BIP-001 One-time small investment in Tropykus & Sovryn

First of all - let’s celebrate our first BIP!! Blindex Improvement Proposal!! 🎉🎈🕺🐵

The proposal

A one-time investment of $5,000 from Blindex’s operational treasury in the following manner:

• $2,500 worth of XUSD in Tropykus lending (6.01% APR at the moment of writing).
• $2,500 worth of XUSD in Sovryn lending (5.79% APR at the moment of writing).

Background

Any DAO that would like to be able to operate consistently will need sources of income.

Blindex has some income sources currently:

• The AMM fees - 0.05% of all swaps go to the Blindex operational treasury multisig. These funds are in the form of LP tokens. Meaning taking them out and investing with them will require lowering the liquidity of the pools.
• BDX claiming fees - when someone claims his/hers BDX rewards form staking, 10% of that amount goes straight to the Blindex operational treasury multisig. Using these funds to invest in other protocols requires us to sell BDX to invest the funds on protocols that do not support generating using BDX (which there is no such protocol as Blindex is a brand new protocol).
• Minting/redeeming fees - these fees are being reflected in the form of the reserves of the BD-Stable pools. This means that whenever someone mints/redeem, they’ll get a bit less than what they paid for, so these fees are just extra collateral on the pool. So unlike swap fees, they are not accessible right away without taking out reserves from the pools.

These income resources, great as they are, will not be able to sustain the DAO for the longer term. Our DAO deserves a mechanism to be self-sustainable through ongoing investments and an automated and decentralized way of achieving enough yield to keep on growing and pay for its needs (development salaries, marketing, liquidity provision on different protocols to promote the platform, etc.).

Our north star is to be able to use our reserves/fees in an intelligent, automated, and decentralized way while still keeping the protocol safe and still being able to pay for all the redeeming Blindex’s users would want. We’re calling this concept “Blindex Strategy Manager” (AKA BSM), and this is something we will prioritize soon enough.

So why do it now? And with such a small amount?

The fact we’re not there yet doesn’t mean Blindex can’t start enjoying the fruit of its labor. This proposal asks the community to approve using a small number of our funds to get the ball rolling. We want Blindex to start practicing investing its funds on well-established protocols and start generating yield. Even small amounts will let us experiment and prepare us for when we work on BSM, and during so will start growing the Blindex treasury.

If this experiment proves to be successful, we could start discussing using the excess reserves in the Blindex reserves for more significant investments, but that would be the subject of a different proposal. Rest assured, the Blindex core contributors are working on getting us to our north star. As usual, we’re on it 💪