YIP Proposal: Treasury Investment Strategy - DPI / ETH Indexcoop Farming
Basic Summary
There has been ongoing discussion about how we utilize the treasury to allocate assets that can generate a return. Previous threads:
This is only the asset allocation portion of the portfolio, which I expect to be only a % of the treasury. We can still start brainstorming and parallel processing this piece without knowing the % yet.
Abstract
TL/DR
This proposal would have the treasury purchase approximately $250k of ETH to be paired with the $250k DPI into a Uniswap Liquidity Pool to be staked with Indexcoop.com DPI/ETH Farm. Periodically the Index tokens that are farmed will be harvested and sold via Uniswap thru a smart contract.
As a volunteer community member contributing strategist with a background in financial planning and history in business and crypto. I’ve come to realize how difficult a task that current Yam Team is working on. Many members on discord constantly complain about how slow progress is (I know I was one) fail to realize that significance of the development work that the Yam team is doing. They are laying the foundation brick by brick for a decentralized finance system. It’s important to measure twice and cut once because this is the foundation. Once it’s ready watchout!
Since this is the first step to utilizing the treasury to farm yields, let’s make sure we do this carefully and not rush. The team will do an informal audit of the DPI/ETH Farming contract.
Research
We’ve narrowed down our investment options to a few quality yield farms with known devs and or audits. Current list:
We’ve also narrowed down our list of assets that the treasury would hodl mid to long term:
- Stablecoins
- ETH
- DPI - Defi Pulse Index: https://www.tokensets.com/portfolio/dpi
- wBTC
Right now the treasury holds:
- yUSD
- Currently purchasing DPI - $250k
Motivation
We should put the DPI to good use by farming on Indexcoop.com. The team is part of the setprotocol.com team that has been audited.
Specifications
When this proposal gets approved, it is only the beginning. The difficult work lies ahead. We can use this as template for our future purchases, which is why it needs to be done carefully.
My non-developer thoughts on the steps that need to be done (Feel free to chime in):
- Contact needs to be written on how to acquire $250k in ETH, due diligence needs to be done on how much to purchase and timing. We could just market buy $250k in ETH on Uniswap by clicking on a button, but that’s not how a decentralized governed structure works.
- Indexcoop farming contract needs to be informally audited by Yam team or community assisted.
- Contract needs to be written to deposit DPI/ETH on to Uniswap’s Liquidity Pool.
- Contract needs to be written to deposit Uniswap LP Tokens to Indexcoop’s Yield Farming contract
- Contract needs to be written to harvest Index tokens and sell.
Additional decisions
- A fast exit (a timelock governance bypass) “button” to unwind stake from both indexcoop.com and uniswap to retrieve DPI and ETH assets?
- A fast exit to sell DPI asset?
- Sell index tokens to which base treasury asset? ETH?
- Should we hedge the ETH investment $250k with OPYN put options to limit downside in investment?
Poll to Measure Sentiment
- Let’s do this!
- Let’s discuss this more!
- Not a good idea.
0 voters
