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Idea: Put treasury funds into yield farming #28

Open kkkrackpot opened 3 years ago

kkkrackpot commented 3 years ago

At the moment the DAO has about 78 ETH sitting idle in the treasury. There's no clear decision yet on what the fund must be used for. And it's still not clear when such a decision will appear.

I would propose to put the most part (like 90%) of the fund into a reasonably reliable yield farming project.

For example, as far as I can see, Yearn currently offers about 2.5% on ETH -- i.e. on 70 ETH it's about 0.004 ETH per day. The vesting project is subject for discussion, though.

Pros:

Cons:

Note 1. The DAO must keep a relatively small amount (like 10%) of liquid funds for 'ongoing needs' (like 2 ETH for the deal with Rarity.tools).

Note 2. The possible agreement with Gearbox must be taken into account, maybe decision should be postponed until it's finalized.

Note 3. The yield profits should go to the DAO for now, they're simply too small to be distributed.

Additionally I would say to move the DAO fund to L2 (Optimism/Arbitrum) in order to save on fees. But l'm too smal brain for such proposal.

bgausden commented 3 years ago

I'd suggest it's too early to be discussing what to do with funds. Until the DAO has a clear mission statement and strategy, we don't know how the funds should be deployed (if at all).

khoazany commented 3 years ago

Agree with the above, the DAO should utilize the treasury to best fit with its mission. There's not gonna short of things that will need some funds when we really get it going.

kkkrackpot commented 3 years ago

To be clear, my idea is not to put it into farming forever. Only until we "really get it going" and will need liquid funds. But personally I have now no idea when we really get it going, in a week, a month, or a year.

hemibal69 commented 3 years ago

why don't we invest DAO funds in interesting projects helping them financially at an early stage and, of course, with smart Lobster heads.farming I think is worth considering from more funds in the DAO

bgausden commented 3 years ago

why don't we invest DAO funds in interesting projects helping them financially at an early stage and, of course, with smart Lobster heads.farming I think is worth considering from more funds in the DAO

You’re suggesting we LARP as VCs? Unless we have the necessary skills within the DAO, this would be high risk and could badly impact the DAOs reputation.

Once we know why the DAO exists, we’ll have a much better idea of what level of risk we’re ready to take on.

In the interim, we could move towards agreeing to a point in time after which the default action is to invest some part of the treasury in low risk, liquid positions.

A governance mechanism is probably a pre-requisite to everything discussed in this proposal.

kkkrackpot commented 3 years ago

why don't we invest DAO funds in interesting projects helping them financially at an early stage and, of course, with smart Lobster heads.farming I think is worth considering from more funds in the DAO

Well, probably because noone yet offered such a project, there was no discussions, no researches, nothing. Besides, it's unclear when it will be and even if it will happen at all. Meanwhile staking at e.g. Yearn requires a dozen of clicks, is relatively safe, and pays interest while ppl discuss associations, constitutions, missions, and other important things.

DaveRodman commented 3 years ago

In my experience, DAOs move reallly slowly. As such putting some allocation of the treasury in a "safe" farm (something very low risk) while we figure out what to do for long term strategy is a really good idea. No harm in putting the eth to work while we figure out the long term stuff.

Datascience-Blockchain commented 3 years ago

I think it's too early for this.

alex-core-0x commented 3 years ago

I'd suggest it's too early to be discussing what to do with funds. Until the DAO has a clear mission statement and strategy, we don't know how the funds should be deployed (if at all).

It's too early before the market finishes its bull phase. Imo, we should discuss the treasury partial exit strategy to USDC/T to keep the value over the bear market.

kkkrackpot commented 3 years ago

I'd suggest it's too early to be discussing what to do with funds. Until the DAO has a clear mission statement and strategy, we don't know how the funds should be deployed (if at all).

It's too early before the market finishes its bull phase. Imo, we should discuss the treasury partial exit strategy to USDC/T to keep the value over the bear market.

1 ETH == 1 ETH no matter what. I doubt the DAO should go into speculation. And as a former speculator, I highly doubt successful speculating can be done by a group of loosely related anons through internet voting...

alex-core-0x commented 3 years ago

I'd suggest it's too early to be discussing what to do with funds. Until the DAO has a clear mission statement and strategy, we don't know how the funds should be deployed (if at all).

It's too early before the market finishes its bull phase. Imo, we should discuss the treasury partial exit strategy to USDC/T to keep the value over the bear market.

1 ETH == 1 ETH no matter what. I doubt the DAO should go into speculation. And as a former speculator, I highly doubt successful speculating can be done by a group of loosely related anons through internet voting...

I don't see it as speculation, but following on a market phase. We, as a community, should find ways to save and grow the treasury. And one of the best ways to save the treasury during the bear market is to hold stables (potentially earning good yield on it).

kkkrackpot commented 3 years ago

I'd suggest it's too early to be discussing what to do with funds. Until the DAO has a clear mission statement and strategy, we don't know how the funds should be deployed (if at all).

It's too early before the market finishes its bull phase. Imo, we should discuss the treasury partial exit strategy to USDC/T to keep the value over the bear market.

1 ETH == 1 ETH no matter what. I doubt the DAO should go into speculation. And as a former speculator, I highly doubt successful speculating can be done by a group of loosely related anons through internet voting...

I don't see it as speculation, but following on a market phase. We, as a community, should find ways to save and grow the treasury. And one of the best ways to save the treasury during the bear market is to hold stables (potentially earning good yield on it).

Are you sure that Tether or Circle will not fuck it up or DAI will not de-peg? It's in addition to hack/rug risks of staking, btw. "Stablecoins" are somehow the riskiest "investments", I believe.

However, if the DAO decides to make it that way -- so be it then.