Treasury Management - Proposal #02

FreeRossDao is taking on an extraordinarily difficult task that may take years to successfully complete. This document outlines a strategy to use the tools of DeFi to make FreeRossDao financially sustainable for years to come.

HIGH-LEVEL ACTIONS:

1. Sell ETH to Buy 1 wBTC This is a symbolic purchase to show support for Bitcoin, the original digital currency that Ross Ulbricht supported and progressed. Bitcoin and the entire cryptocurrency space would not be where it is today without Ross and his support of BTC. This purchase is to show solidarity with Ross and the cryptocurrency space as a whole.

2. Sell 4% (~$200k) of ETH for USDC This will secure a market neutral operating budget, safeguarding our mission in the event of a bear market. The DAO will always seek to keep at a minimum 1-2 years of operating expenses in stablecoins.

3. Sell 10-20% (~$500k-1M) of ETH for FREE Tokens This will demonstrate the DAOs long term commitment to the project, and when we get Ross released, the tokens will be a major cultural touchstone and can go on to help free other political prisoners.

4. Allocate Remainder to Yield Farming • 50% of yield will be allocated to a pool to reward contributors and/or purchase additional FREE tokens for the treasury. • 25% will be used to purchase stable coins for our treasury, which can be used for yield farming and/or rewarding contributors. • 25% will be used to purchase additional ETH, which will be used for yield farming.

5. Funding for Future Proposals To be clear, all resources in the DAO’s treasury including assets used for yield farming are available to fund future proposals and the goal of all treasury actions are simply to grow the value of the DAO’s treasury in order to provide long term financial sustainability of the organization.

YIELD FARMING STRATEGY:

• Deposit 100% of our ETH into the Curve stETH-ETH pool.

• Deposit this staked ETH into the Yearn vault to automate reward claiming.

• Use the receipt for our staked ETH in the yearn vault (yvstETH) as collateral to borrow ~$1.6M in stable coins. The best option is likely MIM from abracadabra.

• Sticking with major tokens, we can reliably earn 10-20% APY on these stable coins across convex, anchor, fuse, ec.

YIELD FARMING MATH: (assuming 20% of treasury is used to buy FREE tokens) Estimated annual yield farming income of $400K-600K

• Curve stETH-ETH pool: $100K-$120K

• $2M in stETH earning ~5-6% APY
• $2M in ETH earning 0% APY

• yvstETH: $120K

• $4M earning 3.30% APY

• $1.6M in debt costing 0.5% per year = ($8K)

• $1.6M earning 10-20% APY per year = $160-320K

OTHER NOTES:

• The sale of ETH for USDC–assuming same price order execution–should be executed across a few DEXs that do not have their own tokens yet so we have a chance of receiving any future airdrops.

• The strategy involves ETH price exposure. We all chose Ethereum because we believe in its long-term prospects. If the value of ETH increases, our relative income will also increase.

• stETH rewards are effectively locked until the ETH 2.0 upgrade which is on track for Q1 2022, and because of this it is trading at a modest discount. On the flipside, the current estimates are that stETH will earn close to 20-30% APY (vs. the current 5-6%) with the merge because a large portion of transaction fees will be included in addition to net new issuance.

• The timing of accumulating FREE tokens will be done at the discretion of the multisig signers, but they will have a maximum of either 30 or 90 days to accumulate, depending on the winning voting option.

VOTING OPTIONS:

1. Yes - 20% FREE accumulated over 30 days [Treasury purchases: 1 wBTC, 4% USDC, 20% FREE + yield farming]

2. Yes - 10% FREE accumulated over 90 days [Treasury purchases: 1 wBTC, 4% USDC, 10% FREE + yield farming]

3. No - Do not use the treasury for accumulating wBTC + USDC + FREE + yield farming.