Should we convert 1/8th of the DAO’s MANA to stablecoin to diversify and stabilize the treasury?

by 0xfe91c0c482e09600f2d1dbca10fd705bc6de60bc

Summary

Given the amount of MANA owned by the Decentraland DAO, we should diversify these holdings between Decentraland's native token (MANA) and stable coins to make the DAO’s treasury more secure.

The DAO should allocate one-eight (1/8) of the treasury, or 4,357,187 MANA, to a portfolio of stable coins including equal proportions of USDT, USDC, and DAI.

The added stability resulting from this diversification will better empower the DAO to fulfill its various financial obligations (e.g. the community grants program) over a longer period of time.

While the formation of a DAO Treasury Committee might result in a more complex and performant financial strategy, this initial proposal aims to suggest a simple change that our community can make right now to immediately help to protect and sustain the DAO's funding.

Abstract

On February 20, 2020, the Decentraland DAO was created and given 222 million MANA by means of a 10 year vesting contract. (Sign into Metamask or connect your wallet to view the DAO's vesting dashboard.) This MANA was set aside to support the continued development of the Decentraland platform by funding decisions made by MANA holders and LAND owners through the DAO.

As of the time this proposal was published, 34,857,497 of that MANA is now available to the DAO's treasury. At a current market value of ~150,000,00 USD.

The Treasury also has 5,392,411 USD in stable coins at the moment used to fund grants. The original proposal to convert 1/5 of the Treasury to stablecoins was approved here.

Maintaining a stable treasury is a critical step toward enabling the DAO to fulfill its obligations to the Decentraland community. The recently approved Grants Framework specifies new grant tiers to be paid in stablecoins. Maintaining a cushion of stable coins within the treasury will help to maximize the number, size, and duration of grants that the DAO can fund in the long term.

Many other DAOs are beginning to explore initiatives such as this, as is discussed in this article and the related report from the Blockchain Capital blog.

In conclusion, the DAO should exchange 1/8th of its treasury (or 4,357,187 MANA) for a portfolio of stable coins containing equal proportions of USDT, USDC, and DAI.

The remaining 7/8ths of the treasury will remain in MANA.

Specification

1/8th of the DAO's existing treasury, or 4,357,187 MANA, is to be exchanged for USDC, USDT, and DAI stable coins, in equal proportions. Using the current price of MANA (4.8 USD/MANA) this transaction will generate ~20,914,498 USD

The transaction is to be conducted by the DAO Committee's multisig using DEX protocols over a period of several weeks ensuring to get an average price and minimizing the impact on markets liquidity.

For

Approve the proposed asset allocation and delegate the transaction to the DAO Committee.

Against

Reject the proposed asset allocation.

• For
• Against
• Invalid question/options

Vote on this proposal on the Decentraland DAO