PGM-37: Treasury Management #9

Paladin Governance Management (PGM) PGM - Approved
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Summary:
Simplify and optimize PoL management

Context:

Paladin DAO has been growing its treasury by providing PAL liquidity on leading AMMs, incentivizing voting on its gauges and farming rewards with PoL. This process was validated by PGM-13 and a budget was renewed until November 2024 in PGM-12.3

The current market is ruthless and shows we have to be extremely selective on campaigns and cannot afford to underwater on campaigns for multiple months.

Rationale

With all strategic assets diving into inferno price-wise, it is important we remain on top of the efficiency of the various campaigns, especially considering we’re noticing an uptick in rewards sold over the past two months.

Let’s do a quick recap of the pools:

  • PAL-ETH on Curve is close to 100% owned by the DAO, so as long as we pay less than emissions, it is a profitable program;
  • PAL-OHM is only 45% owned by the DAO, but this is compensated by a very generous ARB matching program making the process still profitable to this date (>2.2x efficiency);
  • PAL-USDC is 57% of DAO PoL, the pool has been unprofitable for slightly over a month;
  • PAL-FRAX - we will be migrating part of the Curve PoL on Liquis for their launch this week and expect heavy returns on early rounds of bribes;

Considering all of these, we recommend the following:

  • Migrate 25% of Curve PoL on Liquis (already approved);
  • Incentivize this at 2% cap, and maybe more if we can get it raised;
  • Remove PoL on the PAL-USDC;
  • Vote with our vlAURA on the PAL-USDC gauge (to keep feeding farmers at no additional cost)
  • Use the USDC left from the LP to reduce the outstanding debt to Mimo.

Means:

Coordination with multisig signers to execute updates if approved

Technical implementation:

None

Voting options:

  • Yes
  • No, rework proposal
  • Abstain
  • For
  • Against
  • Abstain
0 voters
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If no other comment arise we will push the proposal tomorrow

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Gm ! Thanks for the proposal, agree that POL management is very important and requires an update but seems we could optimize the strategy:

Not sure if removing 45k$ of liquidity is the best move. Instead, we could migrate the POL to PAL-OHM. It also increase the farming earnings since this one is still profitable.

Sure it prevents the DAO to make an additional 10k repayment rn, but 15k were already sent yesterday and 10k are available on the collateral msig, so seems ok to migrate.

To quickly update on this, the DAO acquired AURA yesterday following PGM-36 and currently holds 55300 vlAURA. Another important update is the quorum reduction from 0,2% to 0,1%, making it easier to split votes on several pools.

Considering that the DAO holds 57% of the PAL-USDC, and as several contributors should be ok to migrate as well (I have 1% too) It’s safe to estimate that PAL-USDC TVL should drop at least by 60-65% (around 30k$ TVL left)

Imo it’s not optimal to vote with strategic voting power on it, especially if good communication is done about the migration (small holders might actually appreciate switching on L2s)

However, it make sense to not cut votes right away so small holders have time to switch, so a solution could be to sustain PAL-USDC with a vlAURA quorum (atm 21150 vlAURA) for 1 month starting next voting round and vote on PAL-OHM with the remaining votes.
After one month, the full vlAURA votes should be directed to PAL-OHM if the strategy there is still profitable, or potentially split with dstkAAVE pool once live.

Then, there is a consideration to have about the PAL spending on Quest vs farming capacity. Since Paladin has reached holdings above the quorum, there are two approachs:

  • Reduce effective PAL spent by voting on its Quests to recycle incentives, but this also impact the total votes received because of the budget value dependance.
  • Blacklist the DAO from the PAL quests, enabling to attract more external votes for the same PAL spending to farm more

Considering that PAL emissions were already recently reduced, I think it’s better to start with a blacklist to attract more voters, and monitor the situation to update this point if needed, which can easily be done at the Quest creation level.

Tl;DR:

  • Communicate on the migration to PAL-USDC LPs
  • Migrate POL from PAL-USDC to PAL-OHM
  • Vote for PAL-USDC for 1 month (2 rounds) with 1 quorum
  • Vote for PAL-OHM with remaining vlAURA for 1 month then 100% on it
  • Blacklist the DAO from PAL Quests to attract more voters & monitore the situation

Lmk if you have any thoughts/feedback !

1 Like
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https://signal.paladin.vote/#/proposal/0xe3bcc80a702e8d15bf8803e30a3dc45f42d378aaa780cf5e9093e905ba7a8eda

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PGM-37 Quorum: 603,763 votes

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