Community Call Treasury Tuesday - February 14, 2023
This week's Treasury call covered stablecoin risks and mitigation strategies, including regulatory news updates and a Treasury Utilization Proposal from the Origin team.
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Treasury Tuesday calls are open-invite meetings to drive the strategy, risk management, and overall discussion for all aspects relating to the Rook DAO Treasury.
To participate in the calls and ask any questions you may have, join our Discord!
To participate in the calls and ask any questions you may have, join our Discord!
View the agenda for this event.
Check out the latest Weekly Treasury Report and the Q1 Labs Budget Request.
News
- Kraken has been forced to shut down their staking program, and must pay a $30M fine. The initial assumption is that the key issue with Kraken’s offering is that Kraken determined the staking rewards, rather than directly passing through variable-rate network rewards.
- BUSD has been classified by the SEC as an unregistered security, forcing Binance to cease minting the stablecoin. Paxos, the issuing entity, is being investigated by the New York Department of Financial Services. [2:16]
Proposals [5:03]
- KIP-36 - Expand Funding and Strategies of Testing Wallet: Originally $600K was allocated to the testing wallet effort. Due to the success in generating yield, an additional $400K in DAI funding is being requested.
- KIP-37 - Discretionary Swapping of Like-Kind Assets: Currently, the treasury must go through the slow governance process to swap like-kind assets. This proposal would mitigate risk by giving the treasury the discretion to swap between stablecoins, Ethereum/ETH derivatives, and Bitcoin/BTC derivatives.
- KIP-38 - Replenishing Discretionary Allocation Fund: This gives the treasury the ability to quickly react to and take advantage of market opportunities in a non-public manner. This proposal would replenish the cap to the lesser of $5M or 5% of the treasury’s notional value.
- KIP-39 - Deployment of Additional ETH for Yield Generation: The ETH yield generation experiment has been successful, so there is a desire to increase the limit to 80% of idle ETH.
- Treasury Yield Management for USDC via USV - This proposal suggests investing 20% of the Rook DAO Treasury USDC holdings in Phuture’s USDC savings vault (USV).
- Labs Budget Request - This request would allocate USDC for Rook Labs through March 2023 in accordance with the official budget.
- Passed: mStable Withdrawal - Due to the precarious future of the mStable project, Rook has terminated their position in the protocol by swapping imUSD funds to USDC. [6:00]
Origin Team AMA [7:09]
- The Origin team chatted with the community regarding the stablecoin risks and OUSD’s mitigation strategies and mechanics.
- The team pointed out the importance of addressing problems with decentralized stablecoins, such as peg maintenance and capital inefficiency. [11:30]
- The Origin team has introduced the OUSD Treasury Utilization Proposal. In order to reduce risk, Origin monitors circulating supply, redemptions, liquidity, and the borrow rates on Aave and Compound.
- Feedback from the community is welcome. Please reach out on Discord with any questions or comments!