Should we stake stables on Vector?

Overview:

We would like to move treasury funds to stake in Vector protocol. We believe this will be a lucrative investment as Vector yields will likely be very attractive, particularly at the onset. By staking stables on Vector, we are also supporting the first protocol that was built by Magnet. Vector passed its audit by Omniscia, the same firm that audited Platypus, so we feel it is a safe use of funds.

Proposal:

We move $5M from Trader Joe USDC.e lending to deploy our treasury on Vector using the following “flywheel” strategy:

• Deploy treasury stablecoins on Vector to earn PTP
• The PTP we earn will be converted to xPTP and then staked
• xPTP will be staked to earn both PTP and VTX (a total of 71% of Vectors protocol revenue goes to xPTP stakers)
• Earned PTP will be compounded into our xPTP position
• Earned VTX will be locked (a total of 29% of Vectors protocol revenue goes to locked VTX stakers) 
• VTX will accrue in the treasury, and all VTX earned will be distributed at a later date to MAG stakers / wMAG holders

Benefits:

We strongly believe in the future of both Platypus and Vector. Magnet should be supporting the protocols it incubates, invests in, and builds. By staking treasury stablecoins in Vector, Magnet will also be able to gain exposure to an ecosystem which has significant upside potential and minimal downside risk to our treasury. Through our flywheel strategy, we will be accruing increased yields and additional VTX tokens to distribute to the community.

Timing:

• The vote will last 24 hours; however, if there is a supermajority (>65% of votes being yes) at 6:00pm UTC (~11 hours from now, when Vector launches) - then we will begin staking the stables. If at the end of the vote, the answer is no (>50% of votes being no) after originally being approved by the supermajority, then we will withdraw the stables and go back to Trader Joe lending.