The majority of our treasury is composed of USDC and we are in a situation where USDC is depegged. Should we consider treasury portfolio adjustment?
Change USDC to other coin (ex. USDT or ETH)
This would cause 10% lose due to the depeg.
Change other assets in our treasury to USDC
Investment-oriented with the expectation that the USDC will recover.
Nothing
If we choose to do some actions under this situation, we will shorten our voting period to make it more efficient.
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.
letâs do nothing. USDC will be repeg
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.
Iâd like to choose 3.
Because we canât predict the future, USDC is one of the biggest credible stablecoins backed by Circle based in North America.
And reconciling the treasure with other assets will take a price such as gas fees. It means that we need to use the money for that.
What are the âother assetsâ 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.
Iâm in favor of 3,but I think thereâs also enough reason for 1 and 2, and I think KYUâs and Yuuyaâs opinions are also reasonable. In the end, itâs a question of âhow to predict the marketâ, and I donât think any one individual(include myself) can give the âexact right answerâ. I think itâs 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.
It is of course possible to propose changes to the portfolio from an investment perspective (diversification, DeFiâŚect⌠I donât 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 :
However, I donât think we can continue to go through the âexceptionalâ process if a similar issue arises again in the future, so I suggest we create an âurgent proposalâ 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.
3 is the optimal option as I think this depeg is over reaction of the market at the moment. We donât have to bear loss when we donât have huge amount of cash outflow expected in the near future.
However, would like to add some further action item after depeg issue is solved.
Diversify current single asset portfolio(USDC) to multiple stable coins(ex. Top 5 MC stable coins).
Regarding option 2, rather than investing into USDC using ETH (stated as âother assetsâ but thereâs only ETH can be liquidated freely).
How about staking certain % of ETH into LSD protocols?
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 doesnât mean that we shouldnât 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 thereâs a time sensitive events
(1) Donât put all your eggs in one basket
Iâd 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 wouldâve lost all of our funds within days, while having this discussion in our forum and voting on snapshot. What Iâd like to propose is that whenever thereâs 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 anotherâs collapse. So just the action of âswapping the unstable to another subjectively more stable assetâ is saving the fund and the DAO.