Proposal: MetaCartel Treasury Sustainability

MetaCartel Treasury Sustainability Strategies

TLDR: It’s cold outside and we need a solution to keep our crops green.

Introduction

As a bear winter may be upon us, it’s important that MetaCartel considers a sustainability strategy to not only survive the winter, but to enable the Cartel to continue creating positive impact long after. While ETH may rise again tomorrow, there’s also a good chance it could be in a decline for the next few years, and the MC treasury should be managed accordingly.

There has been debate over the last couple of months on what the best strategy would be in regards to financial and ideological alignment. The purpose of this proposal is to outline the different strategies that were captured during MC Townhall discussions and give space for members to deliberate.

Strategy 1: Generate Yield

There are currently a several strategies being explored around generating yield from DeFi activities to sustain the MC grants program. They are being discussed in a telegram group geared specifically towards treasury sustainability strategies for DAOs. Calls are held every Tuesday, directly after MC Townhall.

1A: Stake MC ETH

MC stakes some of the ETH from the treasury to earn yield.

1B: Stake raised ETH

Perform a raise in ETH to then stake for yield.

1C: Stake borrowed ETH

MC borrows ETH from frens to stake and earn yield with promise of returning the ETH.

1D: Stake raised DAI

Perform a raise in DAI to then stake for yield.

1E: Stake borrowed DAI

MC borrows DAI from frens to stake and earn yield with promise of returning ETH.

1F: Combination of borrowing ETH & DAI

MC borrows ETH and DAI from frens to stake and earn yield with promise of returning ETH.

Technical details

  • The goal is to earn enough yield to support 2-3 $10k grants + ops per month.
  • Whether MC raises or borrows, a Yeeter would be used to streamline the process, with the funds being managed by a DAO comprised of a treasury council to manage DeFi activities.
  • The yield bearing tokens can be deposited back into the DAO treasury where capital contributors can exit with their proportion at anytime.

Strategy 2: Sponsorship Program

Start a sponsorship program is to find larger organizations that are or want to be aligned with the MetaCartel, and are willing to contribute capital towards the MC grants program.

2A: Loot sponsorship

Sponsors tribute ETH to the MC DAO to receive Loot. Give benefits to Loot holders.

2B: Unengaged sponsorship

Sponsors send ETH directly to the treasury without receiving Loot and associated benefits.

Technical details

  • A Yeeter is used to collect Loot sponsorships.
  • Loot holders can receive an NFT and Discord access to Townhall & grants program.
  • unengaged sponsors give money and only get listed on our website.
  • MC would need a role to manage the sponsorship program

Strategy 3: New Memberships & Fees

Restimulate the MC membership program.

3A: New member tributes

Promote MC memberships publicly to generate more membership tributes in the form of ETH.

3B: Reoccurring membership fees

Collect an annual membership fee from new and existing members.

Technical details

  • Membership tributes and reoccurring fees could be in the form of NFT sales.
  • NFT sales could be facilitated by a DAOgroni style solution.
  • OR tributes/fees could simply be paid in ETH directly to MC treasury.
  • MC would need a role to manage the membership program.

Strategy 4: Public goods funding rounds

MetaCartel is a public good and therefore should be supported as such. Raises can be framed as donations to support MC grants.

4A: Public goods fundraising platforms

Leverage existing public goods fundraising platforms to replenish the MC treasury.

4B: MC donation windows

Periodically perform public goods donation events directly with the MC DAO.

Technical details

  • MC can use platforms like Gitcoin to raise and gain exposure.
  • A Yeeter can be used (similar to Strategy 1) to collect donations.
  • MC would need a role to manage the public goods program.

Conclusion

All of these strategies have their pros and cons. They are also not exclusive - multiple strategies could run in parallel. It’s important to consider the operational overhead of these strategies along with the associated risk inherent to each of them. Use this space to discuss the above listed strategies, offer thoughts and opinions, introduce different or modified strategies, and come to general consensus on the best path forward.

The new MetaCartel website is projected to be completed by July 2022. MC members should come to consensus before the launch of the website so that the chosen strategy can be incorporated into the new site and grants onboarding flow.

3 Likes

Hey @jekl thanks for putting these options together for us to consider, personally I think now is the time to double down on ETH, at these low ranges we stand to come up considerably by leveraging.

A couple of things to keep in mind:

1. Most of the strategies that generate any significant yield will not be on Gnosis Chain, so bridging some portion of the treasury out will be required.

  1. How much of the treasury are we comfortable bridging out to a multi-sig of trustees ?

2. Using napkin math, the treasury will run out between 3-5 years if ETH maintains it’s current rates ($10-15k per month for 3-5 years )

  1. Are we comfortable taking on a certain amount of risk to extend the life of the treasury by double, triple, or a potentially infinite timeline ?

3. This move to “generate” sustainable yield is deviation of the existing DAO mission.

  • What do we owe to our existing members in order to ensure they have all the details required to make an informed decision about their involvement before we move towards a “non-rage” quit-table yield generating strategy ?
2 Likes

In the end, I definitely think all strategies can interact together for optimal sustainability, and perhaps these should be pursued in a lightweight manner holistically. That said, starting the yield-bearing strategies and processes seems like a good first step, for the other strategies to tap into when applicable. Other initiatives for new member onboarding and public goods funding can be spun up separately, alongside the yield strategy.

3 Likes
  1. Could use new cross-chain minion to maintain full control by the dao on Gnosis Chain. However, we may still desire to be able to move faster, and trust in multisig.

  2. I think the real solution here is combining with other processes for getting more ETH (members, sponsors, public good funding, etc) to put into the yield, though some risk with existing funds would be tolerable

  3. Imo, funding dapps and daos as public goods is the mission. If yield can generate more funds for fulfilling that mission then cool. But I agree that any modifications to custody of member funds should be formalized and communicated properly. Though we have done some similar initiatives in the past, and as always there will be proposal(s) that members can vote no on if disagree.

1 Like

On Generating Yield,

  • Opposed to most strategies on mainnet that will break RQ
    • Would recommend migrating to L2 for future yields
  • Strategies should be facilitated via a minion proposal in any case possible, where yield bearing tokens are re-deposited back in the treasury or minion
    • PeerDAO with Shared Minion at minimum
  • Implementing these will significantly limit our current granting for a while. So this does extend the runway for the treasury, but we could just as easily not give any grants while ETH is sub [~3k] without any maintenance costs
  • Maintenance of our current funds has been something very few people have wanted to coordinate on. So while I appreciate the effort that’s gone in to suggestions, I’m skeptical on the follow through of managing with minimal fees for the effort required.

Do you have any suggestions for yield on L2 ? Based on our research we have not found any L2’s that will generate significant enough yield to move off of main-net.

Can I make a suggestion that perhaps we distribute a % of funds to a multi-sig, using a cross-chain minion the funds would stay in control of the DAO.

The team from Hedgey including @iceman and Lindsey are willing to step into the management role in exchange for membership into MetaCartel.

We should start with a portion of the funds, begin the process and then review before moving forward to handle more funds.

What portion of the treasury would you support using for this initiative ?

  • 100 %
  • 50 %
  • 25%
  • 0% (I do not support this initiative)

0 voters

If we can get consensus on starting the process and outlining an MVP we can get things moving, I under your doubt @scottrepreneur but we need to try something or else we will be spending ETH at the bottom of the market to fund grants and ultimately lead to the dissolution of MetaCartel grants.

I dont see any reason that we need to move funds to a gnosis safe to do any kind of yield farming. we can do that from the dao minions. and if its cross chain… then no, that is NOT controlled by the dao. i am against moving any funds outside of the DAO’s minions / treasury.

If we’re going to hold weth/xdai in the treasury and want yield on that, swapr is currently 20+% api on that pair: Swapr
Screen Shot 2022-06-21 at 3.38.24 PM
I would support using some funds for LP’ing or staking. but not in a way that delegates so much of our power to insiders.

I think we’re saying the same thing, with different words :crazy_face:

I don’t care “how” it’s done, just “that” it get’s done. If cross-chain minions allow us to get more ETH on main-net then I think we should do that. If we can do it on xDai, then let’s do that.

I’m really surprised to see the APY on Swapr, is that a consistent figure? @Sky

1 Like