Deposit ALL of the current treasury’s 2,555,183.60 DAI into the app.aave.com DAI lending market on Ethereum.
Even with lending markets depressed due to the recent bear market in stablecoins, some basic yield can be earned on our DAI in the treasury. Our DAI currently sits in treasury doing nothing. We are incurring opportunity cost by NOT utilizing it in the markets.
The yield on DAI on AAVE on Ethereum is a nominal 2.26% + 0.36% of AAVE governance tokens.
Aavetgotchi also has an established relationship with the Aave protocol as Aave hosts our GHST listing.
- 2,555,183.60 DAI * 2.26% DAI yield is an earning of ~$66,500 DAI annually assuming APR stays the same. In reality the APR will fluctuate. However, stablecoins tend to have the shortest range of fluctuating APR.
- 2,555,183.60 DAI * 0.36% AAVE yield is an earning of ~ $9,200 AAVE tokens which we can either sell on the open market or use to participate in AAVE governance.
- The funds could be used to fund future initiatives for the DAO without digging into the principal capital the DAO controls. i.e Its free money we are leaving on the table and can be used for anything our heart desires.
- The treasury would be entrusting our DAI into the contract security of the Aave protocol. However, Aave lending markets have been around for a long time and have established themselves as very secure, with no significant contract bugs or hacks that have put assets at risk. The Aave DAI contract currently controls 635M of DAI in its lending contract. This is quite a large asset value and could be used as a proxy for the ‘trust’ that the wider ecosystem places in the Aave protocol.
- Depositing the DAI into the AAVE treasury creates an extra administrative step to remove it should the DAO need to withdraw funds to fund other initiatives.
I would like to see a bit of discussion of more pros and cons im not thinking about before eventually crafting a Snapshot.