FIP-46: ETH Yield Improvements

Summary Shift 100M USD of ETH from Compound and AAVE PCV Deposits to stETH, and 20M USD of ETH from Compound and AAVE PCV deposits to Tokemak Single Sided ETH farming.

Motivation ETH yield is not being appropriately managed by the PCV, and this proposal seeks to increase yield on PCV assets in a safe fashion. At current APR, this proposal grows the estimated yield of the PCV by 6.4M~ USD per year.

The Curve stETH-ETH pair has 5.5B worth of liquidity. This marks stETH as being a highly liquid asset, and appropriate to add to the treasury. Currently the entire recommended stETH allocation can be sold with 0.76% slippage.

Tokemak is a newer DeFi protocol than stETH, and the TOKE token is less liquid and more unstable than ETH/stETH. As rewards for Tokemak farming are paid in the TOKE token, I recommend a smaller allocation for Tokemak. The farming rewards for one year can be sold for 1.8% slippage with current liquidity. As we are staking pure ETH, liquidity for the deposited token is not a concern. The additional TOKE also could allow the DAO to exercise more control over Tokemak, a possibly crucial DeFi primitive.

Specification

Shift 50M USD of ETH from Compound PCV Deposit to stETH Improvement from 0.10% to 5%~ APY 50k → 2.5M Yield

Shift 50M USD of ETH from AAVE PCV Deposit to stETH Improvement from 0.30% (Including stkAAVE rewards) to 5%~ APY 150k → 2.5M Yield

Shift 10M USD of ETH from Compound PCV deposit to Tokemak Single Sided ETH Improvement from 0.10% to 8.33%~ APY 5K → 833K Yield

Shift 10M USD of ETH from AAVE PCV Deposit to Tokemak Single Sided ETH Improvement from 0.30% (Including stkAAVE rewards) to 8.33%~ APY 30K → 833K Yield