Withdraw $250,000 in DAI tokens currently held in sponsorship and send to the Pooltogether Executive team. Pooltogether Executive team will swap the DAI for stETH and deposit $150,000 USD equivalent into the steth.win pool as sponsorship. The stETH sponsorship tokens and the remaining stETH will be sent back to Pooltogether treasury.
Motivations and Reasoning
Pooltogether’s treasury holdings are mostly stablecoins and POOL with the stablecoins earning a very low rate of return and tied to the price of the USD which gives limited upside. More exposure to ETH is something that has been brought up several times by the community but we’ve not pulled the trigger. We’ve also had a stETH pool recently launched by @underthesea, with 50% of the proceeds going to charity and the remainder to 2 winning depositors. This pool already has had 12 stETH in sponsorship added by Witnet. We’d like to support this community pool while increasing our ETH exposure. Recent discussions and polls on the forum have shown majority support for both increasing ETH exposure and sponsoring the community built stETH pool. See the conversations here: https://gov.pooltogether.com/t/rfc-convert-489k-dai-balance-to-steth-and-deposit-as-sponsorship-into-steth-pool-on-pooltogether/2730 This proposal has been decreased from the original proposed amount of $489K to satisfy the wishes of many community members to do a lesser amount. My intention is that in the event that ETH price drops in the coming months I would potentially propose some more buys with the remaining DAI.
Having this transaction done by the Executive team will simplify the process and the funds will only be in the custody of the Executive team for a short time. The Executive team multisig is a 7/11 signature safe and is capable of handling this dollar amount and transactions with no issues.
Sorry to join the conversation late. I have been been afk for a long time. I might need to get caught up to speed on a few things.
Breaking things up into two separate considerations:
1). ETH Exposure
2). Supporting the stETH pool.
1). I disagree that the treasury should be moving from USD to ETH when the protocol token is already like a heavily leveraged ETH long. Any upside from taking on the ETH exposure is more or less meaningless in the bull case (since the gains from POOL increasing would be magnitudes more) and it may be needed in a prolonged bear market. There may be other reasons to hold ETH exposure but I don’t agree that it is a sensible diversification.
2). I think supporting the stETH pool could be worth pursuing but I don’t have a particularly strong view on it. Do we have any sense from the stablecoin pools what sort of bootstrap effects added sponsorship had on TLV?
I don’t really understand why we would withdraw 250k and only put 150k into the pool sending the other 100k worth of stETH back to the treasury. Is the rational for this solely to expose the treasury to ETH?
I disagree that POOL is so correlated with ETH, at least in it’s current form and the treasuries current composition. From my perspective as a holder, the token has one primary function presently and that is to govern the treasury. If the treasury were empty we would be left with only speculative value. The treasury has primarily USDC and DAI → info.pooltogether.com (not pictured are 30 ETH and some ETH/POOL POL)
The Finance Team has published a couple of analysis that include projecting runways and this proposals beefing up our allocation to ETH in the treasury is not going to make a big impact in those regards.