Scaling USP: treasury operations and liquidity management

The following is an extract of the proposal posted on the governance.

Summary

A proposal to approve treasury operations supporting the expansion of USP and sUSP across the Ethereum DeFi ecosystem

Background

Recently @Teo summarised the growth roadmap of USP, sUSP, Credit Vaults, and PAR

Scaling USP: Credit Yield, Repackaged

[...]

Pareto is now positioned to serve this next generation of digital dollar demand, delivering the only dollar-denominated product that aggregates credit-based real return at scale, while preserving underwriting standards familiar to traditional asset managers. What makes USP unique:

• It combines two of the only DeFi-native, scalable sources of credit yield (onchain credit lines and curated underwriting).
• The return stream shows a weak-to-negative correlation to crypto beta, making it attractive as a portfolio diversifier.
• The underlying credit exposure is composed of institutional-grade borrowers, allowing for transparent underwriting and risk assessment.

[...]

Proposal

This proposal seeks approval to allow the core team to use DAO treasury funds to bootstrap new USP-sUSP markets being launched in collaboration with DeFi partners on Ethereum.

To date, the team has seeded two markets using a total of 120,500 USDC from the operational budget held in the Ethereum multisig
0xFb3bD022D5DAcF95eE28a6B07825D4Ff9C5b3814:

1. Balancer USDC-USP AMM pool with 51,000 USDC (Tx 1, Tx 2)

2. Napier sUSP PT-YT market with 69,500 (Tx)

Three additional markets are currently being prepared for deployment. Each will require ~100,000 USDC in seed liquidity, for a total of 300,000 USDC.

Including the already deployed funds, this brings the total required to 400,000 USDC, which this proposal seeks to transfer from the DAO Treasury to the Ethereum multisig.

Implementation

1. Transfer 400,000 USDC (or equivalent) from the DAO Treasury to the Ethereum multisig.
2. Upon deployment of new markets, the allocated bootstrap liquidity will be used to mint USP and stake it into sUSP as needed.
3. The new markets will be seeded with the prepared liquidity.
4. The resulting LP tokens will be transferred back to the Ethereum multisig for safekeeping.