Balancer

This proposal appears on Balancer’s forum.

Hi All, ZeKraken here, been posting on the forum for awhile, but first time submitting a proposal. Please let me know if you have any feedback on any of the below points.

Motivation

As treasury swaps become more commonplace and now that the protocol fee has been turned on you should expect to see more yield farming activity coming from the Balancer DAO. In the vast majority of cases treasury assets should not just sit idly by, they should be put to work to earn yield while the tokens are in your possession. This is of course if the farming is done in a thoughtful, measured, and appropriate way.

Investment Proposal

Below I outline the selected strategies for the FEI, TRIBE, and MTA that the Balancer DAO recently acquired through treasury swaps with those respective protocols.

FEI / TRIBE:

2,454,000 FEI was acquired on Dec 9 2021, worth $2,448,559 at the time of this post

2,598,000 TRIBE was acquired on Dec 9 2021, worth $2,535,854 at the time of this post

ACTION: Deposit the full balance of both tokens to Rari Protocol’s Fuse platform- FeiRari Fei DAO Pool TVL - $171,405,955

ESTIMATED RETURN: FEI - $81,292 (in FEI) annually based on 3.32% APY TRIBE - $718,407 annually (in TRIBE) based on 28.33% APR Total - $799,699 annually

MTA:

334,000 MTA was acquired on Dec 14 2021, worth $297,714 at the time of this post

ACTIONS: Stake the full balance of MTA on the mstable platform giving us an equal amount of vMTA. staked MTA TVL - $6,361,104

Vote on the dials page, giving 100% of the voting balance to the MTA/WMATIC/WETH Balancer Polygon pool. This will bring additional MTA staking rewards to Balancer’s LPs in the Polygon pool. Note: the Mainnet Balancer pool is already capped at 10%, so no vote will be made for that dial at this time

ESTIMATED RETURN: $76,333 annually (in MTA) based on 25.64% APY

OTHER: We will not delegate mstable governance voting rights at this time. Rather the Balancer DAO will maintain the right to vote where it sees fit

For more information about the mstable’s staking/voting process see this link

Risks

There are a few risks to highlight around the depositing of treasury held assets. By far the biggest risk is smart contract risk which could result in partial or total loss of assets. However we are choosing to deposit on highly reputable platforms.

One option to combat the smart contract risk would be to utilize cover from Nexus Mutual for the two protocols. Currently those rates are 2.6% annually for both Rari and mstable (rates subject to change).

Another potential risk is around a reduced return on investment of this proposal vs. other potential strategies. There may be other strategies that could be deployed, but more often than not a much greater return comes with more risks. We feel we can get a decent return with an acceptable amount of risk.

Disclaimer: all figures and estimated returns are subject to change with market conditions, these figures presented here serve as a snapshot in time.

Specification

For TRIBE, the DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) would submit a transaction to 0xc7283b66eb1eb5fb86327f08e1b5816b0720212b approve(spender,amount)

spender: 0xFd3300A9a74b3250F1b2AbC12B47611171910b07 amount: 2598000000000000000000000 (2,598,000)

Then the DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) would submit a transaction to 0xFd3300A9a74b3250F1b2AbC12B47611171910b07 mint(amount)

amount: 2598000000000000000000000 (2,598,000)

Voting rights on the TRIBE snapshot will be delegated to 0xd6E96e437b8d42406A64440226B77a51c74E26b1 through the snapshot UI via “Wallet Connect”.

For FEI, the DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) would submit a transaction to 0x956f47f50a910163d8bf957cf5846d573e7f87ca approve(spender,amount)

spender: 0xd8553552f8868C1Ef160eEdf031cF0BCf9686945 amount: 2454000000000000000000000 (2,454,000)

Then the DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) would submit a transaction to 0xd8553552f8868C1Ef160eEdf031cF0BCf9686945 mint(amount)

amount: 2454000000000000000000000 (2,454,000)

Neither FEI nor TRIBE will be enabled as collateral.

For MTA:

1. Approve MTA to be spend by stkMTA

The DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) would submit a transaction to 0xa3BeD4E1c75D00fa6f4E5E6922DB7261B5E9AcD2 approve(spender, amount)

spender: 0x8f2326316eC696F6d023E37A9931c2b2C177a3D7 stkMTA contract amount: 334000000000000000000000 (334,000)

2. Stake MTA:

The DAO Multisig (0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f) would submit a transaction to 0x8f2326316eC696F6d023E37A9931c2b2C177a3D7 stake(amount, delegatee)

amount: 334000000000000000000000 (334,000) delegatee: 0xd6E96e437b8d42406A64440226B77a51c74E26b1

MTA and TRIBE voting rights should be delegated to the Ballers Gnosis Safe at 0xd6E96e437b8d42406A64440226B77a51c74E26b1

The Ballers Gnosis Safe will then vote in the dials for Balancer’s MTA pool on polygon.