GM 32.1: Treasury Eth To Stable Mandate

Author: Defi Beats Date: September 6, 2022

The following is a proposal to formalize our treasury’s Stable to Eth (and other non-stable balances) as well as formalize a cadence around rebalancing.

We have had a bunch of discussions as well as an informal snapshot of preferences and the following is meant to be a synthesis that strikes a balance. If this proposal does not make it to snapshot (or if it fails snapshot), a new proposal will be made with modified numbers until a proposal passes. (our governance only allows yes/no/abstain votes)

For the purpose of this proposal:

• Stables will mean any stablecoin pegged to USD deemed safe by the treasurer
  • If we would like to ban certain stables, we will need to do that in a separate proposal and anyone is welcome to propose that (it’s out of scope for this conversation)
• Eth will refer to $Eth and ANY liquid staked ETH or ETH derivative (i.e, sETH) deemed safe by the treasurer
  • If we would like to ban certain Eth derivatives, we will need to do that in a separate proposal and anyone is welcome to propose that (it’s out of scope for this conversation)
  • In the future, proposals will be made to diversify the treasury into other assets. These assets will count toward our Eth allocation unless a new portfolio split is proposed

The proposed flow and allocation:

Paying contributors is done once a once (usually at the beginning of the month). The proposal is to rebalance once a month with the calculations being done after contributors are paid.

The proposal is to maintain 8 months of stables which will allow the DAO to have a substantial runway irrespective of macro conditions in the NFT, ETH, and Equities markets. This rule will hold no matter what the overall percentage of Eth vs Stable is.

A notion page will be created with a summary of all the proposals that are active and a summation of how much the DAO is expected to pay in an 8 month period.

Lastly, if 8 months of stables is less than a 30% allocation of Stables, the treasury will be rebalanced so that stables are at least 30% of our multisig (even if this means our runway is greater than 8 months)