Summary:
The Treasury Management and Diversification Committee (TMDC) was established on a trial basis by [SCP-36]. The trial period will end on 16 February 2022 and without a new proposal the TMDC will dissolve.
Based on the successful performance of the TMDC during the trial period this proposal is for the DAO to authorize the continuance of the TMDC from 17 February 2022 on an indefinite basis with the proposed amendments to its mandate below which are based on the lessons observed during the trial period.
Abstract:
If the proposal is passed, the TMDC will continue to manage the treasury for the long term benefit of the DAO to seize opportunities and mitigate risks by using measured decision processes. TMDC committee members will be compensated and the committee member slate will adopt a six month renewal cycle. The TDMC will strive to finish the term with $4M in new stablecoins.
Motivation:
The original impetus to form the TMDC was that we did not want to have every tokenomics decision have to go through full governance because of the delay of time from ideation to execution limited the DAO’s ability to respond to opportunities and risks to the treasury. Specifically, to seize opportunities to diversify and accrue stable coins in our treasury. Concurrently, the TDMC was also directed to provide a layer of due diligence and to take measured decisions.
Without a continuance, the TMDC will dissolve at the end of the trial period on Feb 16, 2022. After that date, the DAO will revert to its previous risk profile without a time-agile response capability to accrue stable coins and it could take too long to take advantage of opportunities to diversify our treasury.
Specifications:
The specifications of the continued committee will be the same as [SCP-36] with the following amendments:
Amendment #1: Members of the committee (with the exception of Kent, who is already compensated as the Tokenomics Workstream leader) will be compensated in FOX at a rate of 4000 FOX per month.
During the trial period, committee members were not compensated. This was because the level of effort was unknown and the value of the committee was unproven. The TMDC met not less than 16 times, studied, deliberated and made asset assignments 15 times. The level of effort and responsibility is substantial. As explained in the State of the Treasury section below the Fox Treasury position is now streaming approximately $44,000 USDC per day into the treasury as a benefit from the TMDC work.
TMDC should be compensated in FOX to incentivize committee members to be long Fox; and a study of fair compensation suggests a range of 3000-4000 FOX per month as reasonable for the level of effort and responsibility. Given the positive performance of the TMDC the value should be at the upper range.
Amendment #2: TMDC will track its activities and provide the DAO with a monthly status of activities within 7 days of the last day of the month each month. Compensation will be conditional upon the production of the monthly summary.
Amendment #3: Pending governance approval and deployment of the FOXy token/contract, the TMDC will be tasked with managing token swaps and other relevant mechanics in order to generate rewards (which will in turn be distributed to FOXy holders).
Amendment #4: The TDMC will strive to finish the term with $4M in new stablecoins.
Governance of the Committee:
The governance of the continued committee will be the same as [SCP-36] with the following amendments:
Amendment #5: The slate of committee membership will be approved by the DAO on a six month cycle from the approval date.
Amendment #6: The proposed slate of members for the continued committee for the first six month cycle are:
Amicus.eth / Rotorless | Joshf | profMcC | seven7hwave/ Kent | JonisJon
State of the Treasury:
Tl;dr - the FOX treasury is receiving yield from TMDC work.
The most significant achievement during the trial period is incoming stablecoin streams to the ShapeShift treasury achieving the mandate of the TMDC.
For example:
The link below shows a value of $830,000 USDC in accumulated yields from TMDC assignments to the initial FOX/USDC Bond that was transferred into the ShapeShift treasury on 7 Feb .
https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48?a=0x90a48d5cf7343b08da12e067680b4c6dbfe551be
The current streaming revenue is Approximately $40,000 USDC. Additionally, the TMDC has increased the assignment to the FOX/USDC fund to yield an estimated $100,000 USDC per day for the next 3 months.
Most, but not all (limitations of aggregation) of the treasury positions can be viewed on this zapper link here:
https://zapper.fi/account/0x90a48d5cf7343b08da12e067680b4c6dbfe551be?tab=dashboard
The Fox and Frens Rari pool can be viewed here: https://app.rari.capital/fuse/pool/79/info
The Fox Tokemak reactor can be viewed here: https://www.tokemak.xyz/
The Olympus Fox/USDC bond offer can be viewed here: Olympus Pro - Bond marketplace for protocol owned liquidity 1
If you are into it you can track these other activities on etherscan (see my comment above on producing a monthly summary):
Deposit $5M FEI Deposit $50,000 Silo Finance Deposit $3M In Tokemak Deposit $ 1M FOX/USDC BOND for 1 month at payout of $40,000 FOX Deposit $1.7M FOX to increase collateral in Rari Fox & Frens Borrowed $1M in FEI, swapped for $1M USDC Sold $150,000 of Toke for $150,000 USDC Deposit $3.5M Fox into Angel Vault Deposit $1M FOX/USDC BOND Increase monthly payout to $100,000 FOX Delegated authority to manage FOX/USDC Bond to the Bond Committee. Added FOX/ETH LP to the the FOX & Frens Rari Pool Extended the FOX/USDC $2M Bond at $100,000 FOX payout for 3 months Deposit 39,920 USDC to Pendo Re-collateralize $900K worth of FOX and 450K USDC in Angel Vault.
Requirements:
The TMDC priority will continue to take a holistic approach to DAO treasury management, and act toward the long-term success of FOX token and the ShapeShift DAO. The committee will remain a dedicated team of FOX members carefully watching, acting and working with each other on a weekly basis.
At the time of writing there was 198M FOX in the Sablier wallet and 237M FOX in the Shapeshift treasury wallet. The initial allocation to the TMDC was 60M FOX. Approximately 15.5M FOX remains. No increase in control over additional funds is proposed for the next cycle.
The committee will administer the pools the community owns. If the committee should want to sell FOX: The committee’s actions should have limited price impact on the FOX token, no one tactic can drop the price by more than 2%.
Roadmap:
TMDC continues to develop tools and processes for treasury management with a view towards continuity of knowledge to enable succession of committee members.
Benefits:
To continue to be capable to act quickly, manage and execute on treasury management and diversification strategies to allow for a more active, holistic and long-term approach to treasury management. To leverage the lessons of the trial TMDC period going forward.
Every FOX holder can vote to add or remove committee members and can bring treasury management suggestions and comment on proposals before the committee.
Drawbacks:
Not every FOX holder can vote on the committee.
