TMC-6: Convert DAO Treasury stablecoins into sUSDS
Strategy
In order to allow the DAO to earn yield on its stablecoin holdings (c. USD 30m in idle stablecoins at the moment), (i) the Lido Labs Foundation and the Lido Ecosystem Foundation (“the Foundations”) shall be permitted to withdraw USDC/USDT/DAI to convert to sUSDS (to be held by the Foundations on behalf of the DAO or to be returned to the DAO Treasury) or a tokenized USD money market fund of choice. (ii) sUSDS shall be added as a stablecoin to the Easy Track allowed stablecoins registry and as an allowed token for Easy Tracks on the Aragon Finance contract, with a one-time limit of 2,000,000.
Objective
Allow (i) sUSDS to be held in the DAO Treasury (or other tokenized USD money market funds by the Foundations on behalf of the DAO) and (ii) the Foundations to draw on sUSDS in the Treasury for operational funding under existing Easy Track setup
Intended on-chain action
1. Add sUSDS (0xa3931d71877c0e7a3148cb7eb4463524fec27fbd) to the Easy Track AllowedTokensRegistry contract. 2. Add sUSDS payment support for Easy Track EVMScriptExecutor on the Finance contract.
Impact on treasury liquidity
Equivalent
Execution complexity
Minor. The initial upfront conversion (via minting sUSDS from USDS at par, without slippage) will be handled by the multi-sig signers of wallets belonging to the Foundations. DAI can be exchanged for USDS 1:1; USDC can be exchanged to USDS 1:1 via the PSM (Peg Stability Mechanism) with currently more than 3bn USDC in available liquidity; USDT may need to be traded for USDC (with low expected slippage, likely < 10 bps). The resulting sUSDS will be returned to the DAO Treasury by a simple multi-sig transfer. The USDC/DAI/USDT balances to be converted to sUSDS can be gradually drawn by the Foundations under the existing Easy Track smart contract instances; this poses lower technical risk than having the DAO approve onchain, one-off transfers from the DAO Treasury by DAO governance. The Easy Track limits currently set already include a buffer in excess of budget limits; for simplicity / risk minimization, the sUSDS addition would treat 1 sUSDS as 1 USD (current market value: ~USD 1.07, accruing yield) and thus slightly increase this buffer. The Foundations are allowed to retain regular budget funding needs until the next Easy Track limit reset on their balance sheet without being required to return the corresponding, obtained sUSDS back to the DAO Treasury. The Foundations may also retain funds in excess of the regular budget funding needs for the current quarter in tokenized USD money market funds (e.g., BlackRock BUIDL, Fidelity Digital Treasury Fund, Circle USYC) on behalf of the DAO.
Maintenance complexity and overhead
Minor
Summary of possible risks
Minor risks as no new deployments are needed. Voters are encouraged to check Aragon votes carefully for correct parameter encoding.
Summary of potential benefits
Generating yield on DAO Treasury balances by using the Sky protocol; at USD 30m, this corresponds to > USD 1m in annual income for the DAO (~USD 1.43m @ current sUSDS rate of 4.75%).
- Future TMC proposals may aim at further diversifying the portfolio of yield-bearing stablecoins held directly or indirectly in the DAO Treasury.
Poll for Treasury Management Committee Members
End date 10-Nov-2025
Convert DAO Treasury stablecoins into sUSDS and update config on Easy Track and Aragon Finance accordingly
Approve
Reject
0voters
If approved, an Aragon DAO proposal will be submitted to implement the changes outlined in the “Intended on-chain actions” section and is subject to ultimate token holder ratification. If LDO token holders reject the change, TMC-5 will be declared void and no changes will be made.
Similarly to when we decided to stake with Lido the ETH in the Lido DAO Treasury, I’m fully supportive of LOW RISK initiatives that help generate income from the DAO’s Treasury.
Following up on TMC-6, the below are operational implementation details and guardrails for the TMC and the Lido Ecosystem / Lido Labs Foundations.
1. Cap on total yield-bearing stablecoins exposure
Scope: sUSDS and, once onboarded, regulated tokenized money market funds (TMMFs) held on behalf of the DAO.
Limit: Combined exposure to these instruments is capped at 15% of total Treasury (all liquid assets, marked in USD).
Process:
Assessed quarterly using end-of-quarter snapshots of DAO and relevant Foundation wallets.
If the cap is exceeded due to market moves or flows, TMC rebalances back to 15% or less during the following quarter, subject to liquidity and costs.
2. Minimum liquidity / runway requirement
Runway floor:
Total liquidity in stablecoins, excluding whichever is greater of the sUSDS balance or the largest single tokenized money market fund position, must be at least 2 months of projected runway (based on latest budget and realized spend).
In other words, for this test the TMC takes all stablecoin balances and subtracts the larger of (i) the total sUSDS balance or (ii) the largest single TMMF position; the remaining amount must cover at least 2 months of runway.
Definition of liquidity for this check:
Non-yield-bearing or near-instantly redeemable stablecoins (e.g. USDC, USDT, DAI and similar) as well as any sUSDS and TMMF holdings.
Held by the DAO Treasury and/or Lido Ecosystem / Lido Labs Foundations for operating expenses.
Priority:
If the 2-month floor is breached, liquid stable balances are rebuilt first, before increasing allocations to sUSDS or TMMFs.
3. Diversification and onboarding of tokenized MMFs
Once regulated TMMFs are onboarded and practically usable:
Onboarding authority and criteria:
The TMC is mandated to decide on onboarding individual TMMFs within the limits of TMC-6 and these guardrails. For each product, the TMC will consider, at a minimum:
Risk and return profile (including underlying asset quality and structure).
Legal and regulatory considerations (jurisdiction, investor eligibility, fund structure).
Counterparty and operational risk (issuer, custodian, transfer agent, tokenization stack).
Liquidity, redemption mechanics and settlement times.
Diversification and concentration across issuers, venues and chains.
The TMC may decline or phase in exposure to specific TMMFs even if they are broadly available in the market, where it considers the risk/return or legal profile unsuitable for the DAO.
Equal split rule:
Within the 15% yield-bearing bucket, allocations are equally split across all approved yield-bearing assets (sUSDS and TMMFs), unless:
A product is temporarily unavailable or illiquid, or
TMC documents a temporary exception (for example a phased ramp-up for a newly onboarded product).
Examples of potential TMMFs (subject to separate onboarding and due diligence):
BlackRock BUIDL (USD Institutional Digital Liquidity Fund)
Circle USYC
Franklin Templeton tokenized U.S. government MMF (e.g. BENJI)
Fidelity or similar institutional tokenized Treasury or money market products
Holding structure:
TMMF positions may be held by the Lido Ecosystem Foundation and Lido Labs Foundation on behalf of the Lido DAO, and are included when checking:
The 15% yield-bearing cap, and
Overall Treasury composition (while the 2-month liquidity floor explicitly excludes the single largest sUSDS or TMMF position as described in section 2).
TL;DR – Operational rules under TMC-6
Yield-bearing cap: sUSDS plus TMMFs at or below 15% of total Treasury, checked quarterly and rebalanced if needed.
Liquidity floor: Total stablecoin liquidity, excluding whichever is greater of the sUSDS balance or the largest single TMMF position, must cover at least 2 months of runway; if breached, liquid non-yield-bearing stables are rebuilt first before increasing sUSDS or TMMF allocations.
TMMFs: The TMC decides which TMMFs to onboard based on risk/return, legal and operational considerations, and then splits the yield-bearing allocation equally across all approved sUSDS and TMMF assets, with positions held by the Foundations on behalf of the DAO.