Spectrum Protocol Investment

Spectrum Protocol is a yield optimizer on the terra blockchain.

Rundown:

Spectrum offers vaults that autocompound various lp's on the terra network. They provide this service for a fee.

Value:

Spectrum rewards the majority of that fee to SPEC stakers in the form of UST as a regular payout. The current rate is around 30% in the highest level stake pool, which is pretty good for a sustainable stablecoin payout on a utility token. They also have a burn mechanism for the SPEC token to combat inflation.

Investment Proposal:

We are proposing that we invest directly in SPEC to gain access to their staking rewards. Between the burn mechanism and the utility for the token, the token should regularly appreciate in value, making our buy-in of SPEC more valuable over time. We would be staking into the 180day lockup pool to get the maximum reward. This will also qualify us to use our staked SPEC as collateral for their new LP leverage system they are about to release, should we choose to utilize it.

To counteract dilution of our SPEC holdings over time, we are proposing that we also invest in the SPEC/UST LP vault on Spectrum's platform. Currently the rate of reward on that vault is around 90%. We are suggesting that we split the SPEC rewarded from this vault into part cashed out profits and part compounded into the stake pool.

There will be a sell-limit on the LP that will be voted on by governance when it is time to cash it out or rebalance to minimize IL over a long time in a volatile/stable LP.

IMPORTANT: This vote allows you to select multiple options. Please ONLY select ONE option from EACH of the three categories, as multiple choices from the same category will nullify your vote. If this is too confusing we will just use multiple proposals instead.

Category 1: Single Stake Spec amount $20k $35k $50k

Category 2: SPEC/UST LP $15k $25k $35k

Category 3: Compound/Cashout Ratio of LP Rewards 40%Compound 60%Cashout 50%Compound 50%Cashout 60%Compound 40%Cashout

Please review the discord thread linked in discussion to further examine the tokenomics and risk analysis from the proposers.