Swap Treasury USDC for Decentralized Alternatives (e.g. FRAX)

Summary

One of X-DAO’s main goals is to build a decentralized gaming ecosystem. The foundation of such an endeavor should be a decentralized stablecoin rather than a centralized one like USDC.

Proposal

After the initial treasury bootstrapping event, our treasury now holds $600K USDC. While USDC is a trusted store of value, holding it still exposes our treasury to the risks of centralization, namely the inherent risk that Circle may one day be forced to blacklist a protocol that is critical to our success (e.g. a partner or even X-DAO itself).

That, among other reasons, is why FRAX has been adopted by so many DAOs recently:

• OlympusDAO holds ~$20M FRAX, slightly over 10% of the treasury’s RFV. Note that 50% is held in DAI and 40% in LUSD (source)
• TempleDAO’s entire $180M treasury is in FRAX (source)
• PixelDAO, attempting to build the “decentralized reserve currency of the metaverse”, will also use FRAX as their primary stablecoin (source)

By adopting FRAX as our stablecoin of choice, we open the door to forming a deeper relationship with the Frax community, both formal and informal. Their team takes pride in supporting new projects from the start (they supported Olympus in its earliest days!), and Frax’s partnership with PixelDAO alludes to their interest in crypto gaming. Moreover, having a hands-on stablecoin partner like Frax will surely come in handy as we prepare for a multi-chain future.

Vote

1. Convert 100% of the $600K USDC into FRAX. Adopt FRAX as our stablecoin of choice and explore informal/formal partnerships with Frax team/community
2. Convert 80% of the $600K USDC into FRAX, and the rest into DAI. Adopt FRAX as our stablecoin of choice and explore informal/formal partnerships with Frax team/community
3. Convert 50% of the $600K USDC into FRAX, and the rest into DAI. Stay agnostic about preferred stablecoins for now
4. Convert 20% of the $600K USDC into FRAX, and the rest into DAI. Stay agnostic about preferred stablecoins for now
5. Do nothing