Proposal: Reallocating Mangrove Treasury

🗳 Governance temp check
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Proposal: Reallocating Mangrove Treasury

Introduction

Since the initial fundraise, Mangrove Governance has been holding USDC until recently moving funds into a vault earning a small APY. To optimize our treasury for better growth and yield, we propose reallocating our assets between ETH and USDE.

Proposal

We suggest adjusting the Mangrove DAO treasury allocation to capitalize on ETH’s potential outperformance expected in Q1 2025 and to benefit from USDE’s attractive yield ranging from 12% to 20%. The proposed allocation options are:

  • Option 1: 70% in Ethereum (ETH) and 30% in USDE
  • Option 2: 50% in Ethereum (ETH) and 50% in USDE
  • Option 3: (My favorite) 40% to ETH, 40% in USD0 in Pendle Vault to farm PILLS,
    20% in sUSDE

Rationale

  • Ethereum (ETH): Anticipated to have significant growth potential, which could substantially increase the treasury’s value.
  • USDE: Offers high yields between 12% and 20%, providing a steady income stream to support DAO operations.

Benefits

  • Growth Potential: Holding ETH positions the treasury to benefit from potential price appreciation.
  • Stable Income: Investing in USDE allows us to earn substantial yields, enhancing financial stability.
  • Diversification: Balancing between ETH and USDE mitigates risk and optimizes returns.

Implementation

  • Asset Reallocation:
    • Convert current USDC holdings to achieve the chosen allocation between ETH and USDE.
    • Use reputable exchanges to minimize fees and slippage.
  • Yield Optimization (USDE):
    • Invest USDE in secure platforms offering the best available yields.
  • Security Measures:
    • Store assets in secure, multisignature wallets.
    • Regularly monitor investments and adjust as necessary.

Decision Required

We invite the community to vote on the preferred treasury allocation:

  • Option 1: Allocate 70% to ETH and 30% to USDE
  • Option 2: Allocate 50% to ETH and 50% to USDE
  • Option 3: (My favorite) 40% to ETH, 40% in USD0 in Pendle Vault to farm PILLS,
    20% in sUSDE

Next Steps

  1. Community Feedback: Share your thoughts and preferences on this proposal and also any strategy to better maintain the treasury and growth it.
  2. Governance Vote: Conduct a vote to decide between the two allocation options.
  3. Implementation: Reallocate the treasury according to the chosen option.
  4. Monitoring: Continuously review the treasury performance and adjust strategies as needed.
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As per Mangrove’s ratified Governance Process, formal proposals are submitted by the Councils. As a result, we removed the MIP numbering of this proposal and recategorized it as a temp check item.