Q2 2023 Update! | DAO Treasury Management for Giveth Multisigs

GIVernance
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1

Hey folks! After some discussion with @Griff and others in the GIVeconomy research call I would like to bring up a few opportunities we have to generate some passive revenue for funds held in our multisigs. :pen:

Namely let’s take a look at these four multisigs:

Currently, most of these multisigs are slowly accruing stable tokens and ETH from donations, including those to the main multisigs through the $nice token program. :sparkles: :nice:

Giveth Main Multisigs

We have about $13k in stables on Mainnet and another $6k in stables on Gnosis Chain. There’s also 10 ETH on mainnet and another 7 ETH coming in from the old Giveth multisig. :giv:

So $19k in stables and 17 ETH - However meager, we could be making some passive revenue on this, right? There’s also other assets we could consider liquidating into ETH or DAI such as ANT or UNI held in the multisig. More on that a bit further below. :point_down:

$nice Token

We mentioned at the outset of the $nice token program that we would use 50% of the income from stables to buyback GIV and combine it with the other 50% to create DAO-owned GIV liquidity. As we near $10k USD accrued in stables, directly or indirectly from $nice we should consider if we follow through on the original plan or reconsider our priorities. From my perspective we have a few options I would like signals on:

  • Stick to the plan. Create GIV/DAI liquidity
  • Use the stables to generate passive income
  • I have another idea… will comment
  • Abstain

0 voters

In whatever outcome from the poll above, I would like to propose we begin staking some or all of these funds into low-risk, well vetted DeFi strategies such as Yearn, Curve or Balancer. We should also consider bridging our stables to mainnet from gnosis chain in order to have a better field of opportunities to invest.

Should we use our Giveth Main holdings to generate passive revenue?

  • Yes!
  • No!
  • Maybe later…I have comments or concerns

0 voters

Bridge Stables from Gnosis Chain to Mainnet

  • Yes
  • No
  • Abstain

0 voters

Should we liquidate assets that are not GIV, ETH or stables into something else?

  • Liquidate everything into ETH
  • Liquidate everything into stables
  • Only some assets into ETH… will comment
  • Only some assets into stables… will comment
  • No liquidation!

0 voters

image

Giveth Matching Pool

A similar idea to the Giveth Main multisig proposal is to put the funds held in our matching pool to generate some passive yield for the matching pool itself - There hasn’t been much movement inside the pool and there isn’t a notable amount on Gnosis Chain but we could put those funds in mainnet to work! As mentioned in GIVmatching - Idea Generation on how to distribute funds - #21 by mitch We set a starting goal for GIVmatching at $500k USD of collected funds - we are still very far from that goal. :frowning_face:

Lets get some signals:

Should we generate passive yield for the Giveth Matching Pool with DeFi?

  • Yes!
  • No!
  • Maybe later…I have comments or concerns

0 voters

Should we liquidate assets in the Matching Pool that are not GIV, ETH or stables into something else?

  • Liquidate everything into ETH
  • Liquidate everything into stables
  • Only some assets into ETH… will comment
  • Only some assets into stables… will comment
  • No liquidation!

0 voters

Liquidity Multisig

This is a bit less of a priority but from the actions we took during the GIVfarm hack a month ago we broke apart all DAO owned liquidity pools - including a GIV/DAI position we held on Univ2. This was done to mitigate the hacker from effectively selling GIV they stole on the open market :stop_sign: . So there’s about 4k DAI and a boat load of GIV in the multisig - what should we do?

What should we do with these stables?

  • Reform the GIV/DAI liquidity on Mainnet
  • Move the stables to the Main multisig and generate yield on Defi
  • Nothing.
  • I have a different idea… will comment

0 voters

Strategies

Suffice to say, there is no shortage of DeFi strategies we could implement to generate yield but I’d like to ask we make some important considerations:

  • The funds should be on a chain that is very accessible and well reputed.
  • We could need to access and cash out the funds at any given moment. Probably not prudent at this time to use a strategy that requires us to lock up funds for a given duration.
  • Strategies should be well-vetted, battle tested and low risk. I generally use DeFi Safety to get a feel for a projects quality and security before investigating further.
  • Whatever we do should require minimal overhead or management.

Math Thinking GIF - Math Thinking Calculating - Discover & Share GIFs

I’d leave this forum post to actively gather suggestions for strategies. I’ll add my three favourites here in the ring:

DAI

USDC

ETH (stETH/ETH)

I’ll leave it there! Looking forward to see your preferences and suggestions. :ballot_box:

How to get it done (if anything)

There’s two routes I see to actually putting anything we decide here into action:

Do everything through the multisigs.

The most secure and decentralized manner would be do go through the process inside the multisigs. This include bridging, swapping, approving, staking etc… etc… for every single action we need to pass a multisig vote. It’s slow, error prone and consumes a lot of collective bandwidth to pull off, but it is the most secure way.

Get a trusted person or entity to do it.

The fastest and easiest way to do it would be to transfer all the eligible funds out of the multisig(s) and get a trusted individual or entity to do all the minute work and then return the LPs, wrapped tokens, deposit placeholder tokens etc… all back to their respective multisigs. This is not a very secure or decentralized way but it would save a lot of time and collective bandwidth and likely avoid some technical headaches and hurdles.

If we choose the latter option I would nominate myself to pull this off. I’m fairly savvy with DeFi and blockchain and I have enough social and financial collateral that I would feel like a trustworthy candidate. My collateral includes:

  • A hefty GIVstream :money_with_wings:
  • My job :office_worker:
  • My personal reputation and relationship with all of you :heart:

One last poll for good luck :wink:

How should we get this done?

  • Do it all through the multisigs
  • Get a trusted person or entity to do it. But NOT Mitch, I wouldn’t trust that guy with a carton of eggs.
  • Plz do it Mitch

0 voters

2 Likes
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Thanks for the detailed post. I’m in with having one person do all the process, my only concern is security, so anything we can implement to make the process as secure as possible should be considered.

3

Well we could always jump into a call with 1 or 2 other persons while doing the actual conversion process - So the trusted entity, whether it’s me or someone else can share screen and have another pair of eyes checking numbers and addresses along the way.

4

Not so much concerned about the team member dealing with the task, I trust any experienced Giveth member. I am concerned about hacks, especially after I got my cellphone compromised.

5

Worth taking a look at these links:

Cash Asset Ratio Definition.

I guess we have to take look at similar experiences about the cash ratio among other DAOs in this business to have a clue.

6

Thanks @mitch for creating this post. I think DAO Treasury Management is such an important topic.

Additionally, learning on the DAO Treasury Management can be applied to Givfy to improve the process before automating.

I think there is a lot to dig into already in the post and even more to come. For example, I think quick-to-implement is preferable with the current treasury. However, more secure would be much better after the fundraising team efforts start to pay off even if it makes transactions slower. What’s the threshold?

I’m in favor of concentrating assets in one or a few currencies. However, if we go ahead with your plan of reaching out to the big dogs and ask them if they would be up for streaming money for pubic goods. Then maybe liquidating their assets could have a bad optic.

7

I also think is a good practice to keep our Treasury Diversified. Not liquidate all ETH for Stable or Stable for ETH.

I would keep both an ETH and a Stable strategy. Ratio between ETH and Stable may vary based on the markets, but IMO keeping both would be a good practice as we grow.

ATM, I think close to a 50:50 ratio would be a good idea, as I think we are in a crab market. But there are more experienced people on this topic than me.

8

Maybe there was some confusion here … I wasn’t suggesting to hold in only ETH or stables…

So the question is more what do we do this these odd tokens here? leave them be or turn them into ETH or stables and earn yield on them?

1 Like
9

Hi Mitch,

This is not financial advice nor any advocacy to make any decision one way or another.

Just some information on how we are doing so you are informed: Aragon is, in my opinion, in its best state as an organisation in the last 2 years. 2 incredible product launches coming and the long-awaited movement of funds into the new Aragon DAO. New leadership team set up from 8 months ago has changed everything for the better.

Info on the new protocol: Meet The New Aragon Protocol
Strategy: Building the Hyperstructure for Governance: Aragon’s New Strategy

More info on the new DAO coming in the new year. And you could also look into treasury information as well to make a good decision for Giveth!

Much love :slight_smile:
-Anthony

1 Like
10

I think we keep our partners/friends tokens (GNO, ANT, HNY, etc)

Keep all GIV tokens (put it in the Hodl vault if there is over 10k USD worth?)

Keep all amounts smaller than $750 (gas makes it not worth it)

2 Likes
11

Okay! I think we got enough feedback to begin the process. I will carry this out today and tomorrow.

Here is a summary of what we will do:

  • Use Giveth Main funds to generate passive income
  • Use stables accrued through $nice token program to generate passive income
  • Bridge our Gnosis Chain stables in Giveth Main to Mainnet, use to generate passive revenue.
  • Liquidate assets that are not partner tokens (ANT, HNY, NODE…), GIV or ETH into stables, use to generate revenue.
  • Generate passive yield for Matching pool funds with DeFi (revenue stays in matching pool)
  • Liquidate funds in the Matching Pool not GIV, or stables or partner tokens into ETH, generate passive yield.
  • Move stables in Liquidity multisig into Mainnet, generate passive revenue.

Strategies

Since there are no other contenders we will stick to the aforementioned Yearn vaults:

Execution

Mitch (moi) will carry out execution with oversight from another contributor. We will keep a record of movements through this spreadsheet:

I will use this address to carry out the transactions:
0x06263e1A856B36e073ba7a50D240123411501611

2 Likes
12

Update

@Cotabe and I pulled this off a few hours ago today. We completed the DAO treasury management plan along with sending out all the user funds that were left in Giveth TRACE! Double Whammy! :hammer:

Here’s the final results:

  • 14,069.48122 USDC Deposited into Yearn USDC Vault
  • 15,830.94354 DAI Deposited into Yearn DAI Vault
  • 34.2 ETH Deposited into Yearn steCRV Vault
  • 2256.744788 USDC worth of yvUSDC sent to Giveth Matching
  • 0.146584 ETH worth of yv-steCRV sent to Giveth Matching

You can see the transactions sent and received here:

Mainnet - https://etherscan.io/address/0x06263e1a856b36e073ba7a50d240123411501611
Gnosis Chain - Address 0x06263e1a856b36e073ba7a50d240123411501611 | GnosisScan

5 Likes
13

Great! Thanks for handling this discussion and execution @mitch !

14

Hello everyone! It’s coming up on 5 months since we did the first treasury management exercise. I wanted to give an update, propose some changes to our strategy and also revisit our reimbursement

Revising the Reimbursement Scheme for Giveth Contributor costs

We recently got a notable amount of funding from the Optimism Retroactive Public Goods Funding. Somewhere to the tune of ~280k DAI. We also should be getting some more from our current fundraising efforts.

Given this big win I would suggest we begin covering 50% of our costs for at least the next 5 months. We should start using the funds to meet our financial obligations and remove a huge part of the financial burden from @Griff .

We can also try out 40% which would give us about 6 months at the current rate.

Or also do 100% which would not quite cover 3 months at our current spending rate.

How would this work?

I would suggest we keep it simple for now and continue the reimbursement scheme by sending funds to Griff in 50% DAI and 50% GIV so we make sure we can put these funds to use immediately and contributors remain getting paid punctually. We should begin doing this with our repayment for April 2023.

We’ll revisit this scheme 3 months later and draft a plan if we need to make any changes.

Revisiting our ETH Strategy

Here’s our current status and earning thus far:
image

So far about $160 in yield earned and with a net APY of ~3.3%. I do think we could do better, I would suggest we migrate this ETH currently in Yearn over to icETH. If you don’t know about icETH it is a product from https://indexcoop.com/ who we are actively pursuing partnership with. icETH uses Liquid Staking Tokens and AAVE to get a higher yield than regular ETH staking rewards. Sitting around 5.6% we could net a few extra percentage points of yield.

icETH is also a token that can be simply swapped for which deceases the cost significantly of managing our ETH position, we don’t have to deposit or withdraw out of a vault contract, it’s just a simple token swap and you’re in!
Check out icETH here:

Revisiting our DAI Strategy

Current status for DAI here:

image
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DAI had a good run for a bit with as high as 7% APY, it has come back down since then. We’ve netted about $200 in yield, again however I think we could do better.

Idle Finance has been around for a while, I know @willy is a big fan and I believe ShapeShift has some sort of partnership with them… correct me if I’m wrong here.

They have some more competitive yields for DAI - consistently between 4-7% for their Senior Pool. The Senior Pool includes a certain amount of guaranteed protection in case of any exploits or technical failures. The Senior Pool insurance is collateralized by the Junior Pool - which offers higher returns with more risk exposure.

You can check out the DAI pool I had in mind here:

In what amounts…

We currently have about 15k in the DAI vault with a further 17k DAI sitting idle from our DAOdrops grant. This brings us to 32k right now that are eligible to be deposited in a new strategy. We could also put in an additional 18k to bring us to a flat 50k in deposits.

If we really want to go big we could throw in an additional 68k and take us up to 100k flat in DAI deposits, but we would probably need to pull it out in a few months to pay for things…

Those are the options, my favourite however is bringing us up to a flat 50k in DAI deposits and not needing to touch it for +6 months.

Revisiting our USDC strategy

image
image705Ă—163 6.48 KB

Not so hot is USDC, the return on Yearn has been pretty dismal compared to other vetted protocols out there.

I would like to suggest two protocols: Goldfinch and again, Idle Finance.

Both offer yields above 6% and are very solid protocols. Goldfinch requires Government ID from a non-US person to create a Decentralized Identity for the depositor. I’m not sure this will work out via a multisig but it could be worth a shot - the yield is generally the highest of the safe yields I’ve seen out there.

If Goldfinch doesn’t work I would recommend Idle Finance, going into a Senior Pool that works similar to what I outlined above for DAI.

In what amounts…

Currently we don’t have much in new deposits in USDC… there is about ~4k from our Polygon grant on Polygon that we can either bridge to mainnet, which could cost $40-60 in gas and deposit into the strategy we choose on mainnet or attempt to find a suitable vault on polygon. None of the protocols I mentioned already are active on Polygon. I believe the only safe option on Polygon would be this Beefy Pool

Beefy is a well vetted protocol that has been around a while, however it does not offer the same mechanism of loss protection offered by Idle Finance.

Multisig Links

giveth-main on mainnet

giveth-main on polygon

Pollzzz :ballot_box:

Should we begin reimbursing our costs in DAI?

  • 50% Reimbursement Coverage in DAI
  • 40% Reimbursement Coverage in DAI
  • 100% Reimbursement Coverage in DAI
  • Nothing, maintain the current reimbursement scheme in only GIV
  • Something else… will comment

0 voters

Should we switch up our ETH yield strategy?

  • Move everything to icETH from Yearn
  • Don’t move any ETH from Yearn, only swap new ETH to icETH
  • Do nothing.
  • Do something else… will comment

0 voters

Should we switch up our DAI strategy?

  • Yes! Move everything to Idle Finance - 32k total deposit
  • Yes! Move everything to Idle - 50k total deposit
  • Yes! Go big - Move everything to Idle - 100k total deposit
  • Only move unstaked funds to Idle… will comment an amount
  • Do Nothing.
  • Do something else… will comment

0 voters

Should we switch up our USDC strategy?

  • Yes! Try to move everything from Yearn to Goldfinch, if not Idle Finance.
  • Do nothing
  • Do something else… will comment

0 voters

What should we do with the USDC on Polygon?

  • Bridge to mainnet, deposit into our chosen strategy
  • Deposit into Beefy Vault
  • Do nothing
  • Do something else…will comment

0 voters

3 Likes
15

Thanks for looking into our DAO treasury @mitch

I think these are great suggestions based on good research of alternatives.

I really like the idea to use the funds raised to start reimbursing our costs in DAI. I think the 6 months of runway that 40% reimbursement covers it’s a good time to aim as a Fundraise WG goal to increase that runway and maybe eventually increase the percentage too.

I also like the idea of stepping up the yield strategies for the DAO & voted on my preferred options. Let’s go BIG and earn yield of the idle treasury.

2 Likes
16

I think we should consider moving off of mainnet… the gas fees are just dumb and don’t seem to be less dumb anytime soon what if we look at Arbitrum, Optimism or Polygon?

4 Likes
17

It might be interesting to do our repayments through polygon or another chain that has better off-ramping

However looking at the state of DeFi - From what I have found is that the best and most secure opportunities tend to hang out on mainnet. We can try to migrate our yield earning strategies to another chain but likely we’ll end up with something that either yields less and/or is less secure of a protocol.

I’m totally down to be proven wrong if someone can find good, SAFE, opportunities outside of Ethereum Mainnet

2 Likes
18

I’m in agreement here with both this suggestion and @mitch’s response that for DeFi, it can’t happen YET.

My support is with the proposed short-term strategy detailed here for now; and let’s put a longer term strategy into development for determining whether we go with Arby, OP or Poly next.

1 Like
19

atm, it might be worth it to leave them alone. (why? cuz the % gain is so pathetic. you move it from one low number, to another low number (even a hair higher) and you spend all that you gained in the first one.

maybe NEW funds, should go into the better setups.
(also things seem to fluctuate alot)

 anyone look at thorsaver vaults?

course, the only one that would fit would be the eth vault.

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I wrapped up this yesterday! We have successfully moved ~100k DAI and ~12k USDC into http://idle.finance/

I also minted us 35.4 icETH using 37 ETH on Index Coop

Lastly, I returned the leftover ETH in the account.

You can see all the transactions I made here: https://etherscan.io/address/0x9cd1E4A6b3361abcCC90C7F8E788ac246d194303

You can check for the funds on our multisig here:

It was fairly expensive to mint the icETH, but we had no choice since swapping for such a large amount would have incurred >10% slippage losses. I hope we don’t need to touch it for a while. :face_with_spiral_eyes:

5 Likes