[Proposal] Creation & Initial Funding of the mStableDAO Asset Management subDAO

Summary

After successfully creating and funding the Funding subDAO last month, and a successful internal motion, the mStableDAO would like to now propose the creation of an Asset Management subDAO committee that will exist within the mStableDAO signer group.

The intention is to strike a solid balance between decentralization and efficiency for managing idle treasury assets in the DAO’s custody, with a smaller signer group that can be more responsive to opportunities.

Abstract

The Asset Management subDAO will consist of 3 signers from the mStableDAO, and be a 2/3 multisig. A new Gnosis Safe will be deployed for this subDAO, and all asset management requests from the ecosystem will be handled by it going forward.

mStableDAO Asset Management SubDAO

Signer 1 - 0x4B37BbC8CAb32aade27Ce8b1bb2A9E614de81E03
Signer 2 - 0xba0E104fF9a400089cc4882f976094fde14AC5E3
Signer 3 - 0x9afF049B4F2E0269F5ae07F3FBf0414ef600Fb0e

Gnosis Safe - 0x67905d3e4fec0C85dCe68195F66Dc8eb32F59179

Funding for the subDAO will be handled in the monthly mStableDAO signer calls.

The current Cat Herder will provide a short summary of activities for the Asset Management subDAO in each signer call, so the wider mStableDAO signer group can stay up-to-date on the committee. The Cat Herder will also be responsible for assuring that all on-chain activities related to these asset management activities will be executed in due time and with proper diligence to maximize the potential of said assets, and one signer from the subDAO will be chosen to liaise with the Cat Herder to handle transactions.

As an initial funding request, it is proposed to move the entire allocation of BAL tokens (ca 13,210) & DAI tokens (ca. 422k) from the mStableDAO treasury into this new Safe in order to deploy liquidity on the Balancer Finance incentivized pools, as well as the Convex Finance platform. The exact farms are to be determined in a separate governance vote pending successful creation of the subDAO.

Motivation

We seek to create this subDAO committee in order to alleviate voter fatigue for the main signer group, and to expedite the ability to act on opportunities and compounding strategies for the mStableDAO.

Pros:

  • More responsive deployment of treasury assets to opportunities
  • Agile compounding strategies are possible with a lower signer threshold
  • Communication between the mStableDAO and Metanauts is further streamlined

Cons:

  • Lower signer threshold reduces security of funds
  • Added complexity to the mStableDAO’s processes

Next Steps

We’ve been pursuing opportunities with our treasury for some time now, with plenty of positive feedback and options highlighted by the community. We are excited to move this discussion forward to a formal vote, and are looking forward to the input and feedback from Meta Governors before we submit this proposal to Snapshot.

Pending no significant objections, this proposal will be taken to a public Snapshot vote on the 16th of August 2021 and will remain open for 5 days to give adequate time for a concurrent discussion here on the forum.

3 Likes

Generally, I am all for this motion! It makes a lot of sense to be a bit more agile when it comes to asset management. Especially if we are talking about a smaller amount.

For transparency reasons, I would be very keen to identify the signers? Is that something that we could do?

Thanks for the great feedback everyone! This proposal is now live on our Snapshot page, and will remain open until Friday, the 20th of August.

@Dimsome I have forwarded your request! :innocent:

1 Like

Small request and only tangentially related to this specific proposal…but could someone please publish a visual “org chart” showing all existing (and proposed) mStable DAOs/subDAOs and their high level responsibilities? They come up infrequently enough that even a fairly engaged community member like me may have a hard time keeping it all straight. :slight_smile:

4 Likes

Great work on this, M09! I know this is something you’ve wanted for a while, so I’m happy to see it come to fruition.

This has been mentioned a few times before, and perhaps there are some good things in the making, but I don’t want to spoil the surprise too much at this stage :grin:

@Cold_Summer thanks a lot, happy to embark on the great yield farming venture together with the subDAO & Metanauts in the coming days. A few things around this shall be told tomorrow in the Community Call if you or anyone else is interested to hear more about this, before it will officially make it’s way to the forum!

1 Like

Great to see productive use of treasury assets! Would be good to see the Asset Management subDAO mandate and the governance around it to the benefit of MTA holders.

For example:

  • What is the DAO’s investment strategy? Capital growth, diversification or preservation?
  • How does the DAO decide on what, where and how much to invest?
  • How does the DAO decide when to exit or cut losses?
  • What decisions do MTA governors hold and vote on?
    etc
1 Like

Hey @derc, thanks a lot for chiming in, and making some excellent points!

I reckon with the two first proposals now in the discussion phase, it would be fantastic to get the input from Metanauts and community members to decide on these pieces.

From my understanding, as a baseline, the DAO is focused very much on safety, diversification, and overall growth potential for the idle treasury assets, without necessarily feeling the need to “ape in” to dubious pools and opportunities that might risk the collateral, but rather focus the efforts on tried-and-tested protocols instead.

Decisions are based on feedback from the community (mainly on Discord), so a lot of the potentials will most likely be discussed there first, before making it to a formal discussion, and ultimately vote, here.

Exit and compounding strategies are pretty much left to the common sense of the lead signer and Cat Herder at the moment, but definitely open to explore a more decentralized strategy in the future for the different positions if the community feels the need. This would then probably be baked into the strategy portion of each vote, and subject to further diligence.

Ultimately, MTA governors decide on the deployment of the asset, as well as the strategy, so have full reign over how the treasury will be utilized. We simply execute the strategy until Meta Governors decide on a different strategy, or find a more lucrative deployment.

Curious to hear if you see any improvement potential down the line for this, or how best to approach the topic in the coming months and years! :blush:

This is definitely one of the very exciting avenues we’ll explore and pioneer together, as this might very well be the future salary streams that keep the project chugging along!

My hope would be that we could eventually create a public facing document that outlines all of these points in great detail, and become incorporated into our overall Governance update down the line!

Love this discussion and agree great questions derc.

mZeroNine, I’ve seen other projects, where their DAO has done some token swaps with projects that can add value or would help if interests were aligned. Something to consider. I can send you an example of such project that did token swaps if helpful.

While we can buy tokens on the open market, token swap is a bit different, it means both sides hold tokens of the others which can create aligned interests. Also adds diversification which is part of the goal.

I think it would be great to think through which projects would have mutual interests to consider swapping tokens with for mutual benefit.

Hi otb, and thanks a lot for the great input.

We’ve previously done such a swap with dHEDGE, so definitely open to consider another similar swap in the future.

If you’ve got anything particular in mind, then please feel free to share it here, so we can gauge the interest from the community, and the protocol(s) in question.

Once we complete a first round of discussion, it can then be properly presented in the next signer call meeting in order to move it forward to the next stage.

1 Like

Thank you mZeroNine.

Here is a good example from another protocol: Building the Perpetual Flywheel — Introducing Perpetual Ecosystem Fund | by Perpetual Protocol | Perpetual Protocol | Aug, 2021 | Medium. In total they have integrated with dHedge: $1M, Charm Finance: $200k, Stake DAO: $200k, Teahouse: $100k, Lemma Finance: $50k.

Next, regarding mStable, here are some thoughts for token swaps. I also think it may make sense to think about size of project and the other project being incentivized for win-win situations. Small to medium projects may be more incentivized vs. very large ones.

More obvious partners can be- governance tokens for stablecoin projects: e.g. FXS, and yield aggregators (Steakdao, yearn, etc.). It would be great to harness the power of this group to enumerate these options.

Right now I can think of one less obvious partner, though I will see if there are more that come to mind.

Yield tokenizers. See Pendle (most advanced from what I can tell) and APWine (in beta). This could work out in an interesting way. At a high level, you deposit an LP token or even a imVault token, and you get two tokens (one representing ownership one representing yield), You can then sell the yield one which has a decaying expiration (others can buy it, there is a marketplace). I think there could be an interesting win-win here. Where applicable to mStable, Pendle supports tokenizing yield of Compound and Aave USDC with expiration of Dec 21 and Dec 22.

By the way, the thinking behind these less obvious options is that if we find a novel idea that’s going to grow rapidly and can compose with them it will be win-win for TVL and usage.

Looking forward to discussing more and also hearing other feedback from the community.

1 Like

Great ideas @otb n- I like the idea of collaborating with stables or yield aggregators