[DAO:6c34f32] Decentraland DAO Treasury Diversification

Governance
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by 0xd6c957f9a6411f35d01baae2658758f277408878 (Rizk)

Introduction:

Our DAO’s value is tied to the assets we hold, and right now, it’s mostly MANA. I analysed the importance of this connection in my article Metaverse Triangle : DAO & Decentraland & MANA and explained in depth the value of the mana (asset) we have in the treasury to the value of the DAO in general. highlighting how a robust MANA treasury bolsters the DAO’s value. But there’s another crucial piece: Ethereum.
Decentraland runs on Ethereum, making it the bedrock and the main base of our virtual world. It ensures secure ownership, smooth transactions, and the smarts powering smart contracts. That’s why I propose carefully expanding our ETH holdings over the next couple of years.

Strategy for Growth:

To strategically increase our Ethereum holdings in the treasury, I propose a systematic approach within a percentage of the Unused fund of the Grant Program’s quarterly structure . The program operates across four quarters (Q1, Q2, Q3, Q4), with a predefined maximum mana allocation determined by the formula:
5,500,000 * 0.7 = 3,850,000 mana/Q.

In instances when we dont reach the quarterly maximum limit, as seen in Q4-2023, with an unused amount of ≈$400k from the allocated funds for this quarter’s grants fund, I propose utilizing these funds to purchase Ethereum. The community would have a decisive role in determining the percentage—whether it’s 25%, 50%, or 75%.

Conclusion:

This innovative approach ensures that, in quarters where optimal grants aren’t fully utilised, we can leverage the remaining funds to incrementally buy Ethereum. It’s important to note that in some months, when the entire budget is utilised, we won’t proceed with Ethereum purchases during those quarters, while other months like Q4 2023 we have a budget for such action.

While individual transactions may appear modest, their cumulative impact over the long run can significantly enhance our asset holdings and fortify the treasury. This method aligns with our commitment to prudent financial management and sustainable growth of our treasury.

  • 25% of the unused budget
  • 50% of the unused budget
  • 75% of the unused budget
  • Invalid question/options

Vote on this proposal on the Decentraland DAO

View this proposal on Snapshot

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Before voting I would love for people in the financial sector like @Morph and @maryana to weigh in.

1 Like
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Voting yes to proceed to the next stage, but I still would love to hear others’ opinions.

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Voting 25% to be conservative

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@Canessa In terms of an opinion, this % will depend on the future market. 50% isnt too bad with the slow bull that is coming. I just dont think we are ready to go full force with 50-75% investment of unused funds.

I’d even say to reassess this % every quarter, if we were to go this route.

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Decentraland DAO Treasury Diversification

This proposal is now in status: FINISHED.

Voting Results:

  • 25% of the unused budget 22% 1,013,538 VP (34 votes)
  • 50% of the unused budget 76% 3,568,403 VP (21 votes)
  • 75% of the unused budget 1% 1 VP (2 votes)
  • Invalid question/options 1% 10,823 VP (5 votes)
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@Canessa @maryana thanks for the feedback and sorry for the late reply.

As I mentioned in the proposal It’s important to note that in some months, when the entire budget is utilised, we won’t proceed with Ethereum purchases during those quarters, while other months like Q4 2023 we have a budget for such action.

Before proceeding with my approach, I observed that in Q4, we had approximately $400k in unused funds, while in Q3, we almost had zero remaining funds. Considering this, adopting an unstable quarterly percentage, as suggested by Maryana (either increasing or decreasing), will fluctuates with the varying unused funds each quarter, and that will lead to a very low accumulation of Ethereum. Such an outcome would not impact or empower our DAO treasury in the end, which is the main goal out of this proposal.

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Decentraland DAO Treasury Diversification

This proposal has been PASSED by a DAO Committee Member (0xfb1afa4dc069ffb47b19dbee196045d508fcd5a2)