TIP79 - Use thUSD protocol for expenses

Tldr Use thUSD protocol to mint thUSD against tBTC collateral to pay for some of the DAO’s monthly expenses.

Proposal Convert $400k T into tBTC each month and add that tBTC as collateral to a vault on the thUSD protocol to mint $160k thUSD (with a safe 250% collateralization ratio). Use the minted thUSD to pay part of the DAO’s monthly expenses.

Benefits Today the DAO pays expenses, including collaborator compensations, with T from the treasury. This is a pretty straightforward operation and each collaborator gets exposure to T. It also implies that the treasury gets depleted by ~$300k each month.

If instead, the DAO buys tBTC each month and borrows against it to pay expenses, the benefits would be:

• T gets dollar-cost averaged (DCA) into BTC: DCA is an investment strategy where an investor divides the total amount to be invested across periodic purchases of a target asset. This strategy aims to reduce the impact of volatility on the overall purchase, removes the pressure to make perfect timing decisions, as investments are made consistently regardless of market conditions and particularly in volatile markets can result in a lower average cost per share compared to lump-sum investing.
• Treasury gets diversified, an overall long-term goal of the treasury guild to build a more resilient treasury where capital is best preserved.
• Thresholds’ own thUSD protocol gets used by Threshold, a solid use case example and strong marketing message for the whole market.
• Getting paid in stablecoin allows each collaborator to choose their exposure.
• If tBTC continues its upward trend: then the DAO sells a part of its tBTC, repays the loan and keeps the rest. Overall treasury value and resiliency increases. At the same time with debt paid down tBTC is released from the Vault and can be put to work to generate additional income.

The potential operation considerations of this process are:

• Increased complexity of monthly operations
• Active debt management would need to be performed
• The DAO would need stables in reserve to handle sporadic loan repayments to avoid pitfalls of market drawdowns and manage decreasing collateral ratios
• The DAO may lose BTC exposure if a vault gets redeemed

For more context and details please read up the complete proposal on the forum.