Request for idle Treasury Assets to be staked on Bancor

Note: Proposal will be put up on Snapshot for voting, but Krause House DAO is waiting on the setup of a legal entity to execute this proposal should it pass on Snapshot.

FUNDING:

1. 1,000,000 USDC, 100 ETH and Insurance Cost of 3.6352 ETH to be staked.
2. 6000 USDC of Contributor Funding

WALLET: Krause House Multi-Sig

Authors: 0xUST#2965 & Magnus#3558

GOAL OF PROJECT:

Stake $1,000,000 USDC and 100 ETH on Bancor

The proposal will include the purchase of insurance cover from Unslashed Finance against Smart Contract Integrity for an amount of 420 ETH.

Background

Bancor is the first decentralized trading protocol, empowering traders, liquidity providers & developers to participate in an open financial marketplace with no barriers to entry. No one needs permission to use the open-source Bancor Protocol.

WHY THIS MATTERS:

The treasury management space is quite nascent and presents a massive opportunity for projects to further monetize holding a token (specific to each project) - and there is no exception to this opportunity for Krause House DAO.

We’d like to declare the amount of funds that we would like to deposit into the Bancor Liquidity Pools.

At time of writing this proposal - Bancor Yields for the assets requested to stake, are currently providing:

ETH: ~4.08% APR USDC: ~29.73% APR

Staking these idle assets will allow the DAO Treasury to earn ~$309,197 on the USDC and ETH side.

The Krause House DAO Treasury Management Strategy plays into the goals of generating yield to accomplish all goals listed in the above-stated plan. The BNT Token earned would be a valuable asset to the treasury as we would then be able to participate in the governance for one of DeFi’s most established protocols.

All Yield generated would be added to the Krause House DAO Treasury. Providing additional funds to increase our runway - providing a more robust future for DAO Operations as we work towards our ultimate goal of acquiring an ownership stake in an NBA Team.

HOW THIS WILL BE DONE:

The Krause House DAO Treasury Management Strategy plays into the goals of generating yield to accomplish all goals listed in the above-stated plan.

As stated above, the plan is to utilize the strategy of deploying funds into:

1. ETH/BNT LP - 100 ETH = ~$291,600
   1. APR of: ETH 4.08% | BNT 41.31% = ~$11,897 for providing ETH single-sided (paid in BNT, not including trading fees which are paid in ETH) | (Compound rewards received from adding ETH liquidity, by single-sided staking BNT, generating yield on the BNT liquidity provision)
2. USDC/BNT LP - $1,000,000 USDC
   1. APR of: USDC 29.73% | BNT 44.53% = ~$297,300 for providing USDC single-sided (paid in BNT, not including trading fees which are paid in USDC) | (Compound rewards received from adding USDC liquidity, by single-sided staking BNT, generating yield on the BNT liquidity provision)

The total prospective yields that can be generated would equate to ~$309,197 on the USDC and ETH side. We can calculate the increased yield once the treasury engages in compounding the BNT rewards it would receive for providing the USDC & ETH liquidity given the BNT APR’s listed above.

Insurance cover from Unslashed Finance will be purchased to cover the total value of 420 ETH deployment to the liquidity pools.

OTHER OPTIONS**:**

Stake 750,000 USDC & 75 ETH ($225,797) = $975,797

Prospective base (annualized) yield would equate to: ~$232,987 (without factoring in BNT compounding)

Stake 500,000 USDC & 50 ETH ($150,531) = $650,531

Prospective base (annualized) yield would equate to: ~$154,791 (without factoring in BNT compounding)

TIMELINE:

Multi-Sig Holders to execute the strategy once proposal reaches quorum.

Treasury Managers:

The 2 primary managers of the currently idle treasury assets that would be deployed to Bancor, should the proposal pass, are both Kris (0xUST#2965) & Magnus (Magnus#3558)

Kris:

• Previously sat on investment team for a digital asset hedge & venture fund.
• Lead emerging ecosystem research across Terra, Avalanche, Near, Fantom, Harmony, etc.
• Specialized in catalyst-driven momentum trades + Market-wide DeFi analysis.
• Has sat on the Bancor DAO Marketing Council since July of 2021 (non-paid contributor)

Magnus:

• Is deeply familiar with the DeFi Space - Started his Crypto journey in 2013.
• Operates and manages his own Crypto-focused Prop Fund.
  • Systematic Trading
  • Early Stage Investments
  • Advisory
  • Yield Farming
• Is a Co-Founder of a DeFi protocol called Redacted Cartel.

DEFINITION OF SUCCESS:

• Krause House DAO Treasury to generate yield to add to treasury
• Would add additional assets to Krause Treasury
• Increase runway by putting idle assets to work

Transparency:

Kris & Magnus will work together to generate monthly performance reports to show increase in treasury asset value since inception (initial deposit of assets) which will primarily be denominated in $ growth.

Compensation:

Requesting $6,000 USDC/mo for a 2 month trial period. This would be split 50/50 between Kris & Magnus for the duration of the 2 month trial period.

RISKS:

• Smart contract risk
• General downturn of the greater market and yields drop and slow the amount of yield being generated

RISK MITIGATION:

In the interests of mitigating against Smart Contract Risks. There is the additional option of buying Insurance Cover against Smart Contract Integrity for Bancor Network. This would cost a premium of 0.3898%/year to purchase this cover for the desired amount of funds - Which would equate to 3.6352 ETH.

The added benefit of purchasing this insurance cover, we would also be farming USF (Unslashed Finance) Token, which in turn would be an additional asset to add to the Treasury.

If there is any cause of concern, the Stewards team may intervene and exit from the above-outlined strategies.

TEAM:

• Kris
• Magnus
• Mario Lopes
• Motif
• Flex Chapman

Options:

Select all options you approve. The higher amount with > 50% approval will be selected.

• Stake 1,000,000 USDC & 100 ETH
• Stake 750,000 USDC & 75 ETH
• Stake 500,000 USDC & 50 ETH
• Abstain
• Do not stake any idle treasury assets