[AGIP 111] Staking 350 ETH with Lido and Acquiring rETH

Author: Dr. Wagmi (16635) Quorum Requirement: 20% (9M) Vote Duration: 14 Days

Objective: This proposal aims to enhance the Aavegotchi DAO's treasury management through strategic staking, with a dual focus on accruing additional yield and increasing our Ethereum (ETH) holdings. We propose to engage in ETH staking through two prominent protocols, Lido and Rocket Pool, to achieve this objective.

Details of the Proposal:

1. Staking with Lido: We propose to stake 350 ETH directly with the Lido protocol. Lido currently offers an estimated yield of 3.7% per annum.

2. Acquiring rETH via Cowswap: Concurrently, we propose to swap an additional 350 ETH for Rocket Pool's rETH using Cowswap. Rocket Pool's yield is approximately 2.94% per annum.

3. Expected Returns: By adopting this strategy, we anticipate an annual yield of approximately 23.24 ETH, equating to a value of $70,000, based on the current ETH valuation of $3,000 per unit.

4. Risk Management: This approach also involves splitting our smart contract risk between Lido and Rocket Pool, the two largest entities in the ETH staking ecosystem. This strategy aims to balance the pursuit of optimal yield (via Lido) with robust participation in the Ethereum ecosystem (via Rocket Pool).

5. Remaining Treasury Funds: Following this allocation, 537.96 ETH will remain unallocated within our treasury, available for other strategic initiatives or active management.

Context and Financial Overview:

• The Aavegotchi DAO presently holds 1237.96 ETH, acquired for $3,000,000 as per AGIP 103.
• The current market value of this holding is approximately $3.7 million, representing an unrealized gain of $700,000 since the approval of the core proposal on January 2, 2024.
• For transparency and ongoing monitoring, the DAO's treasury wallet is accessible at: (https://debank.com/profile/0x53c3CA81EA03001a350166D2Cc0fcd9d4c1b7B62).

Conclusion: This proposal is crafted with a view to optimize the Aavegotchi DAO's asset management, leveraging the potential of ETH staking for yield generation, while maintaining a balanced and risk-aware approach.