Summary

The assets in OlympusDAO's treasury can be utilized to gain passive yield income for all ohmies. The objective of treasury management is to balance this productive income, with a very conservative risk tolerance policy. In order to move together to achieve an optimal use of our assets, we must lay out a sustainable asset framework.

This framework should enable the protocol to manage our treasury assets with agility, without the need to go through a (lengthy) governance cycle. The proposal laid out below is to give the DAO the mandate to allocate up to 33% of excess reserves into whitelisted protocols approved by the community (currently Aave, Convex, and Sushiswap). Excess reserves are treasury assets which are not used to back OHM currently in circulation.

Motivation

At the time of writing, the treasury holds 92.5m USD worth of tokens in MV. Of this 92 million, only 4.5m or <5% is currently deployed in whitelisted protocols of which:

 4.2m of OHM/DAI LP on Sushi Onsen 
 1m of DAI on Aave 
 333K of FRAX on Convex

This only represents 5% of our entire treasury, leaving a lot money on the table. For example, our Onsen LP already netted us around 670K USD in xSUSHI.

This proposal aims to introduce a framework which would allow the DAO to allocate up to 33% of excess treasury reserves in whitelisted protocols. By proposing a % as opposed to a fixed sum, it will allow the DAO to reduce overhead and numerous votes while still maintaining a conservative approach with regards to our treasury management. This in essence makes the DAO more efficient.

One last important note is that these treasury assets can only be used in whitelisted protocols which have been voted on by the DAO. This currently only includes Aave, Convex and Sushiswap but can be extended in the future.

Proposal

This proposal aims to introduce a framework which would allow the DAO to allocate up to 33% of excess treasury reserves in whitelisted protocols.

Vote

1. For the proposed framework (max 33% of excess reserves)

2. Against the proposed framework

Introduce excess reserve allocation framework

    100% FOR. Let's make that money WORK. It's been idle too long already.

      This shifts the focus for new OIPs to which protocols we should trust, which has always been the important part, while still being conservative with the treasury funds. Let's do it!

      Only if its 33.33% though 🙂,
      (3,3)

      In general I like the spirit of the proposal, and think it is a wise decision to put assets to work in this manner. Will there be specific criteria used to determine which pools we stake in within those protocols? If so, what are those criteria? If not, I think there definitely should be some consideration towards a framework for choosing specific pools within those approved protocols even if it's something as simple as we diversify across the top x pools based on TVL, APR, or some other metric?

      Similarly, there should be a framework for adding future protocols before bringing the protocol to the DAO for a vote. I think these things need to be thought through & decided upon prior to a final vote on OIP-20.

      I know this may seem like additional burden placed on the managers, however, thinking through these things now and having specific criteria & frameworks in place will help to achieve the stated goal of "managing our treasury assets with agility, without the need to go through a (lengthy) governance cycle." It will also help build trust between the asset holders and the managers of the treasury as there will be standards in place. Should something go wrong the managers can attest to the fact that they acted in accordance with the criteria and the frameworks set forth and voted on by everyone.

        Definitely for, but any more reasoning on choice of 33%, or what allocation is still conservative but maximizes passive yield? Since these are excess reserves, why not something a bit higher like 69% (33%33% to make 3,3-ers happy)? The protocol would still have a lot of excess liquidity. And I assume we could quickly withdraw if liquidity is needed.

          Question about the language here. The only whitelisted protocols are AAVE SUSHI and Convex, so would this exclude Curve? Seeing how Convex and Curve go hand in hand I think it would make sense to add CRV to the whitelist, would you agree?

          Go for it!!!!!!! this is a great move forwards!!

          kowboy Mainly to reduce risk. If any of these are exploited we would lose a significant portion of our treasury. Therefor being extremely cautious is key here!

            fiatfill

            Great points, on the whitelisted protocols they will always have to be voted upon! So say we want to add Yearn, a vote will have to be done before we can add to it.

            On which pools we deploy in, it will be mainly DAI or Frax pools for now, no LP of sorts.

              @Pasta brought up a good point on the Discord about other chains.

              Would like feedback around sentiments of this proposal possibly exploring chains outside of L1 ETH.

              My current temperature is that I would only like to consider deploying assets from our treasury on L1 ETH protocols.

              I am for this proposal as it is written.

              What's the definition of 'excess' reserve?