Squad: Treasury Department
Date Created: 12.06.2023
- BanklessDAO treasury has 14,693.416 DAI sitting idle
- Deposit DAI in BanklessDAO’s Rari Fuse pool and earn 6.53% APY
After migrating DAO liquidity to Uniswap V3 in early 2022 [here], the DAO was able to create a Rari Fuse pool to enable BANK holders to borrow against their BANK.
What is Rari Fuse?
Winverse wrote a nice piece about it in the 4th June, 2022 issue of the Weekly Rollup(here), but in short Rari Fuse allowed the DAO to create its own money market. [link]
If approved, the follow transaction will be initiated
BDAO multisig would submit a deposit transaction into the rari fuse contract
The treasury department will monitor this position and submit a proposal to withdraw when it is no longer feasible to earn yield from this strategy.
This proposal grants the Treasury Deptment the right to deposit the aforementioned funds into the Rari pool from, and the right to decide and execute the withdraw of such funds back into the DAO multi-sig when judged to be appropriate and necessary for economic or risk considerations.
Risks and disclosures:
- As with anything in DeFi, this strategy is vulnerable to smart contract risks
- The strategy is also vulnerable to loss of value resulting from by high slippage trades triggered by high volatility black swan events
- The rari front end may go down, although this can be mitigated by interacting with the smart contracts directly. The Treasury Department will monitor this and be prepared to exit.
- Gather consensus in the Treasury Department, via poll found here
- Get approval on the forum proposal
- This proposal is presented as a patch as it does not alter the constitution
- Take to Snapshot for final ratification
Great to see us putting our treasury to work!
- didn’t Rari shut down? If so does this create additional risk for our DAI?
- could we add the ability for the treasury Dept to withdraw as they decide IN this proposal so we don’t have to get full consensus when it’s time to pull out?
They closed their doors on any new loans, but the smart contracts are still functioning.
This means that those that took out a loan still need to pay it off, generating the yield you see above.
So no more risk beyond general smart contract risk.
Love the idea, so we can more closely monitor it!
We will update shortly.
You will be updating the current proposal with a withdrawal mandate?
I had the same question. Thanks for the clarification @Icedcool.
And great idea with the withdrawal permission. I have voted yes and would also support the withdrawal permission if added.
Based on feedback from @links and @Bananachain the following text was suggested here and is now added to the proposal
gm frens! Stoked to see the convo about putting treasury assets to work. What kind of yield on DAI from an OG like Compound or Aave? Assume it’s small, like 1%, but I’d like to see some comps from more battle-tested protocols. Thanks!
Yea it is extremely trivial unless we compound it or expose ourselves to more smart contract risk.
Here is Spark:
The benefit with the Rari pool, is someone is winding down their loan with BANK in there, and so we assist with their interest rate, while also supporting the health of the smart contract loan.
sweeet, thanks for the info on how Rari deposit is also helping BANK holders!
What’s the probability of this happening? Is there something (or could there be something in place to protect against this?) possibly the idea that you guys added (give treasury the right to withdraw without a follow up proposal)
I Totally need this, and could be great if we also can stake liquidity from our subDAOs.
Thanks for proposing this @Jengajojo, agree that we should get all DAO units’ treasury working.
For the Marketing Department you proposed using the MakerDAO DAI Savings Rate Module.
What is the difference between the Rari and MakerDAO? Would it be possible to consider MakerDAO also for the DAO Treasury?
It would be interesting for Treasury Department to take the lead in working the DAO’s crypto so that other units could learn from this experience and implement them too.
Rari is an isolated money market, Maker is collateralized debt protocol
if we deposit everything into rari, then the interest would be much lower, which is why I suggested MakerDAO. Maker offers a lower yield than rari at the moment.