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Mandate
The Sector Budget will be utilized for expanding the protocol’s functionality, maintaining and operating existing smart contracts, and ensuring the safety and correctness of protocol design and implementation. In addition, the budget will be allocated toward marketing, business development, and fostering strategic partnerships to enhance growth and adoption.
The team’s mission is to provide the necessary infrastructure to sustainably scale the ecosystem and onboard the next generation of DeFi users.
3Q23 Review
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We ended the quarter in a $67k surplus compared to our forecast driven primarily by lower engineering costs and no audits conducted during the quarter. We anticipate these costs being closer to the forecast amount in the next quarter. We are ramping up our dev resources and deepening our partnership with Robo Labs (https://twitter.com/robolabs_biz) and contracting FTEs on the Engineering front. We remain in-line with our runway forecasts.
DAO & Treasury
In the quarter we began our new treasury strategy with the allocation of 25% of our treasury operations fund into stETH and ETH. We have decided to dollar cost average over 5 months, and so far have completed 3 months of purchases. For full treasury details as passed through snapshot vote, please see: https://snapshot.org/#/sectorfinance.eth/proposal/0x7dfd6ebc19af9c47b29a25b8b045e396cc241e4c43349b0bc263c001f2ace2f0
As per DAO vote, we also have moved our protocol owned liquidity from SECT/USDC to SECT/ETH to better align our token and trajectory with broader ecosystem trends.
At 3Q23 end, our treasury operations fund is as such.
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Automated Liquidity Management
We’re proud to have published our detailed research and findings on our ALM strategies on concentrated liquidity. These operate on concentrated liquidity with the first series of products focused on protocol owned liquidity. We are furthering our goal of addressing DeFi infrastructure by allowing protocols to optimize their assets and provide sustainability and flexibility for DAO management.
The report highlights optimizing LP levels, improving capital efficiency, and supporting DAO token prices. The report uses Y2K as a case study and we are publishing our next findings on randomly generated price paths instead of historical pricing. We have also begun the backtesting and research on consumer oriented strategies for concentrated liquidity.
Sector has begun piloting a portion of our own POL into our strategy and are fine tuning the backend and frontend. Business development has already begun with communication directly with protocols and protocol integrations.
Current Vaults
For our current vaults, we deployed a series of “Next Gen'' strategies. Integrations include AAVE, Camelot, Velo, Chainlink and Sushi. The strategies were launched on Arbitrum and Optimism. We have made upgrades and updates on the strategies and overall UI/UX of our current vault offerings. Upgrades include updates to our aggregator vault and strategy and integrations like with Velodrome and Stargate.
4Q23 Budget Breakdown
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Engineering
By bringing on the support of Robo Labs, our engineering costs will increase this quarter relative to last, but still within our projections as we will be utilizing them instead of full-time hires.
4Q23 Objectives
The following are the high level goals we have for the quarter segmented by what we want to accomplish on the product and business front. The team will continue with our weekly updates where we share our goals and progress.
Refine research and backtests on the next series of concentrated liquidity strategies.
Deliverables will be in the form of continued deep dive reports and the vault launch of the most compelling strategies.
Internal testing of strategies utilizing Sector liquidity and capital
Maintain and build upon existing Phase 1 Vaults and Delta Neutral strategies by canvassing current DeFi market and adding new strategies and integrations
Utilize product develop and research to develop early ecosystem partners by solving core needs around DeFi infrastructure
Continue researching changes and opportunities in DeFi such as Uni v4 launch and any grant opportunities.
Utilize data, research, and backtest to start prototyping analytical tools that can address shifts and trends in DeFi such as intents based orderbooks (UniswapX)
