Rari Foundation

Authors: Autonomous

Reviewers: Campbell Law, Jana Bertram

Abstract

This proposal advocates for the allocation of a $549,933 surplus (details below) from the 2023 H1 (link) and H2 (link) Operational budgets, divided equally between establishing a cash reserve and initiating safe yield generation and investment strategies. The aim is to bolster the financial security and sustainability of the organization through prudent financial management.

Motivation

The surplus from the 2023 operational budgets offers an opportunity to fortify the organization’s financial standing and mitigate risks. Building cash reserves will create a buffer for managing emergencies and capitalizing on strategic opportunities. Meanwhile, investing in safe yield generation initiatives will diversify revenue streams and enhance long-term financial sustainability. Allocating the surplus funds proactively enables the organization to navigate uncertainties effectively and position itself for future growth.

Rationale

Cash Reserves Allocation (50%)

• Transfer stablecoins to a multi-signature wallet with 2 of 3 signers, including a Foundation member, Director, and Autonomous representative.
• This setup ensures security and accountability in managing the cash reserves, providing flexibility for timely decision-making in accessing funds for emergencies or strategic endeavors.

Safe Yield Generation Allocation (50%)

• Utilize a combination of safe yield-generating strategies such as, for example, Franklin Templeton tokenized fund
• This strategy aims to optimize yield generation while preserving capital, enhancing the organization’s financial sustainability.

Key Terms

$RARI - ERC 20 token, used in the RARI DAO governance

Stablecoins - USDC or USDT tokens that hold 1 to 1 value with USD

Specifics:

Overview of 2023 operational budgets reconciliation:

Steps to implement:

The main approvals needed for this proposal include:

1. Approval for the allocation of $549,933 surplus from the 2023 operational budget.
2. Endorsement for the establishment of a multi-signature wallet for cash reserves with designated signers.
3. Authorization for stablecoin conversion to USD through the Foundation’s OTC partner.
4. Approval for investing in the tokenized Treasury bill fund for safe yield generation.

Timeline:

Approximately 6 months to maximize yield generation through short-term T-bill investments. Yield is generated on a daily basis. There are no early liquidation fees, but the longer the funds are held the more yield is generated.

Costs:

OTC trades have a built-in trading cost and yield generating vehicles have associated fees. The Foundation has negotiated these fees and they are in-line with industry standards. The Foundation itself will not charge any fees for execution of the plan.