Given that prices are low for pretty much everything in cryptocurrency, would now be a good time for Wonderland to increase its holding of non-stable coins? It seems like this could be a good medium-term investment/opportunity to grow the treasury when prices recover in the next bull cycle.
Further, while non-stablecoins can be volatile (especially in this market) there are ways to lower the risk/volatility of this strategy. One approach could entail acquiring more established coins like BTC, ETH, AVAX, etc. Further, making this a small percentage of the treasury could also minimize the overall risk/downside. Coins could even be acquired using proceeds from other liquidity investments. (For example, at the time of writing, the treasury currently returns 14.07% APR. Instead of this, pay token holders 12%, and use the remaining 2% to acquire Avax). Obviously these are not the only embodiments this idea could take, but I haven’t seen other discussions of this approach.
I would be very interested in hearing others’ thoughts on this idea. I apologize if this has already been discussed somewhere – I try to read the forums and discord, but sometimes miss stuff. Happy to read anything else on this topic that is already out there and grateful for any links that would be shared. Thanks.
I’m no expert but I’ve heard many say that cash is king in this bear market. Our treasury team is definitely playing it safe for now until the market recovers and limiting our directional exposure.
I’m all for playing it safe (and commend the treasury team for the same mindset). Further, any move in this area should be a very small part of the treasure (<5% at the max). However, AVAX is currently ~$12, down from its ATH of $146. It seems like any assets acquired now would produce a strong return if held until the next bull run in a couple of years.
Your response indicates that the treasure team has at least looked into increasing non-stablecoin allocation. Is this a correct interpretation?
The treasury team has their own strategies to maximize allocation of the treasury. They are experienced in this field so I trust them. If they do see an opportunity to get directional exposure, I’m sure they would propose it as a TMP. That said, I don’t think the way they work is to buy and hold tokens and just pray that the price goes up. Even with our current directional investments, they’re actively trying to lower our cost-basis by staking them/LP-ing, etc.
Completely makes sense. Even if this idea isn’t aligned with the strategy of the DAO, it would be interesting to read about it more (and get a perspective of the treasury team’s thinking).
Also, are you part of the WL team? I noticed you post a lot in the official subreddit as well.
I’m just a mod on the Wonderland Discord helping out with comms on the other social channels too haha. Figured there’s so much misinformation out there that all these good info shouldn’t just be kept in Discord.