[BIP:69] Rebalancing of treasury assets

[BIP:69] Rebalancing of treasury assets

Summary: This proposal aims to adjust the allocation of treasury assets to reduce the risk of market volatility and diversify the portfolio. This proposal reiterates Beefy's treasury council the ability to manage alt coins and other tokens within the Beefy treasury to bring the exposure of the treasury to a balanced ratio of stablecoins, bluechips, and alt coins. The goal of this proposal will be to derisk from more volatile tokens to bluechips and stablecoins as the current treasury assets are heavily concentrated in alt coins. Rebalancing the treasury assets would help achieve a more balanced and resilient portfolio that aligns with the long-term goals and runway for Beefy. A rebalancing approach at the discretion of the Beefy treasury council would also allow the treasury to take advantage of market opportunities and capture value while minimizing market impact. Going forward, rebalancing or other treasury management can occur at any time to capture market opportunities at the discretion of the Beefy treasury council.

The total current value of the treasury is ~$5.9M, of which $900k is the OP grant and is designated for specific purposes. This leaves ~$5M which consists of approximately $2.36M ARB, $960k stablecoins, $275k BTC, $500k BIFI, and $900k of other tokens (ETH, FTM, AVAX, MATIC, etc.). About half of the BIFI in the treasury is tied up as POL for the various chains Beefy is present on.

Treasury Asset Composition: Stablecoins: After BIP-45, treasury income from vault fees were received in stablecoins, which has great benefits in stabilizing the income instead of remaining as chain native assets. Stablecoins are the main currency used for industry conference sponsorships, contributor funding, marketing expenses, and more. The majority of the treasury will be held as stablecoins for stability and can be invested into Beefy stablecoin vaults to generate additional income.

Bluechips (BTC/ETH/BIFI): BTC and ETH are the #1 and #2 largest major cryptocurrencies. They are commonly used by everyone and are generally less volatile than altcoins while still providing significant upside potential for the treasury in the event of a bull market. Again, these assets can also be invested into Beefy vaults or validators to generate additional income. Besides being the protocol token, the DAO treasury needs to have BIFI to provide POL on the many chains that Beefy operates on. The treasury will never sell any BIFI and can delegate voting power to the Core team or other DAO members. In addition, in the future, the treasury can elect to use BIFI to award contributors based on Key Performance Indicators.

Alt coins (including ARB): Beefy was recently awarded ARB for its longstanding performance and contribution to enhancing the Arbitrum ecosystem. Although some of it will be used to rebalance the treasury, a portion of the award will remain as ARB in the treasury and delegated for Arbitrum DAO voting power to demonstrate Beefy’s commitment to decentralized governance of the chain. The ARB can also be drawn down and used for ecosystem boosts on the Arbitrum or other networks or other expenses. In addition, Beefy still needs native tokens of other chains for vault harvesting and development so a portion of the treasury will remain as other native tokens or other altcoins. Currently, a significant portion of this consists of the FTM validator ($212k) and BIFI LP pairings on various networks.