Deposit 3,000,000 GHST from the DAO Treasury into Aave

First off, congratulations to the Aavegotchi community for being successfully listed on Aave as collateral! This is a major milestone for our community and the GHST token. Alongside the DAO Treasury Taask Force, I propose that we immediately take advantage of this partnership by depositing 80% of our DAO Treasury GHST (~3,000,000 GHST) into Aave as collateral to earn passive yield. Within the first 24 hours of listing on Aave, the utilisation rate is at 45% with a deposit APR >3%. Given the significant yield and quickly growing utility of the GHST token, we anticipate ongoing borrowing demand, and, thus, yield for GHST depositors and the DAO Treasury. The Aavegotchi DAO can demonstrate its dexterity, effectiveness and impressive treasury by quickly capitalizing on this passive yield opportunity. This would speak volumes to the broader DeFI and crypto community and immediately provide additional value to GHST token holders through increased borrowing capacity in the Aave pool.

An initial deposit of 3,000,000 GHST would represent approximately 80% of the DAO Treasury GHST. This deposit is completely liquid and could be withdrawn if the DAO designates other uses. A 3% APR is nearly $90,000 which can be used to further invest in the Aavegotchi ecosystem through DAO initiatives. A separate proposal can be considered for the additional 20%, however there are multiple pending core propositions at this time for which we would like to afford leeway with this initial proposition. We do not propose that the received amGHST from this proposed initial deposit be staked for frens. This proposal is not requesting DTF multi-sig control over this deposit or the ongoing management. The upcoming DTF core proposition will outline the DTF budget request and initial goals of the committee which do not include full multi-sig ownership of the DAO Treasury.

Please give feedback on the proposal, the allocation percentage, and any other thoughts as will be the largest decision the DAO has made with its treasury funds to date. I will plan to post the formal signal proposition within 3 days unless there are significant concerns voiced in the community and this governance thread. Thanks and congratulations again to the community on such a great week!

Dr Wagmi

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I like the idea of doing this, especially if the frens can be used for raffle ticket airdrops to gotchis as has been suggested by many.

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It would be better to add a simple poll to guage sentiment.
But 80% is a bit too much. Isnt there a certain percentage of treasury be staked to earn FRENS for minigame rewards?

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3,000,000 GHST leaves ~742k untouched. The DAO previously passed the core prop to deposit 100k GHST for frens which has not happened yet. I wanted to make sure to leave room for that 100k, the DTF’s treasury, the Umbria Narni bridge, etc. In the future, core props will essentially designate “Remove GHST from Aave to do ‘X’”. It will take an extra transaction to remove the funds, but is otherwise very easy and liquid. What number did you have in mind?

Given the low gas fees on polygon, I would support an even higher allocation of GHST on Aave, effectively leaving ~200k GHST for the outstanding SigProps that passed. As Dr. Wagmi mentions, this could be quickly taken off if another sigprop passed requiring an additional disbursement of GHST. The primary risk to the higher, single protocol allocation is definitely the Aave protocol itself, however this is one of the most secure and tested protocols in the Defi space so this risk seems very low. Finally, we really don’t have any viable alternatives at the moment for retaining GHST in our treasury while also being able to put it to work for the Treasury. Those that feel it is too high, I am curious if it’s protocol risk or some other concern on the level of allocation to Aave. Thanks.

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This would reduce GHST depositor’s APYs and make GHST cheaper to borrow on Aave correct?

Treasury could be used for staking GHST at ~40-50% APYs.

I’m fine with starting small, perhaps we match what we agreed on for the Umbria bridge.

This proposal works well for GHST borrowers but will disadvantage GHST depositors. That 3% APY yield will drop.

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If removing GHST does not involves a lot of gas fees then it is good. Do we have an overview of the planned spending of the treasury? Then we can stake 80% of the remaining to AAVE.

「Dr Wagmi via AavegotchiDAO <aavegotchi@discoursemail.com>」在 2022年2月1日 週二,下午1:48 寫道:

Aside from the 100k GHST that was approved by the DAO for staking in GHST to reward community members, we were not proposing to stake the Treasury GHST for frens since this would seriously dilute the frens pool. Additionally, If the treasury begins competing for frens with the Community it will ultimately require these assets be managed and the DAO determine how and when assets are sold, disbursed, etc., creating further complexities at this early stage.

I see this as subsidising cheap loans for borrowers for maybe a 2%-3% APY return. It will dilute the APY of GHST lenders.

I think we can push this forward with more than 3M, maybe 5M?

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Good question. The DTTF isn’t recommending any proposed spend at this time, only the move to begin putting part of the treasury funds to work to begin bringing in a passive income. When the DTTF eventually proposes to the DAO a spend recommendation, it will be accompanied by data demonstrating that the Treasury cashflows will continue to remain net positive.

I agree, this is definitely true in the short-term. I guess it depends on how high the utilization ends up being. Wouldn’t the APY stabilize regardless of how much GHST is deposited in the contract in the longer term though? So, initially we deposit a large sum in the Aave GHST contract and the yield and borrow APY drops as the capital is underutilized, but then over time, low APY attracts more borrowers, increasing utilization and APY until the market settles on the premium for GHST? Is there a case where more GHST deposited in the Aave contract actually lends to building confidence in the market as users see the deeper liquidity as a sign of stability, resulting in more borrowing?

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I think we will get a large migration of liquidity over to AAVE when FRENS for amGHST is enabled (pending Core Prop and implementation). Is the additional 3M GHST from Treasury even required for building confidence in the market to use GHST on Aave?

Agree with the action that will bring the reputation up for Aavegotchi to AAVE protocol after integration. It’ll be a good sign and showcase.
Also, I agree on further amGHST staking for frens to reward mini-game devs, airdrops for community, quests via gotchi-verse and etc.
+2-3% APY for DAO, also sounds great, if % isn’t going to change after migration.

when discussing a flat rate for frens the problem was frens dillution, now less than a week later we are discussing 3m ghst for frens dillution and being able to use ghst leverage to earn more frens…
i would agree with the move of the ghst into stake, but would forfeit the frens eventually generated

Temperature check:

What proportion of the treasury’s GHST should be staked on Aave to get amGHST ?

  • 100%
  • 80%
  • 50%
  • 0%

0 voters

Should the treasury be staked to generate FRENS?

  • Yes
  • No

0 voters

What proportion of the treasury’s DAI should be staked on Aave to get amDAI?

  • 100%
  • 80%
  • 50%
  • 0%

0 voters

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Just wanted to pull this back down from the initial thoughts Dr. Wagmi provided on the proposal and add clarity in case anyone hasn’t been following discussions in the Discord DAO channel.

Discussions have been ongoing about whether or not to allow staking of amGHST for Frens. Regardless of whether or not the staking of frens moves forward, this proposal does not intend to stake the Treasury amGHST for frens.

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The committing of around 80% of the DAO-treasurys GHST to the AAVE-protocol should happen as soon as it is possible.

However, I propose a 2-tranche-approach:
the first tranche could be 2m GHST.
After supplying the liquidity and seeing what kind of behaviour the market exhibits, the second tranche could be adjusted according to the interpretations of the DAO.
This would create an additional opportunity for the DAO to become more aware of its economic intentions.

I think the amGHST should not be used to produce more FRENS.
Maybe there are some other uses?
Would a cam-token-pool at mai.finance make sense?
Or what about borrowing DAI on AAVE itself – and re-depositing it into the AAVE-protocol to farm MATIC?

We have long and eagerly awaited this listing. This is new laand, let‘s seize it!

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Great write up. I support this. I would vote to earmark some of those rewards for our hard working task forces. I know Jarrod has been grinding for us in the frens task force and many of us in the WTF have also put in quite a bit of hours as well :grinning:

Let’s build a system that prevents burnout and is sustainable for us all!

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We plan to discuss taask force compensation with the DTF budget request of 50,000 GHST. We will not be able to award ourselves any compensation, but we hope to acknowledge, reward, and sustain the amazing work the community and it’s other task forces continue to do.

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