Treasury Diversification #2

Excellent analysis, thank you @cobie. I agree that under the current circumstances, Lido should favor price over lockups. Hence a model where Dragonfly or any other prospective partner commits to buying a variable amount of LDO for $10m at a price slightly above spot seems best. If I understand @ashwin correctly, then you suggested this yourself as the second option. This option would be acceptable to me.


Thanks for the votes ser

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why not hire a market maker to pump the price of ldo to 5 usd and then dump otc there?

given that the merge is coming and the hype is real, what is the problem with this?

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Why cant lido borrow against its holdings?

Dragon Liquid hedge fund showing a fake bid on the SNAPSHOT vote!!!

They publicly said they cant do that deal, now they are trying to rope people in to split the ‘no’ vote between 1year lockup and needs more work.

Bros if theyre doing this on a snapshot vote, just imagine what theyre trying to do with the LDO. Scam bids and asks all day, fucking lol. ‘we wont sell THAT LDO’, we will just perfectly hedge it out and then manipulate markets with it.

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Market is really unstable right now and borrowing against holdings may be absolutely ruinous. It should certainly be considered as a part of the way to fund ongoing operations once Lido can set up proper treasury management, but I don’t think it’s a viable option in terms of securing minimum runway.

this is message to the 0x641cE4240508eae5dCaeffE991F80941D683Ad64.
Why did the Snapshot voting begin immediately after receiving the LDO token?

No tweets abt the vote + 3 option vote (when one is a non option, and the ‘no’ isnt a rejection of the deal, its ‘nEeDs MoAr WuRk’) = something odd

@TheDude I would honestly like to hear your plan laid out how to quickly, and efficiently get the best price for LDO considering the risks of waiting and trying to perfect the deal.

If not DragonFly, do you have a buyer ready to go and agree to pay a premium?
If a lockup, is that the maximal capital for Lido to raise today?

You say it was never about price and that is fine, for me it is about price. Who is right? Sounds like we need to have a vote (which we are). Then you seem to be missing the fact that we are only discussing 50% of the targeted total sale after community feedback. This first part is to take risk of the unknown off the table. That gives Lido time to make a better process for the next and potential future sales.

Finally, do you run a fund? I would really like to understand the legal restrictions that come with different fund structures and relevant jurisdictions around the world. DragonFly has multiple funds. Some are liquid funds and some are venture. They are not the same structures. a16z had to restructure the entire fund in order to accept and invest in crypto. Also, Lido is a conservative protocol. We are not willing to make impulsive legal or technical risks, there is too much at stake (kek).

A public sale puts us at risk from a legal perspective. That takes time to find the best path.

If Dragon Liquid can’t or won’t do it, Dragon Ventures is also in the discussion. Don’t assume you know every detail while posting on the forum and antagonizing anything anyone says.

I am happy to hear opinions. They are like buttholes, everyone has one. What I would prefer to see from the community are constructive thoughts and proposals to make this process better.

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To bring the thread back to a more concrete discussion. What are thoughts about the updated proposal from DragonFly?

Does the community care more about the lock up or maximal sale price?

Based on the current vote results: Snapshot

It looks like the proposal will not pass. Now, we will wait til Monday and open a new vote. This will be a traditional 7 day vote structure to allow everyone to chime in. This puts us at August 1st + time to close on the final outcomes.

In the past 7 days, LDO has gone from $1.32 > $1.51 at this time (14% difference). With a max of $1.78 (34% difference). The same may happen over the next 7 days and if other buyers are still interested they will renegotiate the terms based on data at the time. Hopefully LDO goes to $10 and I am an idiot. Now that everything is fully public and open, anyone on the market can manipulate the price, keeps things spicy.

So that being said, what does everyone think the new terms of the proposal should be?

  • Spot with Lockup?
  • Premium with no lockup?
    • How much premium?
  • Whitelist? Are certain investors not allowed to participate?

Let’s focus on how to move this proposal forward please.

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i nomiate cobie for CFO

Spot + Lockup

Secure the bag

No Whitelist

Ban @TheDude from this message board

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What about a community led treasury diversification?
Could be done using
Lockup + Discount

also, if a 7 BTC market buy order is placed on binance, this would throw off the orderbooks and likely send it

the usdt volume is significantly larger, but the btc volume isnt there

this might be an interesting move to pump it 5x in btc for only 150k usd (7 btc equivalent)

Concrete steps to move forwards, in my opinion (disclosure: I am dumb):

  • Proposal should be either small spot premium (+5-10%), or spot price (past 7d avg) with a short lockup. I don’t really care which one. I care about removing the obvious and immediate adverserial incentives. DF or the DAO can decide or whatever. I think spot premium but unlocked is sufficient but can see why people would be more emotionally attached to a lockup.

  • Vote should be binary. The current vote is a strange three option vote, without a clear “rejection” option. The vote should simply be to agree or to reject the proposal – and in turn the proposal itself should be clear.

  • Open the sale to whoever wants to be included. I am sure there are some issues with KYC/the law/etc here. But where that can be handled we should open the sale up as much as possible to a wider group. Ideally, anyone could buy on chain at these terms. However, maybe a practical solution is just whitelisted entities since KYC/etc may be hurdles that prevent such a solution at this time.


legally speaking, for open sale not open to US residents + block usa IP address

business wise speaking, hurry up and close this to secure the runway or else ethereum as we know risks too much

perhaps just lock in the deal for $10 mm to dragon fly and @gametheorizing etc. but require them to do something like X amount of twitter posts or whatever
—get any sort of lock up possible

then do an open sale for the next $10 mm which will be a bit more complicated

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The only thing I would add is: Is the goal to diversify the treasury, as is the name of this proposal? Because it seems like the goal is rather to secure 2 years of runway by attaining $29mm in stables.

If securing runway is the goal, we already have $31mm in ether that can be liquidated with very little slippage. Instead of diversification, I believe it would be prudent to convert that to stables. I believe this ether came from raising a prior round (?), although I am unsure. What I am sure of is that we have the money for the next 2 years, it just needs to be converted from eth to stables. I dont believe we need to raise again at this time.

Imo a conservative protocol should have mostly stables and their native token in the treasury. I think the team sees the need for this too.

I, like everyone else here probably, believe that ether will cost more in the future. But we cant be sure. So i would convert the ether now and secure the future. And then raise venture dollars for LDO in a year or so, if we need it.

PS. sorry if i was offensive in earlier messages. I got a bit heated bc i thought it was a bad deal.

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Im an idiot, and I dont have all the context. But if people think selling the ether is a good idea, a snapshot vote could be written something like this:

Should Lido DAO convert 20,000 ether to a USD stablecoin?
Answer 1: Yes
Answer 2: No

We need to secure 2 years of runway. We estimate that to be $29 million dollars. Our largest liabilities are in USD equivalents and LDO.

We cannot reasonably predict the future price of LDO and ETH. These are the two largest assets in our treasury. Because team costs are priced in LDO and USD, we need to secure our future. We propose selling treasury ether raised from a prior round to do this.

If the yes vote wins, we will execute the sale within 5 days of snapshot close. It is at the team’s discretion to get the best price. The team may use OTC, a DEX, or a CEX, at their discretion.

Personal Notes
Vitalik showed us how important it is to have staking decentralized, when he talked about protocols self limiting. It was important that we choose not to do this (as we did), as other more centralized services could take over our top spot and use their power in a harmful way.

I believe that one of the ways we should achieve this decentralization is by creating a supply crunch in ethereums future governance token, LDO, and making sure it is too expensive for a single player to hold a majority of LDO. To do so, everyone needs to play by the same rules and acquire LDO in the open market. At a $1.5b FDV, it is still possible for a single player to take over. At $1T it is much harder.

As it applies to selling to funds, I am happy to sell my LDO to funds at $15 per LDO; if we reach 66% of all staked ether, I would be happy to sell at $150 per LDO.

Unpopular opinion but this obsession with lockups and preventing VC’s/funds from “dumping on the community” is stupid when applied to LDO at this stage.

Sure, Dragonfly or whoever else should not be able to buy at a discount and sell the next day. But the original offer was a 50% premium to 7-day TWAP which only became a little weird when the market rallied. Even still, they are buying well above the 1-month and 2-month averages. The whole reason there is a trade here is because neither DAO nor VC can market sell/buy the size they want with current liquidity. But then somehow they are going to profitably dump all the tokens immediately?

I get that we’ve been burned many times by VC’s buying seed tokens and selling a speculative rally before anything has been delivered or accomplished. But this deal looks nothing like that. In this case, there has been plenty of liquidity for retail to get what they want at the same or lower price than the VC. I am annoyed by this cynical attitude exemplified by Hsaka’s tweets criticizing the “predetermined outcome”. Maybe securing an 18-24 month runway of stablecoins in this uncertain market is the most boring and obvious decision of all time.


New thread for cleanliness: