Title: [ARFC] Treasury Management - Convert DAO awETH Holdings to Liquid Staking Tokens
Author: @marczeller - Aave Chan Initiative
This ARFC proposes to convert part of the DAO’s current wETH holdings into liquid staking tokens (LSTs), specifically stETH and rETH, to improve yield. The DAO’s current holdings are 1561 wETH, earning a yield of 2%. This proposal aims to convert 50% of these holdings to astETH (currently earning 6.8%) and 30% to arETH (currently earning 5.75%). This change can be implemented directly, slippage-free, and on-chain via an AIP.
The motivation behind this proposal is to increase the annual yield for the DAO. Currently, the DAO earns a yield of 2% on their awETH. By converting a portion of these holdings to astETH and arETH, the yield could be significantly improved.
The following table compares the current annual yield in ETH with the projected yield following the implementation of this proposal:
|wETH (2% Yield)||stETH (6.8% Yield)||rETH (5.75% Yield)||Total Yield||Net Gain|
|Current (100% wETH)||31.22 ETH||0 ETH||0 ETH||31.22 ETH||0 ETH|
|Proposed (20% wETH, 50% stETH, 30% rETH)||6.244 ETH||53.074 ETH||26.92725 ETH||86.24525 ETH||55.02525 ETH|
As per the table above, implementing this proposal could result in a net gain of 55.02525 ETH for the DAO.
Please note that this is an estimation for information purposes. Yield can vary with market conditions, and actual revenue may differ.
The proposal suggests retaining 20% of the DAO’s holdings as wETH. This strategy allows for the onboarding of other decentralized LSTs in the future, offering further potential for diversification and yield optimization.
This proposal does not consider converting any portion of the DAO’s holdings into cbETH. As a centralized asset, cbETH does not align with the DAO’s commitment to decentralized solutions.
The author of this proposal owns stETH & rETH, but no LDO and small holdings of RPL intended to be used to deploy mini-pools. The author has no links with and did not receive any payment from Lido, Rocket Pool, or any other third party to publish this ARFC.
- Gather community feedback and reach a consensus.
- Publish snapshot vote.
- If the snapshot vote outcome is YAE, publish AIP.
By converting a portion of the DAO’s awETH holdings into astETH and arETH, the DAO improves the DAO’s annual yield. This proposal outlines a strategy that not only increases yield in the short term but also allows for future diversification and yield optimization opportunities.
This work is licensed under the Creative Commons CC0 1.0 Universal License.