PIP-69 - Velora Treasury Management

Abstract

Given the current stage of the DAO, which is experiencing a process of revitalized activity and the incorporation of professional contributors across various areas and the current challenging situation of the crypto market, we believe that it is the right time to address a topic that we consider a priority as it is to have a team dedicated to the management of the DAO treasury, in order to professionally propose measures to rebalance its portfolio and generate income with the ultimate goal of making the treasury stronger and more resilient in the medium and long term.

Goals & Review

Introduction

The Driving Protocol Success through Optimized Governance post outlined the view that, once conditions were favorable and community participation sufficient, it would be necessary to introduce a series of gradual proposals for discussion and implementation, among them, the establishment of a treasury management function.

We believe that the current conditions are in place and it is time for the DAO to focus on this.

Currently the DAO main multisig wallet has almost 165.3M PSP, 12.5ETH, and almost 300k USDC. Likewise in the Ethereum Mainnet Fee Claimer wallet has almost 1.1M PSP and 12.5 ETH. In the different Fee Claimer wallets of the different chains it there are also different funds dispersed, such as 3.5 ETH in Avalanche, 12.7 ETH in BNB Chain, 6.18 ETH and 39k FTM in Fantom, 3.8 ETH and 14.5k OP in Optimism, 4.8 ETH in Polygon, etc. and a lot of dust in the different chains. You can check all the funds in the different DAO wallets and in this portfolio tracker.

In addition, the DAO currently receives regular income from the PSP 2.0 fees distribution system established in PSP-IPΔ22: PSP 2.0 whereby 20% of the fees collected by ParaSwap in each epoch are destined to the DAO.

These holdings and regular incomes, as well as the sophistication of the crypto market, require a professional team with the necessary skills to efficiently manage the treasury, diversify it and invest it to generate income, all with the main objective of making the DAO and its treasury sustainable in the mid and long term.

Velora Treasury Manager (VTM)

To this end, we propose establishing the role of Velora DAO's Treasury Manager, who will carry out their tasks and responsibilities within the following framework.

Scopes and Mandates

The Velora Treasury Manager (VTM) will be responsible for:

• Manage the DAO's treasury.
• Monitor income and expenses on a regular basis to ensure a healthy balance is maintained, and if an imbalance is detected that could pose a risk in the short, medium, or long term, the community will be alerted, and a corrective strategy will be developed in order to restore that balance.
• Develop strategies to preserve and grow the DAO treasury.
• Develop strategies to manage treasury PSP/New token, either through diversification into stablecoins and/or others volatile tokens, investments in DeFi products to generate yields, or other strategies to be developed.
• Develop strategies to manage treasury ETH, either by investing it in DeFi products to generate yields, or other strategies to be developed.
• Develop strategies to manage volatile treasury tokens, either by converting them to ETH, stablecoins and/or other quality tokens, or other strategies to be developed.
• In general, identify and develop suitable strategies to activate, optimize and efficiency the DAO treasury assets, ensuring financial health and sustainability, mitigate volatility, risk diversification and security, and increase in the treasury's incomes and generation of yield with the lowest possible risk.

Additional non-mandatory scopes

The above list is neither limiting nor exclusive, and VTM may also address the following additional scopes:

• Develop strategies to strengthen the PSP’s - or the future new token it may migrate to in accordance with Project Miro - value and utility.
• Develop strategies to maintain and grow Velora's liquidity and user base.
• Develop strategies to increase long term stakers.
• Analyze the current PSP 2.0 fee distribution system established in PSP-IPΔ22: PSP 2.0 to assess and propose whether modifications and improvements are necessary.
• Analyze the protocol's current sePSP2 staking system to assess and propose whether modifications and improvements are necessary.

Compliance & Legal Considerations

The VTM must ensure that strategies and implementations plans adheres to the legal and regulatory requirements.

Advisory seat on DAO structures

Given the importance of budgetary matters and the potential impact on DAO funds, the VTM may have an advisory seat on the committees, working groups and generally on any collegiate structure of the DAO, which shall be decided at the time such structures are created. In this case, the VTM role will provide ongoing analysis, evaluation and strategic advice on the health of the treasury in relation to all decisions involving the allocation of funds.

If such advisory role is assigned, the VTM will not receive additional compensation or be compensated as a member of the DAO structures it advises, unless, beyond its role as VTM, it actively contributes to the specific scope of that structure in its own capacity.

Decisions

The VTM will be responsible for carrying out actions related to the regular and day-to-day management of the treasury. However, any decision that involves implementing, executing and/or changing in management strategies, significant fund movements, operations that entail risks, or, more broadly, any decision that may have an impact on the treasury must be proposed and receive prior approval through a DAO vote.

Likewise, any strategy involving the use of external protocols or platforms—whether for yield generation, treasury management, or other purposes—must also be proposed and submitted for DAO approval. Such proposals must include a clear justification for the selection of the specific protocol or platform over other alternatives, and the DAO may suggest replacing the proposed protocol or platform with a different one.

DAO asset integrity

No DAO assets will be transferred directly or indirectly to third parties and the ultimate custody of funds must remain with the DAO, so if, for the execution of actions or strategies related to treasury management, the VTM needs to use multisig wallets, it must be ensured that the DAO—whether through Laita representatives, other DAO service providers, its delegates and/or other designated community signers—retains the ability to withdraw and move treasury assets without any permission whenever it deems necessary.

Deliverables and commitment

The VTM must provide the DAO with detailed quarterly performance reports, which should include:

• The current status of the DAO treasury and its assets.
• The treasury management strategies implemented during the period, along with their results, performance and risk exposure.
• An assessment of whether any new measures or strategies should be taken in the future to improve the treasury's position.

In addition to these quarterly reports, the VTM must also be available to address any interim questions the community deems appropriate.

Composition

The VTM will be composed of a single member, which may be either an individual or an organization.

For its initial composition, and to avoid the onboarding process of an external person or entity, it is proposed that the role of VTM be held by @Avantgarde who not only has a deep knowledge of the protocol, but brings the required experience, skills, and a strong track record in supporting the Velora DAO’s treasury initiatives and as well as having shared with us some drafts on issues that will be the scope of the VTM.

Term Duration

The VTM's mandate will have an initial duration of 12-month term, starting September 1, 2025 and ending August 31, 2026, and and after that it may be renewed for successive terms of the same length.

The DAO votes on whether to renew, modify, or replace the VTM structure.

Renewal and Replacement Process

1. Renewal: Upon completion of the 12-month term following the approval of this proposal, the DAO shall vote to determine whether or not to renew the VTM's mandate for an additional 12-month period. This process must be repeated every twelve months. 2. Replacement: If the VTM decides to step down from the role or is removed by a DAO vote, a selection process will be initiated to appoint a new individual or organization to take over treasury management. 3. Application: Prior to the completion of the VTM’s 12-month term, or in the event that an early replacement is required, a 14-day application process will be initiated for those interested - individuals or organisations - in being the VTM, who must fulfill two requirements, filling out a template and submitting a strategic plan:

• Application Template:

  • DAO-recognized Name:
  • Individual or Organization?:
  • Twitter:
  • Time Zone:
  • Background, expertise and/or skills:
  • Experience & Track Record (Demonstrate proven experience in managing comparable assets, including concrete examples of successful treasury management practices or yield-generating strategies implemented in similar role):
  • What is your motivation for applying? (max 3 sentences):
  • List your past or current association, history, role and contributions to the ParaSwap/Velora protocol or DAO:
  • Briefly describe any other DAO working groups or teams in which you currently participate or have participated in the past:
  • Conflict of Interest Declaration:

• Strategic Plan: Whoever applies to become a VTM must submit a strategic plan containing at least the following:

  • Strategy Overview: Comprehensive treasury strategy that includes:
    • A detailed plan that covers all areas related to the VTM’s ‘Scopes and Mandates’ previously defined, outlining the strategies intended to be activated to manage, optimize, streamline, diversify, preserve, and grow the DAO's treasury in order to ensure its long-term financial stability. It should also address how the PSP token—or any new token—is expected to be strengthened.
    • A detailed risk management plan outlining how the DAO’s assets will be protected under various market conditions, including stress scenarios,
    • Projections for expected returns and yield generation supported by historical performance data and rational,
    • A clear implementation plan with defined phases, timelines, and success metrics to monitor performance and ensure accountability,
  • Reporting & Transparency: Clearly define how performance will be monitored and reported to the DAO, including the frequency and format. Must specify the key metrics and tools that will be used for continuous oversight and explain how these will be communicated in a consistent and transparent manner,
  • Compensation Structure: A detailed breakdown of the proposed fee or compensation model for treasury management, including any upfront, recurring, or performance-based fees. Specify how each fee component will be calculated, the payment schedule, and any conditions or performance thresholds that must be met for compensation to be released.

• Community Review: A minimum of 7-day discussion period allows DAO members to evaluate candidates, ask questions, and provide feedback before moving to the voting phase.

• DAO Voting: A Snapshot vote is conducted where voters select the next VTM.

Means

This proposal does not require any additional Velora, external product or development.

Implementation Overview

We do not foresee any potential negative outcome of the present proposal and it is not expected for the DAO to derive any associated implementation action.

Time of Implementation

The VTM is envisioned as a permanent structure, with its initial term lasting 6 months, and may be renewed for successive terms of the same length.

If the proposal is approved, it will start on September 1, 2025 and end on August 31, 2026.

Budget

Compensation

The following compensation scheme is established for the VTM’s initial 12-month term:

• Fixed hourly rate: $75/hour compensation rate, with a maximum of 10 hours/week to be paid in PSP/New Token.
  • VTM will receive compensation in PSP/New Token. The number of tokens allocated for disbursement will be determined by calculating a 7-day TWAP, using data from the 7-day prior to the disbursement date.
  • Payments will be made on a monthly basis and will be calculated and executed within the first days of the following month.
  • Token historical price data can be gathered from publicly available sources like: CoinGecko - ParaSwap.
  • If payment is scheduled for a given day, the token price for that day can be estimated by averaging the 7 Day Range. This method ensures transparent and consistent valuation based on verifiable data.
  • Each month, the VTM must submit an invoice detailing billed hours. We suggest to follow the template format below when posting:
    • Name:
    • Rate: $75/hour rate
    • PSP/New Token TWAP Price:
    • Payment Address:

Week Start	Week End	Hours	Total (USD)
MM/DD/YYYY	MM/DD/YYYY	X	$Amount
MM/DD/YYYY	MM/DD/YYYY	X	$Amount
MM/DD/YYYY	MM/DD/YYYY	X	$Amount
	Total Hs.:	x	Total $: x
	Token Amount:		Total USD / TWAP Price of PSP

• Performance amount: The VTM may receive a performance fee subject to the treasury strategies eventually proposed and approved by the DAO.

As established in the 'Advisory seat on DAO structures' section, to avoid overlap of functions and double compensation, if the VTM holds a role within another DAO structure, it will not receive additional compensation or be paid as a member of that structure unless it contributes to its scope beyond its duties as VTM.

Risk Assessment

We do not understand that the proposal has cons, and the pros and positive impact on the rest of the community, the ecosystem and the protocol, is that it would enable the DAO to have a dedicated structure focused on the efficient management of the treasury, aimed at preserving its health and sustainability, and at generating revenue for the DAO.