TL-DR: Deposit CRV in lockers, lock BAL in Aura and sell CVX for treasury expenditure.
The DAO is currently managing 21.3M$, 1.3M$ of which are not PAL. We have also harvested 120,000$ earned over the past two months which now pushes us to ask ourselves how we should manage and allocate these ressources. A good allocation of our funds will enable us to create a sustainable organization, this should be our top priority as a DAO.
Previously, we have discussed a redistribution mechanism called the Chest. This mechanism currently being built can be efficient to accrue value to hPAL holders but won’t create enough volume at current revenue size to truly enable the flywheel we have envisioned.
I believe we should postpone the activation of a redistribution mechanism and focus on reinvesting revenue into the growth of a project, like any traditional organizations do.
Here are the core pillars of our treasury management I currently have in mind:
- Growth: reinvest as much as possible in scaling business lines;
- Resilience: accumulate a stablecoin war chest to become asymptomatic to volatility;
- Decentralization: start empowering high value contributors;
Let’s explore this vision of our growth as a DAO in a bit more detail.
- Paladin is barely making revenue, if we compare ourselves to Votium for example, we’re doing 1% of their volume. Using all means possible to grow our market share and stabilizing them should be a priority. This can only be achieved by pulling off a 10x better dapp and marketing it widely.
In order to get there we need to :
- Grow our contributor team;
- Invest or integrate other governance projects in our ecosystem;
- Keep investing in R&D to always stay ahead of the curve.
- I highly recommend this article by Monet and Hasu. By nature, Paladin is a risky business of earning governance tokens. While this is totally aligned with our mission it is not operationally acceptable to have solely gov tokens in your treasury. If we look at the past 6 months, 99% of the tokens have lost 95%+ of their value. How do you continue to operate in such a situation ?
There are several ways of securing a war chest (I estimate our safety net to be at ~2M$), here are the ones we are studying:
- Swapping part of our revenue to stablecoins;
- Fundraising with our PAL;
- Bonding with our PAL;
- As we keep growing, I am convinced expanding as a core team is dangerous and will directly conflict with the interest of the DAO. For this reason, the needs of development should be hired through DAO contributors, and as our DAO revenue strengthens, the pay of core devs should progressively come from DAO treasury (not before at least 12 more months).
Very quickly we are going to need a treasury manager and a general secretary who will manage the transparency report and the relationship between the core team, contributors and the community. We should also start thinking about an ambassador program where a community member can be elected to represent the DAOs interest as a delegate with the (upcoming) Sister DAO’s* voting power.
- Sell the farmed CVX to pay the interests for the agEUR loan (5000 agEUR) and start accumulating stablecoins;
- Deposit CRV in Lockers while we build the SisterDAO;
- Deposit BAL in Aura while we build the SisterDAO;
- Start directing our veAPW towards our pools;
- Build the SisterDAO;
- Find a method to accumulate stablecoins;
- Create a legal entity;
- Hire DAO contributors as the need come;
*The SisterDAO was first suggested in the Chest tokenomics discussion. The main aim of it is to externalize all conflicts of interest within Paladin by delegating the management of governance power and wealth accumulation to a SisterDAO. That way Paladin can continue to be neutral infrastructure and not take sides within DeFi or focus on optimizing profit instead of its tech stack.
Yes / No / Abstain
- Sell CVX to pay off agEUR loan
- Don’t sell CVX
- Deposit BAL in Aura
- Don’t deposit BAL in Aura
- Deposit CRV in Liquid Lockers
- Don’t deposit CRV in Liquid Lockers