I support a relatively small foray into finding conservative interest-bearing opportunities for treasury assets. I would love to see our risk-free value continue to increase and know that, in a year's time, that RFV will be much higher. That's the main goal....feeling confident in a floor for OHM. That said, AAVE is as safe as it gets for conservative strategies such as this....so I'm for it at 5-10% of treasury assets.

Churchee personally a fan of this. aligns with 10% number others are throwing around and who doesn't like a meme number to give a precise target?

    xh3b4sd 10% is max from my pov

    xh3b4sd we should not do more than 10% at a time so that we can have a look at the situation. We can come back and re-evaluate. This is the most prudent thing to do from a policy perspective IMO.

    100%agree

      I think 10% is more than enough risk/reward for yield. Don't forget, it may only be $800k for now, but if sometime in future the treasury gets to like $100mill we'd be trusting alot of money with aave, and could be an opportunity cost if we use too much % on 1 protocol. Could be interesting to see if we could add Dai liquidity to our own fuse pool for higher % and ohmies pay the interest if they wanna borrow against sOHM 🤔 just thinking out loud

      There is general problem here that we need to untangle before we can think about deploying reserves at all.

      I take it we all agree that we should only be playing with excess reserves. However, the amount of excess reserves is constantly fluctuating due to the relation between inflow to the treasury and increase in circulating supply. For example, suppose you allocate 10% of excess reserves to Aave, but then bond sales drop off and excess reserves shrink. We may now find ourselves with a 20% allocation to Aave.

      So at best, any allocation of excess reserves will require a good deal of active management, or settling how often we will rebalance our portfolio, so to speak.

      Also, excess reserves will be determined in part by the APY for stakers, as this will largely determine the rate of circulating supply increase. So my sense is: we need to first figure out what we want for a long term sustainable APY. Only then can we make informed decisions about how to deploy the Treasury.

      It really depends on the strategy for the treasury, IMO. How much % of the excess DAI treasury are we planning on depositing on external protocols? I don't have a good suggestion for that yet.

      However, depositing 1/5 of that amount on Aave seems justifiable. It is the biggest player in the space, so definitely a significant amount IMO. But there should still be room for more of the big protocols, without the scale leaning too much towards Aave.

      √(69/420)3,3 = 0.05078549275 ≈ 5.08 % ≈ 355.498 DAI
      √(420/1337)3,3 = 0.1479941359 ≈ 14.8 % ≈ 1.035.959 DAI

      I'm not a fan of going beyond 10 % of the total excess DAI, though. But it might also be interesting marketing wise? Not sure.

        Zeus
        First I agree with the ball park number of 10%.
        As far as meme goes I would suggest:
        10.288 = cube_root(33)* cube_root(33)

        tex I agree with the idea and in my view the allocation shouldn’t be large at this stage. Anything in excess of 15 percent will be too high. My general preference would be to have the treasury allocation at 10% as a starter.

        Great job for spearheading this, tex. Agree with starting small and re-evaluating. 10%.

        In favor of this in a general sense. As earlier commenters have expressed, I'd prefer to begin with a conservative allocation (relative; perhaps 10%) and increase after an initial evaluation period if the DAO decides it's in the treasury's interest.
        It would be helpful to discuss other near-term plans or general strategy for excess reserves to better understand how AAVE would fit in to the larger plan. Whatever minimizes risk for OlympusDAO and assists in raising OHM's RFV should be considered!

        This is indeed a great initiative. As of the treasury allocation, I agree with those who have expressed conservative numbers (someone said 2sqrt(33) which is ~ 11.5% and a reminder of our favorite meme).
        We want to diversify to mitigate the protocol risks, so we have to keep in mind that we will come up more partnerships in the future (remember the rari fuse pool that is being discussed ).
        Also I think that it would be smart to always save some gunpowder in the treasury, which would give us flexibility and reaction capabilities in case of a blackswan. So if we want to keep building partnerships in a sustainable way, I wouldn't exceed 15%.

        Thanks for the good initiative!

        xh3b4sd I concur. In the future I would also make different % allocations to other protocols depending on the risk they pose (eg RGT). 10% seems like a good place to be but I would refrain from scaling higher in the short or medium term.

        around 10% seems reasonable here ...