Author(s): MYSO Status: Proposed Related Discussions: https://forum.across.to/t/myso-x-across-proposal-2/2060

Summary

This proposal is a follow-up to the previously approved initiative to generate stablecoin revenue by deploying idle ACX treasury tokens into a covered call strategy using MYSO Finance. While the original proposal was passed by the DAO, it has not yet been implemented—primarily due to market timing considerations.

We now propose to revive and expand this strategy in light of:

• A recent pick-up in crypto market volatility
• Significant improvements in MYSO’s capital efficiency and protocol performance
• Proven traction and trust with ~$14M in covered call notional settled through MYSO v3 to date—including transactions with Compound and Gitcoin DAO treasuries
• Improved yield potential under current market conditions

The core structure of the strategy remains unchanged: use idle ACX tokens to write covered calls and earn upfront USDC premiums via MYSO’s trustless, on-chain structured products protocol. We propose increasing the notional deployment to 2,272,272 ACX (~$500k), aligning Across DAO with recent covered call transactions from other DAOs such as Compound ($1.6M) and Gitcoin ($1.2M).

Also note that the previous deployed 400,000 ACX have already been refunded to the DAO treasury and remain available to-be-deployed into covered call strategies too.

What's a Covered Call?

A covered call strategy generates upfront stablecoin income by holding a token and simultaneously selling a call option on it. Yield is earned from token volatility, as trading firms pay premiums to acquire call options for gamma scalping and to trade price swings in a market-neutral fashion.

A call option gives the buyer the right—but not the obligation—to purchase the token at a predefined strike price before the option expires. In a covered call, this right is sold, and the seller earns a premium. The resulting payoff is linear up to the strike, and capped beyond it. The premium earned effectively shifts the payoff line upward, enhancing returns even in sideways markets.

At expiry of the option there are two possible outcomes:

• If token price > strike→ Option is in-the-money (ITM), and you’re converted at the strike price.
• If token price < strike→ Option expires out-of-the-money (OTM), and you retain all tokens.

Motivation

Treasury diversification and sustainable revenue generation are crucial for DAO longevity. While Across has previously explored various yield and liquidity strategies, a substantial portion of the ACX treasury remains idle. MYSO’s covered call strategy allows the DAO to generate yield on ACX treasury tokens—without triggering any market sell pressure.

This follow-up proposal addresses the gap between the previously approved strategy and its execution, while adapting to today’s improved market environment and protocol advancements.

Key Updates from the Previous Proposal

• Increased Notional: Proposal now targets 2,272,272 ACX (previous: 400,000 ACX) to capitalize on market volatility while generating meaningful income for the treasury.
• Improved Yields: Higher implied volatility and recent upgrades to MYSO v3 have increased attainable premiums.
• Expanded Track Record: MYSO has facilitated ~$14M in notional covered call volume, including with reputable DAOs.
• No Change in Risk Assumptions: Strategy remains non-custodial and can be settled fully on-chain through MYSO’s audited v3 smart contracts.

Benefits

• USDC Revenue: Immediate upfront premiums provide liquidity for ops and development.
• Treasury Diversification: The covered call strategy allows diversifying ACX at higher prices if ACX increases above the strike price, all without incurring slippage or swap fees.
• Onchain Settlement: The covered call strategy can be efficiently settled onchain without counterparty risk using MYSO v3.

Implementation Summary

We propose:

1. Deploying 2,272,272 ACX (~$500k) in a covered call strategy on MYSO v3
2. Establishing a new 2-out-of-5 multisig with the same Risk Labs signers on the ACX Emissions Committee (AEC). Members of the AEC can be trusted and have relevant expertise to manage the covered call strategy with the guidance of the MYSO team. The 2,272,272 ACX tokens will be deposited into this multisig.
3. Executing covered calls within pre-defined parameter bounds (i.e., 14–90 day tenor, 100–180% strike), that balance APY and conversion probability
4. No further DAO action required post-setup;

Conclusion

This proposal offers Across DAO a timely opportunity to revisit and scale a previously approved yield strategy using idle ACX tokens. Backed by improved market conditions and an upgraded, validated protocol, this initiative can unlock substantial upfront yield and treasury diversification—without introducing counterparty risk or adverse market impact.

We welcome community feedback and are happy to provide additional modeling, premium quotes, or vault performance breakdowns upon request.

Voting Options

• For – Resume and expand the covered call strategy using $500k ACX via MYSO
• Against – Do not proceed with the covered call strategy at this time