[ARFC] Acquire CRV with treasury USDT
Our vote: Nae
Rationale:
This forum post proposes an OTC transaction where the DAO allocate 2M USDT from the treasury to obtain aCRV from the Curve co-founder 0x7a16ff8270133f063aab6c9977183d9e72835428.
What does this proposal tries to achieve:
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improve GHO liquidity by locking the acquired 5M CRV tokens to gather Curve voting power and support a GHO-specific Gauge
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de-risk Michael’s position by paying off some of his debt.
We do not think this proposal is effective at achieving any of its goals.
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Risk:
i. Instead of de-risking, the proposal just transfers the risk from the safety module to the DAO treasury, even though the safety module is intended to absorb the risk of bad debt.
ii. 2M is small compared to the amount of debt that the user has, so his position would not be de-risked meaningfully.
iii. Aave treasury is and has been operating at a loss, we should not be acquiring more risky assets. The treasury is meant for wealth preservation, not speculations.
iv. Although the CRV would be acquired at a discount, any gains are unrealized and on paper only. We do not know the future market conditions should we try to sell the CRV. -
GHO liquidity
i. It is not clear that acquiring CRV is the most effective way to boost GHO liquidity. As TokenLogic pointed out, veCRV supply has been diluted substantially recently due ot OTC deals, and CRV inflation is scheduled to reduce by 15%.
ii. The proposal provided no analysis of how the OTC deal could impact GHO liquidity, and no comparison of how CRV compares of Balancer. -
DAO’s purpose:
i. It’s not good precedence for the DAO to engage in opportunistic speculations. we think the DAO should focus on growing the Aave protocol and preserving the treasury’s wealth.