Since this is such an important topic in Lido governance & since it had a lot of participation, I want to give a summary of what’s been discussed here and add a few comments/pointers. Hope it’s helpful.
Part 1:
1. Data, Reporting, Auditing
As many have brought up, having clear data on Lido’s expenses is a crucial first step towards making treasury decisions.
1.1. As per @McNut, @Aes, @gmo477 and others: we should get a burn rate and consequent runway (both before and after taking revenues into consideration).
These are some of the core metrics in any startup ou growth stage company outside of crypto, so I agree they should be priorities.
McNut and Aes mentioned they’d be working on some of this financial reporting:
Would love to know if there has been progress you could share here!
1.2. Another generally agreed upon point is that we should get a breakdown of expenses by group, type and denomination.
On a monthly or quarterly basis, how much does Lido spend on salaries by area, on LEGO, on incentives, and on other opex (and which expenses are in stables, ETH or LDO).
-(@timbeiko and @Aes brought up this point)
1.3. I think we can and should learn from a select group of other DAOs in this regard. A couple of interesting things Yearn, Maker and Aave have done when it comes to reporting:
Yearn’s Q4 2021 Financial Report
- Includes a detailed income statement, precise operating expenses, margins, revenue growth, balance sheet (treasury), etc
Aave’s Treasury Report - By Llama
- Includes P&L statements by chain, reserves breakdowns, a “token flow statement”.
- Has a (very strong) associated treasury analytics dashboard for real time monitoring and analysis.
MakerDAO’s Core Unit Budget Framework, an example of a budget proposal, and a MakerDAO SES class on budgeting in a DAO
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I think we should strive to get a dashboard and some (doesn’t have to be too extensive at the start) regular reporting.
As pointed out by @kadmil, this could be started by an in-house treasury management team or by engaging an external team.
2. External Teams and Services
Another topic that came up often in this thread was the possibility of engaging external teams for advisory or services. Quick recap of teams mentioned here:
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**Karpatkey: manages one of the largest treasuries in DeFi (Gnosis DAO).
– @claberus has put forth strong, concrete options for treasury allocation in his post here. Also mentioned that Karpatkey was already putting together a proposal to manage a part of Lido’s treasury. It would be great to look at it here once finished! -
Reverie: provides services to DAOs “helping design and implement strategies that allow them to grow more quickly”.
– @gmo477 Has also provided great overall comments in this thread and suggested Reverie could help with treasury sales. -
Solv Protocol & @dingyimang proposed a $10m bond issuance for Lido.
– The proposal and some extensive comment on its terms can be found in its post: Propose $10M Bond Issuance for Lido. -
Porter Finance & @Jordan also suggested issuing a zero coupon bond collateralized by stETH with them. Link.
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I think the community should continue to engage with these teams since they may have/have specialized expertise on these topics.
However, I’d love if we could get more concrete proposals & terms from them here on the forum.
Especially interested in looking at fleshed out treasury management or treasury diversification proposals.