[TMP #1] - Approval to Increase the Treasury Allocation Limit on UwU Lend to 16%

Scope:

Request DAO approval to increase the exposure limit to UWU Lend to 16% of the total treasury until voted otherwise by the Treasury Council or DAO.

Current Governance Limitations:

By voting yes on this proposal, the DAO would be giving permission to exceed the 10% protocol exposure limit in the Treasury Allocation Proposal (WIP #26).

Objective:

Keep our existing UWU exposure in the farms up to the 16% allocation limit. Allow the Treasury Council to adjust the allocations within UWU. Exclude UWU tokens held and provided LP from the exposure.

Rationale:

It is believed that it would be in Wonderland’s favor to maintain a sizable treasury allocation on UWU Lend farms while the yields are high, since there are currently limited high yielding farms in DeFi.

UWU Lend Background:

UWU Lend is a liquidity market that offers depositing and borrowing and is forked from AAVE v2. Users earn interest on deposits and pay interest to borrow. The protocol was founded and is actively managed by Sifu. Wonderland is currently supplying DAI, USDT, and Sifu in the UWU Lend farms. We are borrowing DAI and USDT for looping, with a Health Rate of 1.20.

Risks:

Price Risk:

UWU price could continue to drop and farmed tokens need to be vested for 4 weeks to not incur a penalty fee.

Smart Contract Risk:

UWU is a fork of AAVE v2. While UWU has not undergone its own audit yet, it is forked from audited code.