Request DAO approval to authorize the Treasury Council to lock UwU-ETH LP tokens on Uwu Lend using currently held/vesting UwU and future UwU rewards.
Currently, WIP #14 requires explicit DAO approval for “long term defined lock ups”. By voting yes on this proposal, the DAO would be giving permission to lock UwU-ETH LP tokens on Uwu Lend.
- Utilize the UwU acquired from rewards and private OTC deal to capitalize on the LP yield at the discretion of the Treasury Council.
- Grow the size of the allocation while the yield is high, since there are limited high yielding farms currently in DeFi.
- Lower our cost basis on OTC tokens that were purchased.
The team is requesting the DAO’s permission to lock UwU-ETH LP tokens to increase the yield received in conjunction with supplying assets on Uwu Lend and reduce the cost basis of the previous deal.
The impact of selling UwU could create a significant price decline in UwU which would have a negative impact on our vesting UwU from the OTC deal and the UwU indirectly held in Sifu Vision’s (SV) wallet.
The locking period on UwU-ETH LP tokens is 8 weeks. After the 8 weeks, tokens are permanently unlocked and available to be unstaked at any time. Staked tokens (locked and unlocked) receive revenue share currently yielding 156% APR, mostly in stables.
Using our UwU rewards this way would be the most profitable option for Wonderland.
It is in Wonderland’s favor to utilize the UwU rewards while the yields are high, since there are currently limited high yielding farms in DeFi. This will also prevent the recently purchased UwU tokens from remaining idle during the full vesting period of 24 months.
Utilizing the rewards will help maintain a low cost basis on our UwU by collecting revenue share in the form of a basket of tokens, majority of which is in stable coins. After doing their due diligence and strategy planning, the Treasury Operators (TO) are convinced that locking into the LP is the better choice versus selling UwU to lower the cost basis further.
Furthermore, selling the rewards would impact UwU Lend’s ability to attract TVL, limiting long term yields in the LP which would otherwise benefit both SV and Wonderland.
For clarity, there will be no further acquisition of UwU other than by farming.
‘Farming’ refers to activities that generate a positive yield partially or totally in UwU, e.g UwU-ETH LP, providing credit on UwU Lend, or future vaults on UwU Lend.
- Authorize TC to lock UWU-ETH LP
- Don’t authorize TC to lock
UwU Lend is a liquidity market that offers depositing and borrowing forked from AAVE v2. Users earn interest on deposits and pay interest to borrow. The protocol was founded and is managed by Sifu.
More details available here:
UwU price could decline, potentially lower than our current cost basis over time (currently $9.60 per UwU on farmed tokens). New UwU-ETH LP tokens will be locked for a total of 8 weeks preventing the sale of locked tokens during this timeframe. After the 8 weeks, tokens are permanently unlocked and available to be unstaked at any time, or left staked accumulating revenue share.
UwU Lend code was forked from Aave v2, which has undergone numerous audits. The rewards system is forked from Geist, which has also undergone numerous audits. UwU Lend has completed its independent audit with Peckshield for all contracts, including the upcoming vaults and results will be published soon.
The LP for UwU-ETH is incentivized and helps in the short term with price stability due to the 8 week lock. However, as the weeks pass, we will have less forecastable liquidity as providers can pull out funds. To mitigate this uncertainty, Wonderland will actively manage its UwU position to capitalize on periods of stronger liquidity and decrease its need for liquidity when uncertainty is greater.
Some moderators and team members at Wonderland are also team members at UwU (Alice, Bamchicka, Catalyst, ruian, Vayu). The proposing TOs have experience with the platform and also hold exposure to UwU Lend.
This TMP has been voted on, in similar form before and each previous vote showed that there was more need for clarification. We ask our voters to check the various links to previous discussions in the #TMP channel on discord and invite you to @ the Treasury Team to clarify further, before to cast your vote.