[DAO Discussion] Treasury Operator - Deal

I’m running for a Treasury Operator (TO) established under WIP #15–specifically looking to fill a position that helps to generate, discuss, and help implement treasury ideas under the supervision of the DAO. This position is meant solely to function as a team during interim periods that are absent of an elected TM. I’ve created a list of ideas that I would like to see happen with approval by the team and/or the DAO. Decisions will need to be approved by the team/council; with that said, I’ve outlined some of the investments I would like to see completed based on feedback by the community and my personal opinions of a solid investment strategy going forward.

Contingencies:
Multisig Access - Given that I am based in the United States, I’m NOT seeking any multi-sig access if elected to TO.
Doxxing - I am willing to be doxxed to the team to ensure the reputation of the DAO and its assets are safeguarded.

Treasury Strategies (w/Approval by Team/DAO):

I’ve outlined which treasury strategies I would advocate for below, so holders can discern how I may vote on certain strategies presented.

1. Increase Farming Allocations & Deploy More Capital

  • Convert at least 50% of existing directionals to GLP (up to a maximum 10-15% allocation of total treasury). UPDATE: Currently in governance process - GLP contains a composition of USDC/USDC.e, AVAX, ETH, & BTC and is currently paying 24% APR on Avalanche. Historically, it has paid 30-40% APR fairly consistently. GLP seems to have overwhelming support in the community based on Discord comments and discussion in the forum. Position can be hedged during market downturns. Profits from GLP could be added to the rev share farm on a regular basis or simply kept in the treasury and redeemed quarterly by those looking to exit. Adding to the rev share farm periodically would benefit actively farming wMemo holders and increase the APR (or we could just keep using this for VC assets).
  • Farm stables like USDC, DAI, USDT, etc. on AAVE, Stargate, and other safu farms at 7-10% (or higher, if available). Also, consider deploying stables in unsecured lending farms for higher APRs. Goal is to reduce risk so any farms perceived to have liquidity concerns, high risk/unethical practices, or recent SC risk/hacks will be avoided. I typically would avoid farms paying in governance tokens unless the price was relatively stable or the APY sufficient for the risk. I would also recommend governance tokens should be dumped almost immediately in this market (or avoided)—they don’t tend to perform well over time unless the market is bullish due to their high rate of emissions. We should also continue farming during quarterly redemption snapshots right up until we need liquidity for redemptions. Some members of the community have addressed concerns regarding USDT–I think we can keep a smaller allocation here relative to USDC, but to forgo it completely would also be risky given we would have a large % of stables primarily in USDC (which also has risks like centralization–although this is mitigated by holding USDC.e I suppose). Also USDT typically has higher farming rates then USDC.
  • Farm any remaining directional assets not allocated to GLP such as Eth, Avax, etc. I think we should stay clear of most directional assets until the market sentiment shifts. We can hedge any directional assets we do have with meaningful APRs in the meantime until the market changes.

NOTE: My stance is the majority (preferable all) of assets in the treasury should be farming at all times, including directional exposure. Holding assets without farming is a disservice to holders, and those assets should instead be returned to wMemo holders via stablecoins in the revshare farm.

2. Take Advantage of Low Risk Arbitrage/Depeg Opportunities (e.g. recent MIM depeg)

I think we can make some calculated bets on things like this. MIM was sufficiently collateralized at the time and this seemed like a relatively low risk bet with a high payoff (we could have potentially made 8-9% return in 1-2 days if timed well). The MIM could have been sold once it repegged from 91 cents back to a dollar. Other safe arbitrage opps will come and might be a good calculated risk play….obviously no algo stables would be considered here–not worth the risk IMHO.

3. Slowly Increase the Directional Allocation as Market Sentiment Shifts

  • Markets will eventually improve and the goal should be to slowly allocate a larger portion of the treasury to directionals. This should occur over a period of time as it’s near impossible to perfectly time the bottom. Macroeconomic trends and fed interest rates should be the overarching theme in determining when this shift might occur. The team can look at historical indicators and investing sentiment to determine the best time to shift treasury allocations.
  • I think we can also set up a framework within the DAO where when the team has agreed that market sentiment has shifted to a bullish scenario, we can slowly shift assets to increase directional exposure utilizing specific “guardrails” as proposed by SkyH and others. We could have a set of guardrails for both a bullish/bearish market scenario to mitigate risk and ensure DAO investment interests are aligned with the Team’s strategies. Until then we can utilize a more risk-off approach.

4. Continue Buybacks

  • Buybacks have been our most profitable trade in recent months. We should continue them going forward to increase the backing for existing wMemo holders so long as the market price remains below backing. Sifuvision has been making large purchases around the $23k price range (an indirect buyback), and we own $25mm in SV tokens, but it is more beneficial to do buybacks directly through our own treasury for holders to receive the full benefit.

5. Enact Proper Risk Mitigation

  • Crypto is risky by nature; that risk is multiplied in a bear market. Wonderland lost roughly $50mm last quarter. To avoid losing more funds or encountering the next UST fiasco we need to make sure we are diversified as much as possible across safe assets. This includes diversification amongst multiple safe smart contracts, multiple safe stables, etc…smart contract risk should be limited by keeping allocations limited to 10-15% of the overall treasury size. Risk mitigation is an understated priority in a bear market. Overallocation to high risk assets and under diversification should be avoided at all costs. Hedging and/or shorting should also be performed during sudden downturns for directional assets such as GLP or as a means of bear market profitability.

6. Diversify the Multisig by Adding Trusted DAO Members

  • WIP #15 is a step in the right direction. We need to make sure all the multisig positions are filled with knowledgeable and trusted DAO members that are able to ensure ethical decisions are made in the interests of the DAO.

Background/Experience:

I’ve been trading through my personal portfolio for several years which is primarily stocks and more recently, crypto trading. I’ve also studied business and finance for 4 years (have a BBA), so I have a solid foundation of macroeconomic cycles and finance. I’m willing to be doxxed to the team. Keep in mind I’m not running for Treasury Manager, but merely as a Team Operator willing to help provide suggestions and guidance at the discretion of the DAO. Let’s be clear that I’m not looking to obtain any multisig access to the treasury but rather to complement it with ideas, suggestions, and guidance by my team members/council and the DAO community. It is critical that we start aligning the interests of the DAO with the investments of the treasury and deploying assets.

14 Likes

I strongly support this.

Deal has put in work and advice behind the scenes that demonstrate his ability to fulfill the role of TO effectively.

The Treasury Team needs be filled out, $120mn is a lot to manage - Deal as TO would be value add.

One thing to note - I believe that all new members to treasury positions should have a trial period that automatically renews if there is no DAO vote to oust them.

9 Likes

Very nice! This is a great application, and I think you’ll fit nicely in this role. Really looking forward to this with all our tentacles spreading our capital throughout defi. We can’t stagnate our capital, it is a disservice to the holders, as you say. There is risk in general just owning any token, so it might as well be doing something.

5 Likes

I’m so excited to see this proposal! You have already been doing a great job discussing your strategies and style with the community. You have my support 100%

4 Likes

Thorough and solid proposal, You have my full support ser!

4 Likes

Appreciate all the positive feedback here. I’m excited to start working on some additional ideas and strategies with the treasury council/team and yourself.

5 Likes

I think Deal has sound ideas and I would love to work with him.

5 Likes

Application moved to RFC: