YIP: Treasury to Invest in DeFi Pulse Index Set

Link to forum: https://forum.yam.finance/t/yip-treasury-to-invest-in-defi-pulse-index-set/568

Basic Summary/Abstract

We propose to purchase $250,000 worth of the DeFi Pulse Index Tokenset 16 (DPI) using the Yam treasury. This will help diversify the treasury away from full exposure to yUSD tail risk, give exposure to the rise of DeFi, increase awareness by aligning with a popular DeFi info resource, and demonstrate a major use case of the treasury.

Motivation

YAM is currently heavily exposed to the risks of yUSD including DAI, USDC, TUSD, and USDT risk, Curve smart contract risk, and Yearn Vault smart contract risk. By allocating treasury funds to the DPI Set, we diversify some of that risk.

While we are eliminating potential downside risk, we also get exposure to new upside. By investing in a basket of DeFi cryptocurrencies, the YAM treasury has the opportunity to grow alongside the broader DeFi markets, rather than solely relying on stablecoin yield.

Finally, this showcases one of the fundamental use cases of the treasury by investing in other DeFi assets and interacting with other DeFi protocols.

Risks

While we limit the risk exposure to yUSD, but do take on price risk to the underlying DPI assets as well as TokenSets smart contract risk.

Specifications

An on-chain governance vote would use treasury funds to purchase the DeFi Pulse Index Set.