[DAO Discussion] Diversify Treasury - Reduce risk

[DAO Discussion] Diversify Treasury - Reduce risk


This proposal aims to sell approximately 10% of $UwU holdings, equivalent to ~11.1M, and utilize the funds for more investments.

Community Interest:

  • I would like to see a formal proposal
  • I am not interested in seeing more
0 voters

High Level Details:

Right now, most of the treasury is comprised of $UwU - $111M. While the investment is generating money, the profit that Volta gets is around $12K per day, or approximately $4.5M annually, which doesn’t justify the risk that comes with having most of our assets in $UwU.
I propose to reduce the risk and slightly diversify by selling off 10% of our holdings, ensuring minimal impact on our positions.

Provide Low Level Details:

Let’s begin with the risk. In the event of any issues with UwU Lend, the worst-case scenario being an exploit, it could significantly impact our investment. Additionally, other factors, such as UwU lend not growing on par with emissions, may decrease the token’s price, subsequently affecting the backing price of $Volta. Moreover, since this is crypto, the price of $UwU might not increase even when the rest of the market is on an upswing. This is currently evident, with the overall market being upns while $UwU has been going down for the past month.
While the investment in UwU Lend encompasses not just the coin but also the project, treasury, and the technology behind it, selling off a small portion of the coin shouldn’t impact these aspects negatively.
Why would we sell? A very importnat part of making investments is to diversify your portfolio, thereby reducing overall risk. Since Volta operates like a fund, having more assets can ensure safety and stability. dditionally, if UwU Lend’s price doesn’t skyrocket, there’s potential for more profit, from other investments which is ultimately what matters at the end of the day.
How should we sell? In my opinion, the best way to sell without affecting the price would be through an OTC deal. Perhaps Sifu or his Vision would be interested, or another person or group, which would be ideal. If such an opportunity is found, selling more than 10% might be an even better choice. If no willing party is found, we could consider selling over a period of several months to minimize the impact on the price. Additionally, with the current market on an upward trend, there’s the hope that the token’s value will also rise.
What should the funds be used for? Given that we have a dedicated team, it would be best for them to decide. Personally, I believe the best investment would be a simple one. Coins like Ethereum or Link for example. Sometimes, to make money, you don’t need to reinvent the wheel or in this case building anything new.

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