Launch ETH Bonds

el_dan0

unbanksy33 You think this will still happen in concert with lowering the APY? We need to increase the runway larger to inspire confidence. Why not include both those stables you mentioned and ETH? I don't think this is a binary choice between the two

Dudemyguy

el_dan0 Apy lowering is not happening at this time. Check discord announcements.

homme

firstly i cant believe that i have just now stumbled into this proposal.

Dai is a scarce asset, look at ALCX, they hold 10% of the existing Dai supply and have deposited it all in yDai.

Having ETH as a Bond might cause an issue with regards to existing pools. my recommendation is to keep the pool as is DAI/OHM with no additional OHM/ETH pool. the current pool has low liquidity as seen from recent price volatility.

Using ETH to purchase OHM should come directly from the protocol, and i believe the protocol should keep the ETH as is and not go through the direction of CDP.

Against CDP for the reasons below:
diversification of the DAO treasury
DAO holds
1) DAI (non-yielding)
2) SUSHI (through onsen rewards)
future
ETH
other US$ pegged stable coins (FRAX, alUSD, USDC)

The plan should be to keep the treasury as risk free as possible and that is by either keeping them in:
1) Wallet
2) Yearn Vaults (yETH and yDAI)
3) Compound (to earn Comp tokens as well as interest income)
4) AAVE ((to earn stkAAVE tokens as well as interest income + possible to take them to L2 and earn MATIC on top of the above)
5) deposit the DAI in CRV, and earn on trading fees as well as CRV tokens (we could in the future introduce an in house yvBOOST similar to what Yearn deploy to incentives users to provide them with CRV tokens to earn the 2.5x boost)

the main issue is how the DAO will value the ETH?

my immediate thought is that it should treat it the same way MKR would when minting DAI, and in this case minting OHM. at 150% collateral + no need for the stabilization fee.

luxophy

homme Thank you for your input homme. Respectfully I feel like your Proposal is not very different from mine. You're not against ETH bonds. You even keep the same valuation but you just want to keep the ETH instead of putting it in a CDP or immediately sell the ETH for DAI. The benefit of using multi asset CDP is that you can manage your entire Treasury in one place. You would use the CR ratio to manage your inflation and would not have to micromanage each asset. With the CDP you get the upside of price appreciation but you are protected on the downside by liquidation if it comes to it. If you are just holding the asset you will be forced to decide whether you have to dump along with the market or burn existing Ohm which means supply contraction.

My Proposal would never have a supply contraction. Liquidation risk can be managed by minting vs a long-term EMA not the daily price. Minting only happens if the current CR is below the desired level not above.

With respect to the yield deployment strategies I agree with them but again they are not in conflict with the CDP. Similarly you can send minted DAI to other vaults for additional yield. I fail to see how sending the DAI minted from the DAO's own CDP differs from sending the DAI from your Treasury to yVault. In fact if you don't use the CDP you would end up selling some of the ETH or borrowing against these assets in some COMP or AAVE pool which would charge you a higher interest rate than MKR. How else would you be able to extract the DAI value to be able to deploy into these aggregator vaults? Selling the ETH for DAI means you miss out on price appreciation. Ohm would be essentially long DAI and short ETH forever.

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