Governance Proposal for Reinvesting Tournament Treasury Funds in Diversified Investment Opportunities

Governance Proposal for Reinvesting Tournament Treasury Funds in Diversified Investment Opportunities

Proposal Title: Reinvestment of Tournament Treasury Funds in Diversified Investment Opportunities

Summary: This proposal seeks permission from the StarHeroes DAO to reinvest up to 410 ETH from the Tournament Treasury into diversified investment opportunities. The goal is to earn yield on these funds, which are currently idle (not yield-bearing), thereby enhancing the financial position of the DAO and supporting the sustainable growth of the StarHeroes ecosystem.

Background: The StarHeroes DAO raised 410 ETH to fund decentralised tournaments, with the aim of fostering community engagement and promoting competitive gaming within the StarHeroes universe. These funds are currently sitting idle in the Tournament Treasury. To ensure efficient use of the DAO’s assets, this proposal recommends reinvesting a portion of these funds into various yield-generating opportunities. This strategy aims to grow the value of the Tournament Treasury over time, ultimately providing more resources for future tournaments and other community initiatives. The reinvestment process will be carried out in a manner that does not hinder the use of funds for organizing tournaments and funding their prize pools.

Proposal Details: The proposal is to reinvest up to 410 ETH from the Tournament Treasury into a diversified portfolio of investment opportunities, including but not limited to:

1. Liquidity Airdrop Farming: Allocate a portion of the funds to liquidity pools that offer airdrop incentives. This strategy can provide additional returns beyond standard yield farming by capitalising on airdrop distributions from emerging projects.

2. Ethereum Staking: Stake a portion of the funds in Ethereum to earn staking rewards. Ethereum staking provides a relatively stable and predictable yield, contributing to the overall growth of the Tournament Treasury.

3. Restaking: Participate in restaking opportunities to maximize yield. The protocols which can be used for this purpose are, i.a., Eigen Layer, Symbiotic, Etherfi, Kelp DAO etc..

Investment Strategy and Risk Management:

1. Risk Assessment: Prior to any investment, a thorough risk assessment will be conducted to evaluate the safety, security, and potential returns of each opportunity. This assessment will be based on factors such as protocol maturity, liquidity, historical performance, and community reputation.

2. Diversification: To mitigate risks, funds will be distributed across multiple strategies rather than concentrated in a single investment. This approach will protect the Tournament Treasury from significant losses due to volatility or protocol failures.

3. Periodic Review and Adjustment: The DAO will conduct periodic reviews of the investment portfolio and make adjustments as needed to align with changing market conditions and the DAO’s strategic goals.

Financial Implications: By earning yield on the currently idle 410 ETH, the Tournament Treasury can grow its assets over time. This growth will enable the StarHeroes DAO to fund larger tournaments, increase prize pools, and support other community-driven initiatives, thereby enhancing the value proposition of the StarHeroes ecosystem.

Conclusion: This proposal offers a strategic approach to enhance the efficiency of the Tournament Treasury by reinvesting idle funds into diversified yield-generating opportunities. By approving this proposal, the DAO will take proactive steps to grow its assets, strengthen the StarHeroes community, and ensure the long-term sustainability of the decentralized tournament initiative.

Next Steps: Voting Phase: Conduct a DAO-wide vote to approve or reject the proposal.

Voting Options:

FOR: Approve the reinvestment of up to 410 ETH from the Tournament Treasury into diversified investment opportunities as outlined in this proposal, with the understanding that the full amount may not necessarily be allocated entirely to reinvestment.

AGAINST: Do not approve the reinvestment of up to 410 ETH and leave the funds in their current idle (not yield-bearing) state.

ABSTAIN: Choose not to participate in the vote.

We encourage all DAO members to participate in the discussion and voting process to ensure the best decision for the StarHeroes community. Thank you for your consideration.