Proposal: Treasury Positioning Strategy for Current State of Affairs of the Dao
- 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
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)
- 4mm in AVAX supply (rewards can either be compounded or distributed through rev share stream)
- 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)
- • 3.75mm deposit in USDC supply
- • 1.5mm deposit into AVAX supply
- • 1.25mm deposit into Qi supply
- • 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