PGM-35 Treasury Management #7

Paladin Governance Management (PGM) PGM - Approved
1

Summary: Declassify CRV from a strategic asset to accelerate debt payback and CVX accumulation

Context:
Paladin has been harnessing PoL farming for the past twelve months, while it has been a successful way to pass the bear market and prove our product market fit, the use of the farmed assets needs to evolve with the DAO needs.

The current priority should be paying back the DAO loan (currently 240,000 USDC debt left) and streamlining the use of various tokens received.

Actions:

  • Declassify CRV from a strategic asset; (1)

  • Sell 20,000 CRV into LIT; (2)

  • Sell 25,000 CRV into USDC; (3)

  • Sell 25,000 into CVX; (4)

  • Starting from this proposal, sell all CRV rewards into 50% USDC and 50% CVX; (5)

  • Deposit all CVX into Warlord; (6)

Rationale:

  1. Paladin has been accumulating more than 20,000 CRV per month, and now owns ~290,000 CRV (or yCRV). This means that Paladin has ~30% of its treasury in CRV, we believe this exposure is too risky and would like to de-risk the treasury;

  2. We have been approached by Liquiss, a Convex-like on top of Bunni to participate in a partner program where we would be paid in LIQ (their gov tokens) 0.1%of their supply for each 10,000$ of LIT deposited in their locker. We believe it is a good opportunity to diversify, accelerate our expansion on Bunni and solidify our relationship with this new layer;

  3. Accelerate debt payback;

  4. CVX is a highly profitable strategic asset;

  5. Warlord is the highest yield opportunity for CVX, including PoL farming.

Voting options:
For / Against / Abstain

  • For
  • Against
  • Abstain
0 voters
1 Like
2

In my humble opinion, it looks like a good proposal because paying back the loan is really needed for us to get a treasury without any bad debt.

Yet I have a single question. Why not go 50 % USDC 35% CVX and 15% LIT to increase the LIQ holding. It really depends on the success that this new protocol would have so we need to not have a really high exposure to it.

2 Likes
3

The partnership proposal with Liquiss is for a minimum of 10,000$ of deposited LIT in their system, which means at least 13,000 CRV.
What do you think of this and all the rest split 50/50 in CVX and USDC.
The reason to also accelerate CVX accumulation is because:

  • It provides high yield in ETH via Warlord;
  • crvUSD is a large catalyst for Curve (hence Convex)
  • v3 is a large catalyst on Frax (hence Convex)
  • Terra Labs is dumping CVX (so it is pretty cheap compared to its underlying - https://buycvxcorrect.netlify.app/)
4

I believe the wording here is a bit too much, especially since the proposal continues to aquire CVX & doesn’t sell all CRV holdings (no mention about selling the yCRV)
However I do agree with the idea of de risking the DAO treasury by converting some CRV to other assets.

Strategic assets diversification should also include MAV imo, but this proposal only takes into account CRV already on the msig, not the ones that will be claimed this month, so we could use that or reduction in the amounts proposed below to reach 20K CRV to MAV.

Fully agree with aquiring 10k$ of LIT to deposit in their locker & get the LIQ allocation, which can be locked for vlLIQ.

Make sense.

It’s probably better to reduce to 20k CRV imo especially since we’re not using CVX as a strategic asset if deposited on Warlord, you mostly want to increase the TVL of the new product which shouldn’t be the goal of Treasury management proposals. Moreover the DAO still represents 10% of the total Warlord TVL without this new potential deposit.

I disagree here about aquiring more CVX. It would make sense if we were using the voting power, but considering its not the case we shouldn’t continue to accumulate CVX, but we should focus on another strategic asset instead.

20k CRV would buy ~ 3,85k CVX, there are already ~ 1,8k in Warlord, and 13,5k which will be deposited there once the unlock period is over. So this brings the DAO close to 20k CVX, which should be enough.

Instead, if we’re selling 100% of newly earned CRV, i’d prefer to see the following split:

  • 35% USDC (repay Mimo loan)
  • 35% ETH (or LST) - (repay Mithras loan & start accumulation)
  • 30% new strategic asset accumulation (could be sub split as several could be interesting here: AURA, MAV, LIQ etc)

I know this one is important to you, seems like you want the DAO to be the highest depositor for some reason even if using Warlord prevent us to use the voting power & add additional risks of deposits unbalance, long cooldown period without yield if we want to exit etc

However I agree that considering it can manage bribe automation selling when the auto voter can’t (which is weird tbh) it make sense to deposit the CVX we currently have, the ones that we might aquire with this proposal and the ones to be unlocked, but I don’t believe we should continue buy some over time and increase the position there.

So to recap, i’m in favor of:

  • Convert the 75K CRV on the msig + the ones to be claimed end of July (~ 15k) as follow:
  • 20k CRV to LIT
  • 20k CRV to MAV
  • 20k CRV to CVX
  • 25k CRV to USDC
  • 5k CRV to ETH

As for the newly earned CRV starting next month, i’m in favor of:

  • 35% to USDC
  • 35% to ETH (or LST)
  • 30% for strategic asset accumulation (not CVX, could be a split but MAV & AURA should be included here imo, maybe LIQ as well)
5

Sure, lets not declassify CRV, but instead stop accumulating.
Small note howecer that we cannot sell our yCRV since it is in the loan escrow.

For MAV accumulation, I am very much against it until proven otherwise. The protocol is great, but the token is valued extremely high and is desinflating. Imo it is not our mandate to catch falling knives. Emissions are a few month away, it is not guaranteed we successfully expand there and we have no liquidity there. We can rotate assets later on, when relevant.

If we don’t buy MAV, do we just get USDC instead? We might be able to repay another 80k$ end of August by doing so.

CVX is a highly undervalued asset (just by checking its underlying) and Curve is still a major part of our operations. The whole point of this proposal was to deleverage CRV exposure without Curve exposure (by switching to CVX).
The deposit to Warlord is simply because it is the best yield around (something you haven’t or can’t deny).

Btw: if you don’t see a point in accumulating CVX you shouldn’t in AURA.

No point in acquiring ETH or adding complexity to treasury until loan is paid back.

So to recap, i’m in favor of:

Convert the 75K CRV on the msig + the ones to be claimed end of July (~ 15k) as follow:
20k CRV to LIT
35k CRV to CVX
35k CRV to USDC

As for the newly earned CRV starting next month, i’m in favor of:

75% to USDC
25% to CVX

1 Like
6

The goal is to start a DCA to not fomo once the emissions will be live like most projects. Agree that valuation is high but Curve was too after they launched and having liquidity there can already be done with boosted pools to chirurgically incentivize pools.

We could increase a little the USDC allocation sure but, as you also I also think we should get more AURA (which is highly undervalued and that we can actually use for treasury strategies if locked directly) So we could split the MAV allocation between USDC/AURA or USDC/MAV/AURA if we start a DCA.

It’s undervalued for sure, but diversify the treasury from CRV doesn’t work that well if you’re buying CVX as the exposure to their ecosystem remains there.

Wrong, i’m for buying AURA if we lock it personally as we’ll be able to use it for treasury strategies, which we could do with CVX as well if it wasn’t locked on Warlord, but as it’s not the case I think the DAO has way enough exposure to Curve/Convex imo.

Wrong, there are several needs to accumulate ETH to:

  • Repay Mithras Loan
  • Implement gas budget
  • Diversify the treasury
  • Potentially increase the yield (if LST)

I don’t see where is the complexity is here.

I disagree here, if we remove MAV then we can do:

  • 20k CRV to LIT for liqLIT
  • 20k CRV to AURA locked as vlAURA
  • 20k CRV to CVX deposited on Warlord
  • 25k CRV to USDC loan pay back
  • 5k CRV to ETH gas budget & accumulation/loan payback

or

  • 20k CRV to LIT
  • 20k CRV to AURA
  • 20k CRV to CVX
  • 30k CRV to USDC
    if we approve ETH/LST DCA on next CRV earned

or

  • 20k CRV to LIT
  • 10k CRV to AURA
  • 20k CRV to CVX
  • 40k CRV to USDC
    if we approve ETH/LST DCA on next CRV earned

Again it makes no sense to keep accumulating CVX, especially in a spirit of diversification, so fully against this, especially as I believe we should really start accumulating ETH / LSTs so I can propose updating the split to reduce the portion for an undefined strategic asset to split as follow:

  • 40/45% USDC
  • 40/45% ETH/LST
  • 10/20% strategic asset(s) TBD
7

Please summarize your ideas into 1-2 options that we can actually vote on, Snapshot cannot be used on 5 different options iirc.

Few notes:

  • The DAO has never bought voting power into an ecosystem directly. At best it has swapped wrappers (crv to cvx or bal to tetu/aura), I believe we have no incentive or mandate to do otherwise.

  • I also see absolutely no need to buy ETH since Warlord is farming almost enough to cover for a gas budget. Its also ironic that you would rather get into LSD (~5% apr) when Warlord is yielding 5x this in the same currency…

  • In general this proposal was writing was written to avoid over exposure to CRV, not Curve ecosystem, buying Aura would have the opposite effect.

8

I think I have summarized quite well at the end of the comment, lmk which split you prefer.

Doesn’t mean we shouldn’t. I proposed it before, you basically blocked the idea and pushed for wrappers which is why we didn’t.

Warlord requires increasing our exposure on the Curve/Convex ecosystem, when buying ETH is getting exposed to ETH, crazy that you compare both tbh

You keep the over exposure with buying CVX how is it hard to understand ?
Buying AURA would indeed diversify the treasury from the CRV ecosystem and increase our strategic voting power

9

Thank you, I will use your final summary in the upcoming poll.

Sure, doesn’t mean I have to agree with this. I have no idea what other core team members think of it, and maybe you will find support in such strategy, but might be better to write a separate proposal.

I’m not against exposure in ETH, I just think our siez is not size and it doesn’t make sense to have exposure to assets that do not directly impact our business.

Because the goal of this proposal is to reduce exposure to CRV, the asset, not Curve the ecosystem.

We have never voted on a strategy to increase our strategic voting power. Might happen in the future, but it is not the case today.

10

lol and its me that is pushing over bureaucracy and multiple proposals when there is no need right ?
I was just suggesting to start a DCA which totally has its place in this proposal, and sure another one could be done to decide how to manage MAV if the aquisition is approved.

That’s what I’ve been saying you just use treasury management proposals to try to increase the TVL of your products which makes no sense. Moreover yield on LST can definitely increase the DAO incomes.

That’s the same and the fact that you don’t understand that demonstrates well why I don’t blindly trust you with treasury management tbh …

We did lol several times, you just don’t like it as you don’t want to have treasury management long term x)

11

I will also include the MAV DCA strategy in the poll options.

It doesn’t make sense for a DAO to use its own products? Even when they offer the best yield of the market for said asset?

No one ever askec you to blindly trust me. CVX & CRV are correlated but I hardly think selling 75% to USDC is not considered de-risking…

afaik, we voted to emit PAL and farm via Quest, but never to vote with our strategic assets, could you point me to the actual proposal enshrining this? I

12

It doesn’t make sense to try to increase the exposure in an ecosystem where the DAO is already over exposed just to pump the TVL of a product no.

We deposited some CVX to bootstrap the market, we’ll deposits the remainings once unlocked and I agree we can rotate a little CRV to CVX and increase the position once, but then we’ll have 20k vlCVX in Warlrod and 200k yCRV in collateral, which is more than enough since we’re not using the voting power, so these are not even strategic assets.

I’m not against to USDC i’m against CVX and for ETH which is what you’re against …

PGM-27 accumulating AURA & TETU, PGM-31 locking half of the strategic assets we had atm to increase the voting power and the other half to bootstrap warlord and probably others I forgot

13

You keep accusing me of false information (yay), but sellinng 50%-75% of the CRV we earned is hardly increasing the exposure -_-

I haven’t asked for more, glad we can agree on something…

14

It is continuing to aquire both CRV with the yCRV & CVX if we buy some with part of the newly earned which is why I’m against, better buy AURA.
Btw the veBAL discount is above 30% with AURA when CVX is only 18% discount of veCRV.

You did ask for more lol the sentence above correspond to swap 20k CRV to CVX once (around 3,8k CVX) the rest we already hold it.

You asked up to 35k CRV swapped to CVX, then CVX accumulation with new CRV, but great if you agree with the sentence above.

15

So to recap, there will be around 90k CRV on the locked multisig after the monthly claim:

  • We agree on 20k CRV to LIT for liqLIT
  • We agree on 20k CRV to CVX for Warlord deposit
  • The remaining assets proposed for the 50k CRV are: USDC, ETH/LST, MAV, AURA
  • While I believe that we should start a MAV accumulation, i agree that valuation is high and that we might do a better use of the funds with other assets atm
  • We can remove ETH/LST from the one shot buy to simplify the split, but I won’t drop it in the split for the newly aquired CRV

This leaves USDC & AURA.

  • We need USDC to pay back the loan faster
  • We need AURA to increase the voting power & the discount is very interesting

So it make sense to get both, and I also agree that we should sell more to USDC than AURA, so according to all this, will try to propose a split:

  • 20K CRV to LIT (liqlit)
  • 20K CRV to CVX (Warlord)
  • 20K CRV to AURA (strategic voting power)
  • 30K CRV to USDC (loan repayment)

Wdyt ?

Then for the newly acquired CRV, I’m open to discussion on % variation below, LST pick if any and strategic asset accumulated, but otherwise I remain strongly in favor of the following:

  • From 35 to 45% to USDC
  • From 35 to 45% to ETH or LST
  • From 10 to 30% to strategic asset accumulation TBD
1 Like
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Proposal is now live: Snapshot

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Quorum PGM-35: 592 237 votes

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