[RFC] - WTM - yieldchad

[RFC] - WTM - yieldchad

  • Appoint yieldchad to TM with no/minor changes
  • Appoint yieldchad to TM with changes
  • Don’t appoint yieldchad
0 voters

Name: [RFC] - WTM - yieldchad

Scope: Potential for yieldchad to become TM, including the structure of his role, his goals for WL, proposed investments, tenure, and compensation

Link to previous [DAO Discussion]: “[DAO Discussion] - WTM - yieldchad”

Objective: To finalize the proposal for yieldchad’s candidacy for TM

Provide a High Level Overview: I (yieldchad) have proposed to the DAO to serve as next TM. There are a number of outstanding questions regarding how I would serve in the role that need to be resolved. I will propose a solution and request comment from the community in order to finalize a proposal for WIP. To discuss:

  1. Background
  2. Why I’m Running
  3. Goals/Plans for Treasury
  4. Multisig Signer Role
  5. Portfolio Management
  6. Tenure
  7. Compensation
  8. Conclusion

Proposal (skip to #3 if you have already read DAO Discussion post)

1. Background
If you have already read the DAO Discussion post you can skip this section

Section removed/edited on 2023-08-28 due to privacy concerns from OP

My career has been a singular focus on investment and fund management. It’s what I love to do, what I’m good at, and what I am doing currently with my own fund.

2. Why I’m Running
If you have already read the DAO Discussion post you can skip this section

99% of projects facing the obstacles that WL has faced in the past year would not have survived. To do so proves WL’s resilience. Today, thanks to top class mods, an intelligent and dedicated community, and tactful stewardship, WL has laid the framework it needs to not only survive, but return to long-term growth.

It may sound corny but I love DeFi and investment management – it doesn’t feel like work to me. When I raised my fund last year, I chose this as my career path.

Because of this, I am in a unique position to be able to commit full time to WL treasury management and bring the strategies I develop for my fund to the benefit of the WL treasury. WL will benefit from my tradfi experience, DeFi knowledge, and strong crypto network, which allow me to deploy specialized, market beating investment strategies as well as partner with protocols across the space to create value for Wonderland.

3. Goals/Plans for Treasury

  • Create a motivated and highly responsive multisig (more detail in section #4)

  • Continue to push forward WIP’s to improve management and oversight of WL treasury through community governance. I will work hard to further strengthen an already strong WL governance process

  • Protect existing treasury value through high EV, low volatility investments

  • Partner with other protocols to unlock value for the treasury and wMEMO holders

  • Continue to hold redemptions or votes on redemptions in line with the Quarterly Redemption WIP, while ensuring redemptions do more to benefit long term wMEMO holders (or at least do not harm their interests)

  • Execute buybacks, at discretion of treasury team, when discount > expected annual return for the treasury

  • Institute revenue share from treasury yield - For the first revenue share, collect some discretionary portion of the income from August and September and send it to a rev share contract at the end of the quarter to be distributed over the following period until the funds for the next rev share are collected.

  • Always act 100% in the best interests of wMEMO holders

4. Multisig Signer Role

  • A responsive and motivated multisig is key to investment performance. WL needs to add additional members to the multisig in order for the next TM to not be hamstrung in their process
  • I suggest a multisig signer role so that the treasury is not dependent on waiting for TO or Treasury Team Member’s to join the multisig
    [DAO Discussion] - New Role - Multisig Signer

5. Investment Strategy Overview

Key Principles:

  • Preservation of Capital - defensive positioning during market uncertainty, with small allocation for selective, extremely high EV trades
  • Increase value for wMEMO holders - buybacks and redemptions will be constructed such that value is delivered to long term holders
  • Partnerships with other protocols - incentivize wMEMO liquidity cross chain and provide unique farming opportunities for treasury/wMEMO holders
  • Use WL’s reach to acquire distressed treasuries at discounts

Detailed Investments:

  • Yielding Opportunities - The majority of the treasury will be allocated to low volatility yielding opportunities

    • Hedged GLP → Please see my DAO Discussion post outlining the strategy here
    • Hedged LP → Provide DEX liquidity for two volatile coins, and hedge the exposure with a short. There are highly liquid opportunities to provide hedged liquidity for volatile coins, not just Matic-MaticX
    • Stablecoin Yield Farming → Some allocation will be made to safe stablecoin yield farms
    • Interest Rate Arbitrage → Arbitrage differences between borrow rates and supply rates. There are other highly liquid opportunities besides the AAVE USDT strategy which I detailed here
    • Options Arbitrage → Arbitrage differences in IV for different options across protocols. This is highly profitable during periods of high volatility, and less profitable during low volatility periods (which we are now in). Gamma and Delta can be hedged out completely using DeFi mechanics
  • Partnerships - WL stands to gain significantly from making protocol to protocol partnerships

    • Sifucadabra → WL has a strategic, long-term interest in partnering with Sifu’s coming lending protocol, given the treasury’s large Sifu.vision holdings. It is in the treasury’s interest to support Sifu to the fullest extent possible
    • Frax → In discussions with Frax team to create gauge proposals to incentivize wMEMO/FRAX pairs on multiple chains
    • Velodrome → In discussions with Velodrome team to create VELO incentivized pools for wMEMO/stablecoin pair on Velodrome
    • Inverse Finance → Inverse team is interested to facilitate a DAO-to-DAO loan, allowing for WL to borrow DOLA and farm DOLA-3Crv on Convex for 36% APR (likely to decrease) in a whitelist-only lending pool. Security is obviously a top concern and nothing will proceed without confidence, due diligence, and DAO approval. Borrowing DOLA and farming DOLA-3Crv is short DOLA exposure, therefore secured against bad debt in Inverse protocol
  • Distressed Treasuries - Use WL reach to partner with distressed projects, acquire their tokens, and set KPIs. If KPIs not met, liquidate tokens for treasury value. Tokens held at cost until during timeline for KPI realization

    • Protocol 1 - Product is protocol pivot to liquidity as a service. Treasury ($10-90mn) is >6x market cap of the token. Have engaged team on potential for partnership with WL. Plan to buy significant quantity of token in OTC transaction, support team in marketing their new pivot project. If KPI’s not met, team will allow WL treasury to swap purchased tokens for treasury value near 1:1.
    • Protocol 2 - Product is yield aggregator. Treasury ($5-30mn) is >6x market cap of the token. Have engaged team on potential for partnership with WL. Plan same as Protocol 1.
    • Multiple additional similar protocols

Note on portfolio details: revealing the investment strategies in detail now risks alpha dilution. After my initial DD proposal, in which I detailed strategies in depth, the AAVE USDT-Short strategy was ruined as a third party came and borrowed $89mn USDT on AAVE, taking all available profits from the strategy and earning 17.5% apr if using 10x leverage. (I know from first-hand experience that there are dashboards tracking governance proposals that the top on-chain funds subscribe to for actionable alpha).
Sensitive details have been blacked out for the time being.

Suggested Portfolio Construction as of 12 July 2022
Assumed $90mn allocation to below strategies, with remainder of treasury allocated to Sifu, partnerships, or distressed treasuries

Portfolio Cashflow

6. Tenure

  • Initial term is a trial period starting from 23 July 2022 until 31 October 2022

  • Term be automatically renewed on a rolling six month basis if no WIP for alternative TM submitted 15 days before end of each term period

7. Compensation

  • Base compensation (paid monthly on last day of month): $5k per month paid in USDC
  • Performance fee (paid quarterly on the last day of the quarter):
    • 5% of the gross profit of yieldchad Discretionary Investments;
    • 2% of the gross profit of Existing Long Term Investments (BSGG, Sifu, etc);
    • Less base compensation paid in the quarter.
  • Gross profits used in performance fee calculations shall be equal to the increase in USD value of the corresponding investments (excluding fees) upon quarter end, subject to respective high watermarks

8. Conclusion

In surviving the controversies and volatility of the past year, WL has proven not only the resilience of its community, but the strength of the governance framework developed and maintained by its mod team, active community participants, and Sifu. Today, WL needs a new treasury manager capable of working with and strengthening the existing governance system in order to guide WL through the first true macro bear market since the invention of Bitcoin in 2008.

My background, network, and investment strategies make me well positioned to take on this role. My experience in private equity has made risk management the number one focus of my investment process - I will defend value in the wMEMO treasury. With a low volatility investment strategy and regular redemptions, wMEMO holders will see the value of their wMEMO go up over time. And through strategic partnerships with protocols like Sifucadabra and other projects with distressed treasuries, the WL treasury will see significant upside despite the bear market.

Since an RFC is a “work in progress” Proposal, not all of these points need to be filled out from the beginning. They can be added over time as the RFC evolves into a mature Proposal.


A very thought out and clear RFC, also thank you for the multisig proposal. Lets see what the community thinks :+1:


Best RFC out of the 3 we have currently for sure.


What Kyle said says it all; voted for yieldchad

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Great read, clear and concise, I got a good feeling in my gut. I like that already proposals are being put forward for improvements and streamlining efficiency, gives a feeling of ‘hitting the ground running’, and once again I have a feeling of hope for WL’s future with this one.

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I like it, it is clear and has a vision and good vibes

Let’s give him a shot and reassess in 6 months. My gut feeling is performance will likely not be stellar but we won’t lose money.

Probably one of the best things we an hope for in this market rn

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In regards to the compensation, how are you calculating the 5k in wMEMO ?

Full backing ? Liquid backing ? Market price ?

Also, what wMEMO will be used ? Bought from the market ? From the treasury ?

As for the performance fee, why gross and not net ? Unsure if it would happen, but wouldnt want to get scammed on fees somehow.

Also, you mention base compensation to be removed from that. Given that there is a HWM, if a quarter has 0 profits, does the HMW start at 15k down ?

This section says you’d start July 23rd, which must have been based on early calculations. Would of course need to be changed to something like as soon as elected or X amount of days after the Snapshot vote has concluded.

I guess the October 31st could stay, although you may want to adjust to 3 months if that was the intended goal.

Any plans/insight on how you’d want to use revenue share ?

Currently holders are getting returns in BSGG based on a bonus that was recieved about 6 months ago. You talk about buybacks, yielding and increasing value for long term holders, but no mention of your strategy for revenue sharing.


  • I would switch compensation to $5k per month paid in stables. Being paid in wMEMO doesn’t matter since my base compensation is netted off my performance compensation

  • If wMEMO is used for any type of compensation, I would suggest to buy it off the market if below backing, as this is accretive to wMEMO holders

  • Gross performance fee is important because I do not know to what degree the DAO will elect to spend money on future development work or projects, and I believe my compensation should not be subject to such effects, or else I am incentivized to veto these expenditures


  • Agree with you, Tenure will start some time period after snapshot vote concluded (24 hours?) and end 31 October

Revenue Share

From a technical standpoint, distributing yield accrued cross-chain in a continuous, automated fashion is fairly difficult and not a good use of resources in my opinion.

There are two feasible options for revenue share: 1) Quarterly dividends (comprised of some discretionary portion of the quarter’s yield) to be issued the day after redemption period to wMEMO stakers, to reward long term holders. 2) Accrue some discretionary portion of each quarter’s yield into a smart contract, and then distribute it to wMEMO stakers over the following quarter.

I think both of these options are good and would seek to execute one of them, given community feedback. I can amend my proposal for the WIP including this language on revenue share if we proceed to that point.


In my opinion, this is the Best TM application so far out of all the discussions, and chatting and collaborating with yieldchad has strengthened that opinion. I would support appointing him as TM.

Regarding distressed treasuries, I imagine that the timeframe to build some of these partnerships, create and execute the OTC deals, and support in the pursuit of achieving set KPIs, will be longer than 3 months and in some cases could even be more than 6 months.

Three questions for @yieldchad:

  1. How will these positions be accounted for in terms of PnL? - I imagine the OTC deals will be buying tokens at a premium to current market price but still at a significant discount to treasury backing. Meaning, immediately on the books the value would be at a loss, with the promise of trading for backing at a later date. E.g. WL acquires $1mil worth of Protocol X’s token OTC for $2mil. The book value of the trade is -$1mil currently. WL can then trade the tokens for $6mil in 6 months if KPIs are not met. During quarterly redemptions or paying out TM/TO compensation, are these positions valued at entry ($2mil) until closed? or at current market value?

  2. How does the position get closed if KPIs are met? - For example, if a OTC deal is done and the set KPIs are being met (mcap targets, revenue growth, TVL), at what point will the position be closed, if at all, and how? Will it only be closed if the value is more than the treasury backing?

  3. Will these liquidation events be available to all token holders of the protocol, or just WL? - From the WL perspective, all that needs to be secured is our claim to the treasury backing, but if this was only available to WL and other token holders of the protocol were not able to liquidate for backing, I imagine that would be a pretty bad look optics-wise. Curious if that is a concern or not for these trades.


I think this is something that needs more discussion. Revshare is essentially one of the only thing Wonderland has going for it currently and holders are constantly asking about when it will be expanded to more than BSGG.

You are referring to cross-chain while revenue share is currently only on AVAX and our presence on ETH or FTM is pretty much non-existant. Essentially limiting the feature based on limits that do not currently exist. Although I understand you would like to expand the cross-chain aspect.

That being said, I’m not sure how your second option is different from what currently exist ? Currently the contract is being topped off every week, but an amount could be allocated quarterly and slowly added to the farm contract.

What is your salary per month in your current job?

Understood - I didn’t realize that the BSGG rev share was manually topped up. Revenue share of cross-chain income and then sending it to an AVAX smart contract for rev share is definitely feasible.

I would suggest to collect some discretionary portion of the income from August and September and send it to a rev share contract at the end of the quarter to be distributed over the following period until the funds for the next rev share are collected.

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I work for myself now, but if I were to go into a job in real estate finance I would make somewhere between $12-15k per month.

  1. Held at cost until the timeline for KPI realization is met
  2. This will have to be considered on a case by case basis but should be a well thought out part of the business plan. KPIs should be sufficiently stringent so as to consider the significant difficulty of exiting the position if KPIs are met.
  3. Case by case basis, but should definitely be a concern for these trades. Community turning against us could ruin the deal even if KPIs are not met. So would have to make our exit a win for the community, somehow.