In the Treasury Working Group’s first operational quarter, the Treasury Assets Management #1 proposal was discussed, transitioned to PTIP 54, and approved by the community. In the end, funds were deployed into PoolTogether V4 and AAVE instead of Notional due to limitations imposed by the governor alpha contract, which is the contract that executes on-chain governance proposals.
With PTIP-54, the community made idle stablecoin assets productive and helped offset the prize subsidy by adding sponsorship capital in V4. PoolTogether has idle non-stablecoin assets in the treasury, and now is the time to take a look at these assets held in the treasury and how we can make the best out of them.
Many of the non-stablecoin assets held by the treasury are DAO governance tokens. While some holdings are small and represent protocols PoolTogether does not utilize or use for a yield source, we should be conscious of the impact that selling another protocol’s governance token can have. When Yearn farmed POOL and sold it, our community was unhappy. This is one consideration to make when reviewing possible asset management strategies but should not hinder our community if the best possible outcome is selling an asset.
In all of the cases that will be reviewed, selling the non-stable asset is a possibility, however, it is important to determine what we want to sell it for.
The first option would be ETH. This would help us cover ETH expenses generated by the Exec team, Grants and the different Working Groups.
The second option would be USDC, which would be used to be deposited in PoolTogether V4 and earn yield for the protocol.
- Sell assets for ETH
- Sell assets for USDC
- Sell some assets for USDC and some for ETH (explain)
- Sell assets for a different token (explain)
All of the assets held by the PoolTogether protocol are listed here (except for TRIBE): Treasury
We will review these tokens one by one and offer different possibilities for each one.
Currently, all of the GTC is held in the Treasury Timelock without earning any interest. GTC is the governance token of the Gitcoin DAO.
As of now, we’re not making use of the token, given that we’re not involved in the Gitcoin DAO. Therefore, holding the token in the Timelock does not seem to be very useful or profitable for the protocol. There are 2 possibilities regarding the GTC token*:
- Sell 100% of the GTC holdings
- Send the GTC holdings to the Exec team to take part in Gitcoin governance
*The sale of GTC is also being discussed in RFC: Protocol Deployed Liquidity On Polygon Uniswap V3
Currently, around $22K is held in the Treasury Timelock without earning any interest. Another $17K is used as V3 reserves, incentivizing the V3 COMP pool. Those reserves are earning interest in Compound (0% APR?), which is distributed as prizes in the COMP pool.
Keeping the COMP token on the treasury can be leveraged to strengthen our relationship with other DAOs. Given that we’re still using Compound as a yield source, holding COMP can be seen as a symbiosis between the 2 protocols.
There are 2 possibilities regarding the COMP token:
- Hold COMP in the Treasury Timelock + V3 reserves
- Sell the COMP in the Treasury Timelock and Withdraw and sell the COMP used as reserve in V3
Currently, all of the SUSHI, UNI and BADGER are used as V3 reserves, incentivizing the corresponding V3 pools.
SUSHI reserves are earning interest in SushiSwap (9.5% APR), which is distributed as prizes in the SUSHI pool.
UNI reserves are earning interest in SushiSwap (0.18% APR), which is distributed as prizes in the UNI pool.
Badger reserves are not earning any interest as of now.
PoolTogether is not using these protocols as a yield source, so unlike with Compound, selling these would not have too much of an impact on DAO to DAO relationships. The other factor to keep in mind is if we should keep incentivizing liquidity in V3 pools for non-stable assets, or use those resources to get other assets which can be used to earn yield for the treasury.
There are 3 possibilities regarding the SUSHI token:
- Keep the SUSHI as V3 reserve
- Withdraw and sell the SUSHI used as reserve in V3
- Withdraw and stake in SushiSwap the SUSHI (9.5% APR) used as reserve in V3
There are 2 possibilities regarding the UNI token:
- Keep the UNI as V3 reserve
- Withdraw and sell the UNI used as reserve in V3
There are 2 possibilities regarding the BADGER token:
- Keep the BADGER as V3 reserve
- Withdraw and sell the BADGER used as reserve in V3
Currently, all of the WMATIC is unclaimed in AAVE and was generated from V4 Polygon deposits. However, no more WMATIC will be accrued, as WMATIC rewards have been stopped in AAVE.
This MATIC could be used to keep the treasury diversified while also earning yield in a validator. As most of the PoolTogether protocol’s activity happens in the Polygon blockchain, it could make sense to keep this MATIC.
There are 3 possibilities regarding the WMATIC token:
- Withdraw WMATIC rewards from AAVE, bridge them to Ethereum network and stake them (5-10% APR)
- Withdraw WMATIC rewards from AAVE and sell them
- Withdraw WMATIC rewards from AAVE and use it as TWAB rewards for V4 depositors
Currently, all of the WAVAX is unclaimed in AAVE and is being generated from V4 Avalanche deposits.
A similar argument as the one presented with MATIC can be made for AVAX. Staking AVAX was considered as an option, however, staking on Avalanche is not feasible for the protocol.
There are 2 possibilities regarding the WAVAX token:
- Withdraw WAVAX rewards from AAVE, and lend them in AAVE V2 (1.4% + 4.3% vAPR)
- Withdraw WAVAX rewards from AAVE and sell them
Currently, all of the stkAAVE is unclaimed in AAVE and is being generated from V4 Ethereum deposits and DAI Treasury funds deployed in AAVE.
Just like with the COMP token, AAVE is the only yield source in V4. Keeping this token can help strengthen DAO to DAO relationships and enable future collaborations.
There are 2 possibilities regarding the stkAAVE token:
- Withdraw stkAAVE rewards from AAVE so that it earns staking rewards (6.9% APR)
- Withdraw stkAAVE rewards from AAVE and sell them
Currently, around $22K is held in the Treasury Timelock without earning any interest. Another $20K is staked in Rari Fuse pool (15% APR). This TRIBE was accrued during the Ondo Laas program.
The same argument as COMP and AAVE can apply with TRIBE.
There are 2 possibilities regarding the TRIBE token:
- Stake the TRIBE (15% APR) in the Treasury Timelock in the Rari Fuse pool
- Withdraw the TRIBE staked in the Rari Fuse pool and sell all of the TRIBE
Let me know your thoughts and let’s start making the most of our treasury!
P.D. Note that only 10 transactions are allowed in each on-chain execution, so we may need to prioritize assets with a higher valuation and leave some others for next time. WMATIC, WAVAX and stkAAVE can be managed by the Exec Team, so their management does not require on-chain transactions. TRIBE is also held by the Exec Team, so it would just require one transaction to be sent to the Multisig.