TMC-6: Convert DAO Treasury stablecoins into sUSDS and update config on Easy Track and Aragon Finance accordingly

Proposals
1
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%).
Compliance with Treasury Management Principles Yes
Proposer @steakhouse, with collaboration from @Armin
Agreement Approved
Perform @steakhouse
Input Pending from community
On-chain execution stage Proposal
Other notes - 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
0 voters

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.

3 Likes
Polar - Delegate Thread
Pol Lanski Delegate Thread
2026 Ecosystem Grant gRequest (EGG): Executing GOOSE-3
Establishment of a Dedicated Bug Bounty Reserve Multisig
Request for Detailed Annual Expense 2025
2

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.

1 Like
3

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

  1. Yield-bearing cap: sUSDS plus TMMFs at or below 15% of total Treasury, checked quarterly and rebalanced if needed.
  2. 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.
  3. 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.
2 Likes
Pol Lanski Delegate Thread
4

Update on multisig rotations to follow address verification, ref

1 Like
5

Snapshot vote started

Please get your wallets ready to cast a vote :white_check_mark:, the Conversion of Treasury Stablecoins into sUSDS or TMMFs Snapshot has started! The Snapshots ends on Mon, 01 Dec 2025 16:00:00 GMT.

6

Thank you for the proposal.

I have some questions:
As curators of many volts on Morpho, you have numerous volts on DAI, USDT, and USDC with a decent profit.
The question itself:

  1. Why move away from diversification to a single asset? What advantages does this provide?
  2. Why was this particular stablecoin chosen, which doesn’t generate more profit than other stablecoins?
7

This specific sleeve uses sUSDS and tokenized money market funds interchangeably. Lending vaults are certainly a possible alternative and Lido DAO could have its own lending vaults, for instance, depending on the denomination asset. But we could explore that in a future TMC proposal, so this is not exclusive.

2 Likes
8

We appreciate the work that has gone into TMC-6 and would like to express our support for the initiative.

Actively utilizing idle stablecoins to generate low-risk income is an appropriate next step for Lido DAO, and the proposed liquidity floors, exposure caps, and operational guardrails appear well-structured and conservative.

As we reviewed the proposal, a few areas emerged where adding clarity or guidance could strengthen ongoing treasury stewardship:

1. Define a hurdle rate or benchmark for allocation decisions

The proposal introduces a liquidity cap and a maximum sUSDS/TMMF allocation, but it does not clearly specify:

  • What minimum yield would justify deploying capital into sUSDS or MMFs.
  • Whether allocations should cease or unwind if the yield environment shifts significantly (e.g., sUSDS yield drops well below attractive alternatives).
  • What benchmark the Treasury Manager should use:
    • Cash/Money Market T-bill rate?
    • Rf + spread?
    • A DAO-specific opportunity cost (e.g., buybacks, hedging, ETH-accumulation)?

Setting even a soft hurdle rate (e.g., “allocate only if the expected annual yield exceeds X% or exceeds the short-term Treasury bill rate by Y bps”) gives clearer decision criteria and avoids yield chasing during unfavorable market regimes.

2. Clarify operational monitoring and day-to-day risk controls

The safeguards in the proposal (runway floor, 15% cap, etc.) are directionally appropriate to get this up and running. As the first(?) proposal introducing lending and counterparty risk to the treasury, it would be insightful to understand how the treasury operations are dealing with them:

  • Which monitoring tools, dashboards, or alerts will be used to ensure the parameters are respected daily.
  • How frequently liquidity checkpoints are executed (daily, weekly, monthly)?
  • Which party is responsible for triggering rebalances or emergency unwinds should peg stability, liquidity, or collateral parameters deteriorate.
  • Whether the DAO expects any automated reporting (monthly or quarterly) on yield, liquidity, and risk metrics.

Arguably some of these these points are too granular for a proposal but the acknowledgement and a response from the treasury management how these are handled helps transparency and forms a template for widening the investment universe as and when appropriate.

3. Scope of mandate and resourcing for the Treasury Manager

It would be helpful to clarify:

  • Whether the monitoring, execution, and reporting required for TMC-6 fit within the existing Treasury Manager scope, or whether this represents a mandate expansion.
  • If additional responsibilities arise (per Q2, ongoing monitoring of pool, peg risk, or cross-asset rebalancing) whether any compensation adjustment or delegated authority is required.
  • How the DAO assesses performance for this new activity (pure yield? risk-adjusted return? policy adherence?).

This helps set expectations and avoids ambiguity around operational ownership.

4. Clarify expected use of proceeds

It would strengthen the proposal to outline what the generated income is expected to fund, for example:

  • LDO buybacks?
  • DAO hedging programs or counter cyclical initiatives?
  • Reinvestment into sUSDS/TMMFs to compound yield?
  • A broader capital-efficiency framework (e.g., grants, liquidity incentives, ecosystem investments)?

A clear statement on capital allocation priorities helps contextualize the economic value of the initiative and ensures alignment between yield generation and DAO objectives.

To re-iterate, we support this expansion of the treasury management framework and look forward to continued collaboration on strengthening Lido’s financial resilience and long-term growth trajectory.

1 Like
9

Snapshot vote ended

The Conversion of Treasury Stablecoins into sUSDS or TMMFs Snapshot vote concluded!
The results are:
Approve: 54.8M LDO

10

Dear Nansen team,

Thank you for your support and for the additional questions:

  1. For (T)MMFs, a (significant) hurdle rate for the yield does not appear appropriate, given that the alternative is holding cash, which generates zero yield (no opportunity cost) and that, apart from good ALM execution and (limited) duration risk management on behalf of the MMF issuer, MMFs mostly pose (traditionally perceived to be very low) credit exposure to the US government.
  2. An unwind of sUSDS may be considered if yields drop below (T)MMF yields plus an appropriate risk compensation for the added credit risk, or if the risk profile of sUSDS becomes more elevated. Any such considerations are not yet enshrined as part of TMC-6, and we would seek the necessary approvals before executing any such actions.
  3. By design, money market funds will be returning short-dated US Treasury yields minus fees (with fee levels currently typically 20–50 bps/year). Given the limited number of available (T)MMF options at the moment, diversification among different issuers takes priority for now, but we might propose larger allocations to better-performing funds down the line. This would, however, require separate approval and is not yet covered by TMC-6. For sUSDS, we will be closely monitoring the risk profile and the quality of the assets backing sUSDS; if the SSR drops below the risk-free rate plus a suitable risk premium, we may propose a divestment of any sUSDS positions.
  4. Regarding operational monitoring and day-to-day risk controls: monitoring will likely be conducted via custom Dune Analytics dashboards (with liquidity checkpoints at least monthly), as all related operations are fully onchain. These monitoring dashboards may be made available publicly.
  5. Regarding the scope of the mandate and resourcing: this proposal fits within the existing Treasury Management Committee (TMC) scope insofar as the TMC executes actions on behalf of the DAO that have been approved by DAO governance; the TMC has very little to no discretion over specific allocation decisions. It represents an expansion of the TMC’s scope to the extent that there is an additional management aspect to allocating and rebalancing between sUSDS and (T)MMFs under this proposal.
  6. Regarding the expected use of proceeds (around USD 1m/year): the Lido DAO holds significant assets in its treasury, and it is in the interest of LDO token holders and the Lido protocol that the DAO manages its treasury in a sustainable manner. The additional revenue generated is therefore not directly earmarked for specific expenses but rather serves to bolster the DAO’s general protocol surplus.
  7. There is no compensation adjustment or additional cost to the DAO for treasury management, as all Treasury Management Committee members are now active contributors to the Lido DAO, contracting with either the Lido Labs Foundation or the Lido Ecosystem Foundation, and these additional activities fall within the scope of existing contributor arrangements.
5 Likes
11

Thanks for the detailed proposal. From a treasury management perspective, this seems like a reasonable attempt to balance capital efficiency with operational simplicity. Converting idle stablecoin balances into sUSDS introduces yield without fundamentally changing the risk profile of the treasury — at least in theory.

That said, I think the most important consideration here is not the headline yield, but liquidity under stress. In normal conditions, sUSDS redemption may be straightforward, but in adverse market scenarios the DAO may care much more about speed and certainty of access than incremental return.

It would be helpful to clarify whether the proposed configuration changes on Easy Track and Aragon Finance include explicit guardrails — for example, limits on the proportion of treasury assets that can be held in yield-bearing wrappers, or predefined triggers for moving back to plain stables if conditions deteriorate.

I also appreciate that this proposal touches both governance and execution layers. Keeping the policy decision (what assets are acceptable) clearly separated from the operational mechanism (how they are deployed) is important, especially as treasury management becomes more automated over time.

Overall, I’m supportive of the direction, but I’d feel more comfortable if liquidity assumptions and exit paths were documented as explicitly as the yield rationale.

12

The Vote #195 has started!

The vote includes adding sUSDS token to stablecoins Allowed Tokens Registry and sUSDS transfer permission to Easy Track EVM Script Executor in Aragon Finance.

Thevote will be open for your “For” or “Against” input until the end of the main phase: Dec 18, 14:07 UTC.

For instructions on how to verify the vote items, please follow this guide.

13

The Vote #195 passed and was enacted! Voting statistics are the following:

  • “No” — 10 (0.01%)
  • “Yes” — 55,231,140 (5.52%)
14

A note that Spark supports USDT deposits