đĢDAOs
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Last updated
There are currently around $12 billion dollars in assets across DAO treasuries. However, most of this is DAO tokens which are extremely volatile assets. And if the 2017 bear market was any indication, this is a risk many teams can't afford to take.
Unlike individuals, funds, or whale investors, DAOs don't have one person executing decisions. This complicates trading DAO treasury assets on centralized services:
Regulatory Risk: Select one person from DAO to complete KYC/AML
Custodial Risk: Trust this individual to custody and trade
Transparency Risk: Trust CEX to give you the best fill behind closed doors
Counter Party Risk: see FTX and a slew of other centralized services that have lost customer money
There are great teams like Llama, Karpatkey, and Aera among others that are building risk and treasury management software to address these issues.
Suppose a DAO wants to sell $50m of its treasury token. It currently has a few options for execution:
As you can see in the options listed in the table above, DAOs need to optimize for low: value left on table and high: transparency. TWAMMs are the only solution that gives you OTC-level execution with DEX-style transparency.
Here's an example of what happens when DAOs leverage Market Orders on DEX Aggregators.On a CEX, the DAO would have saved ~$100k! TWAMMs would execute this order much better, and potentially capture the move upside of the risky asset given a long enough time horizon.
Here's an example of a DAO conducting buybacks of their token. They relied on an OTC desk to conduct a simple TWAP buy instead of doing it all in a single block.
The savings are roughly 190M (+40%!) in Spell tokens, by simply conducting TWAP buys. This particular DAO has an individual executing transactions on behalf of the DAO, a luxury and risk many DAOs don't want to take.
There are a few times DAO tokens are under very high sell pressure:
Investor token vest unlocks
Grants program funding in native tokens
And the biggest one of them all:
Instead of having people dump tokens in a single block which causes network congestion and heavy sell pressure on the token price, trades can be completed over multiple blocks giving the market enough time to digest the price action.
Below are a few examples of DAO governance proposals that could leverage TWAMMs to manage treasury positions.
Buying YFI via Cowswap: https://twitter.com/iearnfinance/status/1486450959723155474
Buying 1M CVX:https://twitter.com/DefiMoon/status/1487313436803481605
DCA with Mean Finance:https://gov.yearn.finance/t/proposal-mean-dca-buyback-pilot-program/12065
Other buyback mechanisms:https://gov.yearn.finance/t/proposal-ymarkt-the-best-buybacks-can-get/12166
With Gnosis Auctions:https://gov.yearn.finance/t/yfi-buyback-auctions/10491
Buyback & build on the open market:https://gov.yearn.finance/t/yip-56-buyback-and-build/8929
Sell $15M ETH for USDC: [Draft][Executable] Sell ETH into USDC
Manage $50M treasury: Endowment initiation
TWAP buyback $100M: https://twitter.com/TheBlock__/status/1608588361576374274
Decentraland $12M Sale: https://governance.decentraland.org/proposal/?id=ef44b230-66d4-11ed-a8f3-85d147463e4c
Nexus Mutual: WNXM buyback discussion
v2 Tribe Buybacks: https://tribe.fei.money/t/fip-37-fei-v2-tribe-buybacks/3571/6
Diversification with DCA: https://tribe.fei.money/t/pcv-diversification-primer/3156/16
Using PCVSwapper to DCA: https://tribe.fei.money/t/proposal-buying-defi-pulse-index-dpi/3348
More Investment Stuff: https://tribe.fei.money/t/fei-dao-investment-policy-statement-ips/3284/2
Buy $4M of Rook with treasury: https://forum.keeperdao.com/t/kip-13-empower-the-multisig-to-buy-back-up-to-4m-of-rook/241
Buy $13M of YFI: https://forum.keeperdao.com/t/kip-draft-strategic-yfi-aquisition/219
Buyback & burn: https://forum.keeperdao.com/t/buy-back-and-burn-initiative/67
