After the Tornado Cash episode and the recent exclusion of $USDC from Binance markets, discussions about an impending regulatory crackdown have become more frequent in the crypto industry. To promote greater decentralization and stability for the BitDAO treasury, this proposal has the following main objectives:
● Decentralization of stable assets.
● More use cases ($BIT).
Thanks for writing this, @Don. In general, I agree that there are significant issues with holding so much of the treasury in USDC and USDT, and that these assets carry significant censorship risk. I think we need a strategy for how we can reduce and manage this risk, and I appreciate your raising this topic here.
In my opinion, I’m not sure that converting only a relatively small percentage is the right strategy, and I’m also not sure that the proposed assets are ideal for solving the issue. For example, DAI is mainly collateralized by USDC, and in the event of censorship by Circle, could end in a nightmare scenario in the current configuration. Additionally, USN would have to be bridged, which would expose the treasury to added bridge risk.
Some other possible solutions I can think of might be to use LUSD (which had a really solid proposal here) and RAI (which is one of the most interesting stablecoin projects in the space, but may lack the sufficient liquidity for our needs)…
Another possible solution in this bear market would be to go ahead and convert the existing stables in the treasury to ETH. I think this would send very strong positive vibes to the ETH ecosystem, and be a good long term investment for the DAO, while de-risking away from stablecoin assets that in general feel highly risky right now.
Just my 2 UST for now , would love to hear what others thing.
Hey thanks @jacobc.eth for encouraging me to write about this. I agree that the $150M funds would not make enough impact to ensure stability of the treasury, but it would be a good start for us to stipulate all the procedures and process with the committee on more choice of assets and volume of amounts.
I agree that LUSD and RAI would be a nice addition. But we need to be well aligned with all the points that this proposal seeks to example be profitable.
I made some security suggestions in the document that can mitigate risks with USDC and bridging attacks.
Regarding the idea of converting everything to Ethereum, this would be a very high risk trade, but with the possibility of extraspheric gain, so we can combine the two ideas.
Start the Committee
USDT USDC exchanges. <> USN DAI ?LUSD ?RAI
Ethereum continues to fall or some other moment of opportunity occurs (BlackSwan)
I would like to request that this proposal remain in soft-proposal in compliance with the following points:
1) The policy was changed after this proposal was sent, we were not notified in any way about this. As soft-proposals are part of the governance and engagement process, our team would like to cordially request that this be restored.
(Even if the archiving is not an impediment to submitting the proposal to governance)
2) I received notification of 3 comments that were removed from the thread and not flagged, we don’t know the reason or reason of favorable comments being deleted while an accusatory and negative comment remained here for months (I flagged it for moderation).
Add posts that indicate the decisions of new policies in the forum or notify authors via email, only with the edition (current model) there is no notification.
1 - The BitDAO forum’s moderation policies are constantly evolving and should remain flexible in order to evolve with the community and organization.
The timing of the policy change has not impacted the ability of community members to participate in the discussion here.
Archived topics will remain public for future review and reference. I personally encourage proposal authors to reference relevant archived discussions when crafting new proposals.
2 - I removed two comments from this topic in accordance with the forum rules:
This forum is for constructive, civil, and long-term conversation. Low quality posts and comments will be heavily moderated. Only comment if you’re adding a thoughtful, new idea. Use emojis to indicate agreement with posts.
Regrettably, I did not flag them for additional moderator review prior to deletion. This is part of our CM guidelines now and will be a regular practice moving forward.
Ultimately our goal is to maintain a tidy forum for constructive conversation, deleting low-effort comments is in accordance with this effort and the forum rules.
I agree with your suggestion, and I’m currently in the process of drafting additional guidelines for forum policy and rule updates that will result in greater awareness of changes for the entire community
As I answered you by DM, I don’t think it’s transparent to deal with offers and suggestions in private channels once the proposals are active in voting.
In the proposal we mentioned that we are making transitions to a new address “cont.io” and with the reformulation in the general proposal of the project we cannot have two different tokenomics available, but this content of the previous version is also in the proposal.
Regarding the involvement of the MakerDAO Growth Core Unit in the BIP-16, you can directly check the contact made in #growth-public on the official MakerDAO discord and get the public information.
Continent DAO maintains its commitment to transparency and respects the collective and internal decisions of all those involved in the submitted proposals.
In my opinion it is a period of extreme risk for crypto yield. Below is a general position towards Yield Strategies (and not only the above proposal):
There has not been community consensus on whether to allocate the treasury to yield generating products (onchain vaults, centralized platforms, funds, etc.). In hindsight, some products of interest did not have good outcomes, and we are lucky BitDAO assets were not exposed. Examples of recent events include: centralized platform yield (FTX, BlockFi, Genesis, Gemini Earn); and blue-chip DeFi protocols such as AAVE v2 longtail assets risk, and Lido stETH price decoupling.
There is high systemic risk in crypto due to: 1) difficulty in calculating a fair price and slippage for altcoins (protocols rely on oracles or liquidations mechanics are vulnerable); and 2) the pressure of projects to compete on go-to-market timing and financial product innovations resulting in many novel products that have not yet been empirically battle-tested. 3) web of borrowings and collateral assets across entities and other “degen-box” type activity.
The risks scale with capital deployment size, and liquidity may be scarce when we need to unwind positions. As such, it is not recommended that BitDAO participate in yield strategies for the time being.
The core of the proposal is not about making a profit, it is about increasing participation in other stable assets, >if< an opportunity or proposal from previously verified interested parties arrives, we could study the possibility of making a profit. The decisions for these cases would be collective.
The second reason for the proposal is to increase the use case of BITs with possible cooperation between partners, as in the case of MakerDAO and GNO.
The third and also important reason is not to be caught off guard by regulators and the risk of all DAO stable assets being in just two options. This is a very likely scenario given the recent Tornado Cash development and “possibility” with major BitDAO wallets.