TMC-3: stSOL repatriation proposal

TMC-3: stSOL repatriation proposal
Strategy Complete the sunsetting of Lido on Solana by repatriating the remaining 13k stSOL to Lido Aragon Agent on mainnet
Objective Recover accumulated SOL by seeking best execution for a sale to USDC and transferring to Lido Aragon Agent with minimal counterparty risk
Intended on-chain action Deploy a Solana Squads multisig to receive stSOL from the Solana Treasury Multisig. Unstake stSOL to SOL. Seek best exection for a sale of SOL to USDC either through an OTC desk or through a DEX. Transfer USDC to Lido Aragon Agent.
Impact on treasury liquidity WIll transform stSOL holdings to USDC for use in grants and funding
Execution complexity Unstaking stSOL with the legacy tools made available in the sunsetting docs may face some technical complexity for signers. Minimizing counterparty risk during the sale and transfer is a priority
Maintenance complexity and overhead None, one-time action
Summary of possible risks - Unstaking process depends on sunsetted protocol
→ docs and sunset functions are still maintained
- Counterparty exposure during transfers and swaps
→Committee will evaluate the balance between best execution and counterparty risk and determine the best course of action to prioritizing risk minimization
Summary of potential benefits - Ability to update and maintain stablecoin runway from the surplus generated by the protocol
Compliance with Treasury Management Principles Yes
Proposer Steakhouse
Agreement Pending from TMC poll
Perform Steakhouse
Input Pending from community
On-chain execution stage Proposal
Other notes - Lido on Solana has been sunset since a DAO vote
- Approximately 14k SOL remain on the DAO treasury on Solana which will be repatriated to the treasury to Aragon Agent on Ethereum as USDC
- The Solana Repatriation Committee (SRC) multisig will evaluate at the time of execution whether to execute the transaction through an OTC desk or through a bridge directly into Aragon
- No part of the SRC multisig will retain any spread and the best execution for the sale will either be guaranteed by DEXes on Solana or by an OTC desk selected
- The amount of SOL to sell will be calculated based on the prevailing SOL price at the time, the TMC will not try to ‘time the market’
- This motion does not affect the ability of the DAO to employ other strategies or Aragon votes directly to raise stablecoins

Reference links

Execution

  • TMC proposes executing the sale for USDC, avoiding taking a view on market conditions
  • To support faster execution while still retaining security over Treasury assets, proposal will signal to Solana Treasury Multisig signers to transfer stSOL to a new 4/7 Solana multisig operated by DAO contributors, organized as a temporary Solana Repatriation Committee that will dissolve once the operation has been completed
  • One of the multisig signers will deploy a self-hosted unstaking widget instance to be able to coordinate the transaction execution through a multisig wallet
  • Once secured as SOL, the Solana Repatriation Committee will weigh options for completing the sale:

A: DEX + CCTP Bridge

  • Using whatever DEX offers best execution in lot sizes that minimize price impact
  • Using the Circle native CCTP bridge to transfer USDC directly to the Lido Aragon Agent address on Ethereum mainnet

B: OTC Desk + Transfer

  • Using whatever OTC desk offers best execution to secure USDC on Mainnet
  • Transferring from a Mainnet Solana Repatriation Committee Multisig to the Lido Aragon Agent address
  • Indicatively, the below show quotes on a consistent rate basis, with estimated price impact from Jupiter and two OTC desks:
Option Platform Rate Conversion Amount (SOL) Indicative Fees/Price Impact Total received Total Received (token)
SOL to USDC Jupiter 143 13800 0.40% 1,965,506 USDC
SOL to USDC Quote 1 143 13800 0.25% 1,968,467 USDC
SOL to USDC Quote 2 143 13800 0.50% 1,963,533 USDC

There are pros and cons to either approach:

Rationale Tradeoff
3rd party legal entity coordinates execution with OTC desk Likely better price execution with 20-25bps range spread Trust assumption during the process required in 3rd party legal entity and in the OTC desk selected
Multisig signers execute swap through a DEX and bridge No trust assumptions required with 3rd party legal entities Some trust assumptions necessary for bridging

The Treasury Management Committee proposes to create a Solana Repatriation Committee with delegated authority to complete the Lido on Solana: Sunset proposal to choose the best execution they deem appropriate with a 4/7 threshold, taking into consideration risks and tradeoffs associated, and will describe the outcome in a post-mortem including the rationale.
Once the corresponding USDC has landed in Aragon Agent, the Solana Repatriation Committee will dissolve.

Members

Poll for Treasury Management Committee Members

End date 16-Oct-2024

TMC-3: stSOL repatriation proposal
  • Approve
  • Reject
0 voters
5 Likes

No objections from me, makes sense to conclude Solana sunsetting of Lido

Approve fully and the sooner it’s done the better, imo

Approval passed, TMC will inform the Lido on Sol multisig signers now and provide updates in this thread

1 Like