YIP Proposal: Treasury Investment Strategy - DPI / ETH Indexcoop Farming

Part of the Yam protocol will be a “ragequit” function that allows yam holders the option to take a % of the treasury. This creates an artificial floor price according to the value of the treasury. In other words, the larger the treasury likely the larger the value of Yams.

community has losted faith! Treasury could‘t take any profits for YAM holders

Already making profits from DPI set that was just purchased today via the first trustless DAO OTC purchase!

Yam team will be using the same OTC on-chain contract to purchase the ETH. Stay tuned. Also I will be submitting a snapshot proposal to farm ETH/DPI on Indexcoop.

Draft to be posted on snapshot for vote. Anything that I am missing?

Link to forum: YIP Proposal: Treasury Investment Strategy - DPI / ETH Indexcoop Farming

Basic Summary/Abstract
This proposal is the final part of the YIP linked above to use DPI/ETH to yield farm on Indexcoop.com for the Yam Investment Portfolio. If your just catching up, here’s our current progress:
We purchase the Defi Pulse Index (DPI) using the first trustless DAO OTC contract:
https://twitter.com/YamFinance/status/1320812699245228035
We passed and are working on completing the ETH purchase using the same DAO OTC format:
https://snapshot.page/#/yam/proposal/QmYDGKFG6hSVjA4tUg61sQv6CgaomGjJdJCoQhyb4oDE2v

Now as the community we have to vote to determine if we want to:

  1. Submit both ETH/DPI to Uniswap Liquidity Pool.
  2. Take Uniswap LP Tokens and stake those on Indexcoop.com which will farm Index tokens at a ~55% APY (unstable).
  3. Sell Index tokens for ETH or Keep Index tokens in Treasury.

Motivation
Our goal is to increase the value of the Yam Treasury.
The larger the Yam Treasury they more we can utilize to funds to develop the Yam ecosystem.
Using assets already in the treasury (DPI and ETH) to gain additional yield is advantageous but we must evaluate the risks.

Risks and mitigating factors

  1. (Minimal Risk / High Value Loss) Indexcoop farming contract bug or exploit.
    a. Indexcoop developers are the same people who created tokenset.com
    b. Farming contract is a fork of Uniswap
  2. (Minimal Risk / High Value Loss) Uniswap Liquidity Pool bug or exploit.
    a. Lindy effect – Uniswap has been battle tested since 2018.
  3. (Minimal Risk / Low Value Loss) Providing Liquidity in a Uniswap Pool is subject to Impermanent Loss (IL).
    a. Explained here: https://finematics.com/impermanent-loss-explained/
    b. As an LP we do collect trading fees from the pool, which can easily offset Impermanent Loss.
    c. DPI and ETH are highly correlated, which mitigates the risk of IL.
    Risks overall are minimal but possible.

Specifications

  1. Informal review of Indexcoop’s contracts.
  2. Provide Liquidity on DPI/ETH pool at Uniswap
  3. Stake Uniswap LP tokens on Indexcoop.
  4. Claim Indexcoop tokens every 2 weeks and Sell or Hold.

Any consensus to Hold INDEX or Sell Index?
If possible I’d like to offer one options on the snapshot but can do both if needed.

I prefer we hold INDEX, they’ve got a good outlook and manageable token inflation. I really think this is just the beginning for INDEX

2 Likes

I’m happy holding. Show’s goodwill to the Tokensets and index guys, which is good if we are going to use more of their products.

Holding will give the YAM community a voice and leeway in their governance, @feddas. Also, like @ross said, it ushers goodwill to the $DPI and $INDEX community rather than labelling the YAM community a farm and dump yamfam degens.