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discord-summary

Tangible red flags in the IDOL / Arrakis DEX-liquidity proposal (pasteable)

  1. Core inconsistency (v3 vs v4): proposal says “Uniswap v4” but references the “existing 0.3% LPT/ETH pool” (on Arbitrum today that’s Uniswap v3). No exact pool/vault/module/hook addresses are provided → cannot audit what we’re actually deploying into.

  2. No pilot / test run despite ~$1M ask: proposal jumps straight to 250k LPT (~$1M) with no staged rollout, no tranche sizing, no time-box, and no “stop button” criteria beyond “we can withdraw”.

  3. No measurable KPIs / stop conditions: it says “reduce slippage / improve depth” but doesn’t define:

    • target price impact at $5k/$10k/$25k (both directions), measured repeatedly
    • inventory drift bounds / time-to-50-50
    • benchmark for net performance (HODL / passive LP proxy)
    • clear stop conditions (underperformance, drift breach, security incident, mandate breach)

  4. Fee structure misalignment: Arrakis takes 50% of gross trading fees even if the treasury loses money net (IL/LVR/tail risk). Fees ≠ net performance; downside is mostly on the DAO.

  5. Numbers don’t support “fees pay for it” at current volume: last 30d onchain volume is ~$1.35M with ~$4.1k total fees (0.30% tier). With a 50/50 fee split, DAO keeps ~$2.0k / 30d (best-case). That’s tiny relative to inventory + smart-contract risk on ~$1M.

  6. “Savings per trade” is overstated without UX details: today, live quotes show ~$25k swaps at ~7% impact; $50k sells can hit a ~45% cliff. Users can sometimes chunk to reduce effective slippage, but that’s not one-click UX and depends on reversion.

  7. If v4/hooks are involved, approvals/roles are the real risk: audit summaries flag hook/approval surfaces where misconfig or role compromise can drain funds. Proposal doesn’t provide a concrete role map (who can upgrade/whitelist/approve/pause).

What we should require before any vote

  • Exact chain + contract addresses (pool/vault/module/hook/manager/guardian), and which components are upgradeable.
  • A pilot (e.g., $100k–$250k tranche, 6–8 weeks) with KPIs + stop conditions written into the mandate.
  • Weekly reporting: depth snapshots, inventory drift, realized fees, net performance vs benchmark, role-change events.

Data + repro: outputs/onchain-slippage.csv, outputs/lpt-univ3-swap-analytics-30d.json, outputs/breakeven-volume.csv, outputs/arrakis-audit-summary.md.