Treasury Diversification #2

The DAO leadership is not made up of crypto traders. It’s made of software engineers and builders. Lido is not some type of on-chain hedge fund. They have successfully built the biggest staking service in existence. I think that’s pretty good.

Why didn’t I advise them? 1) I haven’t worked for Lido for over a year and 2) I don’t advise any DAO what to do with their treasury because I don’t trade for other people ever.

What if I am wrong? Why would they sell just because I said so – I am just a guy? Then, plus, even if they entertained the idea, it would have to go through governance too, and then it needs quorum/majority to decide that selling is a good idea.

Alameda is an investor in Lido – they are much better at crypto markets than I am. Why didn’t they advise them? What if Cobie says buy but Alameda says sell? Actually – why didn’t you advise them? If you wanted Lido to sell so badly, where is the governance post from you suggesting to do so at the time?

It’s a silly line of questioning. These weird hindsight anger sessions are unproductive and pointless, in my opinion.

The 3AC, Defiance and Jump rounds were in April 2021 and priced around $0.7. They are only 2-3 months unlocked, so there is hardly much unlocked for them to dump and they’re only at a 1x profit anyway.

I think it’s also hindsight analysis to say Lido should’ve rejected 3AC and Jump from being investors in April 2021. How could anyone in Lido DAO predict their future actions?

Lets be real – many crypto lenders let 3AC borrow multiple billions of dollars – that’s how trusted they were in the ecosystem. Accepting them as an investor when, at the time, they were one of the most active and reputable crypto funds was not unreasonable. If you thought differently at the time, and somehow knew they were doing fraudulent borrowing schemes, why didn’t you sound the alarm on the diversification thread?

There are two types of mistake: ones that could be avoided, and ones that could not be avoided. Lido should look at the past mistakes, see where weaknesses are, and use that to make better decisions for the future.

Not selling ETH to USD was an avoidable mistake. Lido should’ve sold ETH to USD gradually when ETH was higher. It was an avoidable mistake. Now they have to sell 2% of LDO to compensate for that mistake. They should learn from that and hire a good CFO to avoid these mistakes in the future.

It was an avoidable mistake – but it is not a fatal mistake. Lido will be fine and it will have 2% less of the supply in it’s treasury. Selling 2% of the treasury to secure runway is not the end of the world. It’s fine. It doesn’t need to print new tokens and dilute people. It’s just a treasury sale, maybe at a slightly lower price than Lido would’ve desired otherwise.

Having 3AC and Jump as investors was not an avoidable mistake. It’s pure hindsight analysis to claim that you could know, in April 2021, that 3AC would eventually start doing fraudulent borrowing chains and implode. It’s not an event you can learn from and getting angry about it and making stuff up like “they’re selling at every opportunity” is just silly. They only have 20% of their tokens unlocked, and 3AC hasn’t sold a single one.

I mean, even getting angry at investors for selling after they’ve held through a cliff and vesting is stupid IMO. Look at the markets, everyone is selling stuff. It’s a financial instrument; an investment. Sometimes people sell them!

I agree that there should be a lockup on these tokens, and I agree that there should be a review into whether headcount is at optimal levels – but claiming that all non-technical roles can be collapsed into 2-3 people is just not credible.

All things considered, Lido is doing pretty good. It needs to have better treasury management and needs to figure out if it can optimise burn rate anywhere, but it’s got a good treasury to endure its mistake and is a category-defining protocol.

Selling 2% of tokens, from the treasury, at a slightly lower price and slightly earlier than would’ve been optimal is not a huge deal in the bigger picture.

Hey – at least Lido didn’t let 3AC trade the treasury to “make sure we sell the top” :slight_smile: