Aave - Treasury Report

Authors from Llama: @MatthewGraham, @Elliott and @MSilb7.

Llama is glad to present the very first Aave Treasury Report. A fresh Treasury report will be published here each month providing insight into performance of Aave. Live tracking data is available via the Dune Dashboard.

The Financial statements are set out per reserve showing the income generated from the start of 2021 along with expenses (not that there are many).

We have also presented a token flow statement. It should be noted that this combines all reserves, but for clarity we have split out each reserve into its own statement and provided a consolidation to show the total movement.

We are working to build out a balance sheet for our next iteration of this report and we welcome any feedback.

Aave_Financial_Report_August_2021.pdf (307.9 KB)

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Hi everyone, building on Matt’s update, more info on the Dune dashboard can be found in this forum post: Launch Announcement: Aave Treasury Analytics Dashboard by Llama

You can bookmark this dashboard link for daily updates, it’s set to a view of the trailing 90 days: Dune Analytics

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Matt, thank you very much for sharing it. I wonder do you use any kind of policy or whitepaper? What is the treasury report basis on? Is there any kind of management policy or treasury management policy?

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Authors from Llama: @MatthewGraham, @Elliott and @MSilb7.

Aave - September Financial Results.pdf (3.0 MB)

Llama is excited to present our second iteration of the Aave Treasury Report. A fresh Treasury report will be published here each month providing insight into the performance of Aave, eagle eyed viewers will see this month some design changes too. Live tracking data is available via the Dune Dashboard .

The Financial statements are set out per reserve showing the income generated from the start of 2021 along with expenses.

We have also presented a token flow statement. It should be noted that this combines all reserves, but for clarity, we have split out each reserve into its own statement and provided a consolidation to show the total movement.

We are working to build out a balance sheet for next quarter. We welcome any feedback or insights you would like to see for next month.

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Hi @Elliott, amazing job on the report.

Could you comment on how you calculate the “Revenue generated” on slide 3? Also, will you include Avalanche deployment too this upcoming month?

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Bravo @Elliott, @MatthewGraham and @MSilb7
This is great work
Do you know if anyone looked at forecasting the key metrics into the future to come up with some kind of plan. Say for the next 12 months?

@JeremyKeating this is a particularly interesting idea.

Financial reports, while important for telling stories of the past, give more color on the future health of the company or organization. I believe this standard could be applied to crypto.

Assuming discount rates and applying them to current cash flows could be an adequate way to model this. Take a DCF (discounted cash flow) as an example:

To accurately complete this calculation it would require years (or in this case) months of data.
DCF’s are a popular way to evaluate the future value of an investment.

Borrowing this idea from traditional finance, modeling would allow for more robust due diligence and investment decisions. $AAVE token holders would become more informed and set expectations for the core team and protocol. By doing so it would more closely tie the token valuation to the TVL, revenues, and health of the protocol. Establishing regular financial reporting would become a competitive advantage and would further Aave as a luminary in the industry.

An important integration would be to make sure all protocols are operating off of the same methods of financial reporting.This has been a challenge of crypto and is something regulators, accountants, and investors have yet to figure out. By doing so it would create a baseline which would allow for the comparison of different DeFi protocols.

Are we comfortable with advocating for Llama’s services adopted across other treasuries? What is the best cadence for reporting? Monthly? Quarterly? Or something different? By doing so is it encouraging the proliferation of algorithmic trading and bots for DeFi tokens?

If no - are we aware of any DAO’s or companies that are doing this internally? The answer may be yes and these records should remain public for users to see. This is the goal and epitome of decentralization; to provide more transparency and trust within the community.

These are the questions I consider in terms of next steps and need for the protocol. It will be interesting to see how the release of ARC will contribute to Aave’s revenue.

@MatthewGraham - to do so would it require more resources? If so, this may be a worthwhile grant from the protocol and we would support a proposal requesting additional funding.

Please keep us in the loop as you continue to provide more transparency and finance to major DeFi protocols. In blockchain, we believe success is communal and we remain excited for the future of Aave.

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Hi @fig - good to get your perspective on this
tbh this goes beyond what I was thinking… in a good way
My first thought was to get an idea of what we have already committed to spending over the next say 12 months and what we expect to receive in revenue. I read on another post some concern about the speed of spending and it would be good to understand this. Just a sort of general getting a handle on expected future cashflows in and out.
But taking this further to what I would call a mid-term plan (say 5 yrs) is a great idea. Then also applying dcf to get an understanding of a valuation of the value of the protocol and token. This is a robust financial analysis and very helpful. Useful to do this with different risk rates to understand the potential outcomes
I think establishing regular financial forecasting of business cashflows would be as you say a competitive advantage.
It is something I do in my own profession so maybe the risk dao should look at this when we are up and running. It is a key indicator of future sustainability. Or perhaps it is something I can help with separately

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Authors from Llama: @MatthewGraham, @Elliott and @MSilb7.

Aave - October Financial Results.pdf (2.0 MB)

Llama is excited to present our third iteration of the Aave Treasury Report. A fresh Treasury report will be published here each month providing insight into the performance of Aave. Live tracking data is available via the Dune Dashboard .

The Financial statements are set out per reserve showing the income generated from the start of 2021 along with expenses.

We have also presented a token flow statement. It should be noted that this combines all reserves, but for clarity, we have split out each reserve into its own statement and provided a consolidation to show the total movement.

October has seen great performance with revenue growing month on month. Key takeaways are:

  • Total treasury balance $753.82m
  • Ethereum Network V1/V2 revenue up 24.8% from September to $5.16m
  • Polygon Network revenue up 31.1% from September to $953k

Please do let me or one of the members at Llama know what you would like to see in the next iteration of this report.

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