[DAO DISCUSSION] Allocation of Treasury - Proposal for Investment

Proposal: Treasury Positioning Strategy for Current State of Affairs of the Dao

Opening Thesis

  • The current set of circumstances places the Dao in a transitionary phase. It is crucial that the Dao plan for these circumstances accordingly. We must address the most urgent concerns and put in place a plan to prepare ourselves effectively for the upcoming events. There are many concerns to consider of course, but here I will focus specifically on an investment strategy that would be wise to consider; As we have the opportunity to make investments that will be worthwhile for long term stability.
  • SkyHoppers term officially ends somewhere between the 24th and 26th of July, I propose we extend his term until the 1st of August. This allows us a little more time to make sure the transitory process takes places as thoroughly and successfully as possible. (This is just a thought, without connection to anything else I propose.)
  • Offer SkyH the option to remain as treasurer until Aug 1st
  • Make no Changes

0 voters

High Level Strategy Summary

I propose we allocated 10-15% of stable reserves (may reconsider) for an immediate investment in 5 tokens that I believe everyone will agree are quality projects run by good teams and healthy communities.

(Assuming False Numbers)

Stable Assets in treasury: 100mm USDC
15% = 15mm USDC

I propose we Allocate:

A. 7.5mm DEPOSIT into Aave (Avax Chain)

  1. 4mm in AVAX supply (rewards can either be compounded or distributed through rev share stream)
  2. 3.5mm in Aave supply (atokens will be profitable and potentialy useful for rev share in future)

B. 7.5mm DEPOSIT into BENQI (Avax Chain)

  1. • 3.75mm deposit in USDC supply
  2. • 1.5mm deposit into AVAX supply
  3. • 1.25mm deposit into Qi supply
  4. • 1mm deposit into Link.e supply


> Why is this a good idea?

• We create a position that guarantees Roi, allows us the potential to use flexible strategies with little risk, and we gain insight and knowledge as how to successfully expand initial positions dynamically as markets allow. Assuming improvements and adjustments are considered on a timely basis, agreed upon, and implemented by Dao as needed.

• This strategy suggestion is very broad, therefore it does not require extensive research and planning to realize the benefit of it. We primarily profit through price action and protocol distribution rewards. So then in the future we may use the funds in the next bull market to reposition ourselves; we will have been accumulating without risk in the meantime prior to when this eventually happens. We could then compound, diversify, or realize as protocols profit and income, and utilize for further internal purposes such as rev share or redemptions. Or even external purposes, like helping Abra!

• 3. I believe this proposal also serves as a layer of protection for the Dao during interim period. As we rely on ourselves to be accountable for both the treasury, the protocol, the Dao and its community. It will promote a healthier and mature environment and make it more likely to attract quality people into our community.

• The most likely scenario if something like this does not happen would be: a new TM will be required to create a strategy that has way to many moving parts (trying to outdo Sifu most likely heh) , and the Dao will have to take on the liability for holding them to their own initial standards and theories. If it goes well great, otherwise we are left picking up the pieces while we dwell on our decision to trust someone’s credibility more than their decision making. Just because people have the “qualifications” to be able to decide what is most worthwhile and profitable for the market and the Dao doesn’t mean they understand the full scope of the picture being painted here in defi.

• 5. This type of implementation is very easy to do, requires little discussion, and any discrepancies as to the details and technical assumptions of my proposed investment can easily be discussed and agreed upon in the future after this initial investment is executed.

• 6. These investments give us solid leverage for expanding our voice in the ecosystem. We must find ways to work with other protocols and Dao’s in mutually beneficial ways. We do this successfully in two ways.

a. The first being through utilizing other defi protocols as they are intended to be used, but we do so with integrity and no ill will. We work to their scale. Our goals investing in this way, as I imagine, is to establish mutual trust between protocols and communities, investors, and builders as well. All the while we profit from the source of interdependent cooperation, we honor each other as industry peers and develop healthy dynamics between all our industry neighbors. Xenia, is a powerful ancient Greek custom, and its relevancy today is no different than it was back then. The importance of hospitality is essential.

b. The second is by our economic and portfolio positioning. More along the lines of game theory. We don’t need homerun’s like with the bsgg investment we did in the past. We need base hits. Growth is a slow process for a reason. We take it slow and use our capital to gain an increasing share of the defi market cap over time.

  • Allocate 15mm USDC towards Aave and Benqi
  • Do Nothing
  • Allocate 15mm USDC towards a different investment strategy

0 voters

So if we did what you’re proposing right now tell us what those respective yields would be. I think it’s important you paint more of the picture as it relates to yield which can obviously change a bit but at least educates people on why you think it’s a good idea over doing nothing. I could go try to look up what you’re proposing but I may use a different platform than what you have in mind n yields might be different.

Sure, the yields are variable across the board … all easily under 10% individually or under 30% collectively. This is relatively decent returns while pre-positioning. In the future looping/leverage strategies can be further considered to maximize these yields, but those discussions need to be addressed prior to any kind of relevancy.

The benefits will stem largely from price action of our principal deposits. I firmly believe the amount of growth to come for defi will be unprecedented. And positioning ourselves in the way I am suggesting outweighs any potential downside risk, we have 1000x more to gain and only a fraction to lose, even an investment of this size goes straight to 0, the proportional risks associated with 15 million dollar investment like this are bare minimal in relation to all of assets of value tied up in Wonderland.

Ill start tracking the apy for assumed $100 dollar investments in aave and benqi. supplying avax to both. I will start at the start of the next hour and keep records. both borrowing and lending scenerio’s. @jclemons

Yep and maybe mention reasonable expectations for non bear price movement price appreciation. Buying tokens at discount clearly makes sense and give decent returns even without leverage

thank you good ser, I will amend

1 Like

So you’re in essence proposing we buy;

$5.5mm AVAX
$3.5mm AAve
$1.25mm QI
$1mm Link

i dont think we should be buying any of these tokens in the current market - AVAX would be the only one somewhat acceptable to me.

As to buying the tokens to give WL a voice i dont think we need to bag hold other protocols governance tokens to be heard.

I will address this in the edit.

I’m against adding additional more directional assets in the current market environment unless their hedged or have a high APR for farming (and even that probably isn’t worth it IMHO). I think we should stick mostly to stables, delta neutral strategies, etc. until the market shifts. Governance tokens are even worse than tokens like Avax, they typically have high emissions rates and directional losses are compounded by these emissions (e.g. Spell). This allocation strategy is not logical to me in the current market.

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I agree, but i would make a juke and say that conversation transitions towards does wonderland want to use its capacities for strict p/l … or does it want to acquire market cap of the industry through strategically hoarding governance tokens over time?

I share the same viewpoint as you.

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holding governance tokens is how you get wrecked lol

1 Like

you dont account for time?

I think now is not a great time to be buying into coins like AVAX and LINK. Furthermore, low TVL lending protocols are frequently exploited. If you are using lending protocols, you want to stick with the best.


That’s fair always different options. 15 mill is plenty low TVL to be viable on either of those platforms. I am considering chaning the post to 7.5 mill on Aave and Benqi equally. It would obviously effect rewards respectively all things considered. 7.5 mill is half the pool on qi with a borrow cap of 9,000,000 avax… while the TVL on Aave for Wavax market is above 70 million. What is your fear of exploitation?

Just buy in over a period of time , make adjustments as necessary


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