Continued Discussion Regarding Treasury Management

Shutter DAO DAO Proposals
1

Introduction

I’m following up on my earlier discussion post regarding Shutter DAO 0x36 treasury management: https://shutternetwork.discourse.group/t/shutter-dao-0x36-discussion-regarding-treasury-management/367

In June 2024, Shutter DAO 0x36 took an initial step towards treasury management by swapping 3M USDC for 2.7M sDAI.

I would like to continue the discussion about whether or not to swap some or all of the remaining 2.7M USDC into a low-risk interest-bearing token or some other token.

Shutter DAO 0x36 Token Holdings

As of 8 Aug 2024, Shutter DAO 0x36 treasury holds the following non-SHU assets (approx):

  • 2.7M sDAI (worth approx USD $3M)

  • 2.7M USDC

  • 301K USDGLO

  • 4 ETH (worth approx USD $10K)

  • Multiple LP positions (out of scope for this discussion)

See: https://etherscan.io/address/0x36bD3044ab68f600f6d3e081056F34f2a58432c4 ## sDAI Appreciation

On 9 June 2024, Shutter DAO 0x36 approved and executed Proposal #18 ‘Deposit 3M DAI in the DSR Contract’, which swapped 3M USDC for 2.7M sDAI. Since then, the price of sDAI has risen from USD $1.088 to $1.1015. As a result, the value of Shutter DAO 0x36’s 2.7M sDAI has risen from USD $3M to $3.032M - an increase of $32K.

See: https://coinmarketcap.com/currencies/savings-dai/ ## Opportunity Cost

USDC is not an appreciating or yield-bearing token. Several low risk tokens yield approximately 5% pa. By holding $2.7M USDC (i.e. by not swapping to a low-risk yield-bearing token), Shutter DAO 0x36 incurs USD $135,000 in opportunity cost per year.

Non-Exhaustive List of Options

  1. Hold USDC (i.e. take no action)

  2. Swap USDC for sDAI (Savings DAI) which yields 4% pa or higher as an appreciating token

  3. Swap USDC for USDM (Mountain Protocol) which yields 5% pa as a rebased token

  4. Swap USDC for ETH which may appreciate in value

  5. Re-consider an active management proposal

2

Thanks for putting this up Frank. I agree with you, it would better to fully leverage appreciating stables.

Picking the right % utilization target might be tough. The monthly $233k grant to Brainbot is supposed to be in USDC. We need to keep that in mind, but maybe there’s a creative approach we can find.

@Loring, any thoughts here? What’s the mechanism for the monthly payment, and could it include a swap? Or does it even need to be USDC? Would sDAI or USDM bo okay?

3

brainbot is flexible regarding payment of the monthly recurring grant. We are be willing to accept a combination of USDC, USDGLO, sDAI / USDS, and USDM.

A couple notes:

  • Sablier supports sDAI streams. However, Maker has rebranded as Sky, and DAI will be relaunched as USDS on 18 Sept 2024. sDAI will likely be phased out - although the timeline is not clear. But it may be best to see how the relaunch goes before committing to a sDAI or USDS stream.

  • Sablier does not support USDM streams. USDM is a rebased token, which Sablier does not support.