by 0x1d6dbc9ab48b6c6d743d176be7ddaf0e3589ed46 (Pedro)
Hi, the last proposal didn’t pass the voting threshold by a bit, but I believe the proposal is important and an easy-fix to a potential risk of the DAO (too much exposure to $MANA) so I’m floating it again, and I’ll try my best to do a bit more of outreach to get the proposal around.
Note: I am NOT affiliated with any of the spammers that will comment this proposal with their DAO management tools. If the proposal passes we will debate which specific tool to use (if any).
Here is the proposal:
The DAO treasury should, in my opinion, start diversifying its assets so that the community can protect against market risk related to the $MANA token. Current treasury portfolio can be reviewed here: Transparency
As can be seen, pretty much 100% of the treasury’s assets are either on $MANA or $DAI (which is used mostly to paying out grants).
This is why I propose selling around 20% of the treasury’s $MANA position replacing it with $ETH in a pre-announced progressive timeframe to avoid generate innecessary volatility in the $MANA token and generating a better token distribution. This can be done in the span of 12 months, on a monthly or quarterly basis.
Unless I am looking at this wrong, treasury seemingly has ~$500K in stables + ~$100k in ETH. & A monthly burn of $1.3M (~$1M after income). So, needs to sell at some point soon anyway?
Why not bump to more than 20% though? ~20% Mana → ETH is what $6M? so less than 6 months runway? LMK what I am missing re: nums.
Hi! Yeah. I agree completely that we should diversify further, the idea of this is just doing the first step in order to get all the mechanisms in order and then do a proper treasury protfolio (which, I think, should always hold a considerable amount of $MANA. Just not 99% of reserve assets (all assets - grant money) of $MANA.
Cool. Yeah, we are aligned. You make sense & I agree treasury should hold a large amount of MANA. I also agree with you that 20% probably makes sense given that it covers 6 months run rate; although most treasuries seem to be locking in 1 year run rate (selling 40% is kinda rich though).
I do wonder if selling in quarterly tranches makes the most sense. If the treasury does a monthly sale, it’s essentially operating month to month, which induces forced selling every upcoming month. It’s also just more overhead, market volatility concerns + front-running etc.
We can look at that once/if the proposal passes. A priori I do think quarterly or bimonthly selling is the best. Monthly is just too much overhead but if we do it quarterly we might tie ourselves to diversifying at non-ideal valuations.
I also think that we should have a small, probably honorary, team of contributors that manage the portfolio rebalance. Nothing too fancy.
None of this is in the proposal since I want to gauge --and convince-- the community of the need to diversify the treasury first, and we can figure out the operational details later.
They need to keep it in MANA. This is what ensures they are going to keep it valuable. If they don’t keep it valuable, then they lose because their paycheck relies on it.