BIP-97: DAO Treasury Rebalancing and Aave Farming Options Approval

Proposal

The proposal asks for approval for the following treasury actions:

1. Removing assets from the following Optimism deployment v2 pools: Rocket Fuel, Gyroscope ECLP wstETH/wETH, Native Stable Beets
2. Depositing part of the freed up assets to the Balancer rETH-Aave wETH pool
3. Selling up to 0.75 BTC and 50 ETH/wstETH to stables
4. Approve the following DAO treasury farming options: supplying on Aave markets, acquiring GHO and depositing to sGHO, depositing assets to Aave Umbrella

Motivation

The Beets governance framework gives MDs (Music Directors) the authority to make reallocations in the treasury balance up to $200k per month, while reallocations greater than $200k require a DAO vote. Additionally, MDs are required to raise a governance vote the first time they seek to deposit assets into a new protocol.

The DAO treasury has the following positions on Beets Optimism deployment without any active farming rewards (Balances are based on the time of writing the proposal):

• Rocket Fuel BPT, ~68.4 rETH & ~65.6 wETH, total value ~$539,000
• Gyroscope ECLP wstETH/wETH, ~39.8 wstETH & ~0.2 wETH, total value ~$181,000
• Native Stables Beets BPT, ~37k USDC, ~36k USDC.e, ~23k USDT, ~43k DAI, total value ~$139,000

The MDs ask for DAO approval for the following potential treasury moves:

1. Breaking up the aforementioned BPTs to their underlying assets.
2. Making a deposit to the “Balancer rETH-Aave wETH” pool with the freed up rETH and wETH.
3. Swapping the stables to USDC
4. Swapping/withdrawing the wstETH to wETH

MDs are also asking for DAO approval to sell up to 0.75 BTC and 50 ETH to stables. It would be good to bolster the DAO’s stable reserves and the prices of these assets have risen significantly in the past weeks. This proposal would give the approval to sell up to those amounts, the actual selling and the amounts can be reconsidered by the MDs.

Finally, MDs are always exploring ways to deploy DAO treasury in order to earn revenue and ensure its growth. Per governance framework, MDs are asking the permission to approve the following DAO treasury farming options:

1. Supplying assets on Aave lending markets (https://aave.com/docs/primitives/liquidity-pool)
2. Acquiring GHO and depositing to sGHO (https://aave.com/docs/primitives/gho)
3. Depositing assets to Aave Umbrella (https://aave.com/docs/primitives/umbrella)

Impacts / Risk Assessment

The proposal would give MDs the permission for high value treasury rebalancing movements and selling up to 0.75 BTC and 50 ETH to bolster DAO’s stable reserves.

Additionally the proposal would allow lending on Aave markets, acquiring GHO/sGHO and depositing to Aave Umbrella. While Aave is one of the most known lending markets and -puts a lot of emphasis on security, then all of these activities include a potential risk. Presumably Aave Umbrella has the greatest risk due to assets staked to Umbrella being used for deficit protection and include a slashing risk. MDs believe the Risk/Reward ratios of these systems are still worth it to be considered as suitable options for DAO treasury.

## Specification / Execution Plan MDs would start with removing the BPTs and making the deposit to the “Balancer rETH-Aave wETH” pool. Selling BTC & ETH to stables and depositing to Aave Umbrella and GHO/sGHO would be permitted by the DAO governance, but the specific amounts and timing will be based on MD discretion.