it.
- Abstain
Proposal Passing Requirement (Request for action): 50%+ Yes votes, 10%+ TEDv quorum
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 to 31 August, $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.
Prior decisions referenced: P-005, P-006, P-009, P-018, P-019, P-021.
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).
Vote on P-025: Tezos Homebase
Vote Ends: 06 October 2026 at 13:23 GMTProposal Passing Requirement (Request for action): 50%+ Yes votes, 10%+ TEDv quorum
