[TEMP CHECK] Treasury Management - Introducing StrategicAssetManager

Governance
1

title: [TEMP CHECK] Treasury Management - Introducing StrategicAssetManager
author: @Llamaxyz - @TokenLogic, @dydymoon & Fermin
created: 2023-07-05

Summary

The StrategicAssetManager is a dedicated contract for managing Aave DAO’s strategic assets. At launch the StrategicAssetManager will manage the DAO’s veBAL holding.

Motivation

Aave DAO is soon to attain a veBAL holding. To maximise the upside for holding the strategic asset, the DAO needs a practical means of managing the asset.

The veBAL holding needs to be continually relocked to optimise goverance and rewards. Gauge votes are weekly and would require numerous AIPs to manage the veBAL effectively. Aave DAO also has an opportunity to participate in Balancer’s governance on Snapshot votes via delegating governance rights.

The StrategicAssetManage will also hold the sdCRV position if approved by AIP. Yield generated from each strategic holding can be claimed, swapped and redeposited to compound into each strategy over time. The swaps have MEV protection and can be customised to have defined maximum amount of price impact.

Given the sheer volume and frequency of transactions to be performed, there exists a desire to minimum AIP votes. The StrategicAssetManager contains the ability for the ShortExecutor to assign an AssetManager. This role can be likened to a Treasury Committee (as suggested Part 4 of SM upgrade publications) and provides the DAO optionality to introduce a committee separte from this proposal once adequate guidelines are in place.

The contract contains an allow list which implements tight restrictions around which contracts the AssetManager role can interact with. Further definition relating to what the AssetManager can do will be defined in the [ARFC] publication.

Specification

The below provides a high level overview of the functionality provided by the StrategicAssetManager:

  • Deposit/withdraw voteEscrow contract
  • Lock/relock B-80BAL-WETH
  • Participate in gauge votes
  • Delegate governance voting rights
  • Allocate boost
  • Update boost
  • Delegate boost
  • Allow boost on Warden
  • List boost on Warden (if the DAO votes for it)
  • Claim protocol fees & other rewards
  • Transfer assets (ie: collector contracts)
  • Ability to lock other strategic assets
  • Receive assets from the collector
  • Receive assets from the Economic Reserve

The contract is upgradeable and controlled by Aave’s Short Executor role via governance. Each function on the contract can be implemented via the ShortExecutor whilst also having the ability to assign and remove, a AssetManager role to a community elected address. There is also the possibility of having an IncentiveManager contract that could take on some of the listed functions defined above. These details will be worked through in the future.

Next Steps

Upon recieving a favourable Snapshot vote, @llamaxyz will continue finalising the payload in preparation for submitting to @BGDlabs for peer review. An [ARFC] post will be shared and progressed through governance. The [ARFC]
publication will provide greater insights to the functions on the contract and the Treasury Committee will be a separate [ARFC].

Disclosure

@llamaxyz is a service provider to Aave DAO. Llama is not presenting this ARFC on behalf of any third party and is compensated by only Aave DAO for creating this ARFC.

Copyright

Copyright and related rights waived via CC0.

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Would be great to have a treasury mgmt committee that handles the daily decisions/actions for the DAO. Thanks for the post.

You have a good history of communication about your actions to the DAO and I think it would be a good idea to include in this proposal where that transparency will live and what expectations the DAO should have about what will be communicated.

Your specifications on functionality of the StrategicAssetManager are helpful but these three seem a bit broad to me. I understand they might be necessary but if included, I think it is important to clarify which kind of decisions/actions are clearly under the committees purview without needing DAO approval and where the DAO would like to draw the line on the decision/power allocation.

As a suggestion: I think the DAO should allocate a certain about of tokens to the committee with a specified goal, and any new allocations go through governance. This mainly is referring to the Claim Protocol Fees capability. Similarly, assets that can be locked should either require optimistic consent (2 week communication during which the DAO can veto, can be off-chain). Open to others but would like to avoid micro-managing while still keeping the committee accountable to the DAO.

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Hi @John_TV_Locke,

The ShortExecutor will need to transfer assets from the Treasury to the StrategicAssetManager contract and this can only be performed via a governance vote. Therefore, the StrategicAssetManager contract can only host assets that the DAO approves and it acts to segregate strategic assets from non strategic assets. At launch the only strategic asset is veBAL. Perhaps sdCRV will be added in time.

The ShortExecutor can assign the AssetManager role to an address. The initial AssetManager is likely to be focused on GHO liquidity management. If Aave DAO was to passively hold assets like LSTs, then these assets are better held in the Treasury and not in the StrategicAssetManagement contract. If the DAO was to consider Protocol Owned Liquidity, this could be held in the StrategicAssetManagement contract or a separate contract. The Boost from the DAO’s veBAL holding can be delegated to another contract which means the DAO doesn’t need to hold BPTs in the StrategicAssetManagement.

Whilst we support assigning the AssetManager role to a multi-sig, we believe more discussion should be had around how the DAO should structure its funds.

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