STP-5 | CRV OTC deal

Summary: The objective of this proposal is to determine whether or not we will make an OTC deal with Curve’s founder Michael Egorov.

Context: Recently, Curve got hacked for over $70M through an exploit of the old Vyper version. Part of this hack involved the CRV/ETH pool draining most of the on-chain liquidity for CRV, significantly affecting the liquidity conditions, which could lead to liquidations on various Lending platforms.

For this reason, as well as to avoid any major liquidation on CRV, which could be systemically catastrophic, the Curve founder, Michael Egorov, opened OTC deals at a discounted price of $0.4/CRV (currently, the CRV price is around 0,57$ = ±30% discount price).

So far, a list of sales denominated in CRV has been executed with buyers such as:

17.5M to Oxf510 12.5M to DWF Labs 5M to Justin Sun 4.25M to DCF GOD 3.75M to Machi Big Brothers 2.5M to Cream Finance 2.5M to erwwer [Oxbob] 2.5M to Ox4d3 2.5M to c2tp.eth [for 1M FRAX] 1.24M to 0xcb5

This is an opportunity to invest $500k to $1M into this OTC deal. This will open up a lot of new valleys:

• Buying strategic assets at a nice discount price (± 30%)
• Enhance Spiral’s network effect amidst the Curve ecosystem’s high profiles and renowned actors.
• Support the Curve ecosystem, including ourselves and our partner (StakeDAO)
• Aid in building our new products around the Curve ecosystem

Right now, we haven’t started any deals with Michael. The DAO has to vote so that in case there is an interest from Michael, we will immediately start the deal process.

The objective is to cover the existing debt against CRV at a discounted price / increase our position in stakeDAO liquid lockers and thus get more votes for COIL/FRAXBP liquidity. Currently, we have borrowed +800k CRV on the Aave lending market. With this opportunity, we will derisk our loan position while gaining more strategic assets at a lower cost.

OTC deal Conditions:

The conditions are yet unknown, as we haven’t started a deal process yet. But we expect them to be the following:

• 3-6 months lock-up period (but we can choose what do to with these CRV during this period: holding them in a wallet, locking them for veCRV, or even staking them in the StakeDAO Liquid Locker).
• A minimum market price of 0.8$ (±37% pump) for CRV before being able to market sell.

Means:

• Human resources: Treasury Multisig members will need to do several transactions for the OTC deal and for the newly acquired CRV.
• Treasury resources: $500k-$1M of USDC will be used to buy CRV at a discount price of 0,4$/CRV (±30% market discount).

Technical implementation: Treasury Multisig members will need to do several transactions :

• Free some USDC from the strategies / AAVE
• Make the OTC deal