Tokenomics - Approve DAI Capital Efficiency Strategy

Squad: Treasury Department Date Created: 12.06.2023

TLDR:

BanklessDAO treasury has 14,693.416 DAI sitting idle Deposit DAI in BanklessDAO’s Rari Fuse pool and earn 6.53% APY

BACKGROUND

After migrating DAO liquidity to Uniswap V3 in early 2022 [here 1], the DAO was able to create a Rari Fuse pool to enable BANK holders to borrow against their BANK.

What is Rari Fuse?

Winverse wrote a nice piece about it in the 4th June, 2022 issue of the Weekly Rollup(here), but in short Rari Fuse allowed the DAO to create its own money market. [link]

SPECIFICATION

If approved, the follow transaction will be initiated

BDAO multisig would submit a deposit transaction into the rari fuse contract

The treasury department will monitor this position and submit a proposal to withdraw when it is no longer feasible to earn yield from this strategy.

This proposal grants the Treasury Deptment the right to deposit the aforementioned funds into the Rari pool from, and the right to decide and execute the withdraw of such funds back into the DAO multi-sig when judged to be appropriate and necessary for economic or risk considerations.

Risks and disclosures:

• As with anything in DeFi, this strategy is vulnerable to smart contract risks
• The strategy is also vulnerable to loss of value resulting from by high slippage trades triggered by high volatility black swan events
• The rari front end may go down, although this can be mitigated by interacting with the smart contracts directly. The Treasury Department will monitor this and be prepared to exit.