[DAO Discussion] Treasury Advisor - yieldchad

Allocation would be nice to determine beforehand I agree. I’m not sure if length of tenure is an issue here, we can take it quarter by quarter I would assume. Hate to lock anything in for longer than we need. Exit clause would be nice but may not be necessary if we redevelop the governance framework in a way that is more expedient which I believe is the current plan (we can always prepare another DAO discussion to address it later if needed). Clauses are more important in situations where governance takes forever.

I would be happy to step down from my position in the case that a trusted third party, like Sifu, requests it. I would not want to hold the position any longer if it were against the interests of the community or if community members simply did not want me to continue. Happy to add this provision if you agree.

I agree that an allocation would be nice to fix beforehand, but the nature of the TA position is that there is no full discretion, thus it is difficult to say with any certainty how much will be advised. What do you think?

I think this is a great idea…given the cost and responsibility of managing millions of dollars. I assume including myself that 99% of the DAO members don’t have the qualifications to properly evaluate the skill sets for a TM.

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yieldchad - I can imagine the potential frustration on your side with all of the back & forth as it relates to this discussion but your continued inputs and responses are appreciated thanks

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yieldchad & community - I think this post points out the current hang up that I have about us trying to hire a TA before a TM. At the end of the day we are hiring yieldchad to a position with no real authority or accountability. I think yieldchad’s quals are solid in my ignorant perspective but we still have a $100m+ treasury with no real captain. This seems like we are applying a band to a severed leg, it is a good effort but not really effective.

This goes back to my original point - is the treasury advisor vs treasury manager title a legal distinction in name only? If the unwritten assumption is that the TA will be able to execute his strategy with someone else’s hand with a predetermined allocation of treasury funds without interference then I am for yieldchad as a TA.

If the TA can not execute his strategy with a predetermined allocation of treasury funds without interference then I think hiring a TA is premature at this point.

No worries.

It might be helpful to reference the structure of private equity funds. The legal structure for such funds typically involves an investment management team, and a separate entity which is the General Partner (usually a board of several people). The investment management team makes recommendations, but the General Partner has final sign off on all investment decisions.

In reality, I have never heard of a General Partner not signing off on an investment recommended by the IM team. I’m sure it has happened, but it is rare. Investors demand performance form the IM team, not the GP. The GP ensures that the IM team is not suggesting crazy investments, and that there are some checks and balances to the process.

Per WIP 15, there exists a treasury council which votes on investment recommendations. This serves a similar function to the GP role.

If the community would like for me to advise on a predetermined allocation of the treasury, I am fine with that. The critical point is that I am advising, not executing.

Moreover, this TA proposal does not preclude the addition of a new TM in the future, who I could work with, or resign at that point. From the perspective of a wMEMO holder, I view the TA proposal as an opportunity to get someone qualified, with relevant experience, financially incentivized to deploy treasury capital and earn a return for the treasury. While the TA is not as ideal as the TM, I still think it will be value add for the treasury.


What is the work, on a weekly basis, that YC will have to do for the job?

If the actual work is very little, perhaps we can pay people to do this on a contractual basis?

or it is something that we could figure out between wmemo holders and have the multi sig holders execute?

Why would we put a cap on the amount of money he can advise on ?

I mean, if we had predetermined allocation for the treasury, then sure. We could say he is to advise the farming portion only or something like that, but I’m not sure it make sense as a “general” advisor.

Plus, given that he is advising, there is no AUM. That was the main issue with being TM, having assets managed. By being advisors, the is no asset management. I guess we could have assets under advisement, but it seems weird to me to say, you can only advise on 30m. Especially when someone else has the final word on the execution.

Now, I agree it might be weird if we had a TM in charge of the whole treasury and both would be competing to use funds. But technically, TM would trump TA.

I think until we have a better/bigger trading team in place, an allocation doesnt make much sense since no one else is using the rest. Once we do, the TA could still bring their stuff to the trading team, get his cut and the trade team member gets their cut based on the WIP 15 incentive.

If we want a number, I’d say advise on 100% :sweat_smile:

Only reason I mentioned allocations is because YieldChad was discussing them in his proposal, but perhaps he meant to use them only in the context of payment/advisory fees as a %. If we are discussing fees and payment, we probably should determine beforehand how much he is managing. Seeing as how we was voted him in as TM originally, I have no issue with a 100% advisement allocation.


Yes, I was using them for guidance purposes for fee structure.

I think this is a very simplistic way of looking at it. Whilst an idea and execution might be completed within 30 mins the reality is that in crypto must be constantly monitored. Even so called stable farming protocols require grandfathering and quick responses as we are never far away from the next major hack/attack.

I know from personal experience with regards to chads proposed allocation to takeovers that lots of time goes into calculating, auditing blockchain transactions and combing through developer comments to verify the opportunity and identify potential risk.

Yieldchad could potentially appoint a team of advisors who are paid on the quality of opportunities bought forward. Compensation could then fall as a % of total profit.

Given the role of treasury advisor exists im not sure that a TM is needed. The role could simply be an executioner, appointed by Dani for simplicity.


He is only taking the position of treasury advisor. Other people would execute trades and follow events to see if a defi disaster, like LUNA situation, was developing. The guy couldn’t be awake 24/7 anyway, so a team would be managing that aspect.

This is just a way to scam 200k from the project with very little work.

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Hi Avocado

This is a great point, and I agree with you completely. I have gotten some pushback from other community members against a stable salary, but I think at the end of the day some salary not related to performance is better incentive alignment.

I will suggest $5k per month.

WRT buybacks and redemptions, I will make it a codified part of my proposal to recommend the treasury execute buybacks up to $2.5mn per quarter when discount “becomes excessive”. Some ambiguity here is good as it disincentivizes front running. Any amount beyond this will be discretionary.

Hi Mambo,

I agree with you that the hurdle rate is low. It is quite difficult to thread the needle and ensure that the TA is adequately compensated for outperformance during a bear market (in which a 10% return is quite impressive), while not being obscenely compensated during a bull market. We do not want to be in a scenario in which it is a prolonged bear market and the TA is not incentivized to get a return for the treasury due to excessively high hurdles.

You can play with the compensation figures here: TA Compensation - Google Sheets

I am very open to suggestions.

The assumption is that yieldchad receives a $200k salary for a year with no value creation to the fund and we as a community allow him to stay. There are no obligations to keep yieldchad in place for any specific amount time. If he sucks the DAO will vote him out, if he performs he will remain in place. He is taking a risk by doing this full time just like we are taking a risk on him.

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We cannot have a quasi TM and we cannot have a Treasury advisor prior to finding a TM. The reason is obvious. If we are interested in recruiting an experienced manager, this structure will be an impediment.

Rule #1: The Treasury Manager must put the interests of the DAO ahead of all else, avoiding any conflicts of interest in the process. This “proposal” does not adhere to this rule at all. Someone was interested in being TM and had their eyes on the prize. However, sometime between submitting their candidacy and being elected, a belated decision was made to seek a legal opinion.

I am not criticizing your decision to seek legal counsel, it is prudent. What I have issue with is that you did this very late and as a result you have weakened the protocol due to this uncertainty and nonsensical back and forth that is not getting anywhere. More problematic, in the context of someone being considered for managing the treasury, the sequence of events shows a lack of foresight.

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Post has been approved for RFC, I’d recommend posting this again over there.