XIP#20 - DAO Treasury Rebalance






This proposal is intended to rebalance the current DAO treasury into securing a 2-year runway parked in stablecoins, to counter any potential downside risks the overall cryptomarkets could be subject to - as well as decide on some guiding principles to overall treasury management within NFTX moving forward. If this proposal passes, the action plan under specifications will be executed.


During the NFTX genesis event, the community raise, stake in the DAO has been distributed to all early participants in return for specified NFTs (such as Avastars, Axies, and CryptoPunks) alongside three tranches of ETH. All contributions have been collected into what is called the NFTX DAO Treasury - a balance of assets owned and utilized by the DAO to grow the NFTX ecosystem.

Since the genesis event, we’ve grown the protocol and ecosystem together to hold over 45mm in NFT inventory, as well as generating approximately 1mm USD in protocol-native yield each month without diluting token holders through liquidity mining programs. We’ve also grown the core team extensively, moving from a 1 to 9 person Core team in the last year. This growth comes at a cost which is dubbed burn rate: all expenses made to develop, sustain and grow NFTX.

Having discussed this topic a couple of times during monthly governance calls, the core team feels it is now the appropriate time to rebalance a part of the DAO treasury. To understand the context around current costs, balance sheet distribution, and future outlooks, please refer to the presentation from our last governance call. This proposal is inspired by the mental models posted from Hasu, as well as personal experiences within organizations that failed to properly de-risk their balance sheet for down only market cycles.



  • By rebalancing the DAO treasury to contain a sizable amount of stablecoins (USDC), we will cover a minimum of two years of runway. This allows the current core team structure to remain operational without having to sell crypto assets during a bear market (under perceived value).

  • Setting precedents for how to deal with certain assets during bull/bear cycles in advance rather than in the moment limits emotional biases we may have. For instance, setting a precedent where the DAO is allowed to distribute minor parts of its own governance tokens in return of ETH when the community feels it is fairly valued increases token distribution as well as treasury health, without it potentially be considered dumping (in the moment).


  • Selling assets for USDC will always come with hindsight bias. If i.e. ETH moves up from where it is at the time of sale, it will be considered as the DAO selling the local bottom. A good real-world example of this was the DAO selling off Zombie CryptoPunks in 2021. While being sold at fair value (based on historical sales and the currently listed floor prices), in hindsight we would’ve outperformed by holding.

  • 2-3 years of runway may be considered too little to outlive a true extended bear market without forcefully liquidating any additional assets along the way.

  • Staking our own LP positions to start receiving protocol fees may limit organic liquidity growth. Doing this in a sensible way (specified below) is advised.


The current runway of the Core team is broken down below.

Passing this proposal will raise 2 to 3 years of runway in USDC, by:

  • Removing 2mm of NFTX/ETH liquidity, to sell the ETH for USDC.

  • Unwinding ETH/GLYPH, lend out 500 ETH to bootstrap FloorDAO, and sell to USDC once returned.

  • Unwinding Axie-Origin/NFTX, to sell Axie Origins for USDC.

  • Unwinding Kitty-Gen-0-F/NFTX, to sell Cryptokitties for USDC.

  • Selling Axie Mystic 1 & 2’s for USDC (including already sold assets on Ronin).

  • Selling remaining earned xSushi for USDC.

Next to securing the runway, we want to set two precedents for our DAO treasury management efforts.

  • The DAO will never distribute governance tokens at high discounts (undervalued) during crab/bear cycles unless it is the DAOs’ last resort to survive. However, the DAO should distribute batches of governance tokens at fair/high value during bull cycles. Either will always have to pass the governance process for transparency purposes.
  • To limit direct staking impact on certain vaults where we are a majority market maker, the DAO will start to stake LP/IP position at a 10% per 2w ratio. This means that it will take 20 weeks until the DAO has fully scaled into its position, leaving enough room for other participants to adjust.

Funding request - Yes - Implementation Requires Funding

In order to execute the DAO Treasury rebalance proposal, all assets listed under specifications will be used as funds to secure the runway target.


Proposed points of discussion.

  • General thoughts on proposal / treasury management thesis

  • Implications of distribution NFTX during bull cycles

  • Length of runway: too long/short?

Quorum (For forum)

  • Minimum Quorum: At least 5 votes

  • Passing Threshold: More than 50% must vote in agreement for the XIP to Pass. For changes to the NFTX contract, more than 70% must vote in agreement for the XIP to pass.

  • Yes, move forward with the current proposal

  • No, amend

0 voters

1 Like

Agree in theory, but it doesn’t seem like selling Axies here is a great opportunity with Season 20 starting (lasting 6 weeks so maybe with governance the timing works better). I’d rather see NFTX invested in being live (and providing some initial LP) on Ronin :slight_smile:


I think Chop mispoke on this point. We unwound the AXIE/ETH pool about 5 months ago when they were migrated to Ronin since they couldn’t be used with NFTX anymore. We also listed them for sale then, but it seems like the majority didn’t get purchased and have gone stale. So I believe Chop is just planning on lowering the prices a bit so that the sales go through.

This is a good point though, and I was not aware of new season upcoming. Probably good for Chop to keep in mind when lowering prices (either to lower just a small amount or wait until next wave of demand), so we don’t end up selling below market value. Thanks dude!


This is correct - it’s not a new strategy, just an execution of the previously agreed strategy to sell off all non-floors (with Axies being the majority of the unsold assets due to the floor crashing ±50% since listing them).

New season will (hopefully) act as a volume & eyeballs booster for these assets, allowing us to actually sell them. The assets (Axies) we’re selling are valuable due to their collectible nature (Origins / Mystics are scarce), not due to being strong in the metagame - seasonal changes won’t impact prices of these types of assets that much (relative to axies that fall into new meta).

1 Like

Hello! Just share here as well. I strongly agree to it as we all know due to the stong volatility of the market, it would be reassuring that assets should have cemented foothold to what unforeseen future might bring up. By the way I tried to vote strong for “Yes, execute rebalance” for XIP#20 proposal link on discord but would not register, hence I’m as this really a proposal to be executed for the sake of the community. As reference my wallet address is 0x33EB5d99cCdD0d63610a07DCBc8C9550c79ae592.