KIP-25: Maple Finance Funds Withdrawal

This is an apparent consensus vote, open to ROOK and xROOK token holders.

• Vote 'No objection' if you agree with the proposal.
• Vote 'Object' if you disagree with the proposal. If voting ‘Object’ to the proposal, you are encouraged to voice your reasoning on the Rook Forum. Objections that are backed by a strong argument may potentially hold more weight than a simple objection vote.

Results

KIPs that receive > 50% ‘No Objection’ votes do not automatically pass. On completion of the vote, ‘Object’ votes will be analyzed and discussed by the Rook team and community. If a significant number of objections occur, the vote will either be marked as ‘Failed’ or enter a reconciliation phase. For more information, see the Rook Governance Beigepaper.

Proposal Full Text Links

LINK Github post of record LINK Forum post and discussion

Proposal Summary

kip: 25
title: Maple Finance Funds Withdrawal
authors: DaddyMatty <matt@rook.fi>, JasonW <jason@rook.fi>
status: voting
created: 2022-6-16
replaced-by: none
replaces: KIP-6
dependency: none

Proposal

Proceed with the withdrawal of all Rook treasury USDC, and related earnings, from the Maple Finance position initiated with KIP-6 [1]. The USDC portion of our deposits will be maintained as USDC, with the MPL portion being swapped into USDC through the Rook Protocol.

References

[1] KIP-6 forum post [2] Rook’s Current Maple Position [3] FT article: Three Arrows Capital Margin Call [4] Coindesk article: Celsius Functional Insolvency

Background

Summary

Given volatility in markets and emergent risks in the position, after careful evaluation, the multisig signers have taken the decision to initiate a withdrawal of all USDC and related earnings deposited with Maple Finance per KIP-6 [1]. This is a risk-management decision motivated by risks of potential market contagion rather than a view on Maple Finance in isolation. There is a 10-day processing period between initiation of a withdrawal and its enactment, and in this period the DAO will have the ability to make a collective decision, without unnecessarily delaying the withdrawal process.

All subsequent information relates to data as of June 16, 2022 (“Proposal Date”).

Investment amount and type

As outlined in KIP-6, the Maple Finance position was initiated for the purpose of yield generation. Rook’s position with Maple was $3.563 million USDC and $108.9k MPL as of Proposal Date [2].

Expected benefits for Rook

The expected benefits of this proposal are as follows:

• Protection from locking or loss of Treasury funds due to market contagion
• Recognition and realization of earnings totaling $187.6 as of Proposal Date
  • MPL Rewards: $108.9k [2]
  • USDC Rewards: $78.7k [2]
• Ability to monitor Maple Finance and the broader market for developments and opportunities while reducing risk to our stablecoins

Analysis and Rationale

Market conditions have shifted powerfully since this position was established in 2021, most recently and dramatically with the rumored collapse of several centrally connected market actors such as Three Arrows Capital and Celsius [3,4]. While Maple Finance is not one of those actors, and our analysis of that protocol in itself has not changed, Maple’s status as a leading undercollateralized lending platform has led us, out of an abundance of caution, to recall our deposits.

We feel this is prudent risk management given the need to protect our Treasury’s viability and ability to support ongoing operations. The speed of market developments makes this move unusually urgent.

Implementation

Execution

Execution will be a withdrawal by the Treasury multisig of all Treasury assets on Maple Finance, executed as described in Specification below.

Monitoring and Reporting

The Treasury multisig will report to the DAO upon completion of the trade, which will end with the return of the USDC and MPL to the Treasury portfolio.

Specification

Specific steps to be taken, in bullet point form

• Proceed with withdrawal of total USDC deposits and related earnings ($3.563m) to 0x9a67f1940164d0318612b497e8e6038f902a00a4 (“Rook DAO Treasury”)
• Proceed with the withdrawal total MPL earnings ($108.9k) to the Rook DAO treasury
• Swap total withdrawn MPL earnings into USDC using the Rook Protocol ($108.9k) and maintain in the Rook DAO treasury
• Report back to DAO on completion of these transactions

Note

Three Arrows Capital was an early investor in KeeperDAO, and has had minimal contact with our organization since that time.