[DAO Discussion] Treasury Allocation Proposal (TAP)


Treasury Allocation Proposal (TAP)





Overview

A treasury allocation policy is established in this proposal as a guide for elected officials.

The purpose of this proposal is not to specify how treasury funds should be allocated or deployed at all times. Rather, it acknowledges conditions that are predetermined to be generally accepted by holders in the current market environment. Therefore, management will have more discretion and the community’s expectations will be aligned.

Due to the current market’s condition, the treasury allocation parameters should maintain moderately risky positions with a majority of stable coins.

Treasury value for current allocations
$129,519,680 ($108,652,438 liquid)*

Stable Coin Assets

A range between 45% -75% of liquid assets. A list of Stable Coins for reference include, but are not limited to, USDC, USDT, DAI, MIM, BUSD. Community strategy % goal: eg: 10 - 15% APR

  • Between 50% and 80% of Stable Coin Assets should be deployed in yield-generating positions, whether possible.

Directional Assets

A range between 10% - 40% of liquid assets in Blue Chip positions.

  • No more than 20% of liquid assets should be allocated to any one directional asset at any time.
  • No more than 10% of liquid assets should be deployed when initiating a new directional strategy without governance approval.
  • No more than 10% of liquid assets should be allocated to shorting strategies at any time without further DAO approval.
  • 80% to 90% of Directional Assets should be deployed in yield-generating positions.

Seed Investments

A budget of 15% of liquid assets should not be exceeded per quarter. Capital investments in the early stages of development of a protocol or product are known as seed investments.

Seed assets are also subject to redemption restrictions as per WIP 9 & 18.

Implementation of TAP

At a minimum, the team should deploy an updated TAP once every quarter, whether market conditions have changed or not, in order to maintain a stable record and establish a regular pattern of communication in this area.

Regardless of proximity to our previous or next quarterly TAP review, a new TAP can be deployed whenever the management team believes market conditions have sufficiently changed.

Procedure for Treasury Profit vs Wonderland Farm Split

There is currently no formal procedure in place to determine which funds should go to the treasury and which should go to the Wonderland farm. Currently, all funds are directed to the Treasury and the council votes on the farm allocation. The following default percentages for future revenue and token allocations are proposed:

Upon the realizing of profits, including seed investments

  • 75% of the profit that is generated through the use of strategies shall go to the Treasury.
  • 25% of the profit that is generated through the use of strategies shall go to the Wonderland farm.
  • Proposer shall receive their percentage reward before allocating, when applicable.

Farm allocations are also subject to redemption restrictions as per WIP 9 & 18.

Note that the rate at which the amount allocated to the farm will be handled by the relevant elected officials to ensure a more stable and sustainable return.

Council Adjustments

  • In order to improve the farm’s balance or health, the Council may adjust the split internally by vote. Following the council vote, the Risk officer will make a final determination.
  • If an asset outside of cryptocurrency or digital assets is acquired the treasury-farm split will be determined on a case-by-case basis.
9 Likes

What happens to the assets allocated to farm? Just be held in treasury, mixed with treasury assets?
If so we should have the allocations listed public and transparent somewhere :blush:

4 Likes

If council chooses to adjust percentage internally what is the requirement for notification to the dao on any adjustments?

4 Likes

@Bamchicka Agreed. Definitly need to be clear what is and what isn’t. Could be in the treasury reports or seperate, but should be somewhere. Too bad we don’t have a dashboard :sob:

@jclemons Any recommendation ? I have to admit I’d rather have this done through something like a Treasury Management Proposal and it would take care of the notification part, but since they do not exist at the moment and most things are done through the “treasury council”, figured that’s the option that made more sense unless a full DAO vote would be preferred.

5 Likes

VC deal aquire dashboard project. :grinning:
I don’t want a dao vote but some timely transparency. This would avoid 6 million questions on chat. As long as there’s a requirement to keep dao informed and some reasonable timeline that should suffice. Doesn’t matter to me if it’s part of treasury report or however as long as it’s being done.

6 Likes

May also be worth considering if we should put a limit on how much the DAO can invest in a seed investment without a DAO vote. 1mm, 5mm, 10mm ? Maybe a percentage ?

The proposal suggest an allocation of 15% of the liquid funds. Maybe under 25%, 50% of that allocation ?

4 Likes

Sounds good to me. Let’s do it @NalX!

6 Likes

Crunch those numbers and let’s make this happen! Shipping time @NalX !

5 Likes

When will the updated Quarterly TAP be posted if a revised TAP is deployed prior, due to changing market conditions? Is it three months from the last one, or is it a fixed date every quarter?

3 Likes

Good question. Thinking we do every quarter post redemption.

Treasury may look different after each redemption. This allows for the treasury people to re-asses the guidelines and have the DAO informed/vote with the next quarter plans.

4 Likes

It sounds reasonable. :+1:t2:

4 Likes

25 % for Farm Rewards sounds like the right number for continued treasury growth while rewarding holders. :+1:

4 Likes

To clarify:

Seed assets as defined in WIP 18:

2 Likes

Topic has been moved to RFC: