Compound

Simple Summary

For over a year, the Compound DAO has used Aera for treasury management. This proposal builds upon prior work to further operationalize the DAO’s treasury.

There is currently an excess of USDC and DAI reserves in Compound V2, which could be deployed in lending markets to generate yield for the treasury. Additionally, a portion of the ETH in the Compound Treasury can be utilized to generate yield.

This continuation of the existing programs will enable the DAO to drive a new yield source. The expected impact of this proposal is $30M~ in additional Compound V3 TVL and $1M+ in additional treasury revenue via yield generation.

Deployment details:

• Compound Treasury (2,000 ETH)
• Compound V2 Reserve Assets (15M DAI and 10M USDC)
• The vault’s objective function will be updated from targeted volatility to yield generation. This ensures the stablecoin reserves do not get allocated to volatile assets.
• The vault will continue to allocate into Compound V3 lending markets to generate yield on the underlying assets (this will be enabled in a subsequent proposal due to Compound’s 10 action limit in governance proposals).

For more details, please refer to the Forum Post.

Specification

This proposal is 1 of 2 proposals, the second of which will be put onchain after this one passes. The proposals are split up in order to operate within Compound’s 10 action limit on proposals:

1. Add DAI as an asset to the vault
2. Accept ownership of a new hooks module at address 0x8A216F2C84a3fE5a51Bf57B685864A065D14C53a. We need to deploy a new hooks module and have the Governor Bravo timelock accept ownership of it to work around a limitation in Governor Bravo that only 10 actions can be called in a single proposal. Without this workaround, adding the following function sighashes would put this proposal over that limit. This new hooks module already has all the existing hooks, plus the following new sighashes: cWETHv3 supply & withdraw, and DAI approve (needed to trade it for USDC)
3. Remove current cUSDCv3 C3PO from the asset registry. In a subsequent proposal we will be adding this back in. We are removing it due to a bug in solc and via-ir flag being able to verify the existing contract onchain (which has been successfully used for over 1 year, but cannot be verified on etherscan due to this bug).
4. Wrap a portion of the ETH currently in the timelock into WETH
5. _reduceReserves on both DAI and USDC V2 reserves
6. Approve WETH, DAI, and USDC to be deposited into the Aera vault
7. Deposit the assets into the Aera vault