XIP#38 - DAO Treasury Rebalancing Pt.2

Proposals
1

Authors

Core Team

Summary

This proposal is intended to continue rebalancing the NFTX DAO treasury according to current balance weights and guiding principles set in earlier proposals, to secure a 2 year runway, to guarantee continuation of core development while also taking new market dynamics such as the most recent stablecoin depeg into account. If this proposal passes, the action plan under specifications will be executed.

Rationale

Since the last proposal going into depth on rebalancing the DAO treasury, the DAO has been in a healthy position to continue all operations through multiple industry-wide collapses, such as the FTX era and the more recent events surrounding SVB and other US banks. However, as the DAO currently holds its stables strictly in USDC (with no additional third-party protocol risks through staking), we were temporarily (weekend) exposed to the marketwide depeg of these assets in dollar valuation.

Looking at todays’ treasury, we hold approximately 20mm worth of assets combined, excluding our own governance token. From this balance, roughly 6% has been diversified towards USDC, to secure the DAO core runway for an additional year~.

Through this proposal, we’re looking to diversify an additional 2~mm worth of assets, mainly a part of our non-utilized $PUNK position, to refresh the stablecoin balance of the overall treasury. This amount is projected to allow the core team to ship NFTX v3 and its’ successor in the upcoming two years, at which point NFTXs’ protocol & product(s) must neutralize core team costs.

Effect

Opportunity

  • By executing a treasury rebalance, we will again cover a minimum of two years of runway. This allows the core team to keep operating without having to lay off staff or raise additional funding elsewhere.

Risk

  • Similar to XIP#20, selling always comes with hindsight bias. Holding is in some occasions more profitable, but the other side also rings true.

  • Holding the stablecoin portion in USDC has already shown to be suspect to depeg in case of maximum chaos. Diversifying stablecoins into multiple stablecoins has to be considered if it does not impact operations too much.

Specifications

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

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Passing this proposal will refresh the treasury to hold ~3.5mm in stablecoins (2~ years of burn), by rebalancing part of our non-utilized PUNK holding into USDC.

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.

Communication

Proposed points of discussion.

  • General thoughts on proposal/treasury management thesis

  • Need to diversify USDC to i.e. USDC + LUSD?

  • Alternatives

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