Flexible Magic Index Cauldron
Our current Position:
- Protocol needs to protect its treasury > debt scenario
- Protocol needs additional revenue to pay down debt
- Protocol needs additional revenue to optimize position coming out of the bear market
Scope: The magic index cauldron would be used as such:
- user deposits LUSD/FRAX/USDT/MIM…etc
- team would deploy funds in a way that seeks
-Revenue
-Short term capital gains
-Protects Treasury>debt relationship
- Goal: 20M TVL
- The intitial fee on the cauldron would be 25bps
- Team would take a 15% cut on revenue beyond principle deposit - 25bps fee
- Duration of the Investment would be 16 week epochs
- Funds would be consolidated to stables at the end of each 16 weeks
- In the scenario that treasury<debt at the end of 16 weeks without the Magic index contributions, the cauldron would re enter an additional 16 week epoch
- The flexible epoch scenario would allow our full curve position to be deployed and absorb treasury volatility.
- This cauldron is aligned in the interest of long term governance holders of abracadabra as a line of credit and utility function.
- The utility of this cauldron would not be used to subsidize team compensation
- treasury profits from this cauldron should be used to purchase scalability and pay down debt
Reference: Provide links and resources for the collateral (or the implementation) you are proposing in this part of the RCF. Reference must include, but are not limited to:
Contracts/Technical Requirements:
2 Likes
Flexible Magic Index Vault (edit #1)
Our current Position:
- Protocol needs to protect its treasury > debt scenario
- Protocol needs additional revenue to pay down debt
- Protocol needs additional revenue to optimize position coming out of the bear market
Scope: The magic index cauldron would be used as such:
- user deposits LUSD/FRAX/USDT (non MIM)
- team would deploy funds in a way that seeks
-Revenue
-Short term capital gains
-Protects Treasury>debt relationship
- Goal: 12-20M TVL
- The initial fee on the cauldron would be 25bps (Cover gas expenses)
- Team would take a 15% cut on revenue & capital gains beyond principle deposit - 25bps fee. Abra treasury income= .15(TVL) in excess of Principle deposit – 25bps fee
- Duration of the Investment would be 16 week epochs
- Funds would be consolidated to stables at the end of each 16 weeks
- In the scenario that treasury<debt at the end of 16 weeks without the Magic index contributions, the cauldron would re enter an additional 16 week epoch
- Rewards to holders should be eligible to claim regardless of treasury-debt relationship
- In the situation that the treasury > debt, all stables would be eligible for claim in 72HR period
- Magic Cauldron will continue as long as debt exists within the protocol, failure to claim funds within 72hours would be consent to re enter cauldron for an additional 16weeks.
- The flexible epoch scenario would allow our full curve position to be deployed and absorb treasury volatility. This could be done gradually as liquidity in ycrv improves.
- This cauldron is aligned in the interest of long term governance holders of abracadabra as a line of credit and yielding utility function.
- This strategy should not utilize leverage.
- The utility of this cauldron would not be used to subsidize team compensation
- treasury profits from this cauldron should be used to purchase scalability and pay down debt
Example:
12million deposited into Magic Index Cauldron/Vault
- 6million stables in diversified proven stablecoin strategies, main purpose is to protect treasury-debt relationship in the case of curve volatility
- 1 million locked in CVX for 16 weeks
- 1million in Tricrypto
- 1 million in GLP
- 1 million in yCRV
- 1million lp cvxfxs-fxs
- 1million trading for capital gains opportunities
Ultimately- strategy is 100% up to abracadabra multisig , their leadership and knowledge in the space have advantages most passive investors would grossly underperform.
1 Like
Flexible Magic Index Vault (edit #2)
Our current Position:
- Protocol needs to protect its treasury > debt scenario. Additional non mim stablecoin liquidity needed to buffer CRV volatility as we transition our curve into a equitable investment.
- Protocol needs additional revenue to pay down debt. The index vault and deployed curve position provide this.
- Protocol needs additional revenue to optimize position coming out of the bear market. Magic Index vault can provide this in multiple ways through strategic operations.
Examples
-CRV-YCRV
-CVX
-MIM-3pool rebalancing
Scope: The magic index vault would be used as such:
- user deposits LUSD/FRAX/USDT (non MIM)
- team would deploy funds in a way that seeks
-Revenue
-Short term capital gains
-Protects Treasury>debt relationship
- Goal: 12-20M TVL
- The initial fee on the cauldron would be 25bps (Cover gas expenses)
- Team would take a 15% cut on revenue & capital gains beyond principle deposit - 25bps fee. Abra treasury income= .15(TVL) in excess of Principle deposit – 25bps fee. This revenue would be collected at the end of each epoch.
- Duration of the Investment would be 16 week epochs, request to exit magic index vault would be submitted at week 8 for strategic operations to manage the vault appropriately.
- Funds would be consolidated to stables at the end of each 16 weeks for those that request exit. New deposits into the magic index vault would need to be submitted at the end of week 15 in order to join the following epoch.
- In the scenario that treasury<debt at the end of 16 weeks without the Magic index contributions, the cauldron would re enter an additional 16 week epoch. No funds would be withdrawn with an exception to rewards, new funds into the vault would be accepted.
- Rewards to holders should be eligible to claim regardless of treasury-debt relationship
- In the situation that the treasury > debt, all stables would be eligible for claim in 72HR period if requested at week 8 snapshot.
- The Magic Vault will continue as long as debt exists within the protocol, failure to claim funds within 72hours would be consent to re enter cauldron for an additional 16weeks.
- The flexible epoch scenario would allow our full curve position to be deployed and absorb treasury volatility. This could be done gradually as liquidity in ycrv improves. This index has the capacity to work with yearn to further support the launch of YCRV; both through participation and through liquidity provisioning.
- This cauldron is aligned in the interest of long term governance holders of abracadabra as a line of credit and yielding utility function.
- This strategy should not utilize leverage.
- The utility of this cauldron would not be used to subsidize team compensation
- treasury profits from this cauldron should be used to purchase scalability and pay down debt
Example:
12million deposited into Magic Index Cauldron/Vault
- 6million stables in diversified proven stablecoin strategies, main purpose is to protect treasury-debt relationship in the case of curve volatility
- 1 million locked in CVX for 16 weeks
- 1million in Tricrypto
- 1 million in GLP
- 1 million in yCRV
- 1million lp cvxfxs-fxs
- 1million trading for capital gains opportunities
Ultimately- My current idea is the strategy is 100% up to abracadabra multisig , their leadership and knowledge in the space have advantages most passive investors would grossly underperform.
1 Like
Put that together nicely… would love to see more opinions on this!!!