YIP: Treasury to Invest in Projects Picked by Team

YIP: Treasury Investment Philosophy; Investment Page Development

Basic Summary
Rather than relying on the DP Index, I would recommend for the team to pick the projects and write down their rationale. The process of picking and analyzing the projects itself will offer value to the Yam community, the whole crypto world and constantly attract attention from the crypto community and the public.

Naturally, team will make mistakes, some of the investments will fail. But they will learn and improve by checking the results and the feedback, and by communicating with the various project teams. This will keep Yam relevant to the crypto industry in the long run.

Abstract

  1. Treasury to invest up to 50% of its total value into projects handpicked by the core team. Each investment cannot exceend 0.5% of the total value. Parameters can be further discussed.

  2. Treasury to gradually withdraw the principal; profits to stay invested.

  3. Add treasury investment page to the website (high priority). The page will show details of every token that team has invested in, plus information and links about the invested project. Team investment rationale and analysis only accesbile to Yam token holders.

  4. Performance fee: 20% of the investment proceeds to be granted to the team.

Motivation
This plan will help in various aspects:
(1) generate potentially more profits for token holders;
(2) show the world that Yam is not just an out-dated farm coin, that the team has true insights and expertise in crypto;
(3) make Yam project a hub and homepage for the latest crypto projects with the most promising technologies and tokenomics, thus increaseing Yam exposure to the public and generate positive perception;
(4) incentivize the core team.

Specifications

  1. Treasury to invest up to 50% of its total value into projects handpicked by the core team. Each investment cannot exceend 0.5% of the total value, i.e. the team will in maximum invest in 100 projects. 99 of them could fail, but as long as one of them is as successful as Bitcoin or Ether was, the total investment result will be great. This is a typical VC investment approach.

  2. Rebalancing: Whenever any investment makes profit, Treasury must gradually withdraw the principal, and invest the principal into another project; the profits will be kept there for potentially more return.

  3. Add a treasury investment page to the website. The page will show every investment that team has made, plus information and links about the project. This will become a hub of promising new projects in the crypto industry. The page can redact certain information so as to give the team more flexibility. The team must write up an analysis on each investment rationale and expectation, and give a rating to the project. The analysis is only accesbile to Yam token holders, thus creating one more utility for the token.

  4. Performance fee: To incentivze the team, 20% of the investment proceeds will be granted to the team.

Poll to Measure Sentiment

How much percent of the Treasury should be invested in projects picked by core Team:
  • 30%;
  • 50%;
  • 60%;
  • 80%;

0 voters

Investments to be made equally weighted into [number] of projects:
  • 30;
  • 50;
  • 75;
  • 100;

0 voters

Frequency for Team to make investment decisions:
  • Monthly;
  • Quarterly;
  • Semi-annual;
  • Annual.

0 voters

Your suggesting that the Yam Team individually pick other projects to invest the treasury into? This is highly speculative and risky. Generally not a good idea for any individual let alone a community managed treasury.
The team has some things in the works as far as investment opportunities for the treasury, let’s wait for more details before we use the shotgun approach.

2 Likes

Please refer to the other proposal on allocation. Formalize a treasury investing strategy and allocation

I believe it is generally agreed that part of the treasury will be invested into “Equities,” that is, other projects. The question is not yes or no, but how. How much percent should be invested, and how the targets should be chosen. At the end of the day, no matter how the projects are chosen, there will be risks.

The DP Index was suggested, but my argument is that instead of relying on others, we should pick the projects by ourselves, and we should document the investment process itself, and add value to the community by sharing it with yam token holders.

1 Like

The options you are allowing are limited. I have a few suggestions.

How much percent of the Treasury should be invested in projects picked by core Team:
By having 30% as a minimum option, you are implying that 30% should be the minimum. Please add “Less than 30%”

Equal weighting is not nuanced enough. Not all projects are made equal. Risk/return needs to be analyzed for each project.
Please add, “0.”

Frequency:
Please add the following option “As needed”

Thank you for your suggestion. Unfortunately I cannot change the poll content after it’s published, but I can share my response to your comments:

  1. Regarding the percent, I see that the votes in the other post shows most would support 15% in the equities, so I guess 15% would be the way to go. YIP Proposal: Treasury investment strategy and allocation - Updated

  2. Regarding the weighting, there must be a rule to determine the weighting, i.e. either the investment is made equal weighted, or according to market cap or other parameter. I would strongly recommend equal weighting, because this is the approach widely taken in the Venture Capital industry. The reason is that all Crypto projects are essentially super high risk. Therefore, altough we would trust the expertise of the team investment decision, equal weighting is a rule that would help avoiding “black swans” and therefore significantly reduce risks. Not all projects are equal, but they are equally risky. No matter what, this issue can be put for further voting by the community.

  3. Frequency. Again, I believe a minimum frequency would be necessary because this drives the team to regularly update their thoughts on the investment targets, and therefore keep the Yam project relevant to the broad market. If you are worried that there is no good project for investment in this market, you can vote for “annual”. Considering how rapid the Cyrpto technology is advancing, one year is an extremely long time period for making a decision. There must be something worth investing over such a long period, otherwise the whole crypto sector must be in real deep trouble and Yam project itself probably wouldn’t survive. So I think your concern is well covered.

1 Like