Should LidoDAO stake treasury ETH?

Proposals
1

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?
  2. Should LidoDAO sell treasury ETH?
  3. Should LidoDAO diversify its stablecoin holdings?
  4. Should LidoDAO sell protocol surplus stETH to finance operating expenses?

Context

  • LidoDAO holds 20,304 ETH in treasury since 2021, following the first Treasury Diversification Round
  • The protocol has held on to these through thick and thin during various stages of development of the core product
  • With withdrawals on the horizon, has the time come to stake it in Lido, exchanging it for stETH?
  • The DAO could choose to do other things with its holdings, including sell it but this proposal is not exclusive to it, i.e. token holders could decide to sell 10k ETH and stake the rest, for e.g.
  • What should the DAO decide to do with any unstaked ETH it holds on the Aragon contract?

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

Final options on Snapshot execution may vary slightly.

Options

  1. Yes
    a. As soon as possible
    b. As soon as withdrawals are enabled
  2. No
Pros Cons
Stake 20k (or whatever is left if we sell) Dogfoods the protocol with up to 20k ETH Risks not having ETH on hand in case of need
Do not stake the 20k (or whatever is left) Holds on to the world’s hardest currency for a little longer Opportunity cost for protocol rewards
7 Likes
2

Hold a % as unstaked ETH, stake a % of the ETH, and pair some of the ETH with stETH to provide liquidity in the curve pool (and potentially other protocols).

2 Likes
3

% could be possible. @kadmil to confirm but we could structure the poll as % allocated between various options, including the above, and we pick the top 2 or 3 outcomes and distribute the % accordingly.

i.e. if voters are asked to allocate 100% between five options with the top 3 winning as follows

A. [45%]   Stake as soon as possible
B. [30%]   Stake after withdrawals
C. [12.5%] Curve pool
D. [10%]   Do not stake
E. [2.5%]  Buy NFTs

Cutting off the top 3 would mean:
45/87.5 = 51% gets staked immediately
30/87.5 = 34% gets staked after withdrawals
12.5/87.5 = 15% gets allocated to the Curve pool

On Curve pool this is certainly possible but would just point out would be a drop in the bucket for liquidity

image

What do you think?

1 Like
4

Yes, the curve pool as of now wouldn’t see a big change. My idea is after withdrawals are live, the protocol could start with the curve pool (other protocols can be approved), and in the long term could provide enough liquidity for big institutions/holders that want to skip the withdrawal queue. The DAO would earn an income from it, we could reduce LDO incentives and help pools/oracles.

2 Likes
5

I’d rather settled on reasonable proportion as one of snapshot options — can’t tell whether it makes sense to define the proportion as voting weights.

3 Likes
6

Idea is to allow a broad list of options and narrow it down to the 2-3 largest items to make sure the majority opinions are clearly captured in the final execution. i.e. if ‘Buy NFTs’ gets 2% its not nothing but it’s clearly less relevant to token holders than 30% stake 40% LP 20% something else. The ultimate proportion allocated (for whatever ETH is in the treasury) would be something that reasonably maps onto this set of preferences.

1 Like
7

Yes, stake a % of ETH asap (do not sell) to generate yield that finances Lido DAO Ops. Once withdrawals are enabled, we could stake closer to 100% of ETH.