TL;DR:
As we continue advancing towards our North Star goal of $50MM GMV through Allo, Gitcoinâs Foundation is spearheading a unified treasury management strategy for 2024. Iâm posting this as an overview to discuss (and ensure) a few things - but notably financial sustainability.
The thinking is achieving and discussing this through multiple mechanisms, including (but not limited to) strategic asset management and partnerships, yield generation, financial governance refinement, and the potential formation of a Treasury Management Committee (GTMC).
The plan in bullet points:
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Now: Strategic swaps are being executed across the Org workstream wallets (IN PROGRESS)
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Shortly: Proposal to leverage the funds in the CSDO multi-sig back to the treasury with swaps and other mechanisms
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After that: Formal proposal for yield generation facilitated by partners
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Soon: Gitcoin Treasury Management Committee formation (GTMC) (TBD)
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Later: Sufficient funding in the war chest for further bear markets and beyond
Context and Background:
Being bullish in the bull - letâs be prepared for future cycles. This temp check/strategy is rooted in a proactive approach, drawing inspiration from various community discussions in recent memory and over Gitcoinâs time as a DAO. The idea is to set forth a plan encompassing asset leveraging, strategic DeFi partnerships, and introducing innovative financial instruments to ensure Gitcoinâs resilience and growth while considering the full breadth of Gitcoinâs treasury and financial reporting.
Some References for Context and Inspiration:
- Mobilizing the Uniswap Treasury - Proposal Discussion - Uniswap Governance
- [Proposal] Withdraw and leverage (partial) USDC balance in treasury
- GTC Financial Model - #4 by epowell101
- [GCP-001] - PASSED - Funding IndexCoop gtcETH offering
- Citizens Innovate - Convert x% ETH/wETH into OETH for Passive Yield Generation
- +Further detailed discussions outlined below.
Strategic Overview
The simple goal is to fortify Gitcoinâs assets. The initiatives proposed herein are designed to leverage those assets dynamically and engage our community in meaningful governance. These are just ideations at the moment, and further info - including risk and timeline considerations, will be built out in further posts separate from this overview.
The Gitcoin treasury currently holds ~$5,000,000 USDC and significant GTC holdings. We want stablecoin reserves to sit at a comfortable number, securing a solid foundation to support our community initiatives against potential (and inevitable) market downturns. However itâs just one aspect of our financial health.
Asset Considerations
Itâs important to consider all aspects of our finances, not just a singular wallet or asset.
We are actively reviewing multiple asset sources for strategic management, including:
- The Matching Pool
- DAO Treasury
- CSDO Wallet
- Workstream Multi-sig Wallets
Further info: https://zapper.xyz/account/0x57a8865cfb1ecef7253c27da6b4bc3daee5be518
Ideation(s)
Treasury Diversification and Yield Generation:
Diversify our treasury assets through strategic swaps and yield-generating DeFi engagements, inspired by various proposals on ETH holdings optimization - considering conversations like - the last partnership w/ Index Coop [GCP-001] - PASSED - Funding IndexCoop gtcETH offering, @pete OETH proposal Citizens Innovate - Convert x% ETH/wETH into OETH for Passive Yield Generation and several others posted both on the forum and in other channels.
Strategic Partnerships and Financial Instruments:
Following discussions around leveraging DeFi partnerships, we propose exploring and formalizing these opportunities to enhance our financial stability and support for public goods. Most notable is yield generation strategy (details to follow in a formal forum post).
Proposal for Strategic Swaps
A critical component of our treasury management strategy is the execution of strategic swaps. These swaps are designed to:
- Optimize Treasury Composition: By adjusting our asset holdings in response to market conditions and forecasted needs, ensuring liquidity and reducing exposure to volatility.
- Enhance Financial Stability: We aim to improve our financial resilience against downturns by carefully selecting swap partners and terms.
We are actively modeling ways to go about these swaps without hindering liquidity and accounting for headcount, other partnerships, and some of the proposals mentioned herein. Big shout out to @darwinmvr and @Sor03 for your support with this. We are currently doing this at the workstream level but expect a post on leveraging funds from the treasury to expand this further.
Asset Management and Committee Formation:
Inspired by the most recent Uniswap forum proposal, Iâm asking the community - should we consider the formation of the GTMC to oversee and execute our financial strategies?
This body would oversee strategic financial decisions related to the treasury, ensuring Gitcoin remains financially viable for multiple volatile market fluctuations and executing those txs effectively. The committeeâs formation and detailed responsibilities will be further discussed in upcoming governance posts if this is signaled as a worthwhile initiative based on feedback.
A formal committee should not hinder some of these initiatives, and I welcome feedback on moving efficiently and intentionally without sacrificing time.
The proposed committee would be drivers of some of the items listed below:
- Creating and reporting on the financial strategies of the organization.
- Overseeing the diversification and strategic leveraging of assets.
- Implementing and managing the Gitcoin Staked ETH & partnerships.
- Coordinating with yield-generation partners to optimize treasury growth.
- Ensuring transparency and community engagement in financial decision-making.
Why This Matters:
A coherent treasury management strategy is vital for sustaining Gitcoinâs impact in the Web3 ecosystem. By adopting a strategic approach to asset management, governance, and community engagement, we can ensure our missionâs long-term resilience and effectiveness in funding public goods.
Next Steps for Execution:
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Formal Proposals for some of the items mentioned above: Each component of our strategy will be detailed in individual forum proposals for community discussion and voting - starting with a yield generation proposal, swaps from the CSDO wallet, further leveraging @kyleâs diversification proposal.
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Treasury Committee Consideration: Based on community feedback, we may form a committee to oversee the execution of these strategies, ensuring transparency and effectiveness. This would be run in parallel with some of the initiatives mentioned above, and would be working alongside the Foundation to tighten up our finances and plan of action further.
Community Participation and Engagement:
Iâm excited for this to be a meaty conversation and looking forward to reading comments on how we can further boost some of the more idle areas of our finances.
If youâd prefer to discuss 1:1, Iâd love to hear your feedback and you can book time with me here (my door is always open) on other ideation(s) weâre missing in any areas of the org, or this overview specifically.