[DISCUSSION] BitDAO <> Galleon - Treasury Diversification

Summary

  • Galleon DAO - Asset Management Methodologists Guild (part of Set ecosystem)
  • Specialise in Structured Products
  • Recently launched ETH Max Yield Index ($ETHMAXY) which (utilizes stETH from Lido and Aave services) to create a 1x ETH exposure with levered 10%+ APY and (very liquidation resistant).
  • Wanting to further Collaborate / Partner with BitDAO.

Overview

Hi All, Duck here, Core contributor (Operations & Growth) to Galleon DAO an Asset Management Methodologists Guild (part of Set ecosystem) that specializes in Structured Products.

On Thursday 10th of March following the recent successful quorum of stETH being added to Aave: Proposal: Add Support for stETH (Lido) - #14 by Anjan-ParaFi - New Asset - Aave 1, Galleon launched its second collaborative product (with Beverage Finance) on mainnet called The “ETH Max Yield Index”, aka $ETHMAXY. The product utilizes stETH via Lido and Aave collateral services to create a 1x ETH exposure with levered 10%+ yield.

In a representative example, since stETH is paying 5% staking APY while the borrowing rate for ETH is 2%, ETHMAXY achieves 10%+ APY, the highest ETH APY rates seen in DeFi whilst maintaining full composability and simplicity of a regular ERC20 token.

Understanding the Methodology

The Ethereum Max Yield Index follows a strict methodology, it is composed of stETH, deposited as collateral, allowing ETH to be borrowed and wrapped into stETH — this process is repeated until the token yield is 3x+ levered. Aave LTV for stETH is 70% and liquidation is at 75% which means stETH can be looped 3.33x — 4x.

Product parameters

** Underlying Asset: stETH (collateral), ETH (debt asset).*
** Rebalance Interval: No fixed interval. The product will be rebalanced if the leverage ratio falls due to stETH APY accrued.*
** Streaming Fee: 1.95%*

Motivation

We’re big fans of BitDAO and the ETH Max Yield Index was built as a partnership product aiming to give DeFi natives the most yield possible on their staked ETH in addition to acting as a best-in-class treasury diversification asset for DAOs looking to maximize the productivity of their idle ETH.

We would like to raise the proposal to gauge interest from the BitDAO of a potential treasury diversification into the ETH Max Yield Index. We’re currently running additional incentives on top of the 10%+ APY which includes Governance token rewards from both Galleon ($DBL) and Beverage Finance ($DRINK) the Liquidity Rewards TLDR is as followed:

→ At $1M liquidity — 80% APR

→ At $5M liquidity — 16% APR

→ ~$66,000/m in rewards at current, sub $5M market valuations for both $DBL & $DRINK

These rewards would give BitDAO a stake in our Governance where they can vote on future products we launch, aligning our two DAOs.

Galleon will also cover any minting costs accrued by the BitDAO if they did decide to mint $ETHMAXY.

Final points

Galleon Core team are DeFi natives, who have very grand ambitions, the DAO is currently talking with some of the biggest names in DeFi, there are a lot of exciting products in the works and we would love to develop a BitDAO <> Galleon relationship.

To wrap up, we would love consideration and potential feedback on this proposal, happy to talk in greater detail with the team or any DAO members.

Thanks for your time and kind regards.

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