PR with Payload

https://github.com/BalancerMaxis/multisig-ops/pull/528

Abstract

This proposal introduces additional actions and strategies to the portion of the treasury managed by karpatkey (as per BIP-103), aiming to enhance the treasury’s performance, adaptability, and diversification.

Motivation

Permissions granted to karpatkey to manage the BalancerDAO treasury are not static, and require regular updates to effectively respond to evolving market conditions and to capitalise on emerging opportunities.

As it’s customary, any changes to the preset permissions must be executed by the DAO.

Specification

Permissions that will be added in this proposal are:

1. Deposit USDC on Compound v3;
2. Deposit DAI on AAVE v3;
3. Deposit USDC on AAVE v3;
4. Deposit DAI on MakerDAO’s Dai Savings Rate (DSR) module;
5. Unstake stETH on Lido;
6. Stake (and unstake) ETH on Rocket Pool (rETH);
7. Swap on Cow Swap

Audit considerations

We propose an updated version of the Preset permissions - Balancer Treasury document that shows all the permissions granted to karpatkey, including the ones that are being requested now, highlighted in green.

Reviewing and providing feedback on the preset update payload would be a great service to the Balancer community. We welcome anyone who is willing to take the time to verify the content and encourage community members to share their feedback with us.

karpatkey's tech team is diligently working on enhancing the auditing process. Our primary goal is to provide a clearer visual representation of potential Zodiac preset modifications before implementing any proposed payload. We are committed to keeping the community informed about our progress and developments.

Proposed Actions Overview

1. Deposit USDC on Compound v3

Compound v3 is a streamlined protocol version emphasising security, capital efficiency, and user experience. Following a proposal executed on September 18th, v2 is being phased out, with measures in place to transition users to v3. OpenZeppelin and ChainSecurity have audited v3. As of the day of this writing, $319M USDC is deposited in v3, offering an APR of 4.3%, inclusive of COMP token rewards.

2. Deposit DAI on AAVE v3

This strategy aims to diversify stablecoin holdings via AAVE v3, a leading decentralised money market with a strong link to the Balancer DAO. AAVE v3 was officially deployed on mainnet in January 2023 after being live across six networks since March 2022. This version introduces features for enhanced capital efficiency and decentralisation, coupled with new risk management tools. Comprehensive audits by firms like Trail of Bits, ABDK, Peckshield, OpenZeppelin, SigmaPrime, and formal verification by Certora. Currently, AAVE v3 holds $51.6M DAI with an expected APY of 3.82%.

3. Deposit USDC on AAVE v3

Same logic as above but for USDC. As of the day of this writing, the total USDC supplied on AAVE v3 is $299M, and the expected APY is 2.86%.

4. Deposit DAI on MakerDAO’s DAI Savings Rate (DSR) module

MakerDAO, renowned for creating DAI, is a leading DAO in the DeFi sector. A recent DSR rate hike in May and the introduction of eDSR (enhanced DSR) in August make it an attractive strategy from a risk/reward perspective. Currently, eDSR offers an APR of 5%. By diversifying the Balancer treasury’s stablecoin allocation and capitalising on the higher yield offered by one of the most battle-tested protocols, the investment approach can be optimised.

5. Unstake stETH on Lido

Post the Shapella fork in April, users can now unstake or withdraw staked ETH from the different LST providers. This action was not part of the previous preset update request to the Balancer DAO due to its timing.

6. Stake (and unstake) ETH on Rocket Pool (rETH)

To diversify LST holdings, we suggest adding RocketPool to the whitelist for ETH staking and unstaking. RocketPool ranks third in the liquid staking market, holding about 691,000 ETH, or 6% of the total market. In market share, Rocket Pool's rETH trails Lido's stETH (76%) and Coinbase's cbETH (11%). Despite slightly lower liquidity for rETH to ETH swaps on major DEXes, Balancer DAO treasury's allocated amount should face minimal slippage. For example, DeFi Llama indicates a swap of ~5,700 rETH for ETH would have under 0.1% slippage. Currently, rETH offers an APR of 3.26%.

7. Swap on Cow Swap

Thanks to the efforts of the Gnosis Builders and the karpatkey tech team, Cow Swap can now be seamlessly integrated with the Zodiac Roles Modifier. This enhancement allows for the exclusive swapping of only those tokens that are included in the whitelisted strategies.