Summary

Cerebrum DAO has been operating post Token Genesis Event since April 2024. To-date, we have not had a formal Treasury Management system approved by the Cerebrum Community other than our Compensation Plan in CDP-10. Cerebrum holds a material amount of ETH, NEURON, CLAW, and BIO in its treasury, and will be investing in several new IPTs to come in addition to potential new OTC funding as approved in CDP-15.

We believe it is time to propose a Treasury Management system to generate some passive income on assets within our Treasury. We do not want to make this a complicated framework, nor is it our intention to make staking and investing a core function of Cerebrum. However, it is prudent to earn passive income and/or generate ETH to fund more science through staking, liquidity provisioning, and other passive income activities with our Treasury Assets provided that conservative guardrails exist to properly manage risk and preserve the core Treasury to fund science.

To that end, we are proposing the following Treasury Management Guidelines:

1. Stablecoin Management a. Maintain USDC sufficient to cover a minimum of 6 months of forecasted expenses and investments; b. Up to 40% of USDC can be posted to earn passive income in DeFi on protocols such as AAVE.
2. ETH Prioritization a. Other than the required USDC allocation, the highly liquid Treasury should be maintained in ETH or WETH, which is the native asset of the Ethereum Blockchain ecosystem in which we operate; b. 30% to 50% of ETH and WETH should be staked in a yield-bearing asset such as stETH, wstETH, and/or RETH to generate passive income
3. Other L1 Prioritization a. The same rules shall apply for other Blockchain ecosystems on which we build an ecosystem and community. This can include Solana, Avalanche, or others for example.
4. Liquidity Provisioning a. Native Tokens such as NEURON and IPTs generated from Cerebrum funded IP-NFT Projects may be leveraged to provide liquidity in LP pools to generate trading fees and where appropriate to provide one-sided liquidity which can generate ETH for funding science; b. Additional Tokens earned through partnerships, rewards, or other methods (e.g. BIO) may be applied to provide liquidity in LP pools to generate trading fees and where appropriate to provide one-sided liquidity which can generate ETH for funding science.
5. Airdrops and Staking Rewards a. The use of Airdrops and Staking mechanisms to reward members of Cerebrum and its various projects shall each require Community Approvals before being deployed and are not covered directly by this Treasury Management Proposal.

By approving CDP-16 you are authorizing Cerebrum to execute the Treasury Management system proposed above within the guidelines stipulated. Any variance from these guidelines must seek community approval via a soft governance vote where appropriate or if not appropriate through a new CDP that overrides or modifies this CDP-16.