✅ [RFC] DTOP Liquidation for CVX

Summary

This RFC would like to gather feedback surrounding the current position the Asset Management subDAO holds in DTOP and suggest to replace this token for CVX, as with the recent unlock of all staked CVX there now seems to be a very opportune time to enter this particular ecosystem and benefit from having voting power on the platform towards perpetually incentivizing the mUSD/3crv pool to benefit liquidity providers and Save users alike.

Abstract

It has now been almost 1 year since we swapped 200,000 mUSD with dHEDGE in order to gain an index token which tracks the Top 10 Fund Managers on the dHEDGE platform.

Over time, this asset has underperformed to all our other holdings, and with the current market selloff of CVX it might be a very opportune time to exchange this asset for oversold CVX to benefit our own ecosystem.

Motivation

We originally agreed to the swap from dHEDGE because it seemed like a great way to hedge risk by betting on the best Fund Managers there, while also getting the upside of a lazy governance approach in that the token more or less manages itself, and with us only claiming rewards once in a while.

The reality has been different, and the asset has underperformed compared to simply holding one or any of the underlying assets in the treasury that the managers rebalanced on our behalf.

It is therefore suggested to liquidate this position, and use the resulting liquidity to market buy CVX token to vote on the mUSD/3crv gauge and direct CRV & CVX rewards to this pool. This also directly benefits save users, as more mUSD will be incentivized to deploy liquidity on Convex instead of Save.

Pros

  • Make our treasury more relevant in the current DeFi ecosystem
  • Offload an asset from the treasury that has been underperforming compared to the rest of the market
  • Gain proportional governance rights on Convex Finance in order to perpetually incentivize the mUSD/3crv pool

Cons

  • Realizing the loss on the DTOP token position

Next Steps

It is suggested that the community comment on this RFC in the coming days, and bearing no significant opposition or change in ideation, we would move ahead with this RFC in the coming week and create a formal draft proposal on Github to be used for review.

Meta Governors are encouraged to provide as much feedback as possible until then, so we can create the best possible outcome for mStable and its users.

1 Like

And we thought actively managed assets could outperform passive allocation.

I am ambivalent, the position itself doesn’t offer much value and is strategically also not aligned with our goals. Holding CVX is better in order to reinforce our mUSD market position, but might not with our upcoming launch. The risk is that we swap to something else just to realise our focus is now a different one and we would need to swap to something else again.

Not feel strongly either way, but If we deem CVX a better hold than the DTOP then I would support this proposal.

I think it’s a good time to take advantage of the CVX dump. I’m in

I could have sworn I posted to this…
Anyway, yes, I think swapping for CVX would be great.

Hey everyone,

Thanks a lot for the feedback. I think this seems pretty much unanimous, so unless there are any further comments to the contrary, I’m going to write up a TDP for this now and present it next week to you all! :sunglasses:

1 Like

Thanks for the write-up @mZeroNine

I’m fully supportive of this proposal:

  • I think CVX utility inside the DeFI ecosystem is greater than DTOP one, especially in the mStable case with the mUSD /3Crv pool getting CRV rewards
  • From a pure upside perspective, CVX is quite cheap at the moment ( -72.56% from ATH), DeFI tokens suffering heavily from macroeconomic uncertainties, we might have a good shot now. Convex is owning most of veCRV, therefore is managing most of the Curve substantial CRV Inflation.
    Owning CVX is a safe long term bet for the treasury, in phase with the desire to make the Treasury DAO a productive asset.