✅ [RFC] Treasury DAO Charter

I propose the Treasury seek to secure 10x current expenditures in Stable Coins. If we were to assume a 10% return on investment, that would enable perpetual funding (assuming nominal costs remained the same).

Similarly, it would be appropriate for the Treasury DAO to be able reject Protocol DAO requested funds if the costs were not sufficiently details nor sustainable. If the Treasury DAO is tasked with providing perpetual funding, it needs to be able to influence expenditures.

This raises some really important questions that should be discussed and clarified.

The goal stated here seems to take the view that the project is primarily running as an investment fund with an objective of sustaining itself through investment returns.

I take a very different view that the primary purpose of the project is to build a valuable product, which eventually generates enough revenue to cover costs and create a profit. In this case, the primary role of the TreasuryDAO is simply to custody funds and ensure liquidity for project spending. Of course any returns on idle capital are a useful revenue source too, but the basic assumption must be that the most profitable way to invest capital long-term is to invest in product development and growth (otherwise we should stop building and simply run an investment fund).

I assume that when you say “ProtocolDAO requested funds” that you mean “subDAO requested funds”? The ProtocolDAO expenditure will basically be limited to signer payments and protocol gas fees. All other expenses would be funded through a subDAO.

A couple of points here:

  • Firstly, I don’t think that the TreasuryDAO (as in the signer group) should really play a role in influencing expenditure; it is the role of Meta governors to approve subDAO funding requests. The role of the TreasuryDAO here should be to execute on the will of Governors and to monitor performance of subDAOs to ensure that funds are spent in line with requests and that deliverables are being met.

  • Secondly, taking your two statements together, this would seem to advocate cutting current project funding by over 80% to bring it below 10% of treasury assets.

To me, the most important considerations for Meta Governors around treasury management are:

  • How aggressively should the project invest in growth? Is the expenditure proposed by subDAOs reasonable in relation to the overall treasury size? Put another way: what runway length should be maintained to have the best chance of reaching profitability?

  • What target weights of various assets should be targeted to best support this strategy? Eg. ratios of MTA, liquid stablecoin deposits, and longer term/strategic investments

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A super interesting discussion here. Just quickly wanted to chime in and say that most likely we will continue these discussion here until after the signers have been swapped, and all assets been moved into the TreasuryDAO.

I also say it’d be imperative that all new TreasuryDAO signers join in on this conversation, as it should be part of the charter to steer the treasury in the right direction with this move.

Since it’s a deep topic that will most likely go down a deep rabbit hole, we could agree to have a regular meeting with all signers and other interested ecosystem participants, until we find a good soft consensus on the direction the mStableDAO Treasury should be taking for the next months and years to come.

Super excited to see this process unfolding, and how we can make the magic happen so to say :sunglasses:

Yes when I said the ProtocolDAO, I meant the protocol development funding and not the protocolDAO.

A key element in the sustainability of expenditures that I forgot to include is protocol revenues allocated to the treasury in the calculations of sustainability. So sustainable expenditures = Treasury DAO returns + protocol revenue allocated to Treasury.

The statement “seek to secure 10x expenditures” (now with the caveat of less revenues allocated to treasury), does not necessitate immediately cutting expenditures. However, if eating in the Treasury faster than it grows is required indefinitely then the product is unsustainable and everyone involved in decision making would be doing a disservice not to state that a haircut to expenditures is required. If we wait until TreasuryDAO cannot make it’s required payments to the protocol developers, the TreasuryDAO has failed at its most basic of requirement. My experience at the GrantsDAO taught me that this is the exact type of fundamental topic that must be clarified immediately because it can produce insolvency.

Although you state the focus of the Treasury DAO is asset management, expenditure requirements are upstream in the decision making process. Every dollar that the Treasury DAO allocates to governance tokens is Funding Runway which is put at risk. One of the key elements of risk is not just the chance of governance tokens going to zero but the risk of having to withdraw governance tokens at an inopportune moment which can be at a great loss.

After reviewing the Treasury balance the $3.1m in stables is only earning 2.3% in yield because it is either not allocated anywhere or is not allocated efficiently. In terms of Treasury management, this is the lowest hanging fruit where consensus would be easiest.

For effective Asset Management:

  • The TreasuryDAO must estimate protocol revenue
  • The TreasuryDAO must estimate investment returns
  • The TreasuryDAO must estimate expected expenditures
  • The TreasuryDAO must ensure funding runway for a yet to be agreed upon time frame

Once protocol revenue exceeds expected expenditures then asset management would simply be maximizing returns and investing in protocols which share mStable’s values. That sounds much more fun. I will plot v1 revenues ASAP and will similarly design v2 revenue data capture the moment that it is possible.


I agree with both @Jeshli & @soulsby.

This makes total sense. The protocol should be investing back into itself first and foremost.

However, there is indeed idle capital that could be put to work. I fear that creating another SubDAO with a smaller multisig to handle investments further fragments DAO responsibilities and creates one extra step of bureaucracy.

In my opinion, if governance wills it, then the Treasury DAO multisig is large enough (and presumably all signers now active enough) that idle capital investment decisions can be quickly executed.

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Thanks @Jeshli , I agree with all of your post above.

Agree that it’s critical that the DAO accurately models and tracks these metrics. This is an area where things can be improved to allow better decision-making and transparency.

The last item on the list is a key area for discussion as there are more subjective considerations around the best strategy.

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TreasuryDAO Charter

Quick Summary

This document should serve as a basic pre-draft for the upcoming codified TreasuryDAO charter for the next 12 months (from Governance Resolution of this Charter) under which the TreasuryDAO signers will operate and stand by.

Every sector of the treasury has a particular goal in mind, and a Treasury Charter ensures we are accountable for, and execute on this prescribed goal setting in an open and transparent way.

The document will contain four major sections, describing in detail the purpose, key activities, additional responsibilities, and relevant sub-committees in detail.

It is imperative we bring forward a document that can stand the test of time in any kind of market condition, as well as serve as a bookmark of reference if anyone wishes to observe the legitimacy and correct execution of the operational functioning of the DAO in the wider mStable ecosystem.

Comments and feedback is highly encouraged, and a highly fine-tuned charter will make the life of all participants easier, more enjoyable, and showcase the professionalism under which we steer the Treasury forward.


The following section will outline the purpose of the TreasuryDAO, as well as some guiding principles under which the signers base their decision-making process on when it comes to managing funds, securing runway, as well as ensuring the appropriate custodianship over the mStableDAO treasury side.

It is the mission of the TreasuryDAO to secure runway to ensure that the mStableDAO Operations are sufficiently funded while investing a portion of its assets into key opportunities in the ecosystem if the budget permits.

As one of its primary goals, the TreasuryDAO wants to conservatively and sustainably grow mStable treasury assets in its custody.

To achieve this goal, the TreasuryDAO will follow specific strategies thereafter mentioned “Key Activities” in order to turn the process into transparent and easily verifiable actions by all stakeholders and otherwise interested parties.

It does this by maximizing the potential of the assets the treasury owns and receives to ensure the protocol can grow sustainably with risk aversion in mind.

As an overall guideline, Capital Preservation takes priority over Capital Generation, due to the importance and requirement to have a perpetual runway available to continuously and easily fund the operational side of mStable.

It is proposed to have the TreasuryDAO review the Treasury Charter once per fiscal quarter to account for the fast-paced nature of the overall DeFi and crypto ecosystem, during which any amendments and changes will be communicated via our official forum and are subject to a veto process by all participants. Due to the unavoidable lag induced with this, the Treasury will do their best to rely on mainly passive strategies that only require compounding as a primary means of action.

Key Activities

This next section outlines the Key Activities the TreasuryDAO performs on a day-to-day basis and highlights the means and ways in which those activities are to be governed and steered when making decisions relating to capital preservation and capital generation alike.

The key activities of the TreasuryDAO can broadly be divided into three categories (General Strategy | Investing | Reporting), which are then further divided into Capital Preservation (securing runway) as well as Capital Generation (Investing into the DeFi ecosystem).

Treasury Strategy

The following section outlines in detail the strategy that the TreasuryDAO is proposing in order to manage the available funds in the Safe Multisig for both Capital Preservation, and Capital Generation alike.

For the purposes of this section, runway is defined as the number of months that the project can continue to fund operations with a specific pool of funds, based on projected monthly burn-rate. The funds required to achieve a specific length runway will be calculated by multiplying the number of months by the projected burn rate, taking into account subDAO funding proposals, projected protocol expenses and TreausuryDAO and ProtocolDAO operational costs, and conservative revenue estimates.

I. Secure immediate runway (minimum 12 months) (Capital Preservation):

It is proposed to secure at the very least 12 months of operational runway in a risk-minimized USD based stablecoin, as well as secure a sufficient ETH bank for funding core operations via the Builder subDAO and cover protocol based gas costs for 12 months.

These funds are to be held either in the TreasuryDAO multisig wallet or be deposited in trusted and long-standing DeFi protocols. These funds should be invested in non-volatile strategies since they will need to be accessed in the short term.

II. Low risk investments for mid-term runway (12 - 30 months) (Capital Generation):

It is proposed to secure an additional 18 months of runway consisting of USD based stablecoins and ETH which are free to be invested in one of our previously whitelisted protocols (in a diversified way in order to reduce smart contract risk) as long as they adhere to the stablecoin and ETH requirements defined above. Given the longer time horizon, there is scope for slightly more volatile investment strategies since there won’t be pressure to sell these assets in the short term.

The role of MTA in the Treasury

MTA plays a crucial role in the mStable ecosystem and with the recent movement of all remaining Emissions Controller MTA into the smart contract, the treasury now only custodies non-earmarked MTA, except for the MTA reserved for Market Making originally defined in TDP 31.

As part of these custodied MTA, the Treasury should engage in deployment strategies that will further the mStable ecosystem. Treasury will deploy MTA into liquidity positions in order to earn additional revenue and stabilize MTA price. The exact amount of MTA deployed and price bands set will be determined by the amount of USD and ETH in runway and the price of MTA at the time.

Treasury MTA is the lender of last resort for mStable developers and infrastructure. The Treasury is committed to not selling MTA, however it will have to examine the runway of the project and take actions to ensure the longevity of the protocol.

Treasury Investing

This section outlines the behaviour in which the TreasuryDAO is committed to investing via the above described strategy. This serves to account for the treasury maximizing the potential of the available ETH gas bank to cover 12 months of operations, as well as to remain efficient and precise when executing their asset management manoeuvres.

This ensures that assets are being bought when the market is behaving at a time that is beneficial to acquire such assets, as well as doing so at a time during which the purchase itself is economically sound and valuable to the mStable ecosystem.

By doing so, the TreasuryDAO is also positioned for an eventual return of an increase in value of ETH and other tokens, by which time a purchase with be economically unsound and result in a net negative value return for the project.

Lastly, the TreasuryDAO also is committed to manage it’s own liquidity that is owned by the protocol, or have this liquidity managed by an active liquidity management project like Gamma or Arrakis if the value proposition outweighs the time commitment of manually performing this task.

Treasury Reporting

This section is concerned with the reporting behaviour of the TreasuryDAO to inform stakeholders, community members, and core team members of the actions performed on a monthly basis.

The treasury will utilize both the official forum, as well as provide a Dune Analytics Dashboard, showing the current runway of the project.

Runway is defined as Treasury Holdings / (mStable expenditures - mStable revenue) and it is the duty of the mStable Operations Manager to provide the treasury with a report of expenses which can then be subsequently uploaded into DUNE (Only expenses that can be tracked on-chain will be part of this).

DUNE can be used to calculate protocol revenue and track the value of the mStable treasury, and given that expenditures and revenue are variable, estimates will be derived from historical numbers and the methodology will be approved by the mStableDAO.

The dashboard can be divided into four sections:

  1. Historical revenue and expenditures
  2. Current multisig wallet holdings in USD and ETH
  3. Current treasury investments based in USD or ETH and what yields each investment is producing.
  4. Other assets
    i. A list of every asset held and its allocation in the holdings and its average purchase and sale price.
    ii. A description of additional yield and/or produced by the non-ETH or USD investment.
    iii. An overall summary of treasury growth for this tier.

Sub Committees

This last section outlines the sub committees to reside within the wider TreasuryDAO signer group in order to create a point of contact for each of the above tasks, and be able to leverage subject matter experts within the DAO to have their primary workloads directed towards the topics they’re best suited for.

The TreasuryDAO is committed to schedule a meeting once every fortnight for an official Treasury Call during which each sub committee will present their findings for the epoch, and advise the rest of the group on potential next steps forward and decisions to be made as a whole.
It is therefore proposed to have one team lead for each committee (Investing / Reporting / Strategizing) elected internally, that will serve as a main Point of Contact for any related queries or issues during these meetings.


Copyright and related rights waived via CC0.


This is an opportunity for the community to question, probe, critique, or add to the current proposal for the Treasury DAO Charter.

Thanks @Jeshli @mZeroNine and others who helped put this draft together. I am very supportive of simplifying and codifying the TreasuryDAO’s strategy in this way. A couple of discussion points or areas that could be elaborated on:

  • MTA strategy: how should the TreasuryDAO balance holdings of MTA vs. other assets by buying/selling MTA at opportunistic times depending on MTA price and Treasury balances?

  • How should funds allocated to liquidity provision be reconciled against the mandate to secure immediate and mid-term project funding? This is related to the above question as MTA liquidity provision naturally implies some reallocation between MTA and other assets.


Thanks, @Jeshli for publishing this and @mZeroNine for your help in coordinating all the work from the backstage
I think these guidelines make a lot of sense to enable smooth decision-making inside the Treasury DAO while keeping it accountable to MTA holders

I agree with @soulsby that MTA strategy is a core piece of the Treasury Mandate and should be closely managed as it will represent a significant chunk of the Treasury Value. We want
As of now, given the current market situation, my take would be to lean towards LP positions (vs. Bond for instance that are public offerings useful in case of ) as they involve two assets and can smartly benefit from MTA change in price
Something interesting for the Treasury could be to have a target selling price for MTA should it want to diversify

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Nice piece of writing ser. Very well structured and it’s nice to have some charter to align signers and the wider mStableDAO behind a common goal.

I think this goes into too much detail about the execution. This charter should remain high level, so the actual implementation can be checked against the points in the charter.

It’s a charter, like a constitution.

One note from me:

  • Would we want to add as a third point a strategic allocation of assets in support of mStableDAO goals? i.e. investing in some tokens to strengthen partnerships, collaboration, or assets that directly benefit our product, such as Aura in order to vote on our pools?

This might be the least important goal, but as long as the self-preserving ones are met, I see no issue in engaging in those activities.

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I agree that we shouldn’t go into too much detail (eg. LP strategies vs. selling bonds is definitely implementation) but I think there is room for alignment on how we should generally think about the ratio of MTA vs. other assets in the Treasury and when is the right time to buy or sell MTA.

To you point on allocation for strategic purposes, I think the idea here is that this wouldn’t really happen until a sufficient runway length was secured as the Treasury doesn’t want to be forced to sell these types of assets at inopportune times to fund operations. Hard to know exactly what timeframes makes sense here though.

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Very well written, and it’s nice to see how this is progressing. :clap:

About the dashboards, should we add something about revenue as well?
We are taking a serious look at that in the new products and working on many metrics to define success. Maybe an aggregated version of all the revenue generated from all the products would be interesting.


An MTA strategy is a critical component of the Treasury DAO. It will be difficult to find
a consensus for this strategy for this version of the charter. My positions can be found below:

  • The Treasury should not engage in direct selling of MTA. Sale of MTA should be achieved through UniV3 positions with the aim of stablizing MTA price after price jumps while also increasing ETH balances.
  • If the ETH runway exceeds the USD runway from this strategy, then ETH should be sold for USD until mid-term runway requirements are exceed.
  • It was my original intention to specify a target % of assets beyond mid-term runway to be MTA. This would account for the relative price of MTA to other assets. If MTA price went up, it would allow more MTA to be placed in LPs (or used in strategic partnerships or used to incentivize users). If MTA price went down the Treasury would need to market buy MTA in order to preserve its target % allocation.
  • When Treasury is below mid-term runway requirements, MTA should be near 100% of the excess Treasury.
  • The main question to resolve is if MTA should be market sold in order to meet mid-term runway asset requirements. Although I stated above that MTA should not be sold by the treasury, I would concede that MTA must be sold in order to maintain at least through to mid-term runway. To your point, we do not want to have to sell MTA in a place when it is required to sell in order to survive. Price of MTA is down very far from ATH, however it could always get worse.

I kind of like the approach that we had initially to mainly engage the MTA token in LP positions and position them in such a way as to enable a slow and controller bullish sell-off as the price recovers back to certain milestones, like 50cts, $1, and so on, all in line with total amount of MTA available and/or other strategies proposed internally that are sanctified by our data guys.

It sounds like other than this, and the overall alignment on “risking” stables or ETH from the immediate or mid-term runway to provide liquidity in this venture, we pretty much have consensus on the charter, correct?

If we can resolve the above and align, we could move this to a TDP by the end of the week. I am saying this, as until we have resolved the Charter via governance, our Treasury is in a stalemate position, which seems sub-optimal from many standpoints, and we should aim to get out from under that position relatively soon.

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Thanks @Jeshli and @mZeroNine. I think generally the strategy of using MTA only for liquidity provision makes sense. I don’t think the TreasuryDAO should completely close the door to selling MTA in other ways if the value of MTA assets is high compared to other assets for project funding, but perhaps this would need to be via governance proposal. I also think the DAO should be cautious about committing to purchasing MTA if the price drops (as per Jeshli’s third point) as a decision to purchase should also involve consideration of whether MTA is under or over valued and also take into account funding runway.


To me, this seems like a reasonable position, ie with regards to MTA focus on LPing (ie protocol owned liquidity) which also ‘automatically’ means ‘selling’ MTA when price goes up and ‘buying’ or accumulating when price is lower.


I’m in full support of LPing MTA and continuing on to TDP!

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The above was amended to the proposal. Everyone please examine.


gm everyone,

since there has been no further comment or objection here, we’ll be moving this RFC forward to a TDP in the coming days!

Thank you all very much for participating, and looking forward seeing this charter formalized into something official! :sunglasses: