[EP3.4] Fund the Endowment (first tranche)
Abstract
First tranche to fund the Endowment with 16,000 ETH sent from ENS DAO to the ENS Endowment and an additional 150 ETH sent to the Meta-Gov Pod to account for karpatkey and Steakhouse monthly fees.
Motivation
Approximately one year ago, the ENS DAO initiated a process to ensure the sustainability of ENS as a self-funded public good for the long term. The RFP process (EP2.2.4), on which karpatkey, together with Steakhouse, made a proposal, resulted in the selection of karpatkey (EP2.2.5).
For reference, the proposal submitted by karpatkey was for an initial size of $52,000,000 USD (converted to 32,000 ETH for operational purposes as the Endowment will be founded in ETH and to account for the reduction of the pool according to EP3.3). The proposal included performance fees of 10% above the investment's reference currency, with $ for $-related investments and ETH for ETH-related investments, as well as an annual fee of 0.5% based on the size of the endowment, payable entirely in ETH on a monthly basis.
Karpatkey engaged in discussions with the ENS community to seek feedback on strategies and the ramp-up process, both here and here. Feedback was received regarding concerns about the required time to establish trust and the need to limit executive votes for funding. Karpatkey believes that a balanced approach, such as funding 50% on day one and the remaining 50% after six months, would be a suitable tradeoff for all parties. To address questions and concerns raised, a FAQ was provided.
In the meantime, karpatkey made progress on the setup of the Endowment safe, which has been seeded to display target positions. The necessary managing permissions have been defined and audits from Ackee and Sub 7 have been completed. On its part, Steakhouse has started work on providing open source accounting and financial services, as well as a monitoring Dune dashboard, both of which are work in progress.
If the Endowment is funded through this first tranche, karpatkey will allocate the funds as follows:
| # | Protocol | Assets | Strategy | Share per Strat | Allocated Funds | Share of Portfolio | Proj. APR | Proj. Rev | Pool TVL (MM) |
|---|---|---|---|---|---|---|---|---|---|
| 1 | Compound v2 | DAI | USD - neutral | 50% | $5,506,971 | 20.61% | 2.21% | $121,704 | $560 |
| 2 | Compound v2 | USDC | USD - neutral | 50% | $5,506,971 | 20.61% | 2.16% | $118,951 | $637 |
| 3 | Aura Finance | wstETH - WETH | ETH - neutral | 40% | $6,282,423 | 23.51% | 10.38% | $652,116 | $208 |
| 4 | Curve | stETH - ETH | ETH - neutral | 40% | $6,282,423 | 23.51% | 5.38% | $337,994 | $1,653 |
| 5 | Stakewise/ Uniswap v3 | sETH2 - ETH Range: 1.000 - 1.006 | ETH - neutral | 20% | $3,141,212 | 11.76% | 12.77% | $401,133 | $65 |
| Total | $26,720,000 | 100.00% | 6.11% | $1,631,897 |
Specification
- Transfer 16,000 ETH to the Endowment (0x4F2083f5fBede34C2714aFfb3105539775f7FE64)
- Transfer 150 ETH to ens-metagov.pod.xyz (0x91c32893216dE3eA0a55ABb9851f581d4503d39b) to cover Endowment fees for Q1/Q2
Addresses:
- 0xFe89cc7aBB2C4183683ab71653C4cdc9B02D44b7 - ENS DAO
- 0x4F2083f5fBede34C2714aFfb3105539775f7FE64 - endowment
- 0x91c32893216dE3eA0a55ABb9851f581d4503d39b - ens-metagov.pod.xyz