Very tough choice. But the collapse of USDC basically means the collapse of the majority of crypto financial system anyway, thus I believe it is better to keep the $USDC as #1 requires inevitable lose of 10% in our treasury and #2 could be risk considering the current volatility of the market.
One viable option could be only swapping half of treasury to USDT or ETH.
I also agree with David, its a very tough choice to make. I personally think keeping the $USDC as it is would be a better choice than #1, like what was mentioned I think we could swap half the treasury to USDT or ETH once $USDC repegs for risk management.
I believe proposing Option 1 is the best course of action to prepare for the risk. While we hope that USDC will successfully maintain its peg, in the event that it fails, it would be very bad news for our project because it be over… Currently, with a deviation of around 10%, our assets could decrease by that amount. however, we should consider converting at least half or more of our USDC assets to other stable coins with high stability, such as USDT, to mitigate any potential negative outcomes. We shold have be prepared for risks.
What are the “other assets” in option 2?
Personally I think it may be the best to split our current treasury in 3-4 coins like USDC, USDT.
I am not very fond of keeping such thing as a treasury in ETH or BTC since these still can fluctuate a lot.
But if it is for exampple 25% of treasury, I am fine with that.
Especially since it may also fall into a positive side, resulting in ETC/BTC gaining value.
I’m in favor of 3,but I think there’s also enough reason for 1 and 2, and I think KYU’s and Yuuya’s opinions are also reasonable. In the end, it’s a question of “how to predict the market”, and I don’t think any one individual(include myself) can give the “exact right answer”. I think it’s best to put the opinions together and let the voters decide.
Since this is the first challenge to USDC, which has been considered a safe-haven asset in the crypto scene, I think it is possible to set a special voting period that is shorter than usual, as Tonyhan suggested.
I also think we need to adjust our opinions on points 1 and 2 before we can have an actual vote.
USDC→USDT is possible, but I think USDC→ETH (or ect) is inappropriate, as ETH is a more volatile coin.
Same as above.
It is of course possible to propose changes to the portfolio from an investment perspective (diversification, DeFi…ect… I don’t know much about this area). But I think it should be discussed separately from this proposal, which deals with the issue of stable coin depegging
Therefore, I propose to adjust the options in the vote as follows :
Exchange all (or n%) of USDC for USDT. (has to be decided in the current discussion)
Nothing - keep current status.
However, I don’t think we can continue to go through the ‘exceptional’ process if a similar issue arises again in the future, so I suggest we create an ‘urgent proposal’ format as follows. The purpose is to create a system to help the DAO make quick decisions on events or crises that need to be decided urgently. This is a separate suggestion from this one, and will need to be re-discussed after this one is voted on.
Quick rough idea about Emergency proposal.
Any user can create an “urgent proposal” based on their own judgment.
The Council is able to decide if the proposal is urgent or not.
If all or n members of the Council agree, the proposal will be posted to Snapshot as an Urgent Proposal.
The voting period for urgent proposals will be shorter than usual. 1-3 days, at the discretion of the Council.
Quorum requirements are the same as for other proposals.
Circle did announce that they will recover any missing liquidity in SVB using corporate funds and the market is speculating that it will recover by the next week. 3 is my answer.
But this doesn’t mean that we shouldn’t do nothing. Web3 is still wild wild west and we should have various forms of assets to not put all eggs in one basket and a protocol to react whenever there’s a time sensitive events
(1) Don’t put all your eggs in one basket
I’d like to propose having the assets in $USDC, $USDT and $ETH. We can discuss the proportionality in the future
(2) emergency protocol with immunity
If this $USDC was like a terra case, we would’ve lost all of our funds within days, while having this discussion in our forum and voting on snapshot. What I’d like to propose is that whenever there’s a serious depegging of assets, council can make a decision in swapping that asset to different stables with immunity without Snapshot approval. Immunity because in a serious unstable market, no one knows how the other ecosystem will react to another’s collapse. So just the action of ‘swapping the unstable to another subjectively more stable asset’ is saving the fund and the DAO.