[RFC] - Periodic Treasury Reporting:
- Yes, transparency is important and will attract investors
- No, I’m sure it’s fine
0 voters
Name: [RFC] - Periodic Treasury Reporting
Scope: Given the frequent questions that surround the size and composition of the treasury, the discrepancies between holding in Debank/Zapper vs the dashboard, the fluctuations in the backing price, and the importance of treasury performance to Wonderland’s value proposition, the DAO should issue regular reports on the composition and performance of treasury assets.
Link to previous [DAO Discussion]: This has been posted as a DAO Discussion for 5 days, and response has been 100% supportive: “[DAO Discussion] - Periodic Treasury Reporting”
Objective:
With the shift in focus from TIME to wMEMO, we have an opportunity to make clear to the market that Wonderland is not a copy/paste OHM fork where the only attraction is the APY.
Wonderland is a hedge/VC fund.
The DAO takes in capital through mints and treasury sales, and deploys that capital for a return. As such, the most important information we can provide to the market it the health and performance of the treasury.
We report a treasury balance on the dashboard. However, since a number of holdings do not have reliable price oracles, it is impossible to reconcile that balance with treasury holdings visible in Zapper or Debank. FUD related to the dashboard treasury balance being “fake” or including large amounts of treasury-held TIME is a daily occurrence on the discord.
A periodic breakdown not only of the composition of the treasury, but of the performance of the assets within it, will send a signal that the protocol is reliable, transparent, and delivering real value. If the treasury is generating strong returns, we should make this information as obvious as possible, eventually expanding the premium over book value.
A 20% annual return on the current treasury would imply a P/E ratio of 6.5 based on the current price of wMEMO. Making such an attractive P/E explicit, combined with a proven ability to raise capital through mints/treasury sales, should result in an increase MC/treasury ratio and benefit current holders.
High Level Overview: On a periodic basis, say monthly, report the total treasury at the start of the period, treasury growth from token sales/mints, treasury growth from investment returns, and total treasury balance at the end of the period. Addtionally, provide a treasury composition that can be reconciled with the number on the dashboard.
Low Level Details:
A report shall be generated once per month and posted to Medium or the Wonderland blog. The report shall include three parts: Treasury Performance, Treasury Composition, and Backing
Treasury Performance:
The treasury performance section of the report shall include the following information:
- Treasury balance at the end of the prior period
- (plus) Capital raised from mints and treasury sales
- (plus) Changes in investment values (unrealized gains)
- (plus) Returns from deployed assets (realized gains)
- (less) Team disbursements
- (less) Other expenses
- = Current treasury balance
Treasury Composition:
The treasury composition section of the report shall include balances at the end of the period in such a way that the total value of the treasury can be reconciled with the value reported on the dashboard via publicly available information.
Backing:
The stated position of the protocol is that the backing/wMEMO is the price at which the treasury can buy back all circulating TIME/wMEMO. Therefore, the backing section of the report shall include the following information:
Balance available for backing:
- Treasury balance
- (less) DAO-held TIME/MEMO/wMEMO (can’t back wMEMO w/ wMEMO)
- (less) TIME/wMEMO liquidity pools (can’t use an LP to buy into itself)
- (less) illiquid or otherwise locked assets (these assets can’t be used for buybacks)
- = Balance available for backing
Supply of wMEMO:
- Circulating wMEMO at the start of the period
- wMEMO created (e.g. via mints)
- wMEMO acquired by the DAO
- Circulating wMEMO at the end of the period
Backing per wMEMO = Balance available for backing / Circulating supply
Business and/or technical requirements of the implementation of the proposal:
As this is only a requirement for a periodic Medium or blog post, there are no technical requirements. However, the team may wish to automate the generation of the report to make it available in real time.
Conclusion
The true value driver for Wonderland is the size of the Treasury and the ability of treasury management to deploy those assets profitably. Now that the strategy of the DAO is clear, we should provide the necessary transparency for investors to evaluate our performance and invest accordingly.
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