@llamaxyz would like to present the following pathway forward for addressing the Bad Debt within the CRV Reserve.
A summary of the key actions:
- Acquire CRV to repay 100% of Bad Debt, $1,877,777.89
- Gauntlet to transfer the insolvency fund to the DAO, $308,118.89
- Consolidate Assets held in v2 Collector Contract, $434,299.61
- DAO retains existing aCRV & AAVE Holding, $339,328.88, $308,118.89 respectively
Note: Values are subject to change with asset price movements within the market.
The DAO is to purchase the full amount of the bad debt within the CRV Reserve via a Bonding Curve with a 2% premium to the Chainlink Oracle price, CRV/USD.
The quantity to be purchased is equal to the variableDebtCRV position in the below wallet:
Quantity: 2,651,906.53507042958070438 CRV
USD Value: 1,877,777.89 @ $0.708106/CRV
Gauntlet is to redeem the stkAAVE and transfer the AAVE to the Ecosystem Reserve Contract once the funds have been withdrawn from the Safety Module.
Quantity stkAAVE: 4,923.6
Value stkAAVE: $308,118.89 @ 62.5800
The following tokens in the v2 Collector Contract are to be Redeemed and exchanged for USDC via a series of Bonding Curves:
To repay the bad debt:
pool.repay(crv, total bad debt, variableInterest, Address)
Total Bad Debt:
Llama believes the CRV position held by the DAO can be considered a strategic asset with the intention of it being converted to veCRV and potentially used to either generate revenues, bootstrap GHO on Curve or direct CRV rewards towards new aToken gauges. At this point in time, we believe the DAO can acquire CRV with USDC, and avoid using the existing CRV holding.
The above proposal enables the DAO to continue to maintain its current CRV position. The DAO is one of the largest Liquidity Providers of CRV on the v2 Ethereum deployment and this liquidity when transferred to v3 will continue to generate revenue as CRV is one of the most sought after governance tokens listed on the protocol.
In addition, @Llamaxyz seeks to Redeem the aTokens shown in the image and then convert these holdings to USDC by deploying a series of bonding curves. The amount of tokens, price, value of each holding and the premium to the Chainlink Oracle applied on the Bonding Curve is shown above. This is intended to consolidate the assets held within the v2 Collector Contract and also partially offset the USDC outflows.