CIP-203 ETH Treasury Yield with CityDAO Validators

Earn income from our WETH treasury and contribute to decentralisation

The treasury has 656 WETH that has been sitting idle for over a year.

This CIP proposes creating 20 x 32 ETH CityDAO validators to earn yield on our treasury, whilst also contributing to the decentralisation of Ethereum.

Income We could be earning 28.8 ETH ($55k) per year on our current treasury (640 x 4.5% APR).

Decentralisation By creating CityDAO validators, instead of using LIDO stETH, we’re helping decentralise the validator set. Lido currently controls over 30% of all Ethereum validators.

Risk We currently hold ETH and there is no additional ETH exposure risk. No smart contract risk. By running our own validators, we don’t have any smart contract risk with a liquid staking token.

Slashing risk. Validators will be run by a trusted Node Operator with historic experience.

Withdrawals The beaconchain now allows for withdrawals, when we need to sell ETH, we can withdraw validators in 32 ETH lots or all at once.

There is currently no exit queue to withdraw validators, but this could change in the future and we should plan for withdrawals ahead of them being required.

Node Operator The CityDAO Node will be operated by Reeves (proposal author) who has been running community validators for years. Reeves was a facilitator and Gnosis Signer of the CityDAO Dev guild when it existed, and worked on the Parcel-0 Land NFT.

Costs Initial Hardware Costs: $1,500 USD to purchase dedicated hardware for CityDAO.

Commision: 10% of income to the Node Operator to cover running costs (maintenance, power and internet). This is the same commision that is charged by Lido if we were to use stETH. Rocketpool has a 14% commision.