SUP Transferability: Planning Discussion

Proposals
1

:thread:The post aims to start formal discussions on SUP transferability.

With informal discussions popping up in Discord and a draft SIP, I would like to invite input from key stakeholders, including the community, delegates, and representatives of the Foundation, to ensure that we have captured the key considerations of SUP transferability and coordinate necessary activities before a DAO proposal is put forth.

It’s a big milestone for the DAO. We need to do this right, at the right time, for it to be the ecosystem accelerant that we all want it to be.

What, Why, and When

  • SUP transferability is a key step in the protocol’s decentralization and allows SUP holders to participate in liquidity and economic activities.
  • Transferability of SUP may entice more users to participate in SPR.
  • Transferability depends on a DAO vote, but there are important technical and practical considerations to ensure the timing of transferability is in the best interest of the DAO.

Considerations

  • Audit: Prior to transferability proposal execution, the Security Council needs to ensure the changes to the relevant smart contracts (e.g., the reserve system) have been built, thoroughly tested, and audited.
  • Liquidity: The Foundation should ensure adequate token liquidity to support healthy market dynamics.
  • User Experience: The Foundation should ensure relevant documentation and frontend interfaces are updated, integrations with wallet providers are in place, etc.

Open Questions

  1. Macro Considerations: What are the main external and environmental considerations?
  2. User Pipeline: Has SUP been widely enough distributed to committed Superfluid users (knowing that transferability will change the profile of the user pipeline)?
  3. Season Coordination: Should this be synchronized at the turn of a future SPR season?
12 Likes
2

Thanks for opening this discussion. Adding my 2 cents here.

AFAIK, regarding $SUP tokenomics and token distribution, this is the main document. There, we seeÇ

I want to share how SAFe handled this process, so we can compare it. The TTE (Token Transferability Event) was tied to some KPIs/Milestones, which helped to define thresholds that made sense for it. Questions:

  • Is the DAO willing to set up this?
  • If so, which metrics make sense in this case? (Token distribution %, relevant governance actions completed, token utility definition within the protocol/ecosystem, etc).

In addition to that (as I mentioned briefly here, liquidity provisioning, and token listing are usually in place (or well-defined) to make the TTE something meaningful.

I would like to see more discussion around those items.

8 Likes
3

Thanks for opening this up @graven!

Just want to echo what both @graven and @jameskbh pointed out: transferability makes sense, but it’s important we get the timing and setup right.

The SafeDAO example James mentioned is a great one, they used a structured set of milestones (like ratifying a constitution and defining token utility) to guide the process. It helped align expectations and gave the vote more legitimacy.

Something similar could be helpful, not overly complex, just a few clear signals that we’re ready. Maybe things like:

  • Core contracts reviewed and audited
  • SUP utility in V2 clearly communicated
  • Liquidity planning underway
  • Governance participants aligned on expectations

If the community finds value in it, I’d be happy to help outline a simple signaling SIP to frame this discussion.

8 Likes
4

Thanks for this well though through post!

Given the transferability vote is now live, I would encourage voters to abstain from voting until the following questions have satisfactory answers.
We have 2 weeks on the current proposal to consider and discuss, I hope @imran as well as foundation team such as @dopamino, @0xFran and @hellwolf will chime in.

Security - Is the foundation team confident that the security position of the tradability code is sufficient? e.g. audits and bounties
Liquidity - Has the foundation set up appropriate processes for liquidity provision
User experience - Is the frontend for the liquidity provision ready and tested?
Macro factors - Is market timing good to make this token tradable?

6 Likes
5

@vijay Thank you for raising these important points—each of them deserves attention.

However, I respectfully disagree with encouraging voters to abstain. The purpose of the 14-day voting window is precisely to allow the community to express their stance while continuing the discussion. Abstaining delays momentum and creates uncertainty, especially for a topic that has already gone through significant community engagement and support.

On the specific concerns:

  • Security: The tradability code is already part of the standard ERC-20 implementation—well understood and widely tested.
  • Liquidity: While foundation support helps, the community and markets often drive liquidity organically after transferability. This shouldn’t be a blocker.
  • Frontend/User Experience: These elements can evolve continuously. Transferability enables utility; UX will follow and improve in tandem.
  • Macro Timing: Timing is rarely perfect. What matters most is enabling free movement now so that the token can integrate into broader ecosystems.

Let’s use this window to refine concerns, but I believe the vote itself should move forward decisively.

1 Like
6

Thank you everyone for this thoughtful and nuanced discussion. I deeply appreciate the engagement from @graven, @jameskbh, and others.

I’d like to offer a consolidated response to the key points raised across this thread and help clarify the current intention of SIP-5 while reinforcing a path forward that balances ambition with responsibility.

:compass: On Vision and Legitimacy

SUP transferability is not just a technical update—it’s a symbol of the DAO’s maturity, a gateway to economic participation, and a foundation for deeper alignment between contributors, builders, and capital. That said, we all share a responsibility to get it right, not just to enable movement, but to ensure that when movement begins, it is meaningful, secure, and value-aligned.

:locked_with_key: Security & Smart Contract Audit Readiness

As noted by @graven and others, security is non-negotiable. It’s important to clarify:
SIP-5 does not immediately implement a technical change, but instead acts as a community mandate that authorizes the DAO and Foundation to prepare for and execute transferability, subject to the necessary security review and operational readiness.

If the vote passes:

  • Security Council oversight will still apply to any contract changes.
  • The DAO can delay implementation until audits, bounties, or hardening of any smart contract upgrades (e.g., reserve system, if relevant) are complete.
  • We can embed a final readiness checkpoint prior to execution.

:droplet: Liquidity Provisioning & Market Setup

Token transferability without liquidity planning could create an unstable or misleading user experience. This is a valid concern, and I support the idea of the Foundation:

  • Coordinating LP incentives or DEX/CEX onboarding strategies
  • Ensuring there’s market depth and price discovery
  • Communicating clearly what to expect post-transferability

That said, the DAO should not be locked from deciding transferability at a governance level while waiting for the Foundation to act. Instead, a yes vote gives the DAO authority to initiate and lets the implementation date remain flexible until liquidity setup is complete.

:test_tube: User Experience & Frontend Coordination

Several of you rightly emphasized the importance of frontend readiness—wallet integrations, explorer tags, documentation, and user-facing portals. Again, SIP-5 does not require these to be completed at vote time, but rather mandates the DAO to start coordinating this work.

A successful “Yes” vote should trigger:

  • A collaborative plan to finish user-facing updates
  • A clear go-live communication plan
  • Optional phased rollout or “soft unlock” depending on interface readiness

:abacus: Distribution Metrics & Ecosystem Maturity

As @jameskbh and @graven noted, SafeDAO tied transferability to milestones. I believe that’s a great reference point. However, Superfluid is already in a stronger position in terms of engagement, thanks to Season 1 and the deep involvement of protocol-aligned users.

Rather than creating a rigid milestone framework now, SIP-5 can serve as the governance-level trigger to authorize implementation, while:

  • Allowing for a Foundation-aligned execution window
  • Encouraging a public checklist of readiness metrics (audits, liquidity, UI)
  • Requiring transparent reporting before the final “unlock” occurs

:globe_with_meridians: Macro Conditions & Market Timing

Macro timing is a fair point. But it’s also inherently unpredictable. SIP-5 provides flexibility—it doesn’t demand immediate unlock but allows us to be ready when the conditions make sense. That may be this summer, next quarter, or tied to Season 2.

The key is: we don’t need to delay the decision just because timing isn’t ideal today. A DAO should be able to make a forward-looking call and activate implementation only when it aligns with market readiness.

:hammer_and_wrench: Suggested Refinement Going Forward

If the community prefers, I’m open to proposing a follow-up “Readiness Signaling SIP” (as suggested by others) that:

  • Defines optional checkpoints (e.g., audits complete, liquidity plan live)
  • Gives transparency without blocking SIP-5
  • Reinforces DAO <> Foundation coordination

This allows SIP-5 to act as the mandate, and the next SIP to define the “go-live” triggers or governance guardrails, without causing decision fatigue or slowing progress.

:white_check_mark: In Closing

SUP transferability is not the end—it’s a beginning. And we have a rare opportunity to show how a DAO can move deliberately, but decisively.

SIP-5 respects:

  • Constitutional process
  • Legal and technical constraints
  • The DAO’s right to vote on SUP’s core function

But also opens the door to further checks and safeguards before final execution.

Let’s proceed with boldness—but not recklessness. I’m fully committed to working with the Foundation, Security Council, and every stakeholder here to ensure a secure, coordinated, and successful unlock of SUP that supports Superfluid’s mission for years to come.

Thank you all for your time, your trust, and your thoughtful engagement.

2 Likes
7

The following reflects the views of the Lampros DAO governance team, based on our combined research, analysis, and ideation.

Thanks for opening this thoughtful discussion, and to everyone who has shared their views so far. We appreciate @imran’s detailed response addressing many of the concerns raised so far.

We agree with keeping flexibility in the execution timeline, but we feel it would be helpful to complement this with some distribution and engagement metrics ahead of the unlock. For example:

  • What percentage of SUP is currently delegated or active in governance?
  • How broadly was Season 1 participation distributed across the holder base?
  • Are there any concentration risks we should be aware of?

If the foundation can publish these metrics, it can help the DAO assess whether the current distribution aligns with the goals of enabling broader participation and economic utility.

We’d also suggest considering a capped rollout mechanism (e.g., transfer limits per wallet or daily transfer caps) instead of allowlists. This approach avoids centralizing access while still offering the DAO time to monitor liquidity behavior and adjust if needed. If done transparently, it can help reduce volatility risks while maintaining fairness across users.

We’re aligned with the direction SIP-5 sets, but believe these additional steps would improve execution quality and ensure that when SUP becomes transferable, the ecosystem is well-prepared both technically and socially.

2 Likes
8

You can check here about your questions here in reserve mechanism section Superfluid DAO Governance and Tokenomics

2 Likes