Over the last weeks it’s been discussed in Discord different options regarding the Management of the assets in the PoolTogether treasury. It is estimated we are missing out roughly $300 in daily opportunity cost that could easily be earned with a low risk strategy on the stableassets held by the treasury.
In order to start making the best use out of them, the TWG has put together some basic actions that should be considered.
Withdrawal of Stablecoins from V3
Around 4.2 million $ (3.7M USDC + 0.5M DAI + 16K USDT) are currently deposited in V3 in the form of sponsorship or reserve. These funds are currently incentivizing people to deposit on V3 by helping grow prizes (they also give 50% of the yield to the treasury).
Incentivizing V3 pools should not be an objective of the DAO. Instead, we should encourage deposits on V4, the latest version of the protocol with improved features. To achieve this, the first step is withdrawing these funds from the V3 pools.
There are other assets on V3 pools being used as reserve in their corresponding pools (UNI, SUSHI, COMP). Given that each on-chain vote can only include up to a maximum of 10 transactions, and that the amount of these assets is really small compared to the stablecoins, they will be kept on their V3 pools for now. In the near future, some actions will be considered on what to do with these assets. USDT will also be kept on V3 for now due to these reasons.
There are also other assets such as TRIBE rewards from the Ondo-FEI LaaS program and accrued interest on Ethereum, Polygon, and Avalanche Aave markets in the form of AAVE, MATIC and AVAX. These will also be discussed in a different post.
Deposit stablecoins on V4 + Notional
Although many alternatives are being considered for the stablecoins, until a clear path of action is decided, probably the safest and smartest option would be depositing the 3.7M USDC on PoolTogether V4. These funds will not be eligible for prizes, as they won’t be delegated to any address (or in other words, they will be delegated to 0x0000). As a result, all the yield generated on AAVE by the USDC would be received by the protocol, which can be used to incentivize V4 prizes or help the treasury grow.
Given that V4 only has a USDC pool for now, the DAI cannot be deposited into V4 without previously swapping it. To have some diversification on our stableassts, instead of swapping the DAI for USDC, it could be deposited directly into Notional. This DAI would be earning roughly a 9% fixed APR on a low risk protocol (further analysis can be found regarding Notional protocol on the following document Notional Analysis by BraveNewDeFi).
Let me know your thoughts and let’s start making the most of our trasury!