# Should LidoDAO sell treasury ETH?

**URL:** <https://research.lido.fi/t/should-lidodao-sell-treasury-eth/3868>\
**Category:** Proposals\
**Created:** [February 13, 2023, 9:42pm UTC](https://research.lido.fi/t/should-lidodao-sell-treasury-eth/3868 "2023-02-13T21:42:18Z")\
**Posts on this page:** 1\
**Showing post:** 1

<div class="post-metadata">

**Author:** ![steakhouse](https://dub1.discourse-cdn.com/flex013/user_avatar/research.lido.fi/steakhouse/32/1878_2.png) [@steakhouse](https://research.lido.fi/u/steakhouse)\
**Post date:** [February 13, 2023, 9:42pm UTC](https://research.lido.fi/t/should-lidodao-sell-treasury-eth/3868/1 "2023-02-13T21:42:18Z")

</div>

**LidoDAO Treasury Choices**  
We’ve launched three other treasury-related proposals aiming to obtain a clear signal from LDO token holders regarding basic principles for how the DAO should manage its treasury.

1. [Should LidoDAO stake treasury ETH?](https://research.lido.fi/t/should-lidodao-stake-treasury-eth/3869/6)
2. [Should LidoDAO sell treasury ETH?](https://research.lido.fi/t/should-lidodao-sell-treasury-eth/3868/6)
3. [Should LidoDAO diversify its stablecoin holdings?](https://research.lido.fi/t/should-lidodao-diversify-its-stablecoin-holdings/3876/2)
4. [Should LidoDAO sell protocol surplus stETH to finance operating expenses?](https://research.lido.fi/t/should-lidodao-sell-protocol-surplus-steth-to-finance-operating-expenses/3880)

| 13-Feb-2023 | [Lido DAO Voting UI](https://mainnet.lido.fi/#/lido-dao/0xb9e5cbb9ca5b0d659238807e84d0176930753d86/) | Deployed to service entities | Total USD Value at spot |
| --- | --- | --- | --- |
| ETH | 20,304 | - | ~30.1m |
| DAI | 17,522,386 | 2,621,354 | ~20.1m |
| stETH | 6252 | - | ~9.2m |
| USDC | 366 | 274 | ~0.0m |
| Total | | | ~59.4m |

## Context

- Based on the December and January [run-rates for expenses](https://research.lido.fi/t/rcc-3-lido-1-introduction-to-the-resilience-roadmap/3446/4), we are on-track to a total run-rate of **1.3m to 1.5m USD a month** with a new budget for the period May through December due in the coming weeks.
- In the meanwhile, this proposal aims to answer the question: should LidoDAO increase its allocation of stablecoins in the Aragon treasury relative to ETH or stETH, in order to preemptively secure additional runway in current market conditions?
- We had additionally scoped out options for opening collateralized debt positions against ETH or wstETH in Treasury in order to conserve long-term upside in ETH appreciation at the expense of lower liquidity upfront
  - These options are not in the proposal just due to the operational complexity of executing them through Aragon and maintaining and supervising an adequate health ratio
  - Should there be enough demand for it in the comments period we could include a CDP option in the Snapshot poll
  - For instance, at MakerDAO\*, Lido could obtain fixed and predictable stability fees:
    - e.g. 10k ETH, ~15m DAI at 300% CR would deliver ~5m DAI in liquidity for an annualized interest expense of 0.5% in the wstETH-B vault
    - Other views/vaults/protocols are also welcome

- Proposed execution through Cowswap at stable price parameters over a week or two weeks

Look forward to hearing views, alternative options and other thoughts and comments.

Final options on Snapshot execution may vary slightly.

## Options

1. Yes, sell 10k ETH
2. Yes, sell 20k ETH
3. No, do not sell

| | Pros | Cons |
| --- | --- | --- |
| **Yes, sell 10k ETH** | Set and forget about one more year of runway | Locks in an ETH price level today, which may not be the most favorable positioning wrt ETH |
| **Yes, sell 20k ETH** | Set and forget a longer time frame in stablecoins | Increased exposure to stablecoins relative to ETH, decreased exposure to potential upside on ETH |
| **No, do not sell** | Keeps basic long exposure to the price of ETH, could revisit at a better moment | Loses the optionality to lock in a USD value for runway |
| _Collateralize 10k ETH for USD_ | _Keeps optionality open for repaying appreciating collateral at a cheaper price_ | _Could result in forced selling at worse prices if liquidations are hit, requires active management which is difficult on-chain. DAO can’t effectively manage the position without low capital efficiency or an extra trusted third party which may be undesirable and/or costly_ |

\*_a protocol where SteakFi members also contribute to as the Strategic Finance Core Unit_

---

_[View the full topic](https://research.lido.fi/t/should-lidodao-sell-treasury-eth/3868)._