by 0xd6c957f9a6411f35d01baae2658758f277408878 (Rizk)
Linked Pre-Proposal
Decentraland DAO Treasury Diversification ( Phase B )
Summary
Dollars are crucial for our DAO treasury. This proposal suggests increasing stablecoin reserves during this cycle, to strengthen financial stability, grow the platform, support more grantees, and diversify into other assets in the near future.
Abstract
This proposal recommends diversifying the Decentraland DAO treasury by accumulating stablecoins during the current bull market. Given the treasury’s holdings of 80,000,000 MANA and a monthly vesting of 1,850,000 MANA, the plan proposes converting 3,700,000 MANA (equivalent to two months’ vesting) into stablecoins over the next two to three months. This strategy aims to strengthen the DAO’s financial foundation, ensuring liquidity for future grants and mitigating risks associated with market volatility, particularly avoiding the need to sell MANA when liquidity is low. At current market prices, this approach could generate $2 to $3 million . The incremental execution minimizes the impact on MANA’s price and offers flexibility for the upcoming council to adjust, continue, or pause the plan as needed.
Motivation
Following the success of the first proposal, ( Phase A ), which accumulated approx 500 ETH over the past year through a slow and strategic approach, the Decentraland DAO treasury remains heavily reliant on MANA. This dependency exposes the treasury to market volatility and liquidity challenges during bear markets, particularly due to the lack of stablecoins.
To ensure long-term sustainability and mitigate risks, it is essential to adopt strategies from traditional investment funds, especially around diversification and asset allocation. I wrote an article on this topic a few months ago, which discusses the hybrid approach of combining traditional and DAO investment strategies for financial stability and growth. You can read it here: (Traditional vs. DAO Investment Funds).
By diversifying into stablecoins under current market conditions, the DAO can ensure it has the liquidity needed to fund upcoming grants, regardless of market fluctuations. Accumulating stablecoins during bear markets is impractical due to low liquidity and depressed MANA prices. Implementing this strategy now will help the DAO avoid the scenario of having to sell large amounts of MANA at low valuations, thus protecting the treasury’s value and ensuring operational stability for future initiatives.
Specification
The liquidity of MANA has significantly improved in recent months, with a 24-hour trading volume between $300 to $600 million and a weekly volume exceeding $1.3 billion. The current market capitalization is around $1.35 billion, indicating a strong and stable market presence. MANA’s price hovers around $0.76, showing minor fluctuations. Centralized exchanges (CEXs) account for* 90% *of trading volume, highlighting good market depth and liquidity.
This proposal suggests converting 3,700,000 MANA (equivalent to two months’ vesting) from our 80,000,000 MANA treasury into stablecoins over the next two to three months. The process will be executed on a daily and weekly basis, selling small portions using TWAP via a verified application on our global safe address used for daily operations, a mimic automated address, or immediate swaps, depending on market conditions. The conversion will be to USDT on the Ethereum chain.
The USD generated should be allocated as follows:
- 65% of it, for future grants and council initiatives.
- 35% of it, for purchasing Bitcoin and ETH in 2026, when market conditions are expected to be more stable. Considering 2025 is likely to be a market peak, 2026 should offer more reasonable prices for accumulation.
This process will take place over the next two to three months, providing the incoming council with the flexibility to continue, stop, or modify the plan based on their future vision. They may also choose to convert the USDT to other stablecoins, such as USDC or DAI or any other , if needed.
Conclusion
By implementing this proposal, the Decentraland DAO can proactively strengthen its financial position by diversifying into stablecoins during the current bull market. This approach ensures liquidity for future grants and provides protection against market volatility, helping to safeguard the treasury from the need to sell MANA during periods of low liquidity. The incremental execution minimizes price impacts and offers flexibility for the incoming council to adjust the plan as needed. With this strategy, the DAO is better positioned to support growth, facilitate upcoming initiatives, and capitalize on future opportunities, ultimately ensuring long-term financial sustainability.