Nouns DAO (legacy) - treasury-management (Q5067): Difference between revisions

From Nouns Dev

Latest revision as of 23:29, 14 July 2023

A Nouns discord channel.

Language	Label	Description	Also known as
English	Nouns DAO (legacy) - treasury-management	A Nouns discord channel.

Statements

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https://discordapp.com/channels/849745721544146955/905454537316388944

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Question & Answer

<@603240181050638346> seems to have a very good handle on the practical side of implementing various proposals.--If we were to go in the direction of staking some eth would it be best to perhaps stake 1% of treasury (or even just 0.01 eth) as trial? Or would stand protocol be to just vote on the end final result rather than in stages?

Based on the conversation, it seems that the idea of staking a small percentage of the treasury as a trial was discussed, but no definitive answer was given. The conversation included suggestions for different percentages and potential risks, but no clear consensus or final decision was reached.

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<@910382387983179797> would you trade your noun for a noun in the first 50? First 20? First 10?

Noun 19/Cookie Nounster#3464: <@910382387983179797> would you trade your noun for a noun in the first 50? First 20? First 10?--Answer: Probably not.

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Also I’m confused how can new members join the dao forever, don’t daos have to be capped at some #?

GuyZalaxy#1925's question about whether DAOs have to be capped at some number was addressed by Noun 12#8966, who explained that there is no cap on DAO members and that there are hundreds of DAOs with more members/public keys than 200. They also mentioned that Nouns DAO benefits from a constant refreshing supply of new members and that the cadence of auctions can be changed in governance.

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Are the economics of sETH not expected based on making ETH2 not tradable until after the merge? Looking at crypto, wouldn't one expect that the first thing that would happen would be the creation of a derivative, and that the nature of liquidity would make that derivative winner take all? It seems like hopium to expect that something else would have played out here (reminds me of soulbound nfts tbh). Does this problem not go away on its own once beacon chain withdrawals are possible?

Yes, as soon as the conversion is liquid the peg will restore. The problem is expected to go away on its own once beacon chain withdrawals are possible.

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are we planning on transferring/buying the nouns.eth domain into the DAO?

Yes, there are plans to transfer the nouns.eth domain into the DAO. 4156#9052 mentioned that the domain is currently in the foundation's multisig and that they will ask the board about transferring it to the DAO directly.

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By investing in other NFT projects, aren't we just giving those owners exit liquidity and possibly transferring our goodwill to their project for a not so great return?

By investing in other NFT projects, aren't we just giving those owners exit liquidity and possibly transferring our goodwill to their project for a not so great return?--MikeMcDonald#3707: We're absolutely giving them exit liquidity. The hope is that this works as effective advertising to have people who believe in that project believe in our project.

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can’t one just do it through a CEX? Sell DAI for fiat, send fiat to bank account. -Are you concerned about the slippage when converting to fiat?

Yes, one can sell DAI for fiat on a centralized exchange (CEX) and send the fiat to a bank account. The concern about slippage when converting to fiat may not be significant, as stablecoin/USD trade fees might be low enough on exchanges. It's worth double-checking on exchanges like Coinbase for less sophisticated users.

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does one get sETH in secondary market or from depositing with lido?

Yes, one can get sETH in the secondary market or from depositing with Lido. Islandprime59#9223 mentioned that the market is pretty efficient it doesn't really matter but yea probably deposit.

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for any given auction do not exceed 20% of average settle price of the last three (3) auctions Should this be 120%? When would we expect a Noun to go for that far below the most recent 3 auctions?

Yes, the intention is 120%. It’s an edge case some were vocal about pricing people out of a stellar Noun since the treasury can effectively net 0 on its winning of the auction. So a somewhat arbitrary percentage was chosen to address it.

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Gm everyone! Catching up on discussions while having my morning coffee. Love the thoughtful comments!--I think there’s a strategic decision to be made by NounsDAO with regard to treasury management:--A. ETH-only -B. staked ETH - a low-risk, conservative and passive strategy-C. DeFi yield generation - actively managed yield generation --I would argue in favour of A or B given the early stage NounsDAO is at. This could be a decision that we take for the next 365 days and revisit it annually. --Let me explain the reasoning. As much as I love yield generation, and hate to see the treasury ETH “just sitting there” I think we should be mindful about where we direct our attention and efforts. --What we should consciously avoid at this stage is “incrementalism” in our thinking and this is exactly where strategy C will lead us. Should we get 5% more here or there? Is that farm 20% safer or riskier? Every new person joining will have their own theory about yield generation. None of them will materially move the needle. --By deciding that for the next 365 days we decide *NOT* to have any yield generation discussions (outside of staking ETH) we focus ourselves on core 10x innovations NounsDAO is uniquely positioned to introduce. Yield management is not one of them. --Just a quick pulse check on what other think of it. Which strategy should we focus on for the next 365 days?

Based on the conversation, the question about which treasury management strategy NounsDAO should focus on for the next 365 days was not directly answered. However, there were opinions shared in favor of staking ETH (option B) and some discussions about other potential investments like BTC, NFTs, and ERC-20 tokens. It is suggested that a small and elite committee could be formed to make recommendations on financial strategies for the organization.

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I am probably one of the least experienced on this front, I am DeFi genius compared to my IRL friends but an absolute noob in the private channels of this discord, so I’ll mostly just listen and learn from these conversations but here’s one thing that occurred to my brain that may or may not be helpful to say:--Most noun owners know how to grow wealth, that is how they got to afford a noun. Most noun owners could certainly be (and probably are) putting their personal treasuries to work via yield earning. --What is the appeal of nounsdao? What is the UVP of being a member and investing capital here as opposed to elsewhere?--I don’t believe it’s that you can pool your ETH together to participate in the same yield generation activities that you already can on your own… The opportunity here is the model created where the feedback loop of spending on proliferating nouns, driving value to the NFTs, bootstrapping community and all the good stuff that spending the ETH in novel and experimental ways can bring.--Is attention/focus/time the scarcest commodity in crypto? And are some of nouns greatest assets the brains, experience, and connections of the nouners themselves? --My fear is that every minute nouners spend thinking and debating traditional treasury management measures like yield generation is time not spent engaging in the unique opportunity this project presents us, and therefore kind of… a waste. Could be done elsewhere, way more efficiently, where attention is not so split and votes aren’t required and it doesn’t have to be balanced out with the greater vision which is facing a different direction.

The appeal of NounsDAO is the unique opportunity it presents for its members to pool their resources and invest in novel and experimental ways that drive value to the NFTs, bootstrap community, and create a feedback loop of spending on proliferating nouns. The focus should be on the cultural capital and clout of the organization, rather than traditional treasury management measures like yield generation. The project aims to create one of the most sought-after memberships, status symbols, and cultural artifacts in the world by using the treasury to increase demand.

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is coinbase fee flat or %?

Coinbase fees are a percentage, with a 1.49% fee mentioned for converting USDC to DAI in the conversation.

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Is there some way that the swap and send can be triggered by the searchers such that a naive nouner or builder doesnt need to do anything except watch the funds get converted and transferred?

Yes, there is a way for the swap and send to be triggered by the searchers so that a naive nouner or builder doesn't need to do anything except watch the funds get converted and transferred. The idea discussed involves allowing the searcher to pay through a priority queue, passing the funds through one of the DAO's contracts for accounting purposes, and then having the funds flow to the builder. This would involve paying out outstanding debt before topping up the reserve.

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I thought it was all eth have we sold to stables ?

Yes, if a proposal requires USDC, they sell ETH and forward USDC.

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it sounds like your priority would be to protect the ETH so that Nounders can continue to draw from it to invest in/build their vision, eg spending ETH on creative/viral marketing projects to in turn generate higher auction prices? & that this is the best risk/reward strategy for the DAO full-stop?

The question was whether the priority is to protect the ETH so that Nounders can continue to invest in/build their vision, and if this is the best risk/reward strategy for the DAO. The conversation suggests that the current priority is to collect as much ETH as possible and that the treasury value will be important in the future. The focus is on growing the treasury to fund more projects without eating into the principal as much. There is also an emphasis on attracting new members and increasing the treasury's size to achieve differentiation and attention. However, there is no direct consensus on whether this is the best risk/reward strategy for the DAO.

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Oh so if the prop requires usdc we sell and forward usdc ?

Yes, if a proposal requires USDC, they sell and forward USDC. In some cases, the proposers had to convert after the DAO sent the funds, but they are working on a new model.

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out of curiosity, is the lack of clarity around the tax implication the main reason you voted against prop22?

The main reason Noun 12#8966 voted against prop22 was due to the lack of context and clarity in the proposal. They mentioned that the proposal didn't explain what was learned from the 1 ETH experiment, didn't discuss the tradeoffs in participating in Lido, and wasn't comprehensive enough for treasury management. They wanted a clearer and more articulated proposal for managing large sums of money.

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possibly? i think it could be interesting to refine a dao perspective on macro and potentially explore ways of opportunistically driving revenue to the treasury. arbitrage/writing premium are the primary ways i know of doing this, but imagine there may be other ways people in this space make fear their friend... for example if sub-2k eth pushes some alts (& nfts?) into 'deep-value' territory; do we care? are there revenue ideas out there not centered around finance/trading?

There is no direct answer to the question about exploring ways of opportunistically driving revenue to the treasury or revenue ideas not centered around finance/trading. However, there is a discussion about treasury management, diversification, and staking ETH across multiple products/protocols.

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Probably yes, depending on the 4 nouns. <@!827708794841727076> which noun(s) do you own?

There isn't a direct answer to the question in the provided context. However, there is a discussion about creating a Nouns Market with a lending system that could potentially allow users to borrow against their Nouns as collateral. This idea is still in the draft stage and would require further development and governance approval.

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Question about treasury transparency. If we decided to have a variety of investments, staking, etc how will that be displayed to someone who wants to quickly review the portfolio? I know that we can build a dashboard. However, I don't anything will ever replace going on a block explorer and looking at the ETH balance.--The last thing we need is for the DAO treasury to be as opaque as Tether's reserve.

The question about treasury transparency and how investments, staking, etc., will be displayed to someone who wants to quickly review the portfolio was answered by vapeape#3087. They mentioned that if everything is done from the treasury, plugging the address into DeBank or a similar platform will show it all. If needed, a page could be built on the main site if it gets more complex than that.

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Serious question, is staking ETH completely riskless? In the context of how the treasury is currently setup.

Staking ETH is mostly riskless from a treasury custody perspective if done through liquid staking like Lido or Rocketpool. Lido is not fully decentralized yet, and Rocketpool is newer but completely decentralized and trustless. There is a theoretical risk of Lido getting hacked, but that would cause much bigger problems for the entire ecosystem.

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so <@378904401290592258> you were referencing using this for dumping some of the ETH? https://github.com/banteg/yfi-buyer

Yes, elad#6192 confirmed that they were referencing the yfi-buyer GitHub repository for potentially dumping some of the ETH. They also mentioned they could show the code they're working on if chris224466#1109 is curious.

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Some variant of this could be good but these parameters will be absolute chaos. --I for one will definitely just take ~90 eth loans against each of my nouns and not pay them back and try to use the 90 eth to buy cheaper nouns and repeat. Pretty sure many others would do the same.--Not sure the right amount but probably something more like 40% maxloantovalue would be more realistic? I don't think we should have either:-A) bigger loans than the price of recent sales-B) loans be a major incentive to artificially prop up recent sales

MikeMcDonald#3707's question was about the potential chaos of having high max loan-to-value ratios and whether a lower ratio like 40% would be more realistic. --In the conversation, willprice#7766 agrees with starting with conservative parameters and suggests that if they start with low LTV and high liquidation penalties, and slowly relax them over time, the NounsDAO will accrue substantially all the value instead of profit maxis. Illiquidjpeg#3448 also agrees with a lower LTV of 40-60% and higher liquidation incentive of ~10% to start.

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This is a bit nit-picky but 365 days from now we'll have 470 nouns, of which only 105 + 36 = 141 are definitely represented by members of this chat. 141/470 = 30%. So it feels a bit weird to try to have the 30% speak for the 70% when I believe its majority rules?

Goldy#0420's reply addresses the concern about the 30% speaking for the 70%. They argue that when someone buys into NounsDAO, they accept the decisions that have been made up to that point. They can campaign to change things, but it's not unfair for the DAO to make long-term decisions.

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What do you mean iceberg it? We could let the nounders execute it via a private mempool or in chunks if everyone is comfortable with that

Iceberg it refers to breaking up a large transaction into smaller orders to avoid causing significant price movements or revealing the full size of the transaction. In this context, the user is suggesting that the Nounders could execute the transaction in smaller chunks or via a private mempool if everyone is comfortable with that.

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What do you think about using the treasury to buy eth call options for instance?

Using the treasury to buy ETH call options is a possibility, but another more passive route that is less speculative and matches the governance latency constraint is selling covered calls. However, there is no consensus on the best approach for treasury management, and some members suggest focusing on ETH staking or other strategies.

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Why would there be any dissent? Id like to hear the argument?

The question was about why there would be any dissent regarding the treasury management. The direct reply from 4156#9052 argues that limiting the number of Nouns or focusing solely on the ETH value of the treasury would hinder the long-term potential of the Nouns DAO. They emphasize the importance of cultural capital, clout, and the diverse abilities and opportunities that new members can bring to the organization. The conversation also touches on the benefits of having a constant supply of new members and the potential drawbacks of capping the creation of Nouns.

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would be great if we all started thinking on key decisions re: the stablecoin payments infrastructure-we'd like to bring them up on calls starting next week-------decisions we expect will require more deliberation:--1. which token do we want to pay in? e.g. USDC vs DAI -2. the amount of the baseline position the DAO will hold, denominated in USD (the baseline amount helps pay builders immediately, vs asking builders to wait until we can buy USD on chain)-2.1 with this decision the DAO can set lower and upper bounds within which an admin multisig can adjust things without going through the proposal process-------decisions we expect should be easier to decide on:--1. the max price slippage rate; this should be easy as the DAO can set a reasonable upper bound and let the admin multisig find an optimal value gradually on mainnet-2. who should be the admin; personally I think the tech pod multisig is a great choice with highly relevant people already part of that team (to clarify: the highest owner role is of course the DAO's; the admin has more limited configuration rights)-------please hit us up with questions and feedback anytime!--for anyone curious about the state of the code right now: https://github.com/nounsDAO/token-buyer/pull/1

Based on the conversation, the key decisions regarding the stablecoin payments infrastructure are as follows:--1. The majority of users seem to prefer DAI over USDC, but they want to ensure there's an easy and low-cost path for builders to convert and withdraw their funds.-2. A baseline position of around 2.5% (~700 ETH) is suggested, but there's also a suggestion to peg it as a percentage of total treasury holdings.-3. The max price slippage rate should be 0.5% to attract interest from the MEV community.--However, there is no clear consensus on the admin multisig and the lower and upper bounds for adjusting the baseline position without going through the proposal process.

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Would the increase in usd value be return to the treasury. Or is it increasing the prop runway ?

The increase in USD value would go to the Nouns Esports Pod, which would also be looked to for funding a shortage in the event of catastrophic mismanagement of the last 20% and no revenue being generated.

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Would you need another vote to decide if a project has met its goals? Also, not every project gets an A or an F

Yes, a vote would be needed to decide if a project has met its goals. H O N K D I D D L Y#2881 mentioned a slashing mechanic where people could call out a project for failing to meet its objectives after a certain period of time, and then it would be put to a vote. The details on the best implementation of the vote are not yet clear.

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ya, seems most likely it would stay in steth until then.. but whether the merge outlook begins to change, or lido fundamentals change/ or curve pool liquidity changes (drop in incentives etc).. just seems we want someone to have eyes on it somewhat regularly. maybe there are people in the dao keeping track of these things anyway that we can count on for ongoing risk management?

Yes, it seems that there is a suggestion to have a small team dedicated to treasury management and ongoing risk management. Goldy#0420 mentioned that it has been discussed somewhere that a small team could be dedicated to this task.

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you mean a FIFO queue of the builders which the DAO owes?

The question was whether there would be a FIFO queue of the builders which the DAO owes. The conversation suggests that the idea is to pay outstanding debt before topping up the reserve, and the searcher would transfer tokens directly to the builder, possibly passing through one of the DAO's contracts for accounting purposes.

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Related Proposal

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